Research and Development

Muroran Research Laboratory

Hiroshima Research Laboratory

Research and development activities were almost entirely
funded by the Company during fiscal 2014 Combined
spending on research and development for the Steel andEnergy Products Business and the Industrial Machinery
Products Business amounted to ¥4,104 million (US$34million).
As a materials and mechatronics company, we
strive to innovate products and production techniques
while also engaging in diverse technical alliances andjoint development to deploy new offerings as quickly aspossible.
Our Research and Development Headquar ters
collaborates with business divisions to 1) improve thecapabilities, per formance, and reliabilit y of coreproducts; and 2) develop offerings in new business fields
based on core and differentiated technologies.
The Research and Development Headquarters isbased at our head office, and the Muroran, Hiroshima,
and Yokohama research laboratories are located at theMuroran, Hiroshima, and Yokohama plants, respectively.

14Yokohama Research Laboratory

Basic Research and Development Policy
We develop new products and businesses by focusing on
new energ y and energ y savings, information andtelecommunications, nanotechnology and materials, andnew production technologies, which relate directly toexisting businesses. We have increased collaboration
between the Research and Development Headquarters
and business divisions, and aim to cultivate existing
business by expanding and upgrading core technologies.
We engage in basic research for future technologies
and contemporar y social needs and in researchingcomponent technologies for existing products. We willbuild on these efforts to undertake R&D projects thatcreate new produc t s and busines ses and pur sue
innovations for existing products.
In Steel Products, we emphasize advances in energy
and creating even more industry-leading offerings whilecommercializing new areas. The focuses in Machinery
Pro duc t s are to e nhan ce p la s t ic s ma chin e r y, ITequipment, and other industrial machiner y. We will
allocate significant resources to such machiner y byclarifying that our commercialization framework is open
to mergers and acquisitions and alliances.

Research and Development

Activities by Business Segment

Industrial Machinery Products Business

Steel and Energy Products BusinessIn this segment, our product development activities
encompass developing advanced processing
technologies for plastic molding machines, enhancing theperformance of plastic extruders, developing advanced
micro-nano melt transcription molding machines,
enhancing the functions and performance of film molding
machines, developing technologies to enhance theperformance and lower the costs of magnesium alloy
injection molding machines, developing dampers thatcomply with European specifications, and enhancing theefficiency and functions of compressors. Using the latest
technologies and s ys tems, we also develop laser
annealing systems for thin-film transistor liquid crystal
display (TFT LCD) production and devices for other laser
applications, as well as chemical vapor deposition (CVD)and plasma devices.
R&D spending in this segment was ¥2,760 million(US$22 million) in fiscal 2014.

Product development centers on materials, notably forclad steel pipes for natural gas transportation, large steel
castings, and forgings and high alloys for high-efficiency
thermal power generation, forged steel products foradvanced nuclear power plants, and high-performance
nonferrous alloys, as well as manufacturing process
technology development. We improve materials andcomponent technologies for existing products. In therenewable arena, we develop material and component
technologies to create lighter and more reliable pressure
accumulators for hydrogen fueling stations. We create
analy tical technologies and enhance component
technologies to improve the reliability of wind power
plants.
Segment R&D spending totaled ¥1,343 million(US$11 million) in fiscal 2014.

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