Notice of Decision on Withdrawal from Glass Substrates for HDDs Business
Company Name: Konica Minolta, Inc.
Representative: Masatoshi Matsuzaki, President and CEO
Stock Exchange Listing: Tokyo (First Section)
Local Securities Code Number: 4902
Contact: Yuki Kobayashi, General Manager, CSR, Corporate Communications & Branding Division
Tel: (81) 3-6250-2100
Tokyo (October 31, 2013) - Konica Minolta, Inc. (“The Company”) today announced that at the meeting held today its Board of Directors adopted the resolution to withdraw from the glass substrates for HDDs business which constitutes part of the Company's Industrial Business.
1.Background and reasons for the withdrawal
In the business of glass substrates for HDDs, the Company has been utilizing its proprietary technologies developed in the long history of optical products, including glass melting, production and polishing, in manufacturing and selling 2.5-inch glass substrates for magnetic hard disc drives which are primarily installed in notebook PCs.
In recent years, the technical trends for glass substrates for HDDs have continuously demanded for increased storage capacity per substrate. It has become more difficult for Konica Minolta to respond to those market requirements while maintaining its advantages in the field. As a result, the Company's shipment has recently slowed down and profitability in this business has declined. In addition, with the growth in tablets and other mobile devices, the notebook PC market has been dropping. As introduction of new technologies such as SSD (recording device with flash memory as recording medium) has also eroded the demand, it has become even more difficult for the Company to foresee a sustainable growth in the future demand.
Under the circumstances, confirming the difficulties in improving the performance of the said business in speedily, the Company has decided to withdraw from the glass substrates for HDDs business, targeting in December 2013.
In its Industrial Business, the Company will vigorously review portfolio of the entire business and pursuing selection and concentration. Those efforts will include initiatives in reducing dependency on digital consumer electronics or PC-related sectors that are prone to changes by demand and price fluctuations or technological advancement, and in expanding business fields into industrial and professional uses with greater potential for stable profit growth.
2.Overview of business for withdrawal
Organization: HD Business Unit, Industrial Business
Description of business: Manufacturing and sale of glass substrates for HDDs
End of production: November 2013
End of sale: December 2013
4.Impact on corporate performance
In the financial results during the second quarter of the Fiscal Year ending March 31, 2014, the Company recorded 16.8 billion yen of loss on business withdrawal, caused by the decision to withdraw from the said business, as extraordinary loss. The impact on the financial results for the entire Fiscal Year ending March 31, 2014 was announced today in “Notice of Revision of Consolidated Financial Results Forecast for the Year Ending March 31, 2014.”