New Year Message from the President

Welcome to 2008

I wish you all a very Happy New Year, and I am happy to share this new year’s message with you.

This is a year of two notable events, the Beijing Olympics and the American presidential elections. Last year, the Japanese economy was impacted on by the U.S. sub-prime loan crisis and the effects of rising oil prices, and we can only expect that influence to continue this year. On the positive side, last year saw our customers in the semiconductor market overcome first half stagnation with a significant second-half recovery that achieved a growth rate as high as 3.8 percent. While prospects for this year remain unclear, there are positive signs of expansion in such areas as the PC business, mobile phones, digital consumer products, and automotive products, and we anticipate overall growth as high as 9 percent.

Since the latter half of last year, manufacturers of LCD panels have developed positive investment plans for deployment of new LCD panel manufacturing equipment, and we expect to see positive results from that this year. In the optical disc market, we anticipate strong demand growth for players for next generation discs, and this is fueling our market expectations. In addition, solar power is attracting increasing attention, as a means to protect the global environment and to mitigate global warming, bringing a new level of vigor to the market.

In this business environment, Shibaura Mechatronics will continue to promote a basic policy of “Reinforce product and production power in order to realize a high profit constitution,“ and 2008 will see us bolster our capabilities in productivity, product supply and pricing, reinforce cost competitiveness and product appeal, and build on our strengths in research and development. We will also promote all reforms necessary to achieve continued progress. Those reforms will include measures to achieve a balance among our semiconductor, FPD and optical disc businesses, and measures to make solar power a new pillar o business.

As this new year of 2008 opens, Shibaura Mechatronics Group, acting with “sincerity, zeal and reliance“ and recognizing that “now is the time to turn to the future“ will act resolutely, in order to win the trust of all of our stakeholders and to be recognized as a “one-of-a-kind company“

I ask you for your continued support this year.