FY2008 First Half Results Meeting
Results for the six months ended September 30, 2008
2008
FY2008FY2008 : Year ending March 31, 20092009

November 14, 2008

Ryosan Company, Limited

Code : 8140 / Stock listings: Tokyo Stock Exchange (First Section)
URL : http://www.ryosan.co.jp/eng/

NoticeThis presentation contains forward-looking statements regarding businessperformance, which may differ substantially from actual results, depending on
certain risks and uncertainties, the most significant of which are listed below.

zEconomic conditions in key markets (Japan and the rest of Asia),
rapid changes in consumption patterns and supply-demand balance for productsz

Sharp fluctuations in the ¥/$ exchange ratez

Substantial fluctuation in prices in capital markets

Consolidated forecasts for the fiscal year ending March 31, 20092008/3

2009/3OfTotal

1H (Results) 2H (Forecasts)

Of % Chg.
Total YoY

1H

2H

¥ 100 million¥ 100 million¥ 100 million

Net sales

1,446 1,414

2,860

Gross margin

125

126

251 8.8

119 (4.7)

110 (13.4)

229 8.8 (9.1)

SG&A expenses

73

71

144 5.072 (2.1)

73 +2.8

145 5.6 +0.3

Operating income

52

55

107 3.8

47 (8.3)

37 (34.3)

84 3.2 (21.8)

Ordinary income

55

57

112 3.954 (1.2)

39 (33.1)

93 3.6 (17.5)

Net income

33

34

67 2.433 +2.3

24 (32.0)

57 2.2 (15.4)%% Chg.
YoY% Chg.
YoY%¥ 100 million

1,312 (9.3) 1,288 (9.0)

2,600¥ 100 million%¥ 100 million

%

%

(9.1)

1

Segment results for the fiscal year ended March 31, 2009
Unit : ¥ 100 million, %2008/3

2009/3
1H (Results)

1H

2H% Chg. YoY

Semiconductors
Electronic
Components
Electronic
Equipment
Ryosan Products(Heat sinks)

Sales
Operating income
Sales
Operating income
Sales
Operating income
Sales
Operating income

Unallocable Operating expenses

Consolidated

Sales
Operating income

2H (Forecasts)% Chg. YoY

751 738 1,489 715 (4.8) 685 (7.2) 1,400
37 35 72 35 (3.6) 29 (19.0) 64
540 491 1,031 435 (19.4) 428 (13.0) 863
22 22 44 18 (14.7) 16 (28.8) 34
113 143 256 121 ＋7.7 140 (3.1) 261
46 10
3 (17.5)
2 (58.4)
542 41 83 39 (5.0) 37 (13.6) 76
34
7
4 ＋38.0
3 (29.5)
7(14) (12) (26) (14)
(14)
(28)
1,446 1,414 2,860 1,312 (9.3) 1,288 (9.0) 2,600
52 55 107 47 (8.3) 37 (34.3) 84% Chg. YoY(6.0)(11.2)(16.3)(21.6)＋1.7(43.5)
(9.3)
(1.1)
(9.1)
(21.8)
2

Consolidated results Trend
Net sales(¥100 million)

3,500

3,170
3,000

3,262

Gross Profit margin

Net sales(¥100 million)

SG&A expenses margin
Operating income margin

3,106

2,882

2,860
2,600

2,500

Ratio ofsales (%)

2,000

7.8

8.7

8.2

8.0

10.0

8.8

8.8

9.0
8.0

1,500

7.0

5.0

5.5

4.9

4.9

5.6

5.0

6.0
5.0

1,000

4.0
500

2.8

3.1

2004/3

2005/3

3.3

3.2

2006/3

2007/3

3.8

3.2

3.0
2.0

0
5th MidMid-termManagement Plan

6th Mid--term Management Plan

6 Mid term Management Plan

2008/3

2009/3(Forecasts)

7th MidMid-termManagement Plan

3

Trends in cash Dividends per Share and Earnings per Share (EPS)EPS (¥)

Dividends per Share (¥)(¥)

Dividend ratio

200［Target EPS］
･7th Mid-term management
Plan : ¥200 or more（2010/3）･6th Mid-term management
Plan : ¥150 or more （2007/3）

150

187
178

100

174

158

150

163
45.8%

37.8%

39.2%

42.7%

49.1%

26.6%
50

70

80

80

2006/3

2007/3

2008/380［Target Dividend ratio］･7thMid-term management
Plan : 40% or more･6th Mid-term management
Plan : 30% or more

