A Message from the President and CEO

We announced consolidated business results for the first six months of FY2008 on October 29. The key details follow: Net sales: 3,495.8b yen (-194.1b yen) Operating income: -23.5b yen (-106.0b yen) Net income: -38.5b yen (-84.2b yen) (Y-on-Y difference) Although net sales didn't reach the forecast figure announced in September, operating income and net income was better than the forecast. We regret the large year-on-year decline in net sales and operating income.

Price erosion in NAND flash memory exceeded our expectations, and combined with decreased demand for semiconductors, the result of a sharp deterioration in digital consumer product markets, to drag down net sales and operating income in our Semiconductor business. Improved operating income in Digital Products and Social Infrastructure was not enough to compensate for the loss in Electronics Devices, which includes the Semiconductor business.

With respect to the interim dividend, we decided to pay a 5-yen per share to shareholders recorded in the shareholders register as of September 30, 2008, in appreciation of the support extended by our shareholders.

The global financial crisis is expected to last beyond the third quarter, and there are growing concerns for its impact on the real economy. We will continue to monitor economic trends very closely.

We will reinforce our concerted efforts to improve performance. As we do so, I hope we may rely on your continued support.

November 2008

Atsutoshi Nishida
President and Chief Executive Officer