Earnings release conference 2Q Fiscal Year March,2011 TDK Corporation Oct.28,2010 FY March,2011(October 28,2010) 1 Consolidated results 1H.FY March,2011 Projection for FY March,2011 Takehiro Kamigama/President & CEO Consolidated results 2Q.FY March,2011 Takakazu Momozuka General Manager, Finance & Accounting Department Passive components business Shinichi Araya/Director, Senior Vice President Recording device business Atsuo Kobayashi/General Manager, Senior Vice President FY March,2011(October 28,2010) 2 Consolidated results 1H.FY March,2011 Projection for FY March,2011 Mr Takehiro Kamigama President & CEO FY March,2011(October 28,2010) 3 Consolidated results 1H FY March,2011 1H FY2010 1H FY2011 (Apr 1.2009 - Sep 30.2009) (Apr 1.2010 - Sep 30.2010) ％ Yen millions Net Sales Operating Income(Loss) Income before income tax（Loss) Net income(Loss) attributable to TDK Corp Per common share Net income(loss) attributable to TDK Corp/Basic 385,851 Yen millions ％ ％ 442,234 100 56,383 14.6 5,402 1.4 37,188 8.4 31,786 588.4 953 0.2 34,644 7.8 33,691 - 1,140 0.3 26,116 5.9 24,976 - Yen(8.84) Yen(202.46) Yen appreciation Yen 95.50 Yen 133.21 Yen 88.89 Yen 113.80 Net sales：Lowered 28.2 billion Yen Ex-rate impact to Net sales & Operating Income Operating income：Lowered 8.4 billion Yen FY March,2011(October 28,2010) Yen millions 100.0 Exchange rate US $ vs JP Yen EURO vs JP Yen Change 4 7.0% 14.6% Features in 1H FY March,2011 results Electronics markets were supposed to continuously recover in 1H.However, its momentum has started to slow. The degree of recovery differs by finished products. 9 Steady growth in smart phones, tablet PCs、automobile and industrial equipment field. 9 Slow down in Flat TV, LCD panels, note PCs, HDD Net sales steady growth in passive components 9 Increased 23.3% year on year z Higher sales of capacitors and inductors for broad range of finished products z Higher sales of high frequency components for mobile phones attributable to EPCOS synergy. 5.1% net sales growth in Magnetic application products Year on Year z Sales of HDD heads slow down due to HDD production adjustment and Japanese Yen appreciation FY March,2011(October 28,2010) 5 Projection for FY March,2011 Visibility in electronics markets for 2nd H FY Mar’11 is not clear at this moment Term Item FY2011 FY2011 FY2010 (April 1, 2010 March 31, 2011) (April 1, 2010 March 31, 2011) (April 1, 2009 March 31, 2010) Forecast in October'10 Forecast in April'10&July'10 Actual (Yen millions) (Yen millions) (Yen millions) (Yen millions) vs FY2010 Changes % 880,000 880,000 808,858 71,142 8.8 Operating Income 62,000 62,000 25,774 36,226 140.6 Income before income taxes 60,000 60,000 21,907 38,093 173.9 Net income attributable to TDK 45,000 45,000 13,520 31,480 232.8 Capital expenditures 75,000 75,000 64,370 10,630 16.5 Depreciation and amortization 82,000 82,000 83,788 (1,788) -2.1 Research and development 53,000 53,000 53,942 (942) -1.7 Net Sales Ex-rate for the projection 1 U.S$=Yen 80 1 Euro =Yen 115 FY March,2011(October 28,2010) 6 Forecast for the dividends payment FY Mar 2011 Forecast for the dividends payment in FY Mar’11 Interim dividend JPY 40 Year-end dividend JPY 40（Forecast） Annual dividend FY March,2011(October 28,2010) JPY 80（Forecast） 7 Actions for CY2011 Visibility to electronics markets are not clear Higher priority on growth markets by introducing new products ¾ Growth markets for us 9 Communication market （High-end 3G phones、Smart phones） 9 Electric Vehicle/Hybrid EV/Plug in HEV, General automobile 9 Environmental and renewable energy equipment Accelerate production efficiency improvement centered