TECHNOLOGY INDUSTRY UPDATE · 2012-01-10 · We are also focusing on new technology proposals, such as the iPhone5 release (currently projected for 3Q 2012) and Samsung Electronics’

EQUITY RESEARCH 10 January 2012

TECHNOLOGY Three major trends for tech sector in 2012

Clearer delineation of winners and losers in 2012: We expect technology companies to continue making revisions to their business models in 2012, beginning with recoveries from flooding in Thailand. Our Japan technology team has prepared an outlook report for the various tech sectors in 2012 with an emphasis on the following structural changes as three major trends for the year. We will be looking for Japanese companies to capitalize on these changes as opportunities and make 2012 a year of “converting changes into concrete results.” Focus stocks are Nidec, TDK (mainly in the first half), Shimadzu, Hitachi High-Technologies, and Pioneer.

Trend 1 -- “PC-ization” of mobile phones progressing (rise of smartphones): Smartphones are increasingly achieving PC capabilities in mobile devices (enhancing PC mobility via the cloud) via enhanced chip performance utilizing an ARM core and steady inroads by iOS and Android OS. In 2012, we expect 1) smartphones to remain the tech sector’s top growth driver, despite price declines as low-end solutions emerge, because the adoption rate is still only about 15%. We are also focusing on new technology proposals, such as the iPhone5 release (currently projected for 3Q 2012) and Samsung Electronics’ flexible OLEDs (volume output likely to begin from 2Q).

Trend 2 -- “Mobile-ization” of PCs changing the industry landscape: We think Windows8 (slated for release at end-3Q to 4Q) is likely to provide power savings (resolving heat emission issues) and thinner and lighter designs by utilizing a touch panel and ARM core CPU. We expect this “PC conversion to mobile” to dramatically alter parts costs (BOM; end of DRAM and increased display precision) and spur business operation reforms. The Ultrabook format advocated by Intel is also a transitional product for enhanced PC mobility.

Trend 3 -- Beginnings of post-LCD TV: The two major Korean firms have plans for OLED TVs, and Japanese firms are preparing for volume output as well. Sony’s new display is attracting interest. While the OLED TV market is only likely to amount to about 200,000 units in CY12 (less than 0.1% of the LCD TV market), investors might discount for medium-term technology changes. In the meantime, for the LCD TV market, we will be concentrating on renewed growth potential (our forecast projects a 12% YoY rise in volume) with the possibility of a replacement purchase cycle in developed countries and faster contraction of PDP sales. We also expect to gain a clearer view of the marketability of TVs that deliver a new viewing experience by bolstering collaboration with smartphones and PCs (such as smart TVs and AppleTV).

Barclays Capital does and seeks to do business with companies covered in its research reports. As aresult, investors should be aware that the firm may have a conflict of interest that could affect theobjectivity of this report.

Investors should consider this report as only a single factor in making their investment decision.

This research report has been prepared in whole or in part by research analysts based outside the USwho are not registered/qualified as research analysts with FINRA.

PLEASE SEE ANALYST(S) CERTIFICATION(S) AND IMPORTANT DISCLOSURES BEGINNING ON PAGE 30.

INDUSTRY UPDATE Japan Consumer Electronics 2-NEUTRAL Unchanged Japan Display & Lighting 1-POSITIVE Unchanged Japan Electronic Components 1-POSITIVE Unchanged Japan Precision Instruments 2-NEUTRAL Unchanged

Japan Consumer Electronics Yuji Fujimori 81 3 4530 2973 [email protected] BCJL, Tokyo Makoto Bizen 81 3 4530 2923 [email protected] BCJL, Tokyo Japan Display & Lighting Yuji Fujimori 81 3 4530 2973 [email protected] BCJL, Tokyo Japan Electronic Components Masaru Koshita 81 3 4530 2937 [email protected] BCJL, Tokyo Japan Precision Instruments Masahiro Nakanomyo 81 3 4530 2962 [email protected] BCJL, Tokyo Yoshihiko Nishizawa 81 3 4530 2994 [email protected] BCJL, Tokyo

Barclays Capital | Technology

10 January 2012 2

CONTENTS

Upshot: Three major trends for the technology sector in 2012 ...................................................... 3 Trend 1: “PC-ization” of mobile phones (rise of smartphones) ...................................................... 5

