Nikon 2002 Annual Report Download - page 8

06
Precision Equipment
Severe operating conditions prevailed in the fis-
cal year ended March 31, 2002. The slump in
the semiconductor market, which spread from
Taiwan to Japan and then to the United States,
resulted in a steep decline in sales at Precision
Equipment Company as customers postponed
equipment deliveries and canceled orders. Sales
fell 15.3% year on year to ¥199.0 billion, while
operating income plunged 91.8% to ¥3.6 billion.
In IC steppers, Precision Equipment Company
undertook several measures to rationalize and
strengthen its development and manufacturing
operations. These included the merger of the
Design Department into the Kumagaya Plant and
the commencement of the production of calcium
fluoride crystal for steppers at the Sagamihara
Plant. Aggressive marketing activities helped to
increase sales of the latest excimer steppers,
but failed to compensate fully for drastic cuts in
capital spending by chip manufacturers. Sales of
IC steppers fell steeply as a result. In LCD step-
pers, Precision Equipment Company focused mar-
keting efforts on the FX-701M stepper for medi-
um-sized LCD panel production and the FX-21S
stepper for large LCD panels. As a result, we
achieved a high level of sales, almost on a par
with the previous year.
The outlook for semiconductor-related busi-
ness remains uncertain in the year to March
2003. The foremost strategic question that
Precision Equipment Company must address is
how to construct its business so as to lessen
susceptibility to fluctuations in the silicon cycle
and is aiming to maintain profits even at the bot-
tom of the cycle. The company is taking a variety
of measures to improve its resilience, such as
squeezing the fixed cost base, including improve-
ments in personnel flow and reducing variable
costs; reducing production lead times; and revis-
ing contractual trade practices.
As demonstrated by the development of the
NSR-S306C stepper, which boasts the world’s
highest resolution, Nikon continues to push the
envelope of stepper technology based on its
technical strengths in projection lenses. At the
same time, the company recognizes that it needs
to become increasingly proactive toward cus-
tomers with regard to entire stepper system pro-
posals. In other words, solution capabilities hold
the key to sustained sales growth.
Work continues apace on the development of
next-generation steppers. The company recog-
nizes three principal contenders for next-genera-
tion lithography— electron beam projection
lithography (EPL), F2laser lithography, and
extreme ultraviolet lithography (EUVL). The com-
pany is continuing development work in each of
these areas so it can respond to demand from
all quarters. Regarding EPL, the company has
already secured an order for a model for R&D
from Semiconductor Leading Edge Technologies,
Ltd. (Selete), a firm engaged in R&D into related
devices. Delivery is scheduled for mid-2003.
Leading chip manufacturers and other equipment
manufacturers, together with Nikon, have estab-
lished a technical R&D forum for the develop-
ment of EUVL system. Such moves to develop
commercial next-generation lithographic technolo-
gy will help to ensure Nikon retains its position
as the world’s leading supplier of steppers.
Teruo Shimamura
President, Member of the Board and Chief Operating Officer, President of Precision Equipment Company
Nikon’s strength in the stepper business derives from confidence in the functional excellence of its projection lens
technology. While pushing this technical envelope, Nikon continues to take up the challenge of developing a broad
range of next-generation lithography technologies. Our mission is to maintain its leading market share.