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Top Message

Due to the growing demand for a wide range of applications, DISCO’s advanced Kiru, Kezuru, Migaku technologies have been expanded, and DISCO set the highest record in both sales and profits.

Business Environment and Performance
In the first half of FY 2017, due to increased demand for high performance semiconductors in both smartphones and data center servers, proactive capital investment was observed, particularly in the flash memory market. In addition to this, the precision processing needs are increasing in a wide range of applications, including discrete and electronic components, and the shipment of both dicing and grinding equipment significantly increased compared to the same period of the previous year.

The growth of these various processing needs is shown in the equipment utilization rate in addition to customer demand for equipment, with a high level of shipments for consumable precision processing tools. As for profit and losses, despite the increase in selling, general, and administrative expenses (SG&A), gross profits increased due to the product mix, which was improved by an increase in sales, as well as stronger demand for high-added value equipment and consumables. As a result of the business performance for the first half of FY 2017, new records were set in both sales and profits.

Regarding interim dividends, based on the dividend policy, DISCO plans to distribute an increased dividend of 141 yen per share due to performance-based dividends.

Business Forecast
In FY 2017, due to customers’ continued investments in a wide range of applications including the memory market, new records are expected to be set in both sales and current net income for the fifth consecutive years. From a mid- and long-term perspective, an increase in demand for semiconductors and electronic components is expected in fields such as the IoT, self-driving technology, and medical applications due to the development of technologies.

DISCO is proactively engaging in the advancement of R&D in order to respond to customers’ needs for advanced Kiru, Kezuru, Migaku technologies. In addition, the further enhancement of our production system has been deemed necessary, and a decision has been made to establish Chino Plant Nagano Works as well as an extension of D Zone in Kuwabata Plant (Kure City, Hiroshima), in addition to the C Zone which is already currently under construction. Construction work on D Zone is scheduled to start in September 2019.

Regarding the shareholders’ return, based on the latest business forecast, excess funds, which act as source for the additional dividend*, are expected to decrease compared to the previous year in order to ensure the funds necessary to conduct the active investments described above. Therefore, at present, DISCO plans to reduce the year-end dividend.

In addition to maintaining a focus on cultivating a high quality corporate culture, we will continue to make systems, and implement evolution and improvement activities through which each employees can proactively take action.

We ask for your continued support and encouragement in the year ahead.
*Additional dividends:
At the end of the year, DISCO pays a dividend based on the price when the current account balance exceeds the amount of forecasted necessary funds after paying dividends and corporate taxes, excluding when there has been a deficit.


December 2017
Kazuma Sekiya, CEO & COO
Investors

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