Happy New Year!

Last year was an extremely difficult year due to the one-two punch of the recession triggered by the Lehman shock and a strong yen.
On the other hand, there have been promising signs in the gloomy business environment. We need to seize these opportunities to kick-start our growth strategy so we can get to work in the new year, knowing that “tomorrow will be a better day.”

The first promising sign is an industry-wide increase in production volume of nearly 10% over last year. Our sales in the Taiwan and China area reached an all-time high. I believe this increase is a result of growing demand for computers and accessories fueled by the launch of Windows 7, and our products were able to meet the needs of the market.
Although this field is under constant cost-cutting pressure due to falling prices of end products, we intend to cope by shifting production overseas and strengthening cooperation with outside partner companies.

The second promising sign is the near-completion of our structural changes. Our shift of production to overseas factories is proceeding as planned, with increased capacity at our factories in Thailand and China, and the consolidation of our two factories in Fukushima Prefecture scheduled for completion in March of this year.
Now we will be able to reap the benefits of our restructuring and focus on our growth strategy.

The third promising sign has to do with our growth strategy, which is based on the major policy of drawing out the true potential of crystal devices by leveraging the advantages of quartz crystal. We are starting to see innovative new crystal devices that bring industrial-level performance to the consumer market with compact and low-power designs.
For instance, industrial oven-controlled crystal oscillators (OCXO) are used as reference signals in cellular base stations. With QMEMS technology, we were able to achieve this level of accuracy in the temperature compensation crystal oscillators (TCXO) used in mobile phones, car navigation systems and other consumer devices. This crystal oscillator, which is 100 times smaller and uses 40 times less power than an OCXO, has contributed to the spread of compact cellular base stations in the home (e.g., access point base stations).
Then, we showed an atomic oscillator with even higher accuracy than an OCXO at CEATEC Japan 2009 in October of last year. We are nearing the end of development on this low-power, ultra-compact atomic oscillator, which is 100 times smaller and uses 100 times less energy. In the near future, I am looking forward to seeing the various kinds of new products that can be created with the ultra-accurate clock of an atomic oscillator that loses only one second every 300 years.
I want to help make people’s lives more convenient by developing crystal devices that bring industrial-level accuracy to consumer-level products and, as a result, help our company grow.

Our growth strategies all depend on having customers. In 2009, we set out to acquire customers and create promoters of our products. As a result, we improved the level of understanding of our concepts and acquired a lot of business. In 2010, I would like to further develop our business in new segments and help realize customers’ dreams as we press on toward the Epson Group SE15 long-range vision.

In November of last year, I had the opportunity to visit Kajuji Temple. There is a Buddhist teaching at Kajuji that says, “awake with hope, work with rapture, and sleep with gratitude.” I believe that the growth of a company and its employees are vital to enjoying your work with a sense of hope.
I will work to build upon these promising signs and make this year one in which both the company and its employees can achieve significant growth.

Kaname Miyazawa, President
Epson Toyocom Corporation