• Precision Equipment Business
• Imaging Products Business

Precision Equipment Business

Q. What is the outlook for the market of IC/LCD steppers and scanners?

A. We predict the market for both devices will remain unchanged from last projection for fiscal 2012. Although we expect a slight recovery in the market for IC steppers and scanners in the latter half of 2012, we will keep a close eye on market trends due to an expected postponement of capital expenditure towards memory manufacturers. In regards to the LCD stepper and scanner market, orders in relation to equipment for the production of mid-sized and smaller panels remain strong and we predict a recovering trend in the market from the end of the current period under review into the following period.

Q. How are Precision Equipment business earnings?

A. Unit sales of steppers and scanners fell in the 1Q as a result of contraction in the market, with sales falling 15% in comparison to the previous period. On the other hand, only a slight fall in operating income compared to the previous period was recorded. This is a direct result of strong sales in LCD steppers and scanners and improvements we have made to our earnings structure by shortening the lead time for the production of IC steppers and scanners. We have not changed our forecast for unit sales for the year and as a result, revenue forecasts also remain unchanged. We still expect business performance to improve in the latter half of the period and will continue to channel our energy into the sale of our highly competitive, new products, including the NSR-S621D ArF immersion scanner and the ArF scanner, the NSR-S320F in order to achieve our estimated sales targets.

Q. What can you tell us about the joint development of equipment for 450mm wafers?

A. We have enjoyed a close relationship with Intel Corporation in the past and we don't see anything that will dramatically change our business with them. Development of equipment for 450mm wafers with Intel Corporation is also progressing in line with a technology roadmap with their help of development funding. We predict that equipment for 450mm wafers should arrive before EUVL technologies and hope to be ready to ship mass produced products by 2017.

Imaging Products Business

Q. What can you tell us about the digital camera market?

A. In the 1Q period, the market for digital cameras with interchangeable lenses continued to grow favorably however the compact digital camera market has continued to shrink in size from last year and more recently, this trend is showing a downward spiral. Amidst this business environment, Nikon has responded by increasing production of digital SLR cameras to recover our market share to the point of where it was before the floods in Thailand. In the field of compact digital cameras, we have been able to increase sales despite a contraction of the market and were able to increase our global share to approximately 20%. In regards to average prices, although shipping prices are falling across the entire market, Nikon has increased the average price of its compact digital camera range.

Q. What can you tell us about the non-reflex camera market?

A. The market for non-reflex cameras in the 1Q increased by more than 80% compared to the same period from the previous year, particularly in the US market where it increased more than twofold. More recently, this growth has dropped off slightly however we predict that it will continue to grow gradually into the future. Nikon has only two models in this product lineup however sales are strong, with Nikon holding top share in the US and Europe and approximately 25% of the global market share.

Q. How are Imaging Products business earnings?

A. Production volume has been restored to normal following the floods in Thailand last year and we were able to meet the strong demand for digital SLR cameras and interchangeable lenses. We also managed to increase sales of our compact digital cameras despite a shrinking market. As a result, sales for the 1Q increased 14% compared to the previous period while operating income fell 38% as a result of the strong yen and an increase in sales expenses to normal levels. We are maintaining our forecasts for unit sales for this fiscal year however are making a downward adjustment of sales and operating income by 10 billion yen and 5 billion yen respectively due to a five-yen increase in the exchange rate in relation to the euro.