Focus points in 2012 ........................................................................................................................... 6 Trend 2: “Mobile-ization” of PCs changing the industry landscape............................................... 8

Focus points in 2012 ........................................................................................................................... 9 Trend 3: Beginnings of post-LCD TVs .................................................................................................12

Focus points of 2012.........................................................................................................................12 Other trends not to forget......................................................................................................................13 Sector view ................................................................................................................................................14

Electronic components sector: Masaru Koshita (1-Positive sector view) .............................14 Precisions sector: Masahiro Nakanomyo (2-Neutral sector view)..........................................15 Consumer Electronics and Display Lighting sector: Yuji Fujimori (2-Neutral/1-Positive sector views) .......................................................................................................................................16

FIGURES

Figure 1: Three major trends in 2012 and related stocks ................................................................. 4 Figure 2: Sudden rise of smartphone market from innovator’s dilemma perspective -- Low-end disruption ............................................................................................................................................. 5 Figure 3: Change in LCD panel structure due to in-cell technology ............................................... 7 Figure 4:“Mobile-ization” of PCs from innovator’s dilemma perspective -- New market disruption ..................................................................................................................................................... 8 Figure 5: BOM comparison of notebook PCs, iPad 2, and Ultrabook...........................................10 Figure 6: Comparison of main ARM products and x86 CPU products.........................................10 Figure 7: Display resolution to become even higher ........................................................................11 Figure 8: Valuation (Electronic Components sector) .......................................................................17 Figure 9: Valuation (Precision Instruments sector) ..........................................................................17 Figure 10: Valuation (Consumer Electronics sector)........................................................................18 Figure 11: Valuation (Display lighting sector) ...................................................................................19 Figure 12: Stock performance ...............................................................................................................20 Figure 13: Technology sector market cap ranking...........................................................................21 Figure 14: 4Q11 bottom for short-term cycle (LCD panel supply/demand model).................22 Figure 15: Growth depends on ROW but possible scenario of replacement demand expanding in in EU/North America: LCD TV demand outlook by region....................................23 Figure 16: Growth depends on ROW but possible scenario of replacement demand expansion in EU/North America: LCD TV shipments by region....................................................24 Figure 17: Smartphone production volume outlook (mn units) ...................................................24 Figure 18: Mobile phone production volume outlook (mn units).................................................24 Figure 19: Mobile phone production volume outlook by region (mn units) ..............................25 Figure 20: Tablet demand outlook .......................................................................................................25 Figure 21: Tablets account for growing share of PCs (tablet and PC demand outlook) .........26 Figure 22: PC shipment estimates by area .........................................................................................26 Figure 23: HDD shipment estimates by area .....................................................................................27 Figure 24: Japanese automaker production volume outlook (thousand units) .........................28 Figure 25: LCD TV maker volume targets converging on realistic level (main TV makers)....29


10 January 2012 3

Upshot: Three major trends for the technology sector in 2012

Review of 2011: The Great East Japan Earthquake on 11 March heavily impacted Japanese companies that had been in the process of recovering from “global demand evaporation” caused by the financial crisis. Other challenges were rapid yen appreciation spurred by Europe’s crisis, declines for automobile and consumer electronics demand in reaction to reduced policy assistance, and slower demand in developing countries. These conditions forced companies to revise all of their business assumptions. We think this was a year of reviewing business models that had been in place throughout the post-war period.

Clearer delineation of winners and losers in 2012: We expect technology companies to continue making revisions to their business models in 2012, beginning with recoveries from flooding in Thailand. Our Japan technology team focuses on the following structural changes as three major trends for the year.

Trend 1 - “PC-ization” of mobile phones progressing (rise of smartphones)

Trend 2 - “Mobile-ization” of PCs changing the industry landscape

Trend 3 – Beginnings of post-LCD TV

Other structural changes also bear watching (besides the three major trends), listed below. Figure 1 presents key factors for assessing the directions of these changes and companies likely to be affected by the changes.


