0

Results for the year ended March, 2007

Contents

1.1. Aiming for the No.1 Brand

2.2. Summary of results for the year ended March, 2007 (Consolidated)

1. Aiming for the No.1 Brand1. Aiming for the No.1 Brand

1．Aiming for the No.1 Brand <Contents>

NDKNDK��ss philosophy and core missionphilosophy and core mission

Activities in the existing marketsActivities in the existing markets

Improving response to the marketImproving response to the market

4

NDK�s philosophy

Contributing to the prosperity of society and world peace through our service to customers

Realizing CS

Increasing borderless

economic activities

Global environmental conservation and human happiness

No.1 No.1 SupplierSupplier

No.1 No.1 BrandBrand

5

The successful expansion of crystals in every field

<In the high speed network society><In the high speed network society>

High precision & stable crystal devices High precision & stable crystal devices are are essential for stable & high speed networksessential for stable & high speed networks

such as optical communications.such as optical communications.

6

The successful expansion of crystals in every field

<In the ubiquitous society><In the ubiquitous society>

Mobile PhoneDVDDSC Flat-TV

In the electronics society with In the electronics society with the spread of miniaturization the spread of miniaturization

& wireless technologies,& wireless technologies,high reliability & miniaturized high reliability & miniaturized crystal devices are essential.crystal devices are essential.

7

The successful expansion of crystals in every field

Oscillation source = Oscillation source = ““Providing frequencyProviding frequency��

100MHz<Base station>

19.2MHz<PLL>

622MHz<Optical communication>

4MHz<Tuner>

26MHz<GSM>

14.318MHz<PC>

25MHz<Audio>

2７MHz<Image>

48MHz<USB>

Crystal is necessary Crystal is necessary to provide to provide ��frequencyfrequency��

in every field.in every field.

■■Kinds of frequenciesKinds of frequencies

8

NDK Management Policy

NDK is aware of her mission and responsibility as the top manufacturer in the world, leading the crystal products industry.

NDK provides high quality service to customer while staying ahead of the marketplace.

３NDK is seeking an easier-to-use and more stable oscillation source and creating higher added value.

４NDK is developing a fearless work force which will overcome the difficulties.

５NDK is enhancing each individuals�personality through work.

６NDK respects each individual, and is improving the life of her employees.

７NDK is contributing to the surrounding communities, and is recompensing investors.

８NDK takes her part in protecting the environment, and is fulfilling her social responsibilities.

Core-Mission

１ ２

1．Aiming for the No.1 Brand <Contents>

NDKNDK��ss philosophy and core missionphilosophy and core mission

Activities in the existing marketsActivities in the existing markets1. Industry trends & 1. Industry trends & NDKNDK��ss shareshare2. Activities in the existing markets2. Activities in the existing markets

Improving response to the marketImproving response to the market

10

34 33

4551

37

4753

59 64

75

0

10

20

30

40

50

60

70

80

97 98 99 00 01 02 03 04 05 06

生

産

数

量

（

億

個

）

Industry trend (1) Trend of the production volume of crystal devices

** Although QIAJ has been compiling data on �SAW device� since �02, we do not include the �SAW device� figures. This is because during compilation of the data, QIAJ includes only the �SAW device� of which material of the board is quartz crystal (In fact, the major material is Lithium niobate), therefore the data does not reflect the overall �SAW device� trend.

* SAW and OUT-OUT are not included (QIAJ: Quartz Crystal Industry Association of Japan)

→

Vol

ume

(100

milli

on)

←Crystal filter←Clock oscillator

←Crystal units for consumer

←Crystal units for automotiveelectronics

←Quartz crystaltuning fork

←Crystal unit for industrial use

←Oscillator for industrial use

Optical product

11

2,478

2,1822,1782,0341,908

1,724

2,817

2,172

1,7191,884

0

500

1,000

1,500

2,000

2,500

3,000

97 98 99 00 01 02 03 04 05 06

生

産

金

額

（

億

円

）

Industry trend (2) Trend of the production value of crystal devices

** Although QIAJ has been compiling data on �SAW device� since �02, we do not include the �SAW device� figures. This is because during compilation of the data, QIAJ includes only the �SAW device� of which material of the board is quartz crystal (In fact, the major material is Lithium niobate), therefore the data does not reflect the overall �SAW device� trend.

