Furukawa Denshi Expects Higher Profit in F2006

Electronic material segment of Furukawa Co. Ltd. estimates 9.1 billion yen of net sales and 1.3 billion yen of operating profit for fiscal 2006 ending March 2007, the sales decreasing by 43% from fiscal 2005 and the profit increasing by 23%. Yasuhei Konagaya, president & representative director of Furukawa Denshi which is the core company of the segment, explained how to expand the profit in and after fiscal 2006 to Japan Metal Bulletin.Furukawa Denshi announced price hike for metallic arsenic by more than 50% at the end of 2005 in order to cover the business cost to collect arsenic. Mr. Konagaya said the firm still continues the price negotiation between the arsenic users and some users adopted the hike by more than 10%. Mr. Konagaya said the firm plans to sell 70 tonnes of metallic arsenic in fiscal 2006. He pointed out that the demand is increasing for gallium arsenide semiconductor, the main usage of metallic arsenic, but that the consumption volume is unchanged due to smaller size and higher productivity of semiconductor chips. Even under the situation the firm could sell metallic arsenic at the level along with the original sales plan for fiscal 2006 so far. Furukawa Denshi aims to seek another profitable product as well as metallic arsenic in fiscal 2006, said Mr. Konagaya. One of the targets is gallium nitride substrate for blue and white light emitting diode. He explained the firm planned to start commercial production of the substrate at 800,000 units per month of output capacity and targeted more than 1 billion yen of the sales within fiscal 2006.