60
40

0

2004/3

5th MidMid-termManagement Plan

2005/3

6th MidMid-term Management Plan

2009/3 (Forecasts)

7th MidMid-termManagement Plan

4

[Reference]

Trends in Net Income, Dividends, and Acquisition of Treasury Stock(¥100
million)Net Income

Acquisition of Treasury Stock70

Dividends

Concept of an overall distribution ratio

46％

57

87％
49

47

50
40

85％

57％

84％

60

39％

59％
33
58 11

88％

30

25

20

13
28

57

21

33

65

37 10
21

63

67

28

25

29

28

27

@¥80

10

11

11

14

0

@¥30

@¥30

@¥40

@¥60

@¥70

@¥80

@¥80

2002/3

2003/3

2004/3

2005/3

2006/3

2007/3

2008/3

5th Mid--term Management Plan

2009/3 (Forecasts)

7th Mid--term Management Plan

6th Mid--term Management Plan

5 Mid term Management Plan

57

21

7 Mid term Management Plan

6 Mid term Management Plan

《 Trends in Acquisition of Treasury Stock 》

Amount（\100 million）
Number of stocks（1,000 shares）

2002/3

2003/3

2004/3

2005/3

13.2

10.1

33.1

924

895

2,001

2008/3

2009/3

2006/3

2007/3

11.3

-

-

28.8

21.7

118.2

483

-

-

1,000

1,000

6,303

(Forecasts)

Total

5

Semiconductors Sales Breakdown (By Product)
Unit : ¥ 100 million, %2008/3

2009/3
1H (Results)

1H

2H

2H (Forecasts)% Chg. YoY% Chg. 1H/2H% Chg. YoY(DRAM)

58

59

117

58 ＋

0.0

48

(17.2)

106(9.4)

Memories (Others)

5

4

9

3

(40.0)

3 ＋

0.0

6

(33.3)(Microcomputer)

63
161

63
177

126
338

(3.2)
61
162 ＋ 0.6

(16.4)
51
170 ＋ 4.9

112
332

(11.1)(1.8)

System LSIs (ASIC / ASSP)

316

293

609

278

(12.0)

261

(6.1)

539

(11.5)(LCD drivers ICs)

477
50

470
42

947
92

(7.8)
440
50 ＋ 0.0

431
43

(2.0)
(14.0)(8.0)
871
93 ＋ 1.1(Compound Semiconductor
Devices)

62

61

123

69 ＋ 11.3

60(13.0)

129 ＋

4.9（Others）

99

102

201

95

(4.0)

100 ＋

5.3

195

(3.0)

211

205

416

214 ＋

1.4

203

(5.1)

417 ＋

0.2

751

738 1,489

715

(4.8)

685

(4.2) 1,400

Discrete

Total

(6.0)
6

Semiconductors Sales Breakdown (By Product)《 Results for the first half of fiscal 2008 (Year-on-year comparison) 》
Semiconductors sales
Breakdown(¥ 100 million)
202
Memories[Memories] While sales of DRAMs for memory modules increased,sales of DRAMs for car navigation application decreased.
[System LSIs] Sales of ASICs for disk array application increased.

(76)

126

(14)

Sales of ASICs for camera modules and system LSIs for digital
112

System 1,021(74) 947 (76) 871
LSIs

audiovisual products, on the other hand, decreased.
[Discrete] Despite a decrease in sales of compound semiconductor devices ormeasuring equipment, sales of compound semiconductor devices for digitalaudiovisual products increased.
《 Forecasts for the second half of fiscal 2008 (Comparison with first half results) 》

Discrete 467 (51) 416 ＋1

07/3

08/3

[Memories] While sales of DRAMs for DSCs are forecast to increase, sales of
417
09/3

(Forecasts)

DRAMs for memory modules are expected to decrease.
[System LSIs] Sales of microcomputers for car audio equipment are anticipated toincrease. Sales of ASICs for digital audiovisual products are forecast
to decrease.
[Discrete] Expectations are for sales of automotive general-purpose devices toincrease. Sales of compound semiconductor devices for digital audiovisual
products, on the other hand, are anticipated to decrease.
7

Semiconductors Sales Breakdown (By suppliers)
Unit : ¥ 100 million, %2008/3

2009/3
1H (Results)