* SAW and OUT-OUT are not included (QIAJ: Quartz Crystal Industry Association of Japan)

Pro

duct

ion

valu

e (1

00 m

illion

yen

)

←Oscillator for industrial use

←Crystal filter

←Clock oscillator

←Crystal units for consumer

←Crystal units for automotive electronics

←Quartz crystaltuning fork

←Crystal unit for industrial use

← Optical product

12

Industry trend (3) Trend of the unit price of crystal devices

100103111117

124140

168

145157

169

50

100

150

200

97 98 99 00 01 02 03 04 05 06** Although QIAJ has been compiling data on �SAW device� since �02, we do not include the �SAW device� figures. This is

because during compilation of the data, QIAJ includes only the �SAW device� of which material of the board is quartz crystal (In fact, the major material is Lithium niobate), therefore the data does not reflect the overall �SAW device� trend.

* SAW and OUT-OUT are not included (QIAJ: Quartz Crystal Industry Association of Japan)

1．Aiming for the No.1 Brand <Contents>

NDKNDK��ss philosophy and core missionphilosophy and core mission

Activities in the existing marketsActivities in the existing markets1. Industry trends & 1. Industry trends & NDKNDK��ss shareshare2. Activities in the existing markets2. Activities in the existing markets

Improving response to the marketImproving response to the market

14

Trend of the Fixed Radio Communications Market

■■Projection of shipment for Mobile phone base stations (WorldwideProjection of shipment for Mobile phone base stations (Worldwide))

19

<Market trends><Market trends>* Base stations will increase * Base stations will increase in areas where mobile phones will spread from now on. (in areas where mobile phones will spread from now on. (BRICsBRICs))��Main product in the Fixed Radio Communications market will be Main product in the Fixed Radio Communications market will be industrial oscillators. industrial oscillators. =>=>A field where NDK can utilize its technical strength.A field where NDK can utilize its technical strength.

Source: CSFB

Unit: KiloUnit: Kilo

0

100

200

300

400

500

600

700

800

900

2004 2005 2006 2007 2008 2009 2010

WCDMA

CDMA

GSM

28%28%25%25%

21%21%

14%14%4%4%

8%8%

354

440

550

665720 750

855

14

15

Trend of the Fixed Radio Communications Market

■Optical communication equipment demand projection

19

<Industry trend><Industry trend>�� Optical communication equipment Optical communication equipment for infrastructure of wired for infrastructure of wired

networknetwork will increase. will increase. �� The growth rate will increase especially in 2008 to 2009.The growth rate will increase especially in 2008 to 2009.

0

200

400

600

800

1,000

1,200

1,400

2005 2006 2007 2008 2009

WDM

OCS

DCS

OED

SONET/SDH

Source：OVUM RHK

(K pcs)

948 1,009

852

1,108 1,206

11%11%6%6% 9%9%

10%10%

16

Trend of the Fixed Radio Communications Market

■■New activitiesNew activities will start towards realization of NGNwill start towards realization of NGN

19

<Market trend><Market trend>-- Worldwide intensified investment in NGNWorldwide intensified investment in NGN⇒⇒ Increase in demand for network Increase in demand for network

equipment.equipment.-- Main crystal products for NGN network equipment will be also inMain crystal products for NGN network equipment will be also industrial crystal dustrial crystal

oscillators.oscillators.

NGN=Next Generation NetworkNGN=Next Generation Network

Optical accessOptical access

Digital broadcasting

Digital broadcasting

Triple playTriple play

Grid networking

Grid networking

WiMAXWiMAX

3G mobile phones3G mobile phones

Increase in traffic

RouterRouterSDH/SONET

SDH/SONET

WDMWDM

Base stations

of mobile phones

Base stations

of mobile phones

OLT/ONUOLT/ONU

Increase in demand for network devices

* �Web 2.0�; Technology for the user to send, receive & edit information on the Web. * �Triple play�; A service to offer 3 communication functions (Sound (phone), Video (broadcasting) & Data transmission) with a single circuit. *�WiMAX�; A wireless communications standard approved by IEEE in 2003. Realized communication speed of 70 Mbps (Max) within a radius of 50 Km.

17

■■High precision & high stability productsHigh precision & high stability products

<100MHz OCXO><100MHz OCXO>�� High frequency (100MHz)High frequency (100MHz)�� Low phase noiseLow phase noise�� Low harmonicsLow harmonics

<622MHz <622MHz VCXOVCXO>>� High frequency� (622MHz：Fundamental mode)� Low phase noise� Excellent freq-temp characteristics

For optical For optical digital digital communications communications networknetwork

For measuring For measuring instruments & instruments & base stationsbase stations

600MHz band（Fundamental mode crystal)

VCXO 7311AE

Low phase noise 100MHzOCXO 9325D

<5.0 x 3.2 mm VCXO><5.0 x 3.2 mm VCXO>� Wide variable freq range (+/-100ppm)� Wide temperature range� 52MHz, 152.6MHz

