Taiyo Yuden in Big Trouble

Losses for 4th consecutive year for the CD-R, DVD-R and BD-R pioneer

This is a Press Release edited by StorageNewsletter.com on January 30, 2012 at 3:09 pm

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Taiyo Yuden Co., Ltd. is announcing a decision on voluntary retirement from Board of Directors meeting.

The company is asking employees to accept voluntary retirement. Details pertaining to the solicitation of voluntary retirement are discussed below. The company also announced revisions to its consolidated full-year earnings forecast released on November 9, 2011 for the fiscal year ending March 31, 2012 for the period from April 1, 2011 to March 31, 2012. The decision to solicit voluntary retirement will result in an extraordinary loss in this fiscal year.

Reason for Soliciting Employees
for Voluntary Retirement

As stated by the company on November 9, 2011 in the press release titled TAIYO YUDEN Announces the Reasons for Discrepancies between Consolidated Forecast and Actual Results, Earnings Forecast Revisions, and Reversal of Deferred Tax Assets,’ the company made a significant downward revision to its consolidated earnings forecast for the fiscal year ending March 2012 and expects to record a net loss for the fourth consecutive fiscal year.

The company will implement measures that balance both structural reforms and growth strategies in order to improve profitability in the face of the challenging operating environment seen today and expected in the future. The company has established a target and related actions to reduce fixed costs by ¥10,000 million before the end of March 2013. One of these actions is to solicit employees to accept voluntary retirement.

Summary of Solicitation for Voluntary Retirement:

Number of employees to solicit: Approximately 330
Target employees: All employees of TAIYO YUDEN CO., LTD.
Solicitation period: March 1, 2012 to March 8, 2012
Retirement date: March 31, 2012 (planned)
Benefits for retirees: Employees that volunteer for this program will receive special extra retirement payment. The company will also provide re-employment assistance to employees.

Future Outlook
The company plans to allocate ¥3,200 million as a business structure improvement expenses allocated for special extra retirement payments to be provided to employees participating in the aforementioned voluntary retirement program. This provision will be recorded as an extraordinary loss on the company’s consolidated financial statements in the fourth quarter of the fiscal year ending March 31, 2012.

Revision to the company’s Earnings Forecast
This revision was made to the company’s consolidated full-year earnings forecast due to an extraordinary loss realized for business structure improvement expenses. Specifically, the provision is for special extra retirement payments to employees participating in the voluntary retirement program.

(in ¥ millions)	FY11*	FY12* previous forecast	FY12* revised forecast
Revenues	210,401	189,000	189,000
Net income (loss)	(5,506)	(16,200)	(19,200)

*ended March 31

Comments

Among several other activities, Taiyo Yuden entered in the development of CD-R in 1988, announcing in September of this year the release of the world's first recordable CD-R compact disks, being a technology pioneer in this field, then in DVD-R and BD-R with the first recordable Blu-ray disc using an organic dye recording layer.

taiyo_yuden_voluntary_retirementtaiyo_yuden_voluntary_retirement

The Japanese firm was known for the excellent quality of its discs, being probably the only one to strictly follow the Orange Book specs. But the results were expensive products in an industry where the prices fell drastically, one of the reason being that some manufacturers refuse to pay royalties to the CD-R consortium headed by Philips. Currently only 32 firms have a licensed on CD-R and CD-R Veeza (replacing CD-R), covering essential patents of Sony and Taiyo Yuden. Under Veeza, Philips has cut royalties from 4.5 US cents to 2.5 US cents per piece, but charge royalties based on the number of shipments. Now the only activity in the optical industry for the Netherlands' firm is to collect these royalties.

In 2008, JVC spins off its recordable media business to a new company, Victor Advanced Media Co., Ltd., and starts a joint venture owned at 65% by Taiyo Yuden.

We have counted 119 companies (see below), most of them in Asia, who manufactured write-once CDs. A lot of them disappeared or stopped this business.

CD-R was a huge market, killing floppy disk, but has been progressively replaced by flash key and HDD. DVD-R was a lower market and BD-R is a much smaller one.

About all the companies who were or are involved
in the production of write-one optical discs
(CD-R, DVD-R, BD-R)
* Licensed by Philips

