New Year Message from the President

Welcome to 2007

I wish you all a very Happy New Year.

As we start this new year, let me say a few words of greeting.

Last year, the Japanese economy saw continued recovery, grounded in a rise in consumer spending and capital investment. Exports continued to grow and corporate profits increased, supporting a transition to a growth environment.
In these circumstances, our business group expects its main customers in the flat panel display, semiconductor, and optical disc businesses to enjoy steady growth from now on.

In LCD manufacturing equipment, we recorded high levels of orders and sales in the year before last; however, since last year, makers have sought to adjust inventory by postponing investments in new plant and equipment, a move that has undercut prices for manufacturing equipment and impacted on profitability, and which we must tackle head on and seriously from now on.
In semiconductors, against a background of bullish growth in the market for digital consumer products, including digital cameras, mobile phones and digital audio players, we saw vigorous demand for manufacturing equipment, particularly for memory devices. The market for media devices was flat for some time, but we now see significant signs of recovery, particularly in the Taiwanese market.

Under these circumstances, Shibaura Mechatronics plans to redefine basic business objectives and make the change from “Achieve continuous growth and strengthen a highly profitable business structure” to “Reinforce product and production power in order to realize a high profit constitution.” Our primary focus will be on improving profitability as a matter of urgency, in order to secure a V-shaped recovery. Management considers this a major issue, and we will take positive steps to accelerate implementation of this policy.

As we enter this new year, Shibauara Mechatronics Group will ready itself for the future, take steps to earn the trust of all of our stakeholders, and seek to be a “one-of-a-kind company”.

I look forward to your continued support this year.