The following includes questions and answers at the conference for the financial results for the Third Quarter of the Year Ending March 31, 2009.

A. Manufacturers have further cut back on semiconductor equipment investment. Therefore we have revised and cut back on our current forecast for IC steppers and scanners sales. We believe we will meet our fourth quarter sales forecast as long as there are no delays in incoming installment. While it remains extremely uncertain when the market will recover, investment in cutting-edge equipment continues, and our view is that the market should start to recover in the latter half of the year ending March 2010.

A. Our judgment is that the significant fall in demand for semiconductors and semiconductor manufacturing equipment will continue for some time. As a result, we reviewed the construction schedules for the facilities of Kumagaya Plant and Tochigi Nikon Precision Co., Ltd. and decided to postpone the start of construction at Tochigi Nikon Precision until we find the upturn in sight for the market. As a result of this alternation, the original plan for the capital expenditure of about 35 billion yen over three years has been reduced to about 20 billion yen.

A. Market conditions are expected to deteriorate further in the fourth quarter of the year ending March 2009 resulting in a decrease in unit sales that will extend to high-end Digital SLR cameras. Moreover, we anticipate that ongoing market competition and a reduction in inventory will bring down unit prices and profits.
Therefore, we anticipate that fourth quarter sales will be 20 to 30% less in comparison to the same period last year and we plan a 50% cutback in production. As a result, we anticipate sales to drop by approximately half in comparison to the same period last year and to record an operating loss.
The outlook is that consumer uncertainty and harsh market conditions will continue. Nonetheless, we aim to return to profitability next fiscal year by intensifying our efforts to provide competitive, high-valued added products, and to adjust inventories, cut costs, and reduce expenses.

A. To deal with the current appreciation of the yen, we have been making every effort to cut costs in the design phase of production. In addition to enhancing productivity and increasing the ratio of local procurement by overseas affiliates, we are considering the merits of further shifting production overseas.

A. Given the further deterioration of business results this period, we will implement the following measures to keep in check the decline in profits and we will prepare for the stage of market recovery.