Financial Overview

(in million JPY)

	FY ended Mar. 31, 2012	FY ended Mar. 31, 2011	Rate of change	Factors
Overall
Sales	3,639,468	3,645,331	(0.2)	-
Operating income	225,444	233,761	(3.6)	-
Net income	112,063	124,525	(10.0)	-
Industrial automation systems division
Sales	967,779	921,667	5.0	-Even though the Automotive Equipment Business was negatively impacted by the Great East Japan Earthquake and the flooding in Thailand, it nevertheless won increased program business and generated greater sales year-on-year, thanks to growth in developing countries such as China and India, as well as to the recovery in the North American market.
Operating income	101,192	100,089	1.1	-

Joint Venture

-The Company announced that it concluded an agreement with QiMing Information Technology Co., Ltd., a subsidiary of China FAW Group Corporation, to establish a joint-venture company to develop, manufacture and sell car multimedia products in China. The new company, tentatively named Changchun Qiming Lingdian Automotive Electronics Co., Ltd., will be established in Changchun, Jilin Province this August and begin operating in January 2012. Starting with paid-in capital of 175 million Chinese yuan (approximately 2.24 billion yen or 28 million USD), the Company expects to have a workforce of 400 by March 2016. The new company will be owned 51% by QiMing Information Technology, 33% by Mitsubishi Electric, 10% by Mitsubishi Electric (China) Co., Ltd. and 6% by Koshida Corporation. Mitsubishi Electric and QiMing Information Technology have cooperated in the development of car multimedia software since 2004. (From a press release on June 17, 2011)

Business Plan

-The Company plans to achieve the annual sales of 1.3 trillion yen by the smart grid related business in FY 2015 ending in March 2016. The Company announced on Oct. 19 that it has started full-scale tests of smart grid and smart community technologies in Amagasaki, Hyogo Pref. and Wakayama, Wakayama Pref. with an investment of approx. 7 billion yen. In order to strengthen the business, it will utilize the Company's demonstration experiment facilities to develop and verify smart-grid related products for those from power sources to users. As for automotive applications, the Company plans to utilize its technologies in an integrated manner for EV charging stations, EV support systems using ITS (intelligent transport system) and others. (From an article in the Nikkan Jidosha Shimbun on October 20, 2011)

Management Stratery (Announced in June 2011)

Automotive Equipment business
-Expand business operations in developing countries such as China, India, and Brazil
-Develop products that meet the particular needs in each region

Enhance competitiveness based on the keywords "environment/energy-saving" and "IT" for alternator and starters
-The Company continues to work on timely R&D activities and market launches of products that designed to meet the need for ISS, energy regeneration, high efficiency, compactness, weight reduction, and enhanced fuel economy.

IPUs (Intelligent Power Units):
-The Company will improve the competitive edge of its products by leveraging the synergy effects of its technology on semi-conductors and on-board features in the growing HEV and EV markets.

Motor controllers for EPS (Electric Power Steering) systems
-The Company will develop a competitive product lineup that meets the needs for making vehicles more fuel efficient.

Car multimedia
-The Company will develop multimedia products with greater ability to communicate with on-board units. It will also develop exterior equipment so as to meet the needs for making car navigation systems on-board information centers.

Outlook for FY ending Mar. 31, 2013

(in millions of JPY)

	FY ending Mar. 31, 2013 (Forecast)	FY ended Mar. 31, 2012 (Actual Result)	Rate of Change (%)
Sales	3,740,000	3,639,468	2.8
Operating income	200,000	225,444	(11.3)
Net income	120,000	112,063	7.1

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

R&D Expenses

(in billion JPY)

	FY ended Mar. 31, 2012	FY ended Mar. 31, 2011	FY ended Mar. 31, 2010
Overall	169.6	151.7	133.7
Industrial automation systems	54.9	44.9	34.7

R&D Structure

-The Company conducts its development activities, which include areas from basic research, application research, product planning, up to production engineering at its research centers in Japan, the U.S., and Europe, and in addition, at the development divisions at its plants and consolidated subsidiaries. It also carries out joint development activities with universities and research organizations at home and abroad.

-R&D activities at the Automotive Devices Business are conducted as follows:
1) Fundamental technologies: Information Technology R&D Center, Advanced Technology R&D Center, Design Research Center
2) Applied development: Automotive Devices R&D Center
3) Product development: Mitsubishi Electric Ehime Works, Mitsubishi Electric Mita Works, Mitsubishi Electric Fukuyama Works

R&D Activities

Industrial automation systems
-The Company is engaged in developing motors and related parts, mechatronics devices, FA control systems, automotive electric parts, electric power steering systems and parts, car multi-media devices, and other products.