For optical digital For optical digital communications communications network & network & base stationsbase stations 5.0 x 3.2mm

VCXO NV5032SA

Trend of the Fixed Radio Communications Market

18

Trends of the Mobile Communications Market

778

9641,044

1,1161,175

1,222

108% 107% 105% 104%

121% 124%

0

200

400

600

800

1,000

1,200

1,400

2005 2006 2007 2008 2009 2010

0%

20%

40%

60%

80%

100%

120%

140% Ultra Highend

Highend

Midrange

Entry

UltraLowend(Under$40)

Year on Year

台数：百万台 成長率：％

■■Mobile phone: Production volume projection by classMobile phone: Production volume projection by class

<Market trend><Market trend>�� Due to the stabilization of spread in the emerging markets, therDue to the stabilization of spread in the emerging markets, there will be fewer new entries, and e will be fewer new entries, and

as a result, the growth rate of production volume will be 10% oras a result, the growth rate of production volume will be 10% or below. below. �� Both lowBoth low--end and midend and mid--range models that replace the lowrange models that replace the low--end models will increase.end models will increase.�� MidMid--range models with the same functions as high endrange models with the same functions as high end--models (GPS, Bluetooth & ) are models (GPS, Bluetooth & ) are

expected to be available without price increase.expected to be available without price increase.

Estimation by NDK

<Mature market where production volume will continue to exceed 1<Mature market where production volume will continue to exceed 1 billion>billion>

Volume: Million pcs Growth rate: %

19Mobile phone => �KEITAI (Mobile PC)�

■Additional functions using crystal products

Camera

BasebandClock

RF ID(Felica,etc)

USB

RF

PLL

GPS

TV/RadioTuner

W-LAN

Trend of the Mobile Communications Market

Bluetooth

2520 TCXO for GPS modules

Basic function: �Talk�+

Various additional functionsIncreasing Increasing year by yearyear by year

20

Trend of the AV Market

<Market trend><Market trend>�� From 2006 to 2009, the market will grow at an annual rate of 4 tFrom 2006 to 2009, the market will grow at an annual rate of 4 to 5%.o 5%.�� Qty of crystal devices will grow due to digitalization & increasQty of crystal devices will grow due to digitalization & increase in e in

upgrade to Flatupgrade to Flat--TV.TV.

Source: Chunichisha, Fuji chimera, Yano Research institute, Nikkei Market Access

Unit: Kpcs Forecast of the entire marketForecast of the entire market Growing applicationsGrowing applicationsUnit: Kpcs

21

Trends of the OA Market

<Market trends><Market trends>�� HDDHDD--equipped devices will grow for digital audio products & VTR as wequipped devices will grow for digital audio products & VTR as well as PC.ell as PC.�� Toward the ubiquitous society, devices for wireless communicatioToward the ubiquitous society, devices for wireless communications ns

such as Bluetooth & Wsuch as Bluetooth & W--LAN will increase.LAN will increase.

Source:Source: Fuji chimera, Yano Research Institute

Forecast of the entire marketForecast of the entire market Growing applicationsGrowing applicationsUnit: KpcsUnit: Kpcs

Videogame

22

0

5

10

15

20

25

’01 ’02 ’03 ’04 ’05 ’06 ’07予測年

億台・億個

クロック用水晶発振器

民生用水晶振動子

世界のAV/OA台数

Trend of OA/AV Market <Crystal devices>■■Increase in production volume of OA/AV devices & Increase in production volume of OA/AV devices & crystal devicescrystal devices

12.814.5

16.117.3

18.4

5.1 5.4 5.6 6.0 6.3 6.5 6.7

20.423.1

From QIAJ�s materials

Unit: 100 million pcs

Forecast

Crystal oscillator for clock

Consumer crystal unit

Worldwide volume of AV/OA

<Crystal devices volume trend><Crystal devices volume trend>� OA/AV devices will grow at an annual rate of 4 to 6%.� Due to digitalization & shift to multi-functions, the number of crystals used in one device will

increase.⇒ Actual growth rate of QIAJ�s consumer crystal units & clock oscillators was 8 to 13.

The growth is expected to continue.

23

Trend of OA/AV Market

■■ Trend of miniaturization Trend of miniaturization

Always pursuing Always pursuing miniaturization in miniaturization in

the ubiquitous societythe ubiquitous society

Crystal unit: History of miniaturizationCrystal unit: History of miniaturization

New

productNew

product

24

Trend of the Automotive Applications Market

<Market trend><Market trend>�� Automotive production will stably grow at an annual rate of 3 toAutomotive production will stably grow at an annual rate of 3 to 4%.4%.�� Demand for crystals for safety applications such as TPMS & camerDemand for crystals for safety applications such as TPMS & camera a

and inand in--car network such as Flexcar network such as Flex--Ray will increase.Ray will increase.