10 January 2012 4

Figure 1: Three major trends in 2012 and related stocks

Cos

t red

uctio

nRe

duct

ion

inC

PUco

stD

ecre

ase

in #

of

DRA

MLa

rger

dis

play

Hig

her r

esol

utio

ndi

spla

yTh

inne

r/lig

hter

disp

lay

Li-i

on p

olym

erba

tter

ydi

ffut

ion

Others Positive Negative

Developmnet of smartphone market continues Sequential ● ● ● ● ● ●

Sharp/Sony(Sensor, Sony Ericsson),Murata Manufacturing,Ibiden,Nikon,Elpida Memory

Diffusion of the low-end solutions Sequential ● ● ●(Murata Manufacturing and otherpassive component maker)

Sony(Sony Ericsson)

Application of new technology Sharp(depend on in-cell development) Sharp(depend on in-cell development)

・iPhone5 hitting the market 3Q ● ●Diffustion of LTE and introduction of in-cell touch panel（Added value in touch panel transfers to panel makers）

Ibiden,Murata Manufacturing,Elpida Memory, Renesas Electronics,Toshiba(NAND)

・Samsung new Galaxy hitting the market 2Q ● ● Introduction of Flexible OLED（No need for of glass substrates）Elpida Memory LCD related component, AGCTablet market's re-expansion ・iPad3 sales start/Discount on iPad2 May ● ● ● ● Battery capacity doubles Elpida Memory ・New Samsung GalaxyTab 2Q Possibility of new AP(Exynos5250) introductionWindows8 release ・Application of touchpanel UI "Metro style' (Sharp), Toshiba(NAND), Wacom ・Application ARM core （Windows on Arm）

Expantion of Ultrabook market 2H ● ● ● ● Intel's subsidiy(Sharp), (Ibiden, Shinko ElectricIndustries),

(HDD Component maker),Elpida Memory

Diffution of Android4.0 Sequential ●Android smartphones/tablets to integrate OSAndroid Market to expand

OLED hitting the market 2Q～3Q ● ● ●

Increase in use of Oxide-TFTDiscontinuation/decrease of some LCD components(backlight, glass, etc)Opportunity for Higher resolution/Larger LCDs

Ulvac(Sharp,Sony,Panasonic)AGC,NEG,KONICA MINOLTA ,Fujifilm

Sony's new displayAnnounced

in 1QSelf-emitting device using LED? Sony

Apple TV introduction 2H ● ●New viewer experience through interaction betweensmartphone and tablet?

(Sony) Panasonic(PDP)

Related Japanese Tech stocks

End of3Q～4Q

Expected change

Expectedtiming

●

Nikon,Sharp, TDK(Battery capacityincrease), (Panasonic), Toshiba(NAND)

Ibiden,Shinko Denko,Elpida Memory

Highlighted topicsThree major

trendsin 2012

Outline

Beginnings ofpost-LCD TV

Use of new displaysbeginning; near-term

earnings impact likely tobe small, but stock market

may start factoring infuture changes.

Smartphones allowfunctionality restricted to

PCs until now; in otherwords, cloud technology

has increased PCportability.

Technologies developed inthe smartphone market

transferred to the PCmarket satisfy the

requirements of PC users(thinner, lighter, and lower

power-consuming PCswith superior portability

similar to mobile phones,and touch panel user

interfaces that are easy touse).

Mobile-ization ofPCs

PC-ization ofmobilephone（Rise

of smartphone）

● ● ●

Source: Company data, Barclays Capital Note: Outcome for the related companies in parentheses will depend on their response and could be both positive and negative.


10 January 2012 5

Trend 1: “PC-ization” of mobile phones (rise of smartphones)

We believe improved chip performance with the adoption of ARM cores and the spread of iOS and Android have enabled mobile phones to perform PC tasks. We basically think smartphones have increased PC portability using cloud technology. The following discussion uses the innovator’s dilemma framework advocated by Clayton M. Christensen, a professor at the Harvard Business School.

As indicated by line A in Figure 1, PC innovation has moved in a rightward and upward direction in accordance with Moore’s Law, as CPU processing power has risen (followed by a shift to multicore processing) while memory costs have fallen (installed capacity has increased). Although this has satisfied user performance requirements and opened a vast market, PCs have already reached an over-spec’d level for general users. The industry faces a dilemma in that attempts to increase profitability have the opposite effect of sacrificing profitability through efforts to increase value-added even further. Mr. Christensen would argue that because existing products and services are too good, prices may be relatively higher than prices from which customers would benefit.