3A Media Produktion (Austria)
Adivan High Tech AG (Switzerland)
Advance Mega Magnetic Media Co. (Hong Kong)
Advanced Digital Media S.r.l. (Italy)
Advanced Optical Disc (The Netherlands)
Anyang Sunny Mastering Products Co., Ltd. (China)*
BeAll Developers, Inc. (Korea)
CDA Datenträger Albrechts GmbH (Germany)*
Chin Shing Manufacturing Ltd. (Hong Kong)
China East Technology (Hong-Kong)
CMC Magnetics Corp. (Taiwan ROC*
Computerskill Ltd. (India)
Creation-Optical Greece SA (Greece)
Datapulse Technology Ltd. (Singapore)*
DATAREX S.r.l. (Italy)
Daxon Technology Inc. (Taiwan ROC)
Delphi Technology Inc. (Taiwan ROC)
Digital Data Technologies Sdn Bhd (Malaysia)
Digital Storage Co., Ltd (Taiwan ROC)
E-Top Navigator Technology Inc. (Taiwan ROC)
EDD Bizz GmbH (Germany)
Euro Digital Disc Manufacturing GmbH (Germany)
Euro Multivision Ltd. (India)
Eximpo AS (Czech Republic)
Factory Group S.A. (Paraguay)*
Falcon Technologies International L.L.C. (UAE)*
Finex Disc Technology (Hong Kong)*
Fortis Technology Co. Ltd (Taiwan ROC)
Fortune (Jiangsu) Multimedia Co., Ltd. (China)*
FTI Falcon Technologies (UAE)
Fujifilm (Japan)
General Magnetics Ltd. (Singapore)
Giant Base Technology Ltd. (Hong Kong)
Gigastorage Corp. (Taiwan ROC)
Global Digital Disc GmbH & Co. KG (Germany)*
Grand Technology Co. Ltd. (China)
Guangdong Geerda Science & Technology (China)
Guangdong Yuedong Magnetoelectric Co. (China)
Handsfull Technology Corp./Vakoss (Taiwan ROC)
Hellodisc Technology Co., Ltd (Taiwan ROC)
Henan Standard Disc (China)
Hitachi Maxell Ltd. (Japan)*
Info Source Storage Media Ltd (Hong Kong)*
Infomedia (Taiwan)
infosmart Technology Ltd (Hong-Kong), subsidiary of Mega Century
Inter Media Co., Ltd. (Japan)
Jet-Thai Hi-Tech Co., Ltd. (Thailand)
Jilin Qingda Optical Disc (China)*
K-Well Corporation (Taiwan ROC)
KHypermedia Corporation (USA)
KODA Technology Limited (Hong-Kong)
Kunshan Hutek Co., Ltd. (China)*
Lead Data (Taiwan ROC)
Lena Optical Disc (HK Computer Instrument) (Hong Kong)
Lingstar Enterprises Ltd. (Hong Kong)
Link Pacific Holdings Ltd. (Hong Kong)
M3 Technology (China)
MAM-A / CSI (USA)
Maoming Gainfast Science & Technology Dev. Co., Ltd. (China)*
Maxell Ltd. (Japan)
MDA Technology (Hong Kong)
MediaStar Technology Ltd. (Hong Kong)
Medisk (Iran)
Megamedia Corp. (Taiwan ROC)
Melody Technology Corp. (Taiwan ROC)
Micro Galaxy International Co. Ltd. (Taiwan ROC)
Mirage Recordable Media (China)
Mirex Company Ltd. (Russia)*
Mitsubishi Chemical Infonics Pte. Ltd. (Singapore)*
Mitsubishi Electric Corporation (Japan)*
Mitsubishi Kagaku Media Co., Ltd. (Japan)*
MJC (Singapore) Pte. Ltd. (Singapore)
Moser-Baer India Ltd. (India)*
MPO Media (France)
Must Tech (Taiwan)
Nan Ya Plastics Corp. (Taiwan ROC)
New Star Digital Co. Ltd. (Korea)
Optical Digital Technologies S.A. (Greece)*
Optodisc Technology Corp. (Taiwan ROC)
Pangol MediaTec (China)
Panstar Electronic Co. (Thailand)
Pengo Technologies (China)
Penmax Technologies Corp. (Taiwan ROC)
Phoenitech Ltd. (Hong Kong)
Philips (Nederland)
Pioneer El. Corp. Business Systems Div. (Japan)
Plasmon Data (USA)
Pop Media Technology (Hong Kong)
Princo Corp. Data Storage Division (Taiwan ROC)
Prodisc Technology Inc. (Taiwan ROC)
Promedia International Ltd. (Hong Kong)
R-Planet (Italy)
Radius Co., Ltd. (Japan)
Ritek Corp. (Taiwan ROC)*
Ritek Vietnam Company Limited (Vietnam)*
Shantou S.E.Z. Wo Hing Radio & Video Co., Ltd. (China)
Shenzhen SG&SAST Digital (China)
Shing Hae Technology Co. (Taiwan ROC)
Sony Corp. (Japan)
Sony DADC Austria AG (Austria)*
Skytech Media Ltd. (Hong Kong)
Swing Technology Ltd. (Hong Kong)
Taiyo Yuden Co. Ltd. (Japan)*
Tarako International (Taiwan)
Techno Plus SpA (Italy)
Teltron S.A. (Argentina)*
Trendes d.o.o/Anni (Slovenia)
UL TRAN Technology & Service Corp. (Taiwan OC)
UmeDisc Ltd. (Hong Kong)
Universal Asia Technology Co. (Taiwan ROC)
UniversalDisc (Alger, Algeria)
Ural Electron Plant Ltd. (Russia)*
Verbatim Americas, LLC (USA)*
Verbatim Australia Pty. Ltd. (Australia)*
Verbatim Limited (UK)*
Verbatim Limited (Singapore)
Videolar SA (Brazil)*
Wing Shing Optical Disc Co. Ltd (Hong Kong)
Zhanijiang Hualijin (China)