NEC Electronics
Elpida Memory
NXP Semiconductors
Others
Total

1H

2H

603
41
47
60
751

580
48
48
62
738

2H (Forecasts)% Chg. YoY

1,183
89
95
122
1,489

539
(10.6)
44 ＋ 7.3
47 ＋ 0.0
85 ＋ 41.7
715
(4.8)

% Chg. 1H/2H

510
(5.4)
35
(20.5)
47(0.0)
93 ＋ 9.4685(4.2)% Chg. YoY(11.3)
1,049(11.2)
79(1.1)
94
178 ＋ 45.9
(6.0)
1,400

《 Results for the first half of fiscal 2008 (Year-on-year comparison) 》[NEC Electronics] Sales of ASICs for disk array application increased, sales of ASICs for camera modules decreased.
[Elpida Memory] While sales of DRAMs for memory modules increased, sales of DRAMs for car navigation application decreased.
[NXP Semiconductors] While sales of electromagnetic tape RFID decreased, sales of ASSPs for car audio equipment increased.
[Others] Sales of DVD drive ASSPs decreased. Sales of liquid crystal display driver ICs, on the other hand, increased.

《 Forecasts for the second half of fiscal 2008 (Comparison with first half results) 》[NEC Electronics] Sales of microcomputers for car audio equipment are anticipated to increase. Sales of ASICs for digital audiovisual
products are forecast to decrease.
[Elpida Memory] While sales of DRAMs for DSCs are forecast to increase, sales of DRAMs for memory modules are expected to decrease.
[NXP Semiconductors] Despite a forecast decrease in sales of electromagnetic tape RFID equipment and systems, sales of ICs for game
console application are expected to increase.
[Others] While sales of liquid crystal display driver ICs are anticipated to decrease, sales of liquid crystal TV ICs are forecast to increase.

8NEC Electronics Business-Related Initiatives
１． Short-Term Initiatives① Promote design-in activities with established numericaltargets
Note: Detailed and elaborate plans to expand sales based ona revised target map encompassing the top 50 companies

1H FY2008 Target Achieved(Achievement Rate: 104%)② Increase the breadth and depth of business based on a microcomputerand PMD sales expansion project (Collaboration with NEC Electronics)
Note: Implement a door-to-door strategy targeting the top 100 companies focusing on customers withwhich the Company holds a low market share.
・Uncover new businesses
・Reassess customer potential and engage in marketing activities

２．Initiatives Taking into Consideration Future Conditions◎ Pursue market expansion measures throughjoint projects with NEC Electronics① Automotive and electronic fields: Japan, China
and Korea

Contribution to sales around 2012

② Digital audiovisual field: Japan, China, Taiwan
and Korea

Contribution to sales in FY2009
9

Trends in Overseas Semiconductor Product Sales
Steady progress in efforts to expand businesswith major untapped customers

Annual sales to major
untapped customers: ¥9.0 billion①Genesis・・・1H FY2008 ¥1.1 billion: Commenced LCD TV business②Intersil, Cypress ・・・1H FY2008 ¥0.7 billion: Business launched③Solomon Systech ・・・ 1H FY2008 ¥1.4 billion：Contribution from new design-in LCD driver activities180(¥ 100 million)

250

1H

150

60
30

Annual
206

201

33

27

Memories

75

80

ASSPs

100

29
24

50

95

98

94

NXP

2008/3

2009/3

2009/3

200

120
90

(¥ 100 million)

74

17
10
47

150

97

98

17

14

Memories

34

37

ASSPs

46

47

NXP

148

0

0
2008/3 1H

2009/3 1H（Initial forecasts）

2009/3 1H（Initial forecasts） （Revised forecasts）

10

Electronic Components Sales Breakdown (By product)
Unit : ¥ 100 million, %2008/3

2009/3
1H (Results)

Display Devices
Power Supplies
Mechanical Components
Total
Electronic Components
Sales Breakdown

1H

2H

209
63
268
540

153
69
269
491

2H (Forecasts)% Chg. YoY

362
132
537
1,031

121
66
248
435

(42.1)＋
4.8(7.5)(19.4)% Chg. 1H/2H

99
53
276
428

(18.2)(19.7)＋ 11.3(1.6)% Chg. YoY

220
119
524
863

(39.2)(9.8)(2.4)(16.3)《 Results for the first half of fiscal 2008 (Year-on-year comparison)[Display Devices] While sales of LCDs for tablet PCs increased, sales of LCDs for PNDs and DSCs
decreased.