However, the combined emergence of energy-saving ARM cores suited to mobile devices (although their performance is inferior), operating systems such Apple’s iOS and Google’s Android, and the development of communications infrastructure has enabled mobile phones to transform into smartphones and perform PC tasks (see line B in Figure 2). User performance requirements have shifted to cloud-based mobility and touch panel user interfaces, rather than simple processing power and memory capacity. In short, product value-added (cost structure) has shifted to touch panels and high resolution LCDs while CPU costs and memory capacity have declined.

Figure 2: Sudden rise of smartphone market from innovator’s dilemma perspective -- Low-end disruption

A

B

Time

Sustaining StrategyBring a better product into an

established market

Low-End DisruptionAddress overserved customers

with a lower-cost business model

Perf

orm

ance PC

Smartphone

＜PC-ization of mobile phones＞

Source: “The Innovator’s Solution”, by Professor Clayton Christensen.

What are smartphones?

Innovator’s dilemma with mobile phones


10 January 2012 6

Focus points in 2012

We expect competition to intensify in 2012 because Taiwan’s Mediatek and other companies are working to provide low-end solutions, but think it is still possible to improve value-added. Global mobile phone penetration appears to be around 6bn units (population penetration rate of 81%), and cumulative smartphone shipment volume (2003-2011) is 1.4bn units for a penetration rate of about 17%. A survey in Japan revealed that the penetration rate was only 13% as of November 2011. We believe smartphone makers have ample potential to improve profitability by reducing reliance on conventional mobile phones (feature phones) and increasing ASP.

According to our channel checks, the iPhone 5 will be released in CY3Q and could potentially fully respond to LTE, adopt an even higher resolution display (expect screen size to expand from 3.5 inches to 4.0 inches), and quickly respond to in-cell touch panel technology. We believe this reflects a greater need for lighter and thinner products to counter Samsung, which is bolstering efforts with OLED.

We would expect the arrival of in-cell touch panels to result in the three structural changes cited below. Existing Taiwanese touch panel makers advocate one glass solution (OGS) and appear to have received orders from smartphone makers. Accordingly, we think some Apple products could take a lead with in-cell touch panels in 2012.

1) The value-added of touch panel makers could shift to LCD panel makers (a portion could pass through to Apple as cost reductions or to consumers). 2) ITO films and some glass could be rendered unnecessary. 3) Panel supplier share could change (LG Display, Toshiba (Toshiba Mobile Display; due to merge with Japan Display in April 2012), and Sharp were main suppliers through the iPhone 4S, but we are focusing on whether Sharp can prepare for in-cell touch panels).

Samsung plans to begin mass production of flexible OLEDs in 2Q 2012, which should allow it to appeal to customers with even thinner, lighter, and more durable products. Tablet displays are likely to be the main application for flexible OLEDs, but Samsung will first accumulate expertise with smartphones. It plans to begin making flexible OLEDs using the later section (A2-2) of the A2 line of Samsung Mobile Display, which makes OLED panels (monthly capacity of 48k on A2-2, and 72k in combination with A2-1; could ramp up to 96k through mask reduction in 2012), and use the A3 line (expect equipment installation in early 3Q 2012 and production expected in 1Q 2013) entirely for flexible OLED production.

We think a shift to flexible OLEDs could result in glass substrate being replaced by polyimide substrate and sealing glass shifting to polyimide. Samsung will likely continue to use cover glass to ensure product design, and due also to the configuration of the battery and other components, we do not expect flexible to equate to a bendable display for the time being.

(1) Smartphone market still in early stages; high growth to

continue

(2) Ongoing proposal of new technologies

In-cell technology to penetrate in touch panel

Flexible OLED to reach the market


10 January 2012 7

Figure 3: Change in LCD panel structure due to in-cell technology

Bonding Layer (150-200μm)

ITO Layer

LCD Panel0.225mm×2＝0.45mm

Bonding Layer (150-200μm)

Polarizer Touch Panel

(With 0.5mm cover→0.95mm)

Array Glass 0.5mm→0.225mm

Cover Glass(0.7mm→0.5mm？)

Array Glass 0.5mm→0.225mm

Total GlassThickness：1.48mm

Total Glass Thickness：1.15mm

Cover Glass(0.7mm)

Glass(0.33mm)