in China facilities FY March,2011(October 28,2010) 8 Consolidated results 2Q.FY March,2011 Mr Takakazu Momozuka General Manager Finance & Accounting Department FY March,2011(October 28,2010) 9 Consolidated results 2Q.FY March,2011 2Q FY2010 2Q FY2011 (July 1.2009 - Sep 30.2009) (July 1.2010 - Sep 30.2010) ％ Yen millions Net Sales 204,305 Yen millions ％ Change Yen millions ％ 100.0 220,309 100.0 16,004 7.8 87.7 Operating Income(Loss) 9,047 4.4 16,979 7.7 7,932 Income before income tax（Loss) 6,371 3.1 15,826 7.2 9,455 148.4 Net income(Loss) attributable to TDK Corp 4,356 2.1 11,593 5.3 7,237 166.1 Per common share Net income(loss) attributable to TDK Corp/Basic Yen(33.77) Yen(89.87) Exchange rate US $ vs JP Yen EURO vs JP Yen Yen appreciation Yen 93.73 Yen 133.75 Yen 85.88 Yen 110.67 Net sales：Lowered 18.9 billion Yen Ex-rate impact to Net sales & Operating Income Operating income：Lowered 5.2 billion Yen FY March,2011(October 28,2010) 10 8.4% 17.3% Net sales comparison FY 2Q Mar’11 vs FY 2Q Mar’10 2Q of FY2010 2Q of FY2011 (July 1.2009 - Sep 30.2009) (July 1.2010 - Sep 30.2010) Yen billion ％ Yen billion ％ Change Yen billion ％ Capacitors 33.6 16.4 37.7 17.1 4.2 12.4 Inductive・devices 28.9 14.2 34.3 15.6 5.4 18.6 Other 31.3 15.3 37.5 17.0 6.2 19.8 Passive compnents TTL 93.8 Recording devices 71.0 34.8 65.3 29.7 (5.7) (8.0) Other 25.2 12.3 26.9 12.2 1.7 6.7 Magnetic application products TTL 45.9 109.5 49.7 15.7 16.8 96.3 47.1 92.2 41.9 (4.0) (4.2) Other 14.3 7.0 18.6 8.4 4.3 30.0 Net Sales 204.3 100.0 220.3 100.0 16.0 FY March,2011(October 28,2010) 11 7.8 Segment information 2Q’Mar11 vs 2Q’Mar10 Net sales by industry segment 2Q FY2010 2Q FY2011 (July 1.2009 - Sep 30.2009) Yen billion (July 1.2010 - Sep 30.2010) ％ Yen billion ％ Change Yen billion Passive components 93.8 45.9 109.5 49.7 15.7 Magnetic Application Prodcuts 96.3 47.1 92.2 41.9 (4.0) 14.3 204.3 7.0 100.0 18.6 220.3 8.4 100.0 4.3 16.0 Others Total Net Sales Segment profit(loss) by industry segment 2Q FY2010 2Q FY2011 (July 1.2009 - Sep 30.2009) Yen billion Passive components (July 1.2010 - Sep 30.2010) ％ Yen billion ％ ％ 16.8 △ 4.2 30.0 7.8 Change Yen billion ％ 0.2 0.2 7.3 6.6 7.1 - Magnetic Application Prodcuts 11.3 11.8 12.5 13.6 1.2 10.8 Others sub total 1.2 12.7 8.6 6.2 1.7 21.5 9.0 9.8 0.4 8.8 36.3 69.1 Corporate and Eliminations -3.7 -0.8 0.0 7.9 87.7 (Loss) Total Operating income(loss) FY March,2011(October 28,2010) 9.0 -4.5 4.4 12 17.0 7.7 Statement of operation in 2Q, FY March 2011 results [2nd quarter results] Term Item Net sales Cost of sales Gross profit Selling, general and administrative expenses Restructuring cost Operating income Other income (deductions): Interest and dividend income Interest expense Foreign exchange gain (loss) Other-net Total other income (deductions) Income before income taxes Income taxes Net income Less:Net income (loss) attributable to noncontrolling interests Net income attributable to TDK Note: 2Q of FY2010 (July 1, 2009 Sept. 30, 2009) (Yen millions) 204,305 156,011 48,294 38,493 754 9,047 480 (1,349) (1,104) (703) (2,676) % 100.0 76.4 23.6 18.8 0.4 4.4 (Yen millions) 220,309 163,996 56,313 39,334 16,979 Change % (U.S.$ thousands) 100.0 74.4 25.6 17.9 7.7 2,622,726 1,952,333 670,393 468,262 202,131 (Yen millions) Change(%) 16,004 7,985 8,019 841 (754) 7,932 7.8 5.1 16.6 2.2 87.7 (174) 590 127 980 1,523 - -1.3 306 (759) (977) 277 (1,153) -0.5 3,643 (9,036) (11,631) 3,298 (13,726) 6,371 3.1 15,826 7.2 188,405 9,455 148.4 2,079 1.0 4,188 1.9 49,857 2,109 101.4 4,292 2.1 11,638 5.3 138,548 7,346 171.2 -0.0 45 0.0 536 109 - 2.1 11,593 5.3 138,012 7,237 166.1 (64) 4,356 U.S.