Reorganization of Business Locations And Structural Reform of Nikon's Precision Equipment Company

May 26, 2009

Nikon Corporation (Michio Kariya, President) will implement global business locations reorganization and structural reform to enhance profit and competitiveness of their Precision Equipment Company.

Nikon has been implementing, from the beginning of the last year, various measures such as business expense reduction, capital expenditure revision, etc. with anticipation of deteriorating management environment.
The Precision Equipment Company with IC/LCD Steppers and Scanners businesses is facing further severe business conditions amid abrupt and sharp economic decline since the latter half of the last year. To cope with such environments, it have endeavored to improve products competitiveness, adjust production, adjust workforce to an appropriate level, reduce business expense, lower fixed cost, etc.

However, judging that further enhancement of business structure is indispensable under the expected markets conditions of both businesses, Nikon has decided to implement drastic measures for fixed cost reduction in every business step of production, marketing and servicing.

1. Reorganization of Japanese Production Locations

< Background and Outline >

Production subsidiaries in Japan are currently manufacturing Steppers and Scanners as well as relative devices. We have concluded that it is difficult to maintain current production system by 4 subsidiaries based on our analysis of both IC and LCD markets deterioration and study of expected market fluctuation. The currently operating 4 production subsidiaries in Japan will be integrated into 2 subsidiaries. With this integration, Nikon will adjust workforce of Nikon's Kumagaya plant to an appropriate level.

The 4 subsidiaries are Tochigi Nikon Precision Co., Ltd., Mito Nikon Precision Corporation, Sendai Nikon Precision Corporation and Zao Nikon Co., Ltd. They will be merged to Tochigi Nikon Precision Co., Ltd. and Zao Nikon Co., Ltd. via corporate split and merger as of October 1, 2009. Details of the new companies including will be decided later.

Our current production system in Japan consists of our own 2 production plants and these 4 production subsidiaries. After the reorganization of these 4 subsidiaries, Nikon's Kumagaya Plant and Tochigi Nikon Precision Co., Ltd. will be in charge of production for IC Steppers and Scanners, and Nikon's Yokohama Plant, its Yokosuka Branch and Zao Nikon Co., Ltd. will be in charge of production for LCD Steppers and Scanners.

< Outline of the above subsidiaries >

Tochigi Nikon Precision Co., Ltd.

Representative Takeshi ASAMI, President
Main Business Manufacture of IC Steppers & Scanners, and lenses for IC/LCD Steppers & Scanners
Location Otawara, Tochigi Prefecture

Mito Nikon Precision Corporation

Representative Hisashi HIBI, President
Main Business Manufacture of devices for IC/LCD Steppers & Scanners
Location Naka, Ibaraki Prefecture

Sendai Nikon Precision Corporation

Representative Tadao TATENO, President
Main Business Manufacture of devices for IC/LCD Steppers & Scanners
Location Natori, Miyagi Prefecture

Zao Nikon Co., Ltd.

Representative Akio NAKAZAWA, President
Main Business Manufacture of devices for IC/LCD Steppers & Scanners
Location Katta-gun, Miyagi Prefecture

2. Structural Reform of Marketing and Servicing in the US and Europe

< Background and Outline >

Nikon Precision Inc. and Nikon Precision Europe GmbH have been in charge of marketing and servicing as representative subsidiaries in the North America and Europe. Their marketing and servicing operation will be unified and streamlined as much as possible for structural reform of the Precision Equipment Company and offering better and more efficient support to the customers who have business base in these two regions.

< Outline of Marketing and Servicing subsidiaries in the US and Europe >

Nikon Precision Inc.

Representative Takao NAITO, Director, President, CEO & COO
Main Business Import, sales, maintenance and servicing of IC Steppers & Scanners
Location Belmont, California

Nikon Precision Europe GmbH

Representative Hiroshi Ohseki, Geschaeftsfuehrer
Main Business Import, sales, maintenance and servicing of IC Steppers & Scanners
Location Langen, Germany

3. Structural Reform of Servicing in Japan and Asia

< Background and Outline >

Nikon Corporation directly operating sales in Japan and Asian region, and its subsidiaries are offering maintenance and servicing in each country/territory. These subsidiaries will be streamlined in accordance with their actual business for more efficient business operation. As a part of this reform, the Singaporean subsidiary will be downsized and transfer a part of their business to the Taiwanese subsidiary.

< Outline of Servicing subsidiaries in Japan and Asia >

Nikon Tec Corporation

Representative Tetsuhiko HIRAGA, President
Main Business Maintenance and servicing of IC/LCD Steppers & Scanners
Location Shinagawa, Tokyo

Nikon Precision Korea Ltd.

Representative Toyohiro TAKAMINE, President
Main Business Maintenance and servicing of IC/LCD Steppers & Scanners
Location Yongin-Si, Giheung-Gu, Gyeonggi-Do

Nikon Precision Taiwan Ltd.

Representative Shinichi IKEDA, President
Main Business Maintenance and servicing of IC/LCD Steppers & Scanners
Location Chu Pei City, Hsin Chu Hsien

Nikon Precision Singapore Pte Ltd

Representative Keita SHOGASE, Managing Director
Main Business Maintenance and servicing of IC/LCD Steppers & Scanners
Location Singapore

Nikon Precision Shanghai Co., Ltd.

Representative Masaki YAMAMOTO, President
Main Business Maintenance and servicing of IC/LCD Steppers & Scanners
Location Shanghai

With these reorganization and reform, we are planning to curtail fixed cost of approximately 8 billion yen with about 800 out of 2,900 Japanese manufacturing workforce reduction and about 200 out of 1,700 overseas marketing and servicing, domestic servicing workforce, etc. Nikon is estimating special loss of 4 billion yen or more for the above measures in this fiscal year.

The information is current as of the date of publication. It is subject to change without notice.