Color Filter Glass 0.5mm→0.225mm

R.G.B

Color Filter Glass 0.5mm→0.225mm

0.33mm～0.53mm thinner

Source: Display Search, Techno System Research, Company data, Barclays Capital


10 January 2012 8

Trend 2: “Mobile-ization” of PCs changing the industry landscape

We expect the second trend of 2012 to be “Mobile-ization” of PCs. Smartphones have transformed mobile phones into PCs, and as Apple and Samsung break down the conventional PC ecosystem, we expect the conventional PC companies Microsoft and Intel to adopt aggressive strategies in 2012. Ultimately, we think Microsoft could use the release of Windows 8 to help reinvigorate its operating system in the smartphone market, and believe competition between PCs and smartphones will intensify.

Using the innovator’s dilemma framework shown in Figure 4, we believe the “Mobile-ization” of PCs is akin to new market disruption as described by Mr. Christensen. In short, this is innovation that occurs when the number of prospective customers is limited due to the inherent attributes of existing products or when the usage location is confined to an inconvenient environment that must rely on certain experts. We believe that technologies developed in the smartphone market (ARM core CPUs, touch panels, high-resolution displays, and thinner and lighter technologies, including batteries) can spill over into the PC market and satisfy the requirements of PC users (thinner, lighter, and lower power-consuming PCs with superior portability similar to mobile phones, and touch panel user interfaces that are easy to use).

Figure 4:“Mobile-ization” of PCs from innovator’s dilemma perspective -- New market disruption

A

B

C

Time

Time

Sustaining StrategyBring a better product into an

established market

Low-End DisruptionAddress overserved customers

with a lower-cost business model

Diff

eren

t Mea

sure

of

Perf

orm

ance

New-Market DisruptionCompete against

i

Nonconsumers orNonconsuming Occasions

Perf

orm

ance

＜Mobile-ization of PCs＞

PC

Smartphone

＜PC-ization of mobile phones＞

Windows 8

Source: “The Innovator’s Solution”, by Professor Clayton Christensen.

Innovator’s dilemma with PCs


10 January 2012 9

Focus points in 2012 Impact 1: Windows 8 will use new Metro style applications and support touch panel user interfaces. Consequently, higher resolution displays will be required to expand and display content.

Impact 2: The Wintel (Windows + Intel) honeymoon period has likely ended and Windows will support CPUs that use ARM cores (Windows on ARM; WoA), including Qualcomm’s SnapDragon, NVIDIA’s Tegra3, Texas Instruments’ OMAP, and Samsung’s Exynos5250. ARM cores enable power saving and thinner profiles than Intel CPUs (ARM cores have limited heat problems, which enables fewer anti-heat components and thinner chassis). Intel also seeks to reduce power consumption by shifting to the new Ivy Bridge CPU (release on 8 April 2012) and to Haswell in 2013.

Opinions are divided about the extent to which WoA will penetrate the market. IDC and IHS iSuppli forecast that WoA will account for 15% of the notebook PC market by 2015, and our European team’s analyst covering ARM, Andrew Gardiner, expects the share to rise gradually to 5% in 2013 and 8% in 2014.

Intel announced in May 2011 its Ultrabook concept to counter the spread of tablet PCs and cloud services. The three initially-stated conditions for an Ultrabook (uses second generation Core i series CPU, profile of 20mm or less, price of $1,000 or less) were met with limited enthusiasm by participating makers, but the apparent flexible revision of conditions and subsidies from Intel could possibly encourage PC makers to release products.

Apple’s smartphones and tablets both use iOS and games and other applications and services can be used on either device. Because Android devices will use the same operating system starting with 4.0 (Ice Cream Sandwich), we expect services for Android Market to expand going forward.

Impact 1: End of DRAM. If tablets and Ultrabooks continue to limit the amount of installed DRAM capacity, DRAM bit growth could slow to 30% or below and we believe the market could ultimately see the reorganization and shakeout of smaller makers. If there are signs of an expansion of installed capacity from 2H 2012 to 2013, we would expect profits at surviving makers to recover substantially. However, the emergence of next-generation memory with low power consumption could increase the likelihood of DRAM semiconductor growth diminishing.

