Alps Electric Co., Ltd. Business Report FY2009

Business Highlights

Financial Overview

(in millions JPY)
  FY2009 FY2008 Rate of Change
Sales 493,639 538,995 (8.4)


Operating income 4,742 (26,524) - -
Ordinary income 1,676 (23,305) - -
Net income 570 (70,064) - -
Electronic Components
Sales 281,252 297,948 (5.6) -
Operating income 395 (20,062) - -

Business Overview

Automotive Division
Sales of vehicles installed with the Company's products increased steadily, supported by incentive programs for purchasing new cars, and rising demand for hybrids and other environmentally friendly vehicles that are replacing older vehicles. As a result, sales reached 112,500 million yen, exceeding the level predicted in the beginning of the year.

Recent Developments in Japan

-The Company announced the cumulative production of its TACT(R) switches reached 100 billion units in Sep. 2009. The applications include push-buttons for in-car navigation and audio systems as well as control panels. (From a press release on Sep. 14, 2009)

-The Company will abolish its centralized technical organization to delegate engineering functions based on the product to each of its business unit as of Oct. 1 with the aim of bringing a new product to market earlier, the Company announced. The Technical Department was created on Apr. 1, 2009 as part of revamping the corporate operations. The Company has, however, come to a conclusion that it is better to transfer engineering functions of the department to each relevant business unit like the Automotive Business Unit handling auto parts in that the centralized technical department has been engaged in applied development of specific products, rather than elemental development for general products. (From an article in the Nikkan Jidosha Shimbun on Sep. 19, 2009)

>>>Financial Forecast for the Next Fiscal Year (Sales, Operating Income etc.)

Outlook for FY2010

(in billions of JPY)
FY2009 Year-on-year Fluctuation
Sales 520.0 493.6 26.4
-Electronic Components 286.0 274.1 11.9
Operating income 24.0 4.7 19.3
Ordinary income 21.5 1.6 19.9
Net income 14.0 0.5 13.5
R&D Expenditure 29.0 30.2 (1.2)
-Electronic Components 12.4 9.6 2.8
Investment Expenditure 18.0 18.4 (0.4)
-Electronic Components 12.5 11.9 0.6

Financial Targets based on the 6th Mid-term Management Strategy

Electronic Components (in billions of JPY)
  FY2011 FY2010 FY2009
Sales Over 330 Over 300 286.0
Operating income Over 30 Over 20 14.0
R&D Expenditure Approx. 12 Approx. 12 12.4
Investment Expenditure Approx. 12 Approx. 12 12.5

-The Company aims to increase its sales of automotive electronic components by developing new components and realigning its product array.


R&D Expenditures

(in millions JPY)
  FY2009 FY2008 FY2007
Overall 27,843 40,304 42,255
Electronic components 9,612 13,850 15,015

R&D Structure

Automotive Division
- The Company conducts research and development of in-vehicle input devices and various sensors used in automotive body and drive control systems, mainly at its Furukwa Plant in Osaka. The Furukawa plant conducts activities, from developing parts, up to engineering systems products.

R&D Facilities

Sendai R&D Center Miyagi Pref., Japan

R&D Activities

- The Company is focusing on developing new technologies and products that will help improve driving safety in next-generation vehicles. It has started commercial production of the following products: a touch panel for car navigation systems using electrostatic sensors; and a steering module embedded with magnetic, non-contact angle sensors.

- The Company released environmentally friendly products such as a non-plated power window switch, a non-soldered power window switch, and a lightweight airbag connector using fewer components. These products were developed as replacements for conventional plated, metallic plastic parts.

-The Company announced development of the RK39A, a hollow shaft-type, chip LED-illuminated potentiometer as a controller for automobile air conditioners and audio systems. Its mass production commenced in July 2009. This is a smaller version of the 45.0 mm diameter product developed in December 2008 and has been developed in response to a request for a product to be used in a B-platform, compact vehicle. Dials have been designed in a functional manner to allow temperature and volume control to be performed from the outer ring, while on and off switches have been positioned on the inner section. Chip LEDs in red, ice blue, green and white installed in this product display a high level of luminance because they are mounted at higher positions close to panel surfaces. The RK39A's planned monthly production is 300,000 units. While it was developed at the Company's Furukawa Plant, Miyagi Pref., Japan, it is produced at Dalian Alps Electronics Co., Ltd., Jinzhou District, Dalian, China. (From an article in the Nikkan Jidosha Shimbun on July 4, 2009)

-The Company announced that it has developed SKPR series TACT switch for automotive steering wheel applications. Having a high operation force of 5N, the switch prevents operational errors from occurring such as when a driver touches the wheel inadvertently. In addition, it offers improved durability with an extended operating life of 100,000 cycles. According to Alps, the new product is the world's smallest of its kind among steering wheel switches made from silicon rubber springs and achieve a high operation force of 5N. (From an article in the Nikkan Jidosha Shimbun on Mar. 5, 2009)

-The Company has started development of steering modules integrated with several autobody-controlling units. The control units for steering angle, air-bag inflation and the keyless entry system are considered for integration. Several kinds of modules will be developed as standard components based on the needs of each automaker client and each kind will be mounted on several vehicle models. By unifying the functional parts previously delivered separately, the volume of parts is expected to be approx. 50% less. The Company aims to introduce the integrated modules in vehicles to be marketed around 2013. (From an article in the Nikkan Jidosha Shimbun on Mar. 9, 2010)

-The Company is developing a high efficiency reactor for hybrid and electric vehicles. Use of its original magnetic powder for a core of the winding transformer coil can reduce energy loss to one fifth, compared with the conventional iron powder. Higher efficiency also minimizes heat generated by the electric transformer device. Efficient use of electric power will contribute to improvement in fuel economy as well as extension of the driving range. Furthermore, the simplified cooling function, including of peripheral components, will lead to lower cost and lighter weight of related parts. To increase precision and efficiency in electric control, high-frequency circuits will be used increasingly for electric control devices with reactors. In the future there will be a demand for devices that make high-frequency loss smaller. The Company is aiming for its early commercialization as a leading merchandize for hybrid and electric vehicles. (From an article in the Nikkan Jidosha Shimbun on Mar. 25, 2010)

Investment Activities

Capital Investment

(in millions JPY)
  FY2009 FY2008 FY2007
Overall 18,480 47,202 43,153
Electronic components 11,914 34,363 26,349

Electronic component division
-The Electronic Component Division focused its investment activities on producing parts for new products, and increasing the production volume of contact sheets (for cellular phones), and automotive sensors and switches.

Capital Investment Projects

Division Details of the facility Planned investment
(million yen)
Start Estimated completion
Alps Electric Co., Ltd.
Furukawa Plant and others
(Osaki, Miyagi Pref.)
Electronic components Equipment to produce electronic components 3,735 2010.04 2011.03
Alps Electric Co., Ltd.
(Ota, Tokyo)
Electronic components Equipment  to produce
systems products
1,051 2010.04 2011.03
Alps Electric Co., Ltd.
Nagaoka Plant
(Nagaoka City, Niigata Pref.)
Electronic components Equipment  to produce sensors 807 2010.04 2011.03
Alpine Electronics, Inc.
Iwaki Plant
(Iwaki City, Fukushima Pref.)
Audio equipment Machinery, tools, and dies 2,449 2010.04 2011.03