(¥ 100 million)[Power Supplies] Despite a decrease in sales of power supplies for printer adapters, sales of batteries
for game consoles increased.
Display
Devices401 (39) 362(142) 220

[Mechanical Components] Sales of components for game consoles increased. Sales of components forcell phones decreased.

Power 105
Supplies+27 132 (13) 119

Mechanical 524 ＋13
Components《 Forecasts for the second half of fiscal 2008 (Comparison with first half results) 》[Display Devices] Despite the forecast of an increase in sales of LCDs for printers, sales of LCDs

537 (13) 524

for PNDs and DSCs are expected to decrease.
[Power Supplies] While sales of rechargeable batteries for DSCs are anticipated to increase, sales ofbatteries for game consoles are forecast to decrease.

07/3

08/3

09/3
(Forecasts)[Mechanical Components] Sales of automotive and electronic components are anticipated todecrease. Sales of components for game consoles are forecast to increase.

11Electronic Equipment Sales Breakdown (By product)
Unit : ¥ 100 million, %2008/3

2009/3
1H (Results)

1H

2H

79
34
113

95
48
143

System Equipment
Facilities Equipment
Total
Electronic Equipment
Sales Breakdown(¥ 100 million)

2H (Forecasts)% Chg. YoY

174
82
256

83 ＋
38 ＋
121 ＋

5.1
14.7
7.7

% Chg. 1H/2H

97 ＋
43 ＋
140 ＋

16.9
13.2
15.7

% Chg. YoY

180 ＋ 3.4
81
(1.2)
261 ＋ 1.7

《 Results for the first half of fiscal 2008 (Year-on-year comparison) 》[System Equipment] While sales of PC boards for arcade games decreased, sales ofcar navigation systems equipment increased.
[Facilities Equipment] Despite a decrease in sales of magnetic head manufacturing
equipment, sales of liquid crystal display laser repair

207
SystemEquipment(33)＋6 180174

equipment increased.
《 Forecasts for the second half of fiscal 2008 (Comparison with first half results) 》[System Equipment] Sales of RSE* equipment are forecast to decrease. Sales of
WAVP * systems equipment are anticipated to increase.

Facilities
Equipment

100

(18)

82

(1) 81[Facilities Equipment] While sales of mask repair equipment are expected todecrease, sales of sputtering equipment and systems are

07/3

08/3

09/3
(Forecasts)

forecast to increase.
RSE*: Rear Seat Entertainment System WAVP*: Wearable Audio Visual Player

12Ryosan Products Sales Breakdown (By area)
Unit : ¥ 100 million, %2008/3

2009/3
1H (Results)

1H

Domestic
Overseas
Total

2H

29
13
42

Ryosan Products Sales
Breakdown

2H (Forecasts)% Chg. YoY

29
12
41

58
25
83

27
12
39

(6.9)
(7.7)
(5.0)

% Chg. 1H/2H

26
11
37

(3.7)
(8.3)
(13.6)% Chg. YoY

53
23
76

(8.6)
(8.0)
(9.3)

《 Results for the first half of fiscal 2008 (Year-on-year comparison) 》[Domestic] Sales of water-cooled heat sinks for FA equipment increased.

(¥ 100 million)

Sales of heat sinks for semiconductor manufacturing equipment decreased.
[Overseas] While sales of heat sinks for flat-screen televisions increased,sales of heat sinks for home audio equipment decreased.
Domestic

58＋0

58 (5)

53《 Forecasts for the second half of fiscal 2008 (Comparison with first half results) 》[Domestic] Despite a forecast increase in sales of automotive heat sinks, sales ofwater-cooled heat sinks for FA equipment are expected to decrease.

Overseas

20 +5
07/3

25
08/3

(2)

[Overseas] While sales of heat sinks for digital audiovisual products are23
09/3(Forecasts)

anticipated to increase, sales of heat sinks for home audio
equipment are forecast to decrease.
13

Overseas Sales Breakdown

2008/3
1H¥ 100 million

2009/3
Of
Total

2H¥ 100 million¥ 100 million%

1H (Results)

2H (Forecasts)% Chg.
YoY¥ 100 million%

Of % Chg.
Total YoY

% Chg.
YoY¥ 100 million%¥ 100 million

1,312 (9.3) 1,288 (9.0) 2,600%%

Consolidated net sales

1,446 1,414 2,860

Domestic

852 882 1,734 60.6 789 (7.5) 791 (10.4) 1,580 60.8 (8.9)