Impact 2: Thinner and lighter panels with higher resolution. Installing touch panel capabilities on notebook PCs would require panels to have even higher resolution displays. Moreover, thinner and lighter panels would require solutions such as LG Display’s Shuriken (LCD modules incorporating all components through to the module would be essential). Sharp has withdrawn from monitor and notebook PC panels, but we think this could provide an opportunity for reentry.

Impact 3: Thinner batteries (shift to polymer). Supply/demand relaxed in 2011, especially at South Korean makers, because the tablet market did not take off as fast as initially expected. Motivation to invest to expand capacity is also lacking. However, polymer batteries have advantages for thinner PCs and tablets, and we expect progress in shifting away from cylindrical batteries. Sony has the largest capacity for lithium-ion-polymer batteries, and TDK subsidiary Amperex Technology (ATL) is also expanding operations. Panasonic (former Sanyo Electric) is rapidly expanding polymer battery production capacity in China after previously lagging behind.

(1) Windows 8 release (expected between end-3Q and 4Q)

(2) Full-fledged release of Ultrabooks

(3) Android market expansion with Android 4.0 penetration

4) Drastic change in BOM (cost structure)


10 January 2012 10

Figure 5: BOM comparison of notebook PCs, iPad 2, and Ultrabook

Typical NB PC iPad2 (32GB 3G) UltrabookCost % of Total SEC's M/S Cost % of Total SEC's M/S Cost % of Total SEC's M/S

Display 57 9% 30% TFT-LCD 60 19% 30% SSD (128G) 150 19% 45%

DRAM 26 4% 35% NAND flash 50 16% 50% Display 67 9% 30%

CPU 123 20% A5 & DRAM 27 9% 100% DRAM 26 3% 40%

Hard Disk Drive 52 8% Touch screen 50 16% CPU (Intel i3) 173 22%

Battery 37 6% Battery 25 8% Battery (polymer) 47 6%

Casing 38 6% Baseband 19 6% Metal casing 55 7%

Optical drive 35 6% User Interface 12 4% Optical drive 0 0%Chipset (dataprocessing / ASP)

40 7%BT/FM/GPS/WLAN

9 3% Chipset 40 5%

Connectors 25 4%Electromechanical& mechanical

35 11% Connectors 25 3%

Circuit Board 15 3% Power Management 10 3% Circuit Board 15 2%

Power adapter 7 1% Camera Modules 5 2% Power adapter 7 1%

WLAN 15 3% Box Contents 6 2% WLAN 15 2%

Keyboard 5 1% Manufacturing 10 3% Keyboard 5 1%

Others 18 3% Others 17 2%

Software 75 12% Assembly 20 3%

Warranty 45 7% Software 75 10%

Warranty 45 6%

Total 610 100% Total 318 100% Total 782 100% Note: M/S = Market share Source: Analyst SC Bae’s report on Samsung Electronics “Initiate at 1-OW: Transitioning to a new era” (8 November),Company data, Barclays Capital estimates

Figure 6: Comparison of main ARM products and x86 CPU products

Apple Samsung nVIDIA Qualcomm TI Intel AMD

Code name Ax or A7 Exynos 5250 Tegra 4 or 5 APQ8064 OMAP 5 Silvermont BulldozerGraphic PowerVR Mali Fermi Adreno 320 SGX544 Dx9CPU cores 4x 2-4x 8x 4x 4x 2-4x 4xARM code Cortex A15 Cortex A15 Cortex A15 Cortex A15 Cortex A15 x86 x86Clock speed 2-2.5 Ghz 2-2.5Ghz 2-2.5 Ghz 2-2.5 Ghz 2-2.5 Ghz 2-2.5Ghz 2-2.5 GhzProcess 28/32nm 32nm 28nm 28nm 28nm 22nm tri-g 28nmFoundries SEC/TSMC Samsung TSMC TSMC TSMC, UMC Intel GF, TSMCOSAT SEC/ASE/SPIL Samsung SPIL/KYEC ASE ASE, Amkor Intel AMD, SPILSubstratevendors

Ibiden/Semco/Kinsus

Ibiden/SemcoNan Ya

PCB/UnimicronKinsus, Semco,

UnimicronIbiden, Kinsus,

SemcoIbiden, Shinko

Ibiden, Shinko,NGK

TDP per core 600mW 2W 1-2W n.a. n.a. 5W n.a.Price in US$ US$30-35 US$30-35 US$45 US$35 US$30 US$60-100 US$55

Source: Analyst Andrew Lu’s report “Andrew on Semis: Win on ARM notebooks” (4 January), Company data, Barclays Capital estimates

Mobile-ization of PCs has made it necessary to integrate PC and smartphone operations. This is a natural development for Apple, and Samsung also handles tablets in its wireless business (smartphone business). Going forward, we think PC operations are likely to be included in wireless operations. At Sony, a key issue is how it will integrate the VAIO business (handles both PCs and tablet PCs) after buying out Sony Ericsson in January.

