Asahi Glass, Hoya: optoelectronics depress 4Q figures

Two Japanese manufacturers of glass for optoelectronics, Asahi Glass and Hoya Corp., produced poor results for their segment businesses during the October-December 2008 period.
Asahi Glass“ Electron…

Two Japanese manufacturers of glass for optoelectronics, Asahi Glass and Hoya Corp., produced poor results for their segment businesses during the October-December 2008 period. Asahi Glass“ Electronics and Display operations marked a 36% drop in sales for the quarter along with a 64% fall in operating profit from the preceding quarter. Shipments of LCD substrates, the business segment“s major product, contracted by 30% due to production cutbacks by panel manufacturers. The business accounts for more than 60% of the company“s overall operating profit, so it was hit hard by the depressed figures. The Tokyo-based company therefore postponed starting up its new melting furnaces for LCD glass substrates that it had installed in South Korea and Taiwan. “We hope the business will fully recover starting July-September 2009”, said company president Kazuhiko Ishimura. He fears that demand for synthetic quartz and other materials for electronic components will remain generally lackluster. “A clear upturn for the semiconductor business cannot be expected in the near future”, he noted. Hoya“s Electro-Optics division, which had been supporting the Tokyo-based company“s growth, suffered a 22% decline in operating profit in the October-December 2008 quarter, compared with the year-ago quarter, with an operating-profit margin of 26%, down from 35%. Its mask blanks for semiconductor manufacture and glass disks for hard-disk drives, which are market leaders and had been profit engines, were adversely affected by the slump in the electronics industry. Asahi Glass and Hoya now intend to look for and develop new profit-earning businesses. Asahi plans to cut its capital investments by more than JPY 100 billion (USD 1.1 billion) and increase its R&D expenditures by JPY 4.3 billion to JPY 42 billion. Half of the additional R&D spending will be allocated to the solar-energy field, with its figured glass and transparent-conductive-oxide coated glass, as well as its conventional fluororesin films and glass frit, to be utilized in the development and manufacture of solar cells. Hoya is looking to its healthcare products, including contact lenses and endoscopes. “These businesses have been growing steadily on a local-currency basis”, a company official said. In addition, Hiroshi Hamada, the company“s COO, said, “They are less affected by economic changes, so we will take active steps for further development”.