単位：千台

Source: Fuji chimera, Yano Research Institute

Growing applicationsGrowing applicationsUnit: K pcsUnit: K pcs Auto production volumeAuto production volume

Body control (TPMS)

Engine control

ITS/info system

Power train control

Car control (TPMS)

24

1．Aiming for the No.1 Brand <Contents>

NDKNDK��ss philosophy and core missionphilosophy and core mission

Activities in the existing marketsActivities in the existing markets

Improving response to the marketImproving response to the market-- Activities in the Low Volume Mixed Activities in the Low Volume Mixed Products Market Products Market --

26

The challenge of new businesses: Technology seeds development with crystal technologies as the core

Crystal technologies<Wireless high

frequency technologies>High frequency, high sensitivity

Micro signal detection

<Digital signal processing technologies>

High precision, high-speed processor & controller

Wireless module Biosensor

<Frequency control technologies>Low noise, high resolution,

High-speed synchronization, high stability, Miniaturization

Microwave synthesizer

Developing original & �Only One� product through integration of �NDK crystal

technologies & wireless technologies

27

CHITOSE Technical Center:Development of world�s No.1 technologies and launch of new business

(1) Microwave synthesizer: (1) Microwave synthesizer:

* Started sales of high performance synthesizer for digital terr* Started sales of high performance synthesizer for digital terrestrial broadcastingestrial broadcasting* Commercialization in the worldwide digital terrestrial broadca* Commercialization in the worldwide digital terrestrial broadcasting marketsting market→→ Receiving exclusive orders for synthesizer units through Receiving exclusive orders for synthesizer units through realization of far realization of far

superior low noise & reliabilitysuperior low noise & reliability→→Started delivery for major broadcasting equipment makers Started delivery for major broadcasting equipment makers

(2) Biosensors(2) Biosensors* New model for researchers (High speed & precision crystal bios* New model for researchers (High speed & precision crystal biosensor) ensor)

Commencement of sales in July, Commencement of sales in July, ��0707* Presentation at an international conference (* Presentation at an international conference (BBiomimeticsiomimetics))→→RealReal--time detection of trace substance in liquid time detection of trace substance in liquid captured great attentioncaptured great attention

A rush of inquiries from universities & research instituteA rush of inquiries from universities & research institute(3) Wireless module(3) Wireless module

* Development of new wireless communication system* Development of new wireless communication system→→ 100 times 100 times sensitivesensitive & 1000 times & 1000 times resistant to interferenceresistant to interference* Adaptable to various wireless communication systems. * Adaptable to various wireless communication systems.

Approaching major customersApproaching major customers→→ LSI development & commercialization in 2007LSI development & commercialization in 2007 27

2. Summary of results 2. Summary of results for the year ended March, 2007for the year ended March, 2007(Consolidated)(Consolidated)

29

Business Organization Structure

30

Financial Highlights (Consolidated)

31

Annual Results (Consolidated)

32

Half Year Results (Consolidated)

33

Quarterly Results (Consolidated)

34

Sales Breakdown by Market Segment (Consolidated)

35

Sales Breakdown by Product Segment (Non-Consolidated)

36

Sales by Customer-based Geographic Area (Consolidated)

37

Cost to Net Sales (Consolidated)

38

Capital Expenditures（Consolidated）

39

R&D Expenses（Consolidated）

40

Break-even Analysis （Consolidated）

41

Cash Flow (Consolidated)

42

Summary of Cash Flow (Consolidated)

43

Free Cash flow & Net Income (Consolidated)

44

Equity Ratio（Consolidated）

45

Profitability （Consolidated）

46

Per Share Data (Consolidated)

47

Stock Information

48

Business Forecast of FY2007 (Consolidated)

49

Dividends

50

【Note】Statements made in this presentation with respect to our current plans, estimates, strategies and beliefs and other statements that are not historical facts are forward-looking statements about our future performance. These statements are based on management�s assumptions and beliefs in light of information currently available to it. We caution that a number of important risks and uncertainties could cause actual results to differ materially from those discussed in the forward-looking statements, and therefore you should not place undue reliance on them. You also should not rely on the belief that it is our obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Risks and uncertainties that might affect us include, but are not limited to; fluctuation of currency exchange rates, overall supply and customer demand in the industry, product development and production capacities, performance of affiliated companies, and other risks and uncertainties.

Thank you for your attentionThank you for your attentionWe are grateful for your continuous supportWe are grateful for your continuous support