Canon 2005 Annual Report Download - page 51

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RESEARCH AND DEVELOPMENT, PATENTS AND
LICENSES
Year 2005 marks the final year of Phase II of the Excellent
Global Corporation Plan, which started in 2001. The plan aims
to guide Canon to the No.1 position worldwide in all core busi-
ness areas and to build on its R&D capabilities to continually
create new businesses. While working to bring Phase II to a
successful conclusion, Canon is also making thorough prepara-
tions to pursue sound growth, its new target for Phase III,
which begins in 2006.
With respect to its R&D goals, Canon formulated a vision,
which is to create a borderless environment between people
and devices where images and information are exchanged in a
way that lets us live and work the way we want, virtually any-
time, anywhere. Toward the realization of its vision, Canon has
accelerated the development and commercialization of display
devices. In particular, Canon has developed SED devices with
the aim of the mass production at SED Inc., established in
2004. In addition, Canon has strengthened its R&D of such
items as projectors and organic light-emitting diodes
(“OLEDs”). Furthermore, Canon continues to promote activities
giving rise to its next-generation businesses pursuing its search
for new business domains, as well as to reinforce its R&D
infrastructure.
In regard to its R&D efficiencies, Canon has utilized of
3D-CAD systems, in order to accelerate product development
and curtail costs. Moreover, Canon enhanced and evolved its
simulation, measurement and analysis technologies, introduc-
ing a high-performance cluster computer and other leading-
edge facilities in 2005. As such, Canon has succeeded in
greatly reducing the need for prototypes, dramatically lowering
costs and shortening development lead times.
Canon has R&D centers worldwide, including the USA, that
closely collaborate in their R&D activities. Some regional R&D
centers conduct basic research into technology, and others
apply their expertise to develop new products and businesses.
The Company’s R&D activities are conducted in the follow-
ing four organizations:
• Core Technology Development Headquarters (where
component engineering and base technology R&D, such
as optics technology, nanotechnology and production
engineering, is conducted)
• Leading-Edge Technology Development Headquarters
(where most advanced technology R&D, aiming to create
new technological capabilities, is conducted)
• Platform Technology Development Headquarters (where
platform technology R&D, such as system Large Scale
Integration (“LSI”) chips, network technology and visual
information technology, is conducted)
• Device Technology Development Headquarters (where
key device R&D, such as for semiconductor devices, is
conducted)
Canon had R&D expenditures of ¥286,476 million
(U.S.$2,428 million) in fiscal 2005, ¥275,300 million in fiscal
2004 and ¥259,140 million in fiscal 2003. The ratios of R&D
expenditure to total net sales for fiscal 2005, 2004 and 2003
were 7.6%, 7.9% and 8.1%, respectively.
Canon believes that new products protected by seminal
patents will not easily allow competitors to catch up with, and
have advantages in establishing standards in the market and
the industry. The United States Patent and Trademark Office
announced that Canon obtained the second-greatest number
of private sector patents in 2005. This achievement marks
Canon's fourteenth consecutive year as one of the top three
patent-receiving private-sector organizations.
RECENT DEVELOPMENTS
Canon acquired all of the issued and outstanding shares of
ANELVA Corporation, which possesses advanced vacuum tech-
nology, and made it into a subsidiary as of September 30,
2005. ANELVA Corporation’s corporate name was changed to
Canon ANELVA Corporation as of October 1, 2005. By making
Canon ANELVA Corporation a subsidiary of the Company,
Canon aims to promote the in-house production of manufac-
turing equipment which Canon believes is indispensable to dif-
ferentiate Canon products from products of its competitors in
various fields, including Canon’s new display business.
Canon acquired the shares of NEC Machinery Corporation
(listed on the Second Section of the Osaka Securities
Exchange), which possesses advanced automation technolo-
gies, through a tender offer and made it into a subsidiary as of
October 19, 2005. NEC Machinery Corporation’s corporate
name was changed to Canon Machinery Inc. as of December
17, 2005. By making Canon Machinery Inc. a subsidiary of the
Company, Canon aims to make further advance in its produc-
tion reform activities, including the automation of production
processes for Canon products.
300,000
0
R&D Expenditure
(Millions of yen)
01 02 03 04 05
233,669
259,140
275,300 286,476
218,616