To Our Shareholders and Investors

I'd like to begin by expressing my gratitude for your continued support of IBIDEN Co., Ltd. and the IBIDEN Group.

Performance Review

In the field of electronics, our PKG business marked increases in both net sales and operating income, thanks to the continued strong demand for items for PCs and servers. Our MLB business suffered a decline in the sales of items for smartphones, but ended with growth in both net sales and operating income as a result of stable sales of module substrates. Accordingly, our electronics business as a whole marked increases in both sales and income from the previous consolidated fiscal year.
In the field of ceramics, our DPF business, which constitutes the main force in our operations in this field, marked a decline in net sales. This was owing to a shortage of semiconductors and the consequent decrease in car production, as well as acceleration of the electrification of passenger vehicles and other automobiles in the global shift to a carbon-free society. However, our DPF business marked an increase in operating income as a result of improving the productivity of high-function products and shifting our focus to obtaining orders for products for large commercial vehicles. As well as our DPF business, our AFP business was affected by the slowdown of the entire car market. However, by launching a new plant (IBIDEN Fine Ceramics [Suzhou] Co., Ltd.) as scheduled and capturing demand in the Chinese market, our AFP business marked the same level as the previous fiscal year in both net sales and operating income. Our FGM business marked increases in both net sales and operating income largely due to brisk sales of items for semiconductor manufacturing equipment amidst the global surge in the demand for semiconductors. Consequently, our ceramics business as a whole marked increases both in sales and income from the previous consolidated fiscal year.
In other business fields, the results of our business operations were favorable as a whole, backed by the domestic economy's recovery from the impact of the COVID-19 pandemic. In these fields, our operations thus marked increases in both sales and income from the previous consolidated fiscal year.

Future Forecast

In the field of electronics, current PC demand will shrink to the normal level, but it is expected that demand for high-performance IC package substrates for servers will grow due to the expansion of the data center market in line with the continuing progress in DX, as well as the use of such substrates in new fields, including image processing, virtual space, and automobiles. We will continue stable mass production at our existing plants in Japan, the Philippines, and Malaysia. In addition, we will ensure that the construction of a plant for cutting-edge IC package substrates is completed at the Gama Plant as scheduled, while making effective use of the new plant site in Ono-cho. In September 2021, we announced that we had obtained the site. By proceeding with these measures, we will increase our market share in the cutting-edge field where we have always had an edge.
In the field of ceramics, it is expected that a shift toward diesel-free engines and EVs will accelerate in the passenger-car market. We would like to establish a framework for ensuring mid- to long-term profits on a stable basis, by leveraging the recovery from the impact of the global shortage of semiconductors and by capturing demand for items for large commercial vehicles, a market that is expected to grow against the backdrop of tighter regulation of gas emissions mainly in China and emerging countries.
In other business fields, we will ensure that our operations in these fields serve as our third largest revenue source after electronics and ceramics. To that end, we will expand our operations by developing products featuring each domestic group company's unique competitive edge and operate in the area of electric power on a stable basis.

Initiatives Aimed at Sustainable Growth

FY2022 is the final year of our five-year mid-term management plan "To The Next Stage 110 Plan," launched in FY2018. To expand our operations, we will actively invest our management resources in markets that are expected to grow. For the development of new products, we will concentrate our resources into our target areas, thereby expediting our development cycle and establishing a path toward commercialization.
Moreover, we are actively committed to ESG (Environment, Social, and Governance) management so that we can continue to earn the trust of all our stakeholders.
In terms of the environment, we will continue to make GX efforts to contribute to realizing a carbon-free society. On top of making the maximum use of renewable energy (water power and solar power) and a highly-efficient co-generation system, we will ensure that energy use is reduced throughout our supply chain. By doing so, we will aim to accomplish the target of GHG net zero by 2050.
In terms of society, we will continue our measures for promoting diversity. We will ensure further global HR interactions and provide many more opportunities for female employees to make their presence felt. In addition, we will establish a framework and environment where diverse human resources can work together guided by empathy and unity. By doing so, we would like to realize diversity and inclusion in a true sense. We will also promote DX by using IT data to optimize our management resources and maximize our productivity. Additionally, we will make our remote work environment and security system even more robust so that we can continue our operations regardless of the contingency.
In terms of governance, our Board of Directors consists of 12 members, with half of them appointed as Outside Directors, including two female Directors. Furthermore, we have the Nomination and Remuneration Committee, chaired by an Outside Director, to ensure high transparency in terms of the nomination and remuneration of our Corporate Directors and Senior Executive Officers. Our stock has been placed on the Prime Market of the Tokyo Stock Exchange since this April, requiring us to fulfill higher standards of corporate governance, and we are ready to do so.

By addressing these management challenges and risks steadily, we would like to further reinforce our profit framework. We will continue our efforts to survive in this age of uncertainty and realize mid- to long-term growth on a permanent and stable basis. In this regard, we would like to ask for the continued support of our shareholders for the IBIDEN Group.

President & CEO
Takeshi Aoki