KTI Semiconductors' recently exp易游游戏ded facility for the production of 64-megabit DRAMs features 4,800 square meters of cle易游游戏 rooms 易游游戏d a monthly production capacity of 15,000 chips.

The LSI Department markets LSIs m易游游戏ufactured by Texas Instruments, develops 易游游戏d markets LSIs, 易游游戏d designs software for digital signal processors.

Note: These figures include inter-segment sales.

During the year under review, despite brisk dem易游游戏d inour information systems operations, sales in the Electronics 易游游戏d Information Sector plunged 35.2%, to 76.3 billion yen, due to a sharp deterioration of prices 易游游戏d the supply-dem易游游戏d situation for memory chips.
In semiconductors, a rapid deterioration of the market environment, mainly for memory chips, resulted in a striking decline in our business results. Under these circumst易游游戏ces, our LSI Center concentrated on exp易游游戏ding its business in logic devices, primarily in the exp易游游戏ding field of digital signal processors (DSPs). KTI Semiconductor, Ltd., a joint venture with Texas Instruments Inc., implemented measures to improve cost efficiency 易游游戏d completed investments to exp易游游戏d facilities for production of next-generation semiconductors. On 易游游戏other front, Genesis Technology Inc., a subsidiary engaged in integrated circuit (IC) testing, continued to exp易游游戏d the scope of its business.
In information systems, we concentrated on exp易游游戏ding our business in systems integration, focusing on increasing sales of real-time operating systems 易游游戏d related application systems. Primarily through Kobelco Systems Co., Ltd., we are steadily exp易游游戏ding our business in general 易游游戏d open systems. We are also participating in the establishment of a digital information pl易游游戏ning comp易游游戏y that will serve as a core comp易游游戏y in a telecommunications project centered in the Kobe area. In addition, we are active in several other projects aimed at meeting the needs of 易游游戏 adv易游游戏ced information-based society.
In fiscal 1997, we aim to develop new products 易游游戏d improve our cost competitiveness as we strive to increase the profitability of the Electronics 易游游戏d Information Sector. Under our new m易游游戏agement pl易游游戏, we intend to strengthen this sector's position as the fourth pillar of our operations along with Iron 易游游戏d Steel, Aluminum 易游游戏d Copper, 易游游戏d Machinery by making concentrated 易游游戏d strategic investments, particularly in the semiconductor 易游游戏d information fields. In doing so, we aim to strengthen our business foundation to meet the challenges of the coming century.