-The Company successfully developed the following products during the fiscal year that ended March 2012.
• Memory car-navigation system
• DSRC devices
• Diatone car speaker SW-G50
• New-type display system that can be fitted on contoured surfaces
• Automotive Blu-ray disc player

Product Development

EV motor system with a built-in silicon carbide inverter
-The Company announced on March 8, 2012 development of a prototype EV motor system with a built-in silicon carbide inverter. Motor/inverter integration has downsized the whole system including the wiring and piping for cooling to half the dimensions of the current system consisting of separate motors and inverters. The company aims to market the product in five years. It plans to enter the business of automobile drive motors in 2014 by accelerating development of EV technologies. For power semiconductor devices for inverter switching, it has selected silicon carbide instead of silicon, which has been widely used. Silicon carbide enables thinner chips, which reduces electrical resistance, resulting in 50% reduction of inverter loss. At present major automakers produce their own EV motors. The Company, however, expects the growing demand at home and abroad, as many automakers should outsource them when EVs become widespread. It has supplied inverters to Honda and Ford Motor but it has never supplied automobile drive motors. It plans to mass-produce the EV and HV motor system that use separate motors and silicon-based inverters in 2014. (From an article in the Nikkan Jidosha Shimbun on March 9, 2012) 

600V high-voltage integrated circuit
-The Company announced on March 6, 2012 that it will launch on April 2 a 600V high-voltage integrated circuit (HVIC), the M81729FP, to be used in voltage converters of EVs and HEVs. It has achieved a wide guaranteed temperature range and high reliability required for automotive applications, which should contribute to downsizing and high reliability of voltage converters of EVs and HEVs. The new HVIC prevents power semiconductor devices from being destroyed by shutting down power output when power supply voltage falls. Its operating temperature range of -40 to +125℃ addresses the need of automotive applications, and high-temperature and long-term burn-in tests have assured its reliability. It has eliminated exclusive devices, such as circuits of photo couplers or comparators, which should downsize voltage converters. The price of a sample is 500 yen, excluding sales tax. (From an article in the Nikkan Jidosha Shimbun on March 8, 2012) 

In-vehicle battery charger for installation on electric and plug-in hybrid vehicles
-The Company has developed an in-vehicle battery charger for installation on electric and plug-in hybrid vehicles (EVs & PHVs) and will begin its commercial production in the Japanese market as early as the end of 2012. By using its original gradationally controlled technology to improve power conversion efficiency, the Company has achieved efficiency up to as high as 94 percent. Looking to the use of EVs and PHVs expanding, the Company is devoting its resources to business related to vehicle electrification. A battery charger is a device for charging electricity from 100/200 volt commercial power outlets to batteries on EVs and PHVs. The device is composed of an AC/DC converter from alternating to direct current and a DC/DC converter between different direct currents. The Company is engaged in development of driving motors, inverters, and rare earth-free motors for EVs, PHVs and HVs with an eye on product lines related to vehicle electrification. (From an article in the Nikkan Jidosha Shimbun on January 23, 2012)

Transfer molded power module (T-PM)
-The Company announced the launch of a new transfer molded power module (T-PM) mainly designed for hybrid and electric vehicle applications. The J Series T-PM, whose lifespan is 30 times longer than that of industrial power modules, uses the Company's original, inner connection technology called direct lead bonding (DLB). Sales will begin in April 2011. (From a press release on April 7, 2011)

Capital Expenditure

(in million JPY)

	FY ended Mar. 31, 2012	FY ended Mar. 31, 2011	FY ended Mar. 31, 2010
Overall	167,500	126,964	102,767
Industrial automation systems	45,271	34,116	22,911

-The Industrial Automation Systems Division focused its investment activities on increasing production of automotive equipment, and on factory automation systems.

 

Investment Outside Japan

<China>
-The Company announced that it will strengthen its production operations for power modules, demand for which is expected to grow especially in the areas of electric and hybrid electric vehicles and solar power generation systems. The Company has established a power module production company in Anhui Province, China through a joint investment with GEM Electronics (Shanghai) Co., Ltd., a licensed manufacturer (assembly test process) of Mitsubishi Electric power modules. The new company, Mitsubishi Electric GEM Power Device (Hefei) Co., Ltd., is capitalized at 5 million US dollars (approximately 425 million yen), of which 70 percent was invested by Mitsubishi Electric Corporation, 10 percent by Mitsubishi Electric (China) Co., Ltd., and 20 percent by GEM Electronics (Shanghai). The facility will be located at the Hefei Economic & Technological Development Area of Anhui Province. New operation will begin in January 2012, with its workforce planned to be increased to 800 by the end of 2015. The establishment is intended to double the group's capacity to conduct power module assembly testing in China compared with the 2011 level. (From an article in the Nikkan Jidosha Shimbun on September 29, 2011)

Planned Capital Investment

(As of Mar. 31, 2012)

	FY ending Mar. 31, 2013 (in millions of JPY)	Main investment and its purpose
Overall	160,000	-
Industrial automation systems	50,000	-Increase and rationalize production of FA and automotive equipment.