Showa Denko K.K. (SDK) will expand its hard disk (HD) media production capacity by 3.05 million disks a month, to 13.75 million disks a month, by March 2006 to meet a growing demand, centering on 1.89-inch-diameter HDs for use in mobile music players (MP3 players).
Demand for HD media is growing for consumer electronics applications, including DVD recorders and mobile music players, in addition to conventional desktop and notebook PC applications. Thus, demand is expected to continue growing at the rate of more than 10% a year. Furthermore, HDs with diameters as small as less than one inch will be increasingly used in mobile phones, accelerating the speed of growth.
To supply high-quality HD media, SDK expanded its capacity in the fall of last year, from 8.3 million disks a month to 10.7 million disks a month, mainly through debottlenecking of existing facilities in Chiba (Japan), Singapore and Taiwan. Due to strong requests of customers for additional expansion, however, SDK has decided to invest approximately ¥12 billion to further increase its HD media production capacity by 3.05 million disks a month.
At the new production lines, SDK will be able to use its perpendicular magnetic recording technology, which has already been established in the mass-production of 1.89-inch-diameter media. Moreover, SDK is considering mass-production of the world’s smallest 0.85-inch diameter HD media, which is now being developed.
Under the ongoing medium-term consolidated business plan, the Sprout Project, the HD media business was initially included in the category of businesses that need restructuring. However, SDK has completed structural reform of the business through various measures, including acquisitions, achieving a leading share in the world market. As continued rapid growth is expected for the business and its earning base has been strengthened, we are now including this business in the category of strategic growth businesses.