Nikon 2003 Annual Report Download - page 14

instruments
Operating฀Results
Sales฀of฀biological฀microscopes฀recorded฀steady฀growth,฀particularly฀research฀
models.฀Although฀the฀ongoing฀downturn฀in฀the฀semiconductor฀market฀had฀
an฀impact฀on฀sales฀of฀industrial฀microscopes,฀measuring฀instruments฀and฀
semiconductor฀inspection฀equipment,฀sales฀of฀CCD฀Test฀System฀Light฀Source฀
supported฀overall฀sales฀in฀the฀industrial฀sector.฀Total฀sales฀rose฀6.9%฀year-
on-year฀to฀¥49,872฀million.฀Successful฀measures฀to฀boost฀protability฀helped฀
operating฀income฀climb฀to฀¥1,842฀million,฀an฀increase฀of฀293.6%฀relative฀to฀
the฀previous฀year.
Business฀Strategy
Nikon’s฀instruments฀business฀encompasses฀biological฀microscopes,฀industrial฀
microscopes,฀measuring฀instruments,฀semiconductor฀inspection฀equipment,฀
and฀other฀products.฀Since฀the฀major฀customers฀are฀hospitals,฀universities฀and฀
research฀institutions,฀the฀biological฀microscopes฀business฀tends฀to฀be฀rela-
tively฀immune฀to฀the฀economic฀cycle,฀and฀prots฀are฀relatively฀stable.฀While฀
continuing฀to฀focus฀on฀this฀sector,฀we฀will฀work฀hard฀to฀improve฀protability฀
with฀other฀product฀groups฀to฀generate฀higher฀prots฀for฀the฀whole฀Instru-
ments฀Business.
The฀most฀important฀issue฀that฀we฀face฀is฀the฀implementation฀of฀com-
prehensive฀structural฀reforms฀directed฀at฀boosting฀protability.฀The฀nancial฀
results฀for฀the฀year฀ended฀March฀2003฀conrm฀that฀the฀effects฀of฀struc-
tural฀reforms฀are฀gradually฀starting฀to฀emerge.฀We฀are฀continuing฀with฀our฀
program฀of฀reform฀to฀further฀reduce฀costs฀and฀boost฀efciency,฀both฀on฀the฀
development฀and฀production฀side฀and฀on฀the฀sales฀side.
Our฀development฀and฀production฀reforms฀have฀centered฀on฀the฀construction฀of฀inte-
grated฀supply฀chain฀management฀practices฀to฀integrate฀our฀production,฀including฀outside฀
consignment฀manufacturers,฀sales฀and฀distribution฀functions.฀The฀introduction฀of฀SCM฀
is฀helping฀to฀raise฀the฀efciency฀of฀production฀processes.฀It฀is฀also฀playing฀an฀important฀
role฀as฀we฀strive฀to฀achieve฀drastic฀cuts฀in฀procurement฀and฀manufacturing฀lead฀times฀and฀
improve฀inventory฀management.฀Our฀goal฀is฀to฀drastically฀halve฀global฀inventory฀levels.฀
Separately,฀we฀are฀raising฀microscope฀production฀at฀our฀subsidiary฀in฀China฀(Nanjing฀
Nikon฀Jiangnan฀Optical฀Instrument฀Co.,฀Ltd.)฀to฀reduce฀costs฀further.
On฀the฀sales฀side,฀we฀are฀planning฀to฀revise฀the฀distributor฀system฀that฀we฀have฀been฀
introducing฀to฀boost฀sales฀of฀microscopes฀in฀Japan,฀creating฀a฀range฀of฀incentives฀de-
signed฀to฀increase฀distributor฀focus฀on฀Nikon฀products.฀At฀the฀same฀time,฀we฀are฀expand-
ing฀the฀marketing฀capabilities฀of฀our฀sales฀branch฀to฀facilitate฀closer฀contact฀with฀custom-
ers.฀In฀turn,฀we฀expect฀this฀to฀improve฀the฀process฀of฀information฀feedback฀to฀product฀
development฀through฀better฀assessment฀of฀customer฀requirements.
