Furukawa Denshi to Seek Better Profitability, Gallium Nitride Launch

Furukawa tries to expand the gallium nitride business under 3-year plan to fiscal 2010 ending March 2011. The electronics unit expects lower operating profit for fiscal 2008 when the unit’s profitability depends on high purity metallic arsenic market. The electronic material subsidiary, Furukawa Denshi tries to improve the profitability for metallic arsenic and launching gallium nitride. Furukawa Denshi posted 29% lower operating profit for fiscal 2007 from fiscal 2006. The president Yasuhei Konagaya said the high purity arsenic sales decreased to 74 tonnes from 86 tonnes. He said the metallic arsenic sales is monthly 6.5 tonnes as last year but the demand is uncertain in summer and after due to Chinese demand drop after inventory building import until July when China bans certain import including arsenic during Olympic game. The firm purchases materials of arsenic from Chinese companies but Mr. Konagaya said the availability for high grade material is limited. He said the firm tries to seek alternative sources when China tries to shut some of the arsenic material making plant. The firm increases purchase from domestic copper smelters. Mr. Konagaya said the firm tries to reduce the operating cost through companywide effort and the firm could increase the selling price when the firm cannot cover the higher cost for imported material. Mr. Konagaya said the firm establishes mass production system for gallium nitride at Oyama plant in Tochigi starting shipment in fiscal 2009. He said the firm could build the production ability at Iwaki plant in Ibaraki and the final target is high valued epitaxial wafer business.