Q&A of Financial Results for Third Quarter of the Year Ending March 31, 2016
The following includes questions and answers at the conference for the financial results for Third Quarter of the Year Ending March 31, 2016.
Precision Equipment Business
Q. Can you tell us about the decrease in unit sales forecast of ArF immersion scanners for this fiscal year and how you will secure earnings from semiconductor lithography systems for next fiscal year?
A. Regarding the three-unit decrease in unit sales in our full-year sales forecast for ArF immersion scanners, it would be difficult to sell our originally-forecasted figure during this fiscal year due to the fact that product evaluations by new customers are taking longer than expected. For this fiscal year, semiconductor lithography system unit sales forecast over the full year decreased due to a drop in capital expenditure in the semiconductor industry and the aforementioned situation with product evaluations by new customers. However, for the next fiscal year, we will endeavor to secure earnings by capitalizing on a recovery in the industry's capital expenditure levels to capture unit sales of ArF immersion scanners and ArF and KrF products as well as by boosting sales of refurbished products and after-service.
Q. Can you tell us about your FPD lithography system market forecast for 2016?
A. We stated that it is possible for the size of the FPD lithography system market during CY2016 to exceed our unit forecast for 2015 by approximately 20% for our previous forecast as of November 6. Since then, as investment plans for small and medium-sized panels have gained momentum and demand for large panels has also been solid, our view at this juncture is that it is also possible for the size of that market to exceed the actual number of units present in the market during CY2015 (approximately 80 units) by about 40% to reach approximately 110 units.
We intend to make sure that we capture growing demand for small and medium-sized high-definition panels, which have advantages for us, and will continue to keep an eye on future market trends.
Imaging Products Business
Q. Can you tell us about your future market forecast for digital cameras-interchangeable lens type?
A. While we are currently not at a stage where we can provide a concrete forecast for the digital camera-interchangeable lens type market for next fiscal year, our view is that the market will continue its downwards trend. In the markets for digital SLR camera and interchangeable lens, both of which constitute leading products of ours, the inventory adjustment finished during the second half of 2015, and we predict that the supply-demand gap will be resolved during next fiscal year. Our view is that the rate of negative growth in those markets year on year will halt at a single digit.
Q. Can you tell us about the delay in the release of your "D500" new digital SLR camera?
A. As we have received a level of orders that has surpassed our expectations since announcing the release of the "D500" at the beginning of the year, we have decided to delay the product's release to secure sufficient quantities of the product. We apologize sincerely for the great inconvenience that this delay is causing for customers and other related parties. We are doing our utmost to increase the production of the "D500" so that we may supply it in late April.
Q. Can you tell us about foreign exchange rates and their impacts for the fourth quarter?
A. We have not changed our assumed foreign exchange rate for 4Q to 115 yen /U.S. dollar and 130 yen /Euro.
Currently, we expect every 1 yen change in the Yen/USD exchange rate to impact net sales by 800 million yen, while every 1 yen fluctuation in the Yen/Euro exchange rate is expected to impact net sales by 300 million yen. Similarly, we expect every 1 yen change in both the Yen/USD and the Yen/Euro exchange rate to impact operating income by 100 million yen. We will continue to implement our preexisting measures for mitigating the impact of foreign exchange rate fluctuations, such as procuring by foreign currencies.