A: Please refer to (PDF Link here) for the complete press release. In addition, we held an explanatory meeting to analysts regarding this release on June 25, 2001. Presentation used at the analyst meeting (PDF Link here).

A: The Information Technology (IT) industry, which was the prime source of significant growth to the overall economy up to the second half of 2000, has entered into a severe downward phase. The industry has been growing at record levels, marked by aggressive capital investments, rapid production and deployment of communications equipment into the network infrastructure, but is now at historically worst levels of decline and in a severe adjustment phase.
Specifically, due to the excess production and deployment of equipment last year, carriers worldwide are experiencing a significant downturn in their businesses. In closer relation to and directly affecting our performance, there has been a reexamination of next generation mobile communication standards in Europe, a delay in the deployment schedule of next generation mobile communications (W-CDMA) in Japan, and an abrupt change in the network infrastructure due to the rapid growth of the internet in Japan (a shift from ISDN to ADSL).
Our main products PLDs (Programmable Logic Device) and ASSPs (Application Specific Standard Product) are greatly used in the prototyping, designing, development of products and equipment that make up the network infrastructure and enable all forms of communications. In result, the above mentioned reasons have significantly influenced and affected our business performance and results.

A: Although we are forecasting a significant slowdown in business for the second half of our 2001 fiscal year, we anticipate strong growth to return as the industry passes through this stagnant phase and starts recovering, supported by demand from the Internet and other communications needs. Our products and solutions offerings are continuously improving with higher-densities, more integration, higher efficiencies, cost effectiveness, and we believe that we can return to attaining growth rates we enjoyed in the past.

A: We are to carry out the following measures and business objectives:

• To maintain profitability for the current term; we will restructure our organizational structure of organization (PDF Link here) to focus on our existing lines, gaining design wins during the course of this year targeting returns for the next year.
• To further strengthen our management and internal systems, to conduct continuous improvement on inventory control, both of which have been carried out from the end of last year.
• To focus on business efficiency and various cost reductions, in line with maintaining profitability for the current term, as mentioned above. However, we anticipate ongoing investments in personnel, based on market recovery and strong growth to return in the future.
• To further strengthen and focus on creating new business, acquiring additional lines, combined will lead to the development of new markets and opportunities.