TDK Corporation Announces Withdrawal From the Manufacturing of Recordable CD&DVD Accelerating the Restructuring Recording Media
08 Mars 2006 - 10:28AM
Business Wire
TDK Corporation (NYSE:TDK) announced today that the board of
directors decided at the board meeting held on March 8, 2006, to
further accelerate the restructuring of recording media business,
to withdraw from the manufacturing of recordable CD&DVD
products in TDK group. Consequently, TDK decided to shut down the
production facilities at its European subsidiary, TDK Recording
Media Europe in Grand Duchy of Luxembourg. The shut down is planned
to take place at the end of May 2006. This decision completes TDK's
withdrawal from the manufacturing of recordable CD & DVD
products, coupled with the reorganization of plants in Chikumagawa
area (Nagano, Japan) implemented at the end of last year. TDK
Corporation and its group companies (hereinafter called "TDK") have
been fundamentally restructuring the recording media business
during this fiscal year. While reviewing the progress of the
restructuring and future strategies of the recording media
business, TDK has looked for ways to re-strengthen the
manufacturing of recordable CD&DVD foundations from various
perspectives. However, a sharp drop in market prices of recordable
CD&DVDs as well as the increased cost of natural resources has
led the recording media business in TDK to serious problems. After
studies of measure for re-strengthening manufacturing, the decision
of withdrawal from the manufacturing of recordable CD & DVDs
that TDK management has made should lead to an improvement and
reform of recording media business to change fundamentally the
business model. With this decision, TDK will accelerate ODM
business model for the current generation of recordable CD&DVD
products, or the third party supply. In the domain of blue laser
disc, a product much expected to grow in the near future, TDK will
continue its R&D and manufacturing activities, the latter
exclusively focused on highly value-added products, by utilizing
the pilot production lines established at Chikumagawa Tecno Plan in
Japan. TDK will also concentrate its resources on strengthening
data storage tape business, which is another core business. Through
implementation of a series of restructuring activities, TDK will
improve the business structure of recording media business all at
once, seek improvement of efficiency and profitability for the
future, and accelerate changes in the business structure and
development of core products. Estimated Impact to the forecast
profit for this fiscal year The planned expenses needed in relation
to the announced withdrawal from the manufacturing of CD and DVD
will amount to approximately 8 billion yen. -0- *T (a) Supplements
About TDK Recording Media Europe S.A. 1. Location Bascharage, Grand
Duchy of Luxembourg 2. President Mr. Toru IDE 3. Established in
1990 4. Paid-in Capital Euro 82,846,016 5. Parent and shares TDK
Europe S.A. 100% TDK Europe S.A. is a TDK's wholly owned company.
6. Number of Employees 431 7. Products and capacity CD-R 7 Million
Pcs./month, DVD-R/+R 8 Million Pcs./month (a) Data as of end Feb.
2006 *T About TDK Corporation TDK Corporation (NYSE:TDK) is a
leading global electronics company based in Japan. It was
established in 1935 to commercialize "ferrite," a key material in
electronics and magnetics. TDK's current product line includes
ferrite materials, electronic components, wireless computer
networking products, magnetic heads for HDD, and advanced digital
recording media. For more information about TDK, please visit
http://www.tdk.co.jp/tetop01/index.htm
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