$1=Yen 84, for convenience only. FY March,2011(October 28,2010) 2Q of FY2011 (July 1, 2010 Sep. 30, 2010) 13 Breakdown of Operating Income Changes （Unit：Billion Yen) 7.9 【Change in operating income total】 Change in sales and products mix 19.8 Rationalization and cost reduction and Purchased materials saving SG&A expenses Increase (3.0) Exchange fluctuations（US$=Yen 93.7=>85.9) (5.2) Sales price reduction（4.4％） FY March,2011(October 28,2010) (10.2) 14 6.5 Segment information 1Q’Mar11 vs 2Q’Mar11 Net sales by industry segment 1Q FY2011 2Q FY2011 (Apr 1.2010 - Jun 30.2010) Yen billion (July 1.2010 - Sep 30.2010) ％ Yen billion ％ Change Yen billion ％ Passive components 105.1 47.3 109.5 49.7 4.4 4.2 Magnetic Application Prodcuts 100.3 45.2 92.2 41.9 (8.0) (8.0) Others Total Net Sales 16.6 221.9 7.5 100.0 18.6 220.3 8.4 100.0 2.0 (1.6) 12.2 Segment profit(loss) by industry segment 1Q FY2011 2Q FY2011 (Apr 1.2010 - Jun 30.2010) Yen billion (July 1.2010 - Sep 30.2010) ％ Yen billion ％ (0.7) Change Yen billion ％ 6.2 6 7.3 6.6 1.1 Magnetic Application Prodcuts 16.1 16.0 12.5 13.6 (3.5) (22.0) Others sub total 1.1 23.3 6.3 11 1.7 21.5 9.0 9.8 0.6 (1.8) 59.8 Corporate and Eliminations -3.1 (1.4) 45.3 (3.2) (16.0) Passive components Total Operating income(loss) FY March,2011(October 28,2010) 20.2 -4.5 9 17.0 15 7.7 17.6 (7.8) Passive Components business Mr. Shinichi Araya Director, Senior Vice President FY March,2011(October 28,2010) 16 Net sales comparison in Passive components 2Q’ FY Mar11 vs 2Q’ FY Mar10 2Q of FY2010 2Q of FY2011 (July 1.2009 - Sep 30.2009) (July 1.2010 - Sep 30.2010) Yen billion Capacitors Inductive devices Other passive components Total Passive components ％ 33.6 28.9 31.3 93.8 Yen billion 35.8 30.8 33.2 100.0 Change ％ 37.7 34.3 37.5 109.0 34.5 31.3 34.2 100.0 Yen billion 4.2 5.4 6.2 15.7 ％ 12.4% 18.6% 19.8% 16.8% 1Q’ FY Mar11 vs 2Q’ FY Mar11 1Q of FY2010 2Q of FY2011 (April 1.2010 - June 30.2010) (July 1.2010 - Sep 30.2010) Yen billion Capacitors Inductive devices Other passive components Total Passive components FY March,2011(October 28,2010) 38.0 32.5 34.6 105.1 ％ Yen billion 36.2 30.9 32.9 100.0 17 37.7 34.3 37.5 109.0 Change ％ 34.5 31.3 34.2 100.0 Yen billion (0.2) 1.8 2.9 4.4 ％ -0.6% 5.5% 8.3% 4.2% Business overview in Passive components（1Q vs 2Q) Sector 1Q’FY Mar11 vs 2Q’FY Mar11 Sales status Ceramic capacitors Steady sales in automobile and communication markets. Capacitors Inductive devices Other passive components △0.6％ ＋5.5％ Aluminum & Film capacitors Net sales slightly down despite steady sales in automobile and industrial, renewable energy equipment due to Japanese Yen appreciation. Higher sales of EMI filters and power choke coils and other products in mobile phones centered on smart phones, tablet PCs. Higher sales of noise filters in industrial and renewable energy equipment. High-frequency components Higher sales in WiFi modules, RF modules, RF filters attributable to EPCOS synergy. ＋8.3％ FY March,2011(October 28,2010) Piezoelectric, circuit protection components & Sensor Steady sales of actuators and circuit protection components in communication field, centered on smart phones. Steady sales of sensor, piezoelectric components in automobile and industrial equipment field. 