(5) Integration of business operations


10 January 2012 11

Figure 7: Display resolution to become even higher

Maker -- --Sony

EricssonHTC Apple Apple -- Samsung NEC Dell ASUS Apple HP Apple -- Apple Apple -- --

Panel Size QVGA VGAXPERIA

arcSensation iPhone4S

iPad 2(XGA)

HD720Galaxy

Tab10.1"

MultiSyncLCD-

EA191M

Inspiron15"

K52F15.6"

iPhone5TouchSmart320PC

MacBook

Pro 15"(Upgrad

FHViPad3

(QXGA)

MacBook

Pro 15"(2012

QFHD(4K2K)

SHV(4K8K)

diagonal 320X240 640X480 854X480 960X540 960X640 1024X768 1280X720 1280X800 1280X1024 1366X768 1366X768 1440X800 1600X900 1680X1050 1920X1080 2048X1536 2880X1800 3840X2160 7680X4320

85 5 9 12 13 14 15 17 18 19 18 18 19 22 23 26 30 34 52 10465 6 12 15 17 18 20 23 23 25 24 24 25 29 30 34 39 45 68 13655 7 15 18 20 21 23 27 27 30 28 28 30 35 36 40 47 53 80 16046 9 17 21 24 25 28 32 33 36 34 34 36 41 43 48 56 63 96 19240 10 20 24 28 29 32 37 38 41 39 39 41 48 50 55 64 73 110 22032 13 25 31 34 36 40 46 47 51 49 49 51 60 62 69 80 91 138 27523 17 35 43 48 50 56 64 66 71 68 68 72 83 86 96 111 126 192 38320 20 40 49 55 58 64 73 75 82 78 78 82 95 99 110 128 145 220 44119 21 42 52 58 61 67 77 79 86 82 82 87 100 104 116 135 153 232 46417 24 47 58 65 68 75 86 89 96 92 92 97 112 117 130 151 171 259 518

15.6 26 51 63 71 74 82 94 97 105 100 100 106 122 127 141 164 186 282 56515.4 26 52 64 72 75 83 95 98 106 102 102 107 124 129 143 166 189 286 572

15 27 53 65 73 77 85 98 101 109 104 104 110 127 132 147 171 194 294 58713 31 62 75 85 89 98 113 116 126 121 121 127 147 152 169 197 223 339 678

12.1 33 66 81 91 95 106 121 125 135 130 130 136 158 164 182 212 240 364 72811.6 34 69 84 95 99 110 127 130 141 135 135 142 164 171 190 221 250 380 76010.1 40 79 97 109 114 127 145 149 162 155 155 163 189 196 218 253 288 436 872

9.7 41 82 101 114 119 132 151 156 169 162 162 170 196 204 227 264 299 454 9087.0 57 114 140 157 165 183 210 216 234 224 224 235 272 283 315 366 415 629 12594.5 89 178 218 245 256 284 326 335 364 348 348 366 424 440 490 569 646 979 19584.3 93 186 228 256 268 298 342 351 381 364 364 383 443 461 512 595 676 1025 20494.2 95 190 233 262 275 305 350 359 390 373 373 392 454 472 525 610 692 1049 2098

4 100 200 244 275 288 319 366 376 409 391 391 411 475 494 549 638 724 1099 21973.5 114 229 280 315 326 366 420 431 468 448 448 471 545 566 629 731 830 1259 25183.2 125 250 306 344 361 400 459 472 512 490 490 515 596 619 688 800 908 1377 2754

Pixel per inch(dpi)

Feature phone Smartphone

Tablet

NotebookPC

TV

Source: Company data, Barclays Capital


10 January 2012 12

Trend 3: Beginnings of post-LCD TVs

Focus points of 2012 We expect LG Electronics (LG Display handles panel production) and Samsung Electronics to demonstrate 55-inch OLED TVs at the 2012 International CES to be held January 10–13. We expect LG Electronics/LG Display to be the first to market with a release as early as April, and although we expect Samsung’s release to be later than initially planned, we anticipate release around September. Samsung could introduce the RGB system (separates into three colors) in addition to the white + color filter system employed by LG Electronics. It could also conceivably dissolve S-LCD, an LCD panel joint venture with Sony, and convert its 8G lines to OLED.

