Nikon 2004 Annual Report Download - page 7

Toward฀a฀V-Shaped฀Recovery
A฀primary฀task฀of฀the฀Nikon฀Group฀in฀year฀ahead฀
is฀to฀engineer฀a฀V-shaped฀recovery฀on฀the฀back฀
of฀revitalization฀in฀the฀semiconductor฀market฀and฀
an฀improving฀business฀environment.฀We฀plan฀to฀
adopt฀an฀aggressive฀stance฀to฀achieve฀this฀aim.
Reports฀by฀the฀presidents฀of฀each฀in-house฀
company฀within฀the฀Nikon฀Group฀elsewhere฀in฀this฀
report฀provide฀more฀details฀of฀operational฀strategy฀
in฀each฀area.฀Here,฀I฀want฀to฀take฀a฀general฀look฀
at฀the฀direction฀of฀each฀business฀as฀well฀as฀of฀the฀
Nikon฀Group฀as฀a฀whole.฀
The฀key฀to฀engineering฀a฀V-shaped฀recovery฀
is฀to฀restore฀profits฀in฀Precision฀Equipment.฀An฀
upturn฀in฀the฀semiconductor฀market฀coupled฀with฀
growing฀demand฀for฀IC฀steppers฀and฀revitalized฀
investment฀in฀large-size฀panels฀led฀to฀a฀strong฀per-
formance฀in฀our฀LCD฀stepper฀business.฀We฀have฀
also฀achieved฀dramatic฀reductions฀in฀production฀
lead฀times.฀These฀positive฀factors฀point฀to฀brighter฀
prospects฀for฀the฀year฀ending฀March฀2005.฀We฀
continue฀to฀invest฀in฀the฀development฀of฀next-
generation฀machines฀to฀ensure฀that฀we฀can฀secure฀
a฀competitive฀edge฀in฀the฀latest฀lithography฀tech-
nology.฀At฀the฀same฀time,฀we฀are฀pursuing฀further฀
structural฀reforms฀to฀generate฀higher฀profitability.
Imaging฀Products฀faces฀a฀favorable฀business฀
environment฀as฀a฀sharp฀increase฀in฀demand฀for฀
SLR-type฀digital฀cameras฀in฀accord฀with฀ongoing฀
expansion฀of฀the฀market฀for฀digital฀cameras฀coun-
tered฀concerns฀over฀price฀competition฀in฀compact฀
digital฀cameras.฀We฀aim฀to฀enhance฀our฀dominant฀
position฀in฀SLR-type฀digital฀cameras.฀In฀the฀com-
pact฀digital฀camera฀segment,฀where฀price-based฀
competition฀is฀especially฀intense,฀we฀plan฀to฀boost฀
profitability฀by฀enhancing฀our฀production฀system฀
with฀greater฀in-house฀production฀of฀key฀compo-
competitive฀edge฀and฀profitability฀in฀core฀business฀
areas.฀We฀will฀also฀aggressively฀develop฀new฀busi-
ness฀areas฀to฀get฀our฀business฀back฀on฀track฀and฀
raise฀the฀competitive฀strength฀of฀the฀entire฀Nikon฀
Group.
Advanced฀Technology฀Remains฀the฀Key฀to฀
Growth
Nikon฀has฀grown฀over฀the฀years฀by฀developing฀
a฀number฀of฀advanced฀technologies฀in฀line฀with฀
areas฀that฀the฀Japanese฀government฀has฀desig-
nated฀as฀strategic฀industrial฀sectors.฀At฀Nikon,฀
the฀creation฀of฀cutting-edge฀technologies฀lies฀
deeply฀entrenched฀in฀the฀company’s฀DNA.฀Of฀
the฀four฀strategic฀industrial฀sectors฀currently฀
promoted฀by฀the฀government฀–฀information฀and฀
communication฀technologies,฀life฀sciences,฀nano-
technology฀and฀the฀environmental฀sciences฀–฀we฀
are฀closely฀involved฀in฀three฀domains฀where฀we฀
possess฀world-class฀resources฀in฀the฀Nikon฀Group.฀
Cultivating฀these฀resources฀and฀assertively฀striv-
ing฀to฀challenge฀new฀areas฀will฀help฀us฀establish฀
highly฀advanced฀technologies฀inside฀the฀Nikon฀
Group฀that฀are฀very฀difficult฀to฀replicate.
