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OUTLINE OF THE JFE GROUP
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| Kawasaki
Microelectronics (Kawasaki Micro) is a vertically
integrated specialist in the application-specific
integrated circuits (ASICs) field. Its operations
cover from designing to shipping of ASICs.
While actively utilizing outsourcing in the
stage from the manufacture of wafers to testing,
we strive to ensure the highest quality throughout
the entire production processes. |
 THE
FIRST MEDIUM-TERM BUSINESS PLAN
| MAIN MEASURES |
1.
|
Secure high profitability
by strengthening competitiveness and promoting
the development of next-generation ASICs |
 |
| 2. |
Public offering
of shares at the earliest possible date |
|
 |
|
| CONSOLIDATED
FINANCIAL TARGETS |
 |
| |
Billions
of yen |
|
| |
Actual
|
Actual |
Target* |
Plan's
final target |
|
(Years ended/ending
March 31) |
2003 |
2004 |
2005 |
2006 |
|
| Ordinary
income |
1.0 |
4.5 |
4.5 |
3.0 |
| Return
on sales (ROS) |
2.9% |
11.1% |
9.6% |
5.8% |
|
|
|
|
|
|
| *
Estimated figures for the year ending March
2005 are those declared as of August 30, 2004. |
|
REVIEW
OF EARNINGS FOR THE YEAR ENDED MARCH 2004
MEETING THE GOALS OF THE PLAN AHEAD OF
SCHEDULE
In the fiscal year ended March 2004, sales
of ASICs for digital cameras and LCD timing
controllers were robust, helping the company's
consolidated net sales to rise 18.6% year
on year to ¥40.4 billion, consolidated operating
income to grow by 4.1 times to ¥4.9 billion,
and consolidated ordinary income to expand
by 4.5 times to ¥4.5 billion. Ordinary income
has already far outpaced the target of ¥3.0
billion for the year ending March 2006 in
the First Medium-Term Business Plan.
FUNDAMENTAL
STRATEGY
PROMOTING OUTSOURCING FOR HIGHER PROFITABILITY
Kawasaki Micro is an
active outsourcer. Through its strategic alliance
with Taiwan foundry UMC Group, Kawasaki Micro
outsources the manufacture of design rules
measuring less than 0.18 µm which it
developed jointly with UMC. In addition, it
outsources the manufacture of 0.13 µm
products to Taiwan's TSMC. As a result of
the growing trend towards deep sub-micron
processes in the semiconductor industry, an
enormous amount of investment is now required
for manufacturing facilities. Outsourcing
enables us to reduce our capital investment
risk to a minimum, freeing up our management
resources for use in investment in intellectual
property (IP)* and new technologies, with
the aim of maximizing profitability. Currently,
Utsunomiya Works is operating at full capacity,
and sales of products manufactured by UMC
and our other outsourcing suppliers exceed
those of products manufactured in Utsunomiya.
Ahead of the competition, we became
involved in outsourcing the manufacture of
ASICs, a move which had long been regarded
as difficult. As a result, we have built up
a high level of expertise in controlling the
quality of our outsourcing suppliers, and
this is one of our strengths.
| *
|
Intellectual
Property (IP): Large-scale integration (LSI)
design assets, or the functional circuits
that make up the LSI, as well as the software
that operates on it. In system LSIs, which
are a large-scale integration of circuits,
a great deal of time is required to design
all the circuits. The use of commercially
available, high-quality IP in the form of
development support tools can help to reduce
planning time. |
OUR
SPECIALTIES
LARGE MARKET SHARES IN THE FIELDS OF DIGITAL
CAMERAS, LCD MONITORS
Our business started with the manufacture
of image-processing ASICs and has since expanded
to cover other areas. Nevertheless, imaging
and processing remain our particular fields
of specialty. About 20% of the world's digital
cameras use our image-processing engines,
and we have a global market share of about
60% for chips that control the timing of data
transfer for the LCD monitors of PCs. In addition,
our ASICs for office automation equipment
and networks are highly regarded throughout
the world.
FUTURE
BUSINESS POLICY
As one of the world's leading ASIC manufacturers,
we aim to increase our sales of ASICs for
digital consumer electronics in Japan and
throughout Asia, develop new markets in Europe
and the Middle East, further solidify our
high-profitability business structure and
make public offering of our shares in the
near future.
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