18 Recording device business Mr. Atsuo Kobayashi General Manager, Senior Vice President FY March,2011(October 28,2010) 19 Net Sales results & forecast in FY Mar’11 （Unit：Billion Yen） As of July 29’2010 As of October 28’2010 1st H 140.0 137.0 （Results） 2nd H 153.4 110.9 （Forecast） Total 293.4 247.9 （Forecast） FY March,2011(October 28,2010) 20 Supplementary Data FY March,2011(October 28,2010) 21 Sector classification changes 【Previous Classification】 【New Classification】 Constituent Main business Classification Sector Ceramic capacitors Ceramic capacitors Electronic Ferrite cores materials Electronic materials and Components Recording media Magnets Inductive devices Electronic Hihg-frequency devices devices Sensors & Actuators Power supplies Recording HDD Heads devices others Al electrolytic capacitors Film capacitors Inductors Other Ceramic components Sensors Energy devices others Al electrolytic capacitors Film capacitors Passive components Inductive devices (Coils/Ferrite cores/Transformers) High-frequency devices Piezoelectric materials products, Cuircuit protection devices Sensors Recording devices Magnetic Application Power supplies Magnets Products Recoring media Other Recording media FY March,2011(October 28,2010) Main business 22 Energy devices Mechatronics Other Cautionary Statements with Respect to Forward-Looking Statements This Thismaterial materialcontains containsforward-looking forward-lookingstatements, statements,including includingprojections, projections,plans, plans,policies, policies,management management strategies, targets, schedules, understandings and evaluations, about TDK or its group companies strategies, targets, schedules, understandings and evaluations, about TDK or its group companies (TDK (TDKGroup). Group). These Theseforward-looking forward-lookingstatements statementsare arebased basedon onthe thecurrent currentforecasts, forecasts,estimates, estimates, assumptions, assumptions,plans, plans,beliefs beliefsand andevaluations evaluationsofofTDK TDKGroup Groupininlight lightofofinformation informationcurrently currentlyavailable availabletotoit,it, and andcontain containknown knownand andunknown unknownrisks, risks,uncertainties uncertaintiesand andother otherfactors. factors.TDK TDKGroup Grouptherefore thereforewishes wishestoto caution cautionreaders readersthat, that,being beingsubject subjecttotorisks, risks,uncertainties uncertaintiesand andother otherfactors, factors,TDK TDKGroup’s Group’sactual actualresults, results, performance, performance,achievements achievementsororfinancial financialposition positioncould couldbe bematerially materiallydifferent differentfrom fromany anyfuture futureresults, results, performance, performance,achievements achievementsororfinancial financialposition positionexpressed expressedororimplied impliedby bythese theseforward-looking forward-looking statements, statements,and andTDK TDKGroup Groupundertakes undertakesno noobligation obligationtotopublicly publiclyupdate updateororrevise reviseany anyforward-looking forward-looking statements statementsafter afterthe theissue issueofofthis thismaterial materialexcept exceptas asprovided providedfor forininlaws lawsand andordinances. ordinances. The Theelectronics electronicsmarkets marketsininwhich whichTDK TDKGroup Groupoperates operatesare arehighly highlysusceptible susceptibletotorapid rapidchanges. changes.Risks, Risks, uncertainties uncertaintiesand andother otherfactors factorsthat thatcan canhave havesignificant significanteffects effectson onTDK TDKGroup Groupinclude, include,but butare arenot not limited limitedto, to,shifts shiftsinintechnology, technology,fluctuations fluctuationsinindemand, demand,prices, prices,interest interestand andforeign foreignexchange exchangerates, rates,and and changes changesinineconomic economicenvironments, environments,conditions conditionsofofcompetition, competition,laws lawsand andregulations. regulations. FY March,2011(October 28,2010) 23 FY March,2011(October 28,2010) 24