In฀the฀years฀to฀come,฀we฀seek฀to฀expand฀our฀
business฀in฀various฀fields฀by฀focusing฀on฀how฀to฀
effectively฀utilize฀these฀refined฀technologies฀on฀a฀
commercial฀basis,฀including฀leveraging฀alliances฀
with฀other฀companies.฀
Another฀aspect฀of฀today’s฀increasingly฀border-
less฀world฀is฀that฀we฀need฀to฀send฀out฀our฀own฀
personnels฀to฀countries฀and฀regions฀that฀conduct฀
highly฀sophisticated฀technological฀research.฀This฀
way,฀we฀can฀better฀understand฀where฀the฀market฀
is฀headed,฀allowing฀us฀to฀predict฀future฀needs฀
and฀discern฀areas฀that฀possess฀the฀most฀growth฀
potential.฀In฀our฀instruments฀business,฀we฀have฀
nents฀and฀higher฀China-based฀production฀capacity฀
to฀reduce฀costs.
In฀Instruments,฀since฀the฀life฀sciences฀are฀the฀
field฀with฀the฀greatest฀growth฀potential,฀we฀are฀
investing฀primarily฀in฀biological฀microscopes฀to฀
develop฀our฀strong฀position฀in฀this฀sector.
Several฀other฀businesses฀also฀provide฀us฀with฀
good฀growth฀prospects฀in฀the฀coming฀year.฀Our฀
new฀CMP฀(Chemical฀Mechanical฀Polishing)฀systems฀
business฀is฀now฀starting฀to฀produce฀results.฀We฀
also฀expect฀to฀start฀making฀profits฀from฀surveying฀
instruments฀after฀the฀successful฀establishment฀and฀
start-up฀of฀a฀joint฀venture,฀Nikon-Trimble฀Co.,฀Ltd.,฀
with฀U.S.-based฀sector฀leader฀Trimble฀Navigation฀
Ltd.฀Elsewhere,฀we฀have฀new฀business฀ventures฀
in฀glass฀materials฀and฀optics฀engines,฀which฀have฀
application฀in฀high฀quality฀projection฀TVs.฀
Hence,฀my฀point฀is฀that฀we฀will฀soon฀start฀to฀
see฀the฀results฀of฀various฀reform฀and฀investment฀
programs฀undertaken฀over฀the฀past฀few฀years.฀
Combined฀with฀an฀upturn฀in฀the฀business฀environ-
ment,฀the฀prospects฀are฀now฀better฀than฀they฀
have฀been฀for฀several฀years.฀
Results฀expected฀for฀the฀year฀ending฀March฀
2005฀indicate฀that฀we฀will฀achieve฀a฀V-shaped฀
recovery.฀Besides฀anticipated฀record฀sales,฀we฀plan฀
to฀secure฀a฀high฀level฀of฀operating฀income฀owing฀
to฀strong฀contributions฀from฀Imaging฀Products฀
and฀Precision฀Equipment,฀which฀will฀mark฀a฀return฀
to฀profitability.฀
I฀am฀confident฀that฀this฀is฀the฀turning฀point฀
from฀the฀difficulties฀we฀have฀faced฀over฀the฀past฀
few฀years฀and฀we฀can฀now฀look฀forward฀to฀new฀
growth.฀We฀intend฀to฀establish฀a฀top฀global฀posi-
tion฀by฀making฀the฀most฀of฀opportunities฀that฀
lie฀before฀us.฀We฀will฀launch฀highly฀competitive฀
products฀and฀revamp฀business฀processes฀to฀boost฀ 5