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Taiyo Yuden Pulls Plug on Optical Disc Business

Some sad news today. Industry pioneer Taiyo Yuden announced that it will pull the plug on its writable optical disc business (CD-R, DVD±R, BD-R) by the end of the year.

Choosing to focus on electronic components over recent years, optical media comprise a small, and rapidly declining, fraction of Taiyo Yuden’s net corporate sales.

Writable Optical Media

Fiscal Year Net Sales (¥ millions) Corporate Sales (%)
2015 12,859 5.7
2014 14,232 6.9
2013 15,412 8.0
2012 16,152 8.8
2011 20,479 9.7
2010 26,823 13.7
2009 31,168 16.8
2008 31,837 13.4
2007 33,012
2006 30,553

Unedited press release follows:

Withdrawal from the Recording Media Business

Tokyo, June 11, 2015 — TAIYO YUDEN CO., LTD. (“the Company”) announces that it will discontinue the recording media business. The details are as follows.

(1) Background regarding the business withdrawal
Taiyo Yuden has been the market leader for optical recording media driven by leading edge products such as CD-R, DVD-R, BD-R etc. and critical market solutions since the development of the CD-R in 1988. The Company has promoted optical recording media as one of its core businesses. Despite increasingly fierce competition from overseas manufacturers, it has continued to provide the market with high-quality products and has received high acclaim from countless users for offering reliable Japanese optical recording media.

As the larger storage capacity of hard disc drives (HDDs) and the use of cloud computing is driving changing market conditions, the market for optical media products has been diminishing. To respond to this trend, the Company has striven to improve profitability by accelerating its cost reduction efforts, enhancing productivity and promoting the archiving business. However, as a result of market shrinkage exceeding the Company’s expectations as well as the effects of the hike of raw material prices etc., the Company has determined that it would be difficult to further improve earnings and thus decided to withdraw from the recording media business altogether.

As a result of this announcement and decision to withdrawal from the recording media business the Company will reform its business structure and further concentrate management resources into super high-end products as a main driver of its growth strategy with the aim of improving earnings capacity.

(2) Future outlook

(i) Schedule
The Company is scheduled to terminate sales of its recording media products by the end of December 2015.

(ii) Impact on corporate earnings
The Company currently expects that the impact of this business withdrawal on its corporate earnings will be immaterial.