The฀year฀witnessed฀various฀overseas฀developments.฀In฀July฀2002,฀our฀U.S.฀subsidiary,฀
Nikon฀Instruments฀Inc.,฀established฀a฀new฀sales฀branch฀in฀Arizona฀for฀semiconductor฀
inspection฀equipment.฀In฀Europe,฀the฀instruments฀division฀of฀Nikon฀Europe฀B.V.฀became฀
an฀independent฀operation฀in฀April฀2002฀with฀the฀creation฀of฀Nikon฀Instruments฀Europe฀
B.V.฀Moreover,฀in฀China,฀where฀we฀anticipate฀strong฀market฀growth,฀we฀will฀set฀up฀a฀local฀
marketing฀and฀after-sales฀service฀subsidiary,฀Nikon฀Instruments฀(Shanghai)฀Co.,฀Ltd.,฀and฀
start฀operations฀in฀August฀2003.
The฀life฀sciences฀are฀projected฀to฀be฀the฀source฀of฀much฀of฀the฀company’s฀future฀
growth.฀In฀Japan,฀levels฀of฀both฀state฀and฀private-sector฀capital฀investment฀continue฀to฀
rise฀steadily฀in฀this฀eld.฀We฀expect฀demand฀to฀rise฀for฀advanced฀microscope฀systems,฀
measuring฀equipment฀and฀analyzers฀that฀will฀be฀needed฀to฀push฀this฀scientic฀envelope.฀
We฀are฀tailoring฀R&D฀programs฀to฀develop฀products฀that฀will฀meet฀this฀demand฀based฀on฀
the฀latest฀Nikon฀technological฀advances.฀One฀area฀that฀is฀already฀beneting฀in฀sales฀terms฀
is฀that฀of฀microscopes฀with฀evanescent฀wave฀illumination,฀which฀can฀play฀an฀important฀
part฀in฀several฀areas฀of฀the฀latest฀life฀science฀research.฀We฀plan฀to฀expand฀sales฀of฀these฀
products฀further.
Another฀product฀area฀with฀substantial฀market฀growth฀potential฀is฀one฀that฀marries฀
optical฀microscopes฀with฀two฀other฀Nikon฀strengths—digital฀cameras฀and฀digital฀image฀
processing฀technology.฀In฀June฀2003,฀we฀launched฀the฀COOLSCOPE,฀a฀digital฀microscope฀
that฀replaces฀the฀traditional฀eyepiece฀lens฀with฀digital฀images฀displayed฀on฀a฀monitor.฀We฀
plan฀to฀focus฀on฀sales฀efforts฀on฀this฀product,฀which฀boasts฀numerous฀features฀designed฀
to฀make฀operation฀user-friendly.
Semiconductor฀inspection฀equipment฀is฀another฀area฀with฀growth฀potential.฀Increas-
ingly฀diverse฀customer฀requirements,฀greater฀expectations฀of฀automated฀functionality฀and฀
various฀demands฀for฀observation฀and฀inspection฀are฀driving฀market฀demand฀for฀advanced฀
measurement฀capabilities.฀We฀plan฀to฀expand฀sales฀by฀developing฀new฀products฀that฀play฀
to฀our฀technical฀strengths,฀focusing฀particularly฀on฀the฀trend฀toward฀300mm฀I C฀wafers฀
and฀meeting฀the฀latest฀requirement฀for฀a฀line-width฀of฀90nm.
Topics/Achievements
Nikon฀has฀developed฀an฀Evanescent฀Wave฀Imag-
ing฀System฀that฀enables฀observations฀of฀single฀
moleculars฀in฀living฀cells฀of฀proteins฀or฀genes.฀
This฀system฀promises฀to฀play฀an฀important฀
role฀at฀the฀cutting฀edge฀of฀research฀in฀the฀life฀
sciences.
Fibroblasts฀from฀mouse฀skin฀displayed฀with฀
pseudo-color฀through฀imaging฀that฀Ovelay฀of฀
the฀images฀with฀evanescence฀wave฀illumination฀
and฀with฀epi-uorescent฀illumination.
Image฀courtesy฀of฀Dr.฀Gregg.฀G.฀Gundersen,฀
Columbia฀University
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