Overseas594 532 1,126 39.4 523 (11.9) 497 (6.7) 1,020 39.2 (9.4)(China Bloc)

351 311 662 23.1 303 (13.7) 282 (9.3) 585 22.5 (11.6)

(9.1)

14

Trends in Local Business Sales in China Bloc
While the semiconductor business remains firm,
results are insufficient to fully offset declines in the LCD business

Semiconductors
Annual sales of ¥ 13 billion① General trend toward a decline in the LCD business（ＮＥＣＥＬ Annual sales of ¥10 billion）② Results for the first half of FY2008 exceeded both the previous period
and the corresponding period of the previous fiscal year in the semiconductor bisiness③ Implementing measure to expand the semiconductor businessin an effort to promote growth and stability(¥ 100 million)

250
200
150

350

1H

(¥ 100 million)

300
169

76

100
39
50
54

250
138

132

37

26
35

35
66

71

0

LCDs

200

Others150

Annual

313
283

125

72

249

41

LCDs

71

74

Others

117

140

134

Semiconductors

2008/3

2009/3

2009/371

100
Semiconductors

5002008/3 1H

2009/3 1H（Initial forecasts）

2009/3 1H（Initial forecasts） （Revised forecasts）

15

Key Clients《Top 5 (by business)》《Top 40》
Top 1-10

ALPS Electric
CASIO
DENSO

Clients(alphabeticalorder)

Fuji Film
HITACHIALPINENIKON

HOSIDEN

CHI MEI （T）

OMRON

Hyundai (K)Furuno Electric

Panasonic Electric
Works

Izumi

SHARP

NINTENDO

Sumitomo ElectricIndustries

47%

Fujitsu

Calsonic Kansei

Mitsubishi Electric(Top 10)ADVANTESTTop 31-40

Bussan Microelectronics

NEC

PIONEERTop 21-30

Brother Industries

JVC

Panasonic

Percentage
Sales of allclients

Top 11-20

Taiyo Yuden
TOSHIBA(Top 20)60%

Hitachi Kokusai
Electric

SANYO

JRC

TAKATAKENWOODYAMAHASEGA

YASKAWA Electric

YAZAKI meter(Top 30)

67%

Semiconductor

Electronic
Equipment

Fuji Film
HITACHIJVC
Mitsubishi Electric
PIONEERCHI MEI （T）
DENSO
Fuji Film
HITACHITDK( Top 5 )46%

( Top 5 )55%

Electronic
Components

Ryosan Product

CASIO
Calsonic Kansei
NEC
NINTENDO
Panasonic

DENSO
FUNAC
HITACHI
Mitsubishi Electric
TOSHIBA( Top 5 )31%

( Top 5 )26%

Stanley Electric
TDK(Top 40)70%* Rank and percentage share are based on results for the first half of fiscal 2008.
* T: Customer in Taiwan, K: Customer in Korea* Customers identified in blue have improved their ranking year on year based on increased sales
16Main suppliers

COSEL
1.6%

Other suppliers
22.1%

NEC
2.1%

NEC Electronics
41.1%

NEC LCD
Technologies
2.1%

Percentage share( By business )Elpida Memory
3.4%

Electronic
Equipment
9%

Alps
CASIO
Electric
COMPUTER 8.9%
6.2%

NXP Semiconductors
3.6%Japan Aviation
Electronics Industry

4.0%Electronic
Components
33%

Ryosanproducts
3%

Semiconductors
55%

NEC TOKIN
4.9%* Percentage share is based on sales of supplier’s products for the first half of fiscal 2008.

17

R&D, Capex and Depreciation
Unit:¥ 100 million

6.0[2007/9][2008/9]

Unit:¥ 100 million

12.0

5.0

10.0

4.0

8.0

3.0

6.0

2.0

4.0

1.0

2.0

0.0

0.0

2007/9■ R&D■ Capex■ Depreciation

2.9
2.5
4.1

¥ 100 million

2008/9¥ 100 million

3.0
1.2
3.8

2008/3(Results)% Chg. YoY＋7.7(52.0)(5.4)%[2008/3]■ R&D■ Capex■ Depreciation¥ 100 million

5.4
5.1
8.4

[2009/3 (Forecasts)]

2009/3(Forecasts)¥ 100 million

5.7
9.7
9.2

% Chg. YoY＋ 5.2＋ 89.5＋ 8.5％

18