Message from the President

To Our Shareholders and Investors

Let me begin by expressing my gratitude for your continued support of IBIDEN CO., LTD. and the IBIDEN Group.

During the interim period under review, the global economy moved on a recovery trend, led by the United States, although uncertainty persisted due to concerns about a potential economic slowdown in China and other emerging nations, as well as geopolitical risks. Overall, the Japanese economy recovered moderately, aided by increasing capital spending and improvement in the labor market together with a recovery in consumer spending, which had declined following the consumption tax hike in April 2014.

In the semiconductor/electronic components industry, smartphones continued to enjoy a high rate of growth. However, the main growth driver shifted to lower-end products, especially in emerging nations, while Chinese manufacturers boosted their presence in the market, intensifying competition among suppliers. In the PC market, sales remained below year-on-year levels, despite demand from corporate users for replacing older PCs. Accordingly, the Electronics Operation continued to face an intensely challenging business environment.

Automotive sales remained brisk around the world, as the European market recovered, and supported by buoyant sales in the North American and Asian markets.

To respond to these operating environments, IBIDEN worked to strengthen its earnings base by seeking to enhance its competitive advantages company-wide and by working to improve its global operations. For example, the Electronics Operation integrated the IC package substrates operation for PCs and the small and thin IC package substrates operation for smartphones and tablet devices, in an effort to unify technologies and share production facilities. The mainstay package substrates operation reported higher operating income supported by higher sales compared to the previous year. In the Ceramics Operation, we unified separate business units, so that the entire ceramics business could benefit from the synergistic effects.

In the second half of this fiscal year, both the Electronics and Ceramics Operations are likely to face continued uncertainty in the markets, while competition is expected to intensify globally. In the Electronics Operation, we will focus on achieving stable mass production at the second facility of IBIDEN Electronics Malaysia to meet growing demand in the smartphone and tablet devices market. We will also unify the management of electronics operations at IBIDEN Electronics Malaysia, so that we can provide business resources more flexibly and bolster the production system. In the Ceramics Operation, we will step up efforts to launch IBIDEN Mexico, which is designed to become a new manufacturing base for diesel particulate filters (DPFs) for large vehicles for the North American market.

In line with our medium-term management plan, we will direct our efforts to bolster our competitive advantages.

We thank you for your continued support and understanding of the Group.

November 2014
President & CEO
Hiroki Takenaka