Presentations & Events


- ended March, 2006

Strategies for Growth

- August 9, 2005

Q & A Session

Q1. How confident are you that you can achieve the goal for FY2007 that you explained today?
Unfortunately, we have not achieved mid-term targets that we have disclosed since FY2000, because of unexpected price erosion, market fluctuations, and so on. In this plan, we incorporated a certain amount of risk, so the goals should be our minimum commitment.
Honestly speaking, we have the internal targets that are much higher than the numbers disclosed. I believe we can achieve the disclosed goal if we work toward the internal targets without compromise.
Q2. How important to you are your shareholders?
I want to increase opportunities to communicate with stakeholders. Stakeholders include our shareholders, customers, suppliers, employees, and so on, all of whom are important. But, needless to say, shareholders are seated in the important position among stakeholders.
Q3. How do you prioritize your time allocation?
I planned to visit 150 of our customers and I have already visited 110 since June, when I was appointed president. I have also visited 14 of our factories and two of our R&D centers.
In addition to domestic customers and sites, I want to find time to visiting our overseas customers and operations, and to take part in IR activities.
Q4. Please explain the mid-term business plan in more detail, by segment.
Semiconductor as well as AV and PC business is subject to the impact of market price fluctuations. The goal for FY2007 we disclosed today is our commitment assuming severe competition. The FY2007 overall operating profit target for Digital Products is 2%, but the target differs for each business unit. For example, the AV business is one of the severest businesses in terms of competition. Therefore we do not expect big profit in that business in FY2007.
Q5. What kind of benefit can Toshiba get from the alliance with Microsoft?
We cannot go into detail on the alliance, as we have a non-disclosure agreement with Microsoft. However, we do not expect reduction in license fee payments to Microsoft. We will strengthen R&D activities with Microsoft in AV and PC products, and cooperate in marketing activities.
Q6. How you can utilize your experiences in the PC business in the other businesses? How are other businesses different from PC's?
The way of responding to the business environment in accordance with changes in the market, products cycle and the products mix looks similar for each business. It is the same thing even in the Social Infrastructure Business: the products line-up is very important and prices are eroding. Strengthening the procurement to cope with the price reduction, shortening the development term with speed and establishing cost control systems with IT technology are common challenges for all businesses. In that sense I believe I can utilize my experiences for all businesses.
Each business has its own uniqueness as a matter of course. I am studying the thermal power business and nuclear power business but I could not catch up with the professionals in these businesses. However I believe I could manage with my overall management knowledge and experiences and also the universal way of thinking.
Q7. In your “i cube” innovation strategy (process innovation in R&D, production and marketing), which area do you expect to have the biggest impact on the bottom line?
We are now preparing to initiate innovative schemes in each of those areas. I hope we can carry out concrete projects in the second half of this fiscal year. Of the three areas, I think we should put special emphasis on R&D.
Q8. Please give us your forecast for capital expenditure on the semiconductor business in the three years up to FY2007.
We plan to direct almost half of our total capital expenditure of 1,100 billion yen into the semiconductor business. This may be revised up in response to the market conditions.
Q9. How will you make the System LSI profitable business?
I think our System LSI business could move into the black in this fiscal year and stay profitable in future.
Q10. What is the impact of yuan exchange rate appreciation on Toshiba's overall business and PC business?
Current range of yuan exchange rate appreciation would give us a positive impact as a whole. The impact on PCs will be very limited, not material.
Q11. Please tell us a target price, inch size, and commercialization target for SED?
We plan to start production this August with a pilot line at Canon's Hiratsuka Operations. Commercialization will not start very soon, as it will take some time to accumulate the required level of SED panel inventory, due to the limited production capacity.
We will start mass production of 50-inch class SED panels in CY2007, on the strength of a 180 billion yen investment. We anticipate that improved yield rates and sales volume growth will absorb the depreciation burden. We want to promote SED TVs with a material cost merit of cost competitiveness against LCDs and plasma TVs.
Q12. What do you think of the cost competitiveness of HD DVD against Blu Ray.
It is clear that the HD DVD has a cost competitive edge against Blu Ray in terms of media coat comparison. We have achieved almost the same cost of production for HD DVD media as for current conventional DVD media.
We will commercialize an HD DVD player by the end of this year and an HD DVD recorder next spring. We will also introduce a slim type HD DVD and incorporate it into our notebook PCs by next spring.

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