Message from the President

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 Electronics Operation, the PKG business as a whole marked increases in both net sales and operating income compared to the previous fiscal year thanks to generally strong demand for items for servers, despite a slowdown in demand for items for PCs after the summer.
In the Ceramics Operation, the DPF business marked a decrease in net sales compared to the previous fiscal year, despite shifting our focus to obtaining orders for products for large commercial vehicles in response to the accelerating shift to EVs in the passenger car market, particularly in the European market. Operating income also decreased from the previous year due to the impact of soaring raw material and energy prices at IBIDEN Hungary, our main plant. The AFP business marked a year-on-year increase in net sales owing to sales expansion efforts in the Chinese market under the stable mass production system of IBIDEN Fine Ceramics [Suzhou] Co., Ltd. However, operating income remained at around the same level as the previous fiscal year due to the impact of soaring raw material costs. The FGM business recorded year-on-year increases in both net sales and operating income due to rising demand mainly for products for semiconductor manufacturing equipment. Consequently, the ceramics business as a whole posted the same level of net sales and lower operating income compared to the previous fiscal year.
In the Other Business Operation, net sales increased year-on-year due to generally strong performance in all businesses backed by the domestic economy's recovery from the impact of the COVID-19 pandemic, but operating income decreased year-on-year due largely to soaring raw material prices.

Future Forecast

In the Electronics Operation, the demand for semiconductors has slowed down due to the current sharp slowdown in demand for PCs and investment restraint by large-scale users of high-performance servers used at data centers, etc. However, from the second half of this fiscal year, demand from large-scale users for high-performance servers for data centers is expected to recover, and therefore demand for high-performance IC package substrates is expected to increase. This is due, in addition to the completion of inventory adjustments in the PC market, to further advancement of DX and the AI field as well as the expansion of applications to include new fields such as autonomous driving. We will strive to increase our market share in high-value-added products, which are among IBIDEN's strengths, through the construction of the Gama Plant and the Ono Plant, which has been subsidized by the Ministry of Economy, Trade and Industry, as planned.
In the Ceramics Operation, the mainstay DPF and AFP businesses will see a continuing trend toward electrification in the passenger car market, but the market for vehicles with internal combustion engines is expected to be extended into the 2030s due to new technologies such as synthetic fuels. In addition, the market for products for medium and heavy commercial vehicles is expected to grow against the backdrop of tighter regulation of gas emissions mainly in China and emerging countries. We will maintain our medium- to long-term growth path by continuing production in optimal locations utilizing our four production bases in Japan, Hungary, Mexico, and China while capturing the growing demand in China and emerging markets and expanding sales of components for electric vehicles. As for the FGM business, we will expand the business by aggressively making capital investments to meet the medium- to long-term growth in demand for semiconductors, including power semiconductors used in electric vehicles.
In the Other Business Operation, we will aim to grow this operation as our Group's third pillar of revenue following electronics and ceramics, along with our stable electric power business. To that end, we will expand our core businesses by leveraging each domestic group company's unique competitive edge, and we will implement "selection and concentration."

Initiatives Aimed at Sustainable Growth

The IBIDEN Group has developed a new five-year medium-term management plan, "Moving on to Our New Stage 115 Plan," starting in FY2023. In the new medium-term management plan, we will pursue five main reinforcement activities while accurately responding to changes in the business environment to realize sustainable and stable growth of not only the electronics business but also the ceramics business and other businesses, thereby aiming to achieve net sales of 620 billion yen and operating income of 125 billion yen in FY2025.
In addition, we will pursue human capital management. Specifically, while promoting the development of self-reliant human personnel and flexible organizational management, we will implement well-being initiatives that seek to provide a physically and mentally healthy and socially satisfying work environment, with the aim of realizing the continuous growth of individual employees and strengthening the competitiveness of the company. Furthermore, as part of our ESG management, in addition to promoting carbon neutrality initiatives, we will continue striving to respond to increasingly sophisticated corporate governance requirements.

By steadily addressing these management challenges and risks, the IBIDEN Group will further solidify its earnings base and survive in this age of uncertainty. We will continue our concerted efforts not only to achieve the goals of the new medium-term management plan but also to realize long-term and stable growth.
In this regard, we would like to ask for the continued support of our shareholders for the IBIDEN Group.

President & CEO
Takeshi Aoki