Supply, Demand and Price Fluctuations in the LCD and Touch-Panel Markets

「Demand for optical films increased due to the earlier-than-planned production of high-end notebook PCs and tablets. Meanwhile, revenue declined because the company advanced its strategic withdrawal from optical films for LCD smartphones and reduced prices through material rationalization for process protective films.」

「Revenue in Information Functional Materials grew compared with the previous interim consolidated period. Demand for optical films and transparent conductive films increased substantially as tablet production remained strong. In addition, demand for optical films, transparent adhesive sheets, process protective films and other peripheral components increased alongside higher production of high-end smartphones by Chinese manufacturers and the trend toward larger automotive displays.」

「Meanwhile, demand for optical films for high-end notebook PCs and tablets and products for data centers declined due to deteriorating market conditions.」

「Meanwhile, demand for products for data centers and optical films for high-end notebook PCs and tablets declined due to deteriorating market conditions.」

「Meanwhile, demand declined for products for data centers and products used in the production of semiconductors and electronic devices due to deteriorating market conditions.」

「Demand for optical films for TVs and high-end notebook PCs declined due to deteriorating market conditions. Demand for CIS (Circuit Integrated Suspension) also declined as the data-center HDD market underwent an adjustment.」

「In the third quarter of the current consolidated fiscal period, a pronounced decline in stay-at-home demand emerged for electronics products. Demand for semiconductor and data-center products, which had performed well, declined as customers moved to optimize inventory levels. Meanwhile, demand grew for products for high-end smartphones and notebook PCs, which are priority areas for the Group.」

「Revenue in Information Functional Materials grew compared with the previous second-quarter cumulative consolidated period. Demand for optical films for high-end notebook PCs increased. Production at the Group's sites was constrained in the first quarter of the fiscal year due to lockdowns in Chinese cities associated with the spread of COVID-19, but production and shipments recovered rapidly through the second quarter after the lockdowns were lifted.」

「Production of optical films for smartphones, notebook PCs and tablets was constrained at the Group's sites in China due to lockdowns associated with the spread of COVID-19.」

「Revenue in Information Functional Materials fell short of the previous third-quarter cumulative consolidated period. Demand for TV products, optical films for LCD displays used in smartphones and ITO films declined. Meanwhile, demand for optical films for notebook PCs and tablets and for OLED displays used in smartphones increased.」

「Revenue in Information Functional Materials fell short of the previous third-quarter cumulative consolidated period. Demand for TV products, optical films for LCD displays used in smartphones and ITO films declined. Meanwhile, demand for optical films for notebook PCs and tablets and for OLED displays used in smartphones increased.」

「In the Group's major markets, demand for optical films for notebook PCs and tablets remained firm, while demand for OLED optical films, assembly components and high-precision substrates for smartphones grew.」

「Demand for optical films for notebook PCs and tablets, supported by the expansion of telework and other factors, remained firm. For smartphones, adoption of optical films for OLED displays expanded.」

「Smartphones entered their full-scale production season, but production varied among smartphone manufacturers due to the impact of COVID-19, and overall demand for optical films declined.」

「The smartphone market showed little growth in production volumes, partly due to US-China trade tensions and the limited number of high-end new-product launches. As a result, demand for optical films remained sluggish. High-capacity hard disk drives (HDDs) used in data centers entered an inventory adjustment phase, affecting the performance of printed circuits.」

「The impairment loss related to tangible fixed assets, including buildings and structures and machinery and equipment, and intangible assets in certain cash-generating units in East Asia within the Information Functional Materials business of the Optoelectronics business segment. An impairment loss was recognized because the recoverable amount fell below the carrying amount due to lower earnings prospects and other factors.」

「Information Functional Materials was affected by the smartphone market entering maturity, with no growth in production volumes, but captured customer growth areas in smartphone applications and worked to improve production efficiency. Demand for large-screen TV applications was sluggish due to the relocation of customers' production bases and the resulting production adjustments. In printed circuits, demand for HDDs for data-center applications was on a recovery trend, while demand for personal-computer applications declined and affected performance.」

「The smartphone market showed little growth in production volumes, partly due to US-China trade tensions and the limited number of high-end new-product launches. As a result, demand for optical films remained sluggish. High-capacity hard disk drives (HDDs) used in data centers entered an inventory adjustment phase, affecting the performance of printed circuits.」

「Meanwhile, demand for optical films used in smartphones did not recover to the previous fiscal year's level due to a slowdown in market growth and other factors. The benefits of rationalization were also limited, resulting in weak performance in Information Functional Materials. Process materials performed poorly as demand for semiconductor manufacturing applications entered an adjustment phase.」

「Demand for optical films used in smartphones is usually strong from October to December, but this fiscal year demand did not increase to the expected level, affecting Information Functional Materials and resulting in weak performance. Printed circuits remained firm, driven by high-capacity hard disk drives (HDDs) for data centers. Process materials performed poorly as demand for semiconductor manufacturing applications entered an adjustment phase.」

「Demand for optical films used in smartphones was sluggish because the market lacked the momentum seen in the same quarter of the previous year, resulting in weak performance in Information Functional Materials.」

「Smartphone production remained sluggish compared with the same period of the previous year. Information Functional Materials was affected, and optical films performed poorly.」

「In the fourth quarter, this segment was affected by the usual seasonal adjustment as well as a slowdown in smartphone demand.」

「In Information Functional Materials, earnings from polarizing films for LCD displays used in smartphones, tablets and notebook PCs grew from the beginning of the fiscal year. In smartphones, profit from various film materials for OLED displays, including transparent conductive films for touch panels, increased substantially as productivity improved.」

「In Information Functional Materials, optical films for LCD displays used in smartphones, tablets and notebook PCs continued to grow strongly, following their favorable performance since the second half of the previous fiscal year. Shipments of transparent conductive films, transparent adhesive sheets and process protective films for new high-end smartphones using OLED displays also got fully underway and made a significant contribution to performance.」

「In Information Functional Materials, the core optical-film business for TV applications remained sluggish, but strong demand for high-end smartphones that had continued since the second half of the previous fiscal year drove further earnings growth. The company also advanced preparations for the adoption of OLED displays in smartphones, which is expected to progress, and achieved substantial growth in transparent conductive films for touch panels and protective films for manufacturing processes.」

「The main components of the impairment loss related to tangible fixed assets, including buildings and structures and machinery and equipment, and intangible assets in the China Circuit business belonging to the Optoelectronics business segment. An impairment loss was recognized because the recoverable amount fell below the carrying amount due to lower earnings prospects and other factors.」

「In Information Functional Materials, volumes of optical films for smartphones and TVs generally recovered toward the second half of the fiscal year, partly reflecting a rebound from the inventory adjustment in the first half. Demand for transparent conductive films for touch panels also recovered from the beginning of the fiscal year due to seasonal factors.」

「These measures were not sufficient to offset the effects of customer production adjustments for optical films and circuit materials in the core Optoelectronics business, as well as the sharp appreciation of the yen and other factors.」

「In Information Functional Materials, new optical films were affected by a large-scale inventory adjustment for LCD panels used in high-end smartphones that began in the previous quarter.」

「When the fourth quarter began, LCD panel production adjustments started, affecting both volumes and prices. As a result, revenue was ¥455,831 million, down 10.5%, and operating profit was ¥65,444 million, down 25.2%.」