We expect 55-inch OLED TVs to be priced above $5,000, and believe they will be niche products with only a 0.1% share of the LCD TV market in 2012 (about 200,000 units). Many production issues remain. However, self-luminous OLED TVs could ultimately achieve costs lower than LCD TVs, and the stock market may anticipate technological changes over the medium term. We believe the following points merit attention.

Several essential LCD panel components will no longer be required. Specifically, backlights will be eliminated and color filter glass (decrease from two to one sheet) and polarization plates (decrease to one plate) may also be affected.

If OLED TVs establish positions as premium brands, then LCD TVs may increasingly become commodity products. Consequently, LCD TV makers will likely seek to increase value-added though higher resolution with cost advantages compared with OLED TVs, and this could prompt the spread of ultra definition (4K2K).

The OLED TV initiatives of Japanese makers are as follows. Sony released an 11-inch OLED TV in 2007 but ended production in 2010. It is currently manufacturing and selling up to 24-inch models, primarily for use as commercial monitors for healthcare and broadcasting applications. Accordingly, it has ample mass production technology. Sony could possibly conduct trial production separate from Japan Display, but because a return to TVs would require a large investment, we think an alliance with another company would be key.

Panasonic intends to build a 5.7G trial production (pilot) line within its 8G plant in Himeji and has already ordered equipment. We expect equipment installation in 3Q 2012 and startup in 4Q 2012. Panasonic plans to operate its TV business as an asset-light business, and intends to pursue alliances with other companies for full-scale mass production.

Sony could possibly exhibit an entirely new display at CES. The company appears to be involved with multiple technologies, but we believe a self-luminous device that uses a covering of micro LEDs is the most promising. At any rate, because the method for manufacturing the back plane is important in terms of cost, we believe an entirely independent effort will be difficult and partnering with another company may be essential.

The LCD TV market has shifted from a growth to a mature market, but we are focusing on the prospects for growth to accelerate again. We expect global LCD TV volume to grow 12% YoY, higher than the market consensus for 7%–8%. Our forecast is based on two main factors: 1) given that large TV sales during the year-end shopping season were stronger than expected, the LCD TV market in advanced countries may have entered a replacement cycle; and 2) the decline in PDP TVs is accelerating. We expect greater-than-expected

(1) More large OLED TVs to hit market

Impact 1

Impact 2

Impact 3

(1) Panasonic focusing on asset-light in TV business

(2) Will Sony unveil a new display?

(3) LCD TV market growth could accelerate again


10 January 2012 13

market growth to have a positive impact on LCD TV makers, which are struggling with losses, and on manufacturers of related components.

We expect the marketability of smart TVs to gradually become clear as these TVs are capable of delivering a new viewing experience with a stronger connection with smartphones and PCs. We believe the most promising product is the new Apple TV, which we expect Apple to release in 2H 2012 based on our channel checks. Details are currently unknown, but multiple panel makers have apparently made product proposals.

Internet-based video distribution services for smartphones and tablets have already taken off. We expect new services to emerge, including shared video viewing using SNS, and think the time in which TVs are no longer simple reception devices is steadily approaching. We believe the spread of smart TVs is a negative for broadcasters, but a positive for higher resolution displays (we think the Apple TV could possibly use a 4K2K panel).

Other trends not to forget

We expect Canon to finally enter the compact interchangeable-lens camera market in 2012. We believe this could be the year when all major digital camera makers enter the market and the direction of market growth becomes clear. The compact interchangeable-lens camera market seeks to expand a customer base that differs from DSLRs by offering lightweight and compact models with video capability. However, internet compatibility is lagging behind and new cultivation of digital users is inadequate. There are questions about whether future product development at all companies contributes to expanding the base of new users or serves only to supplement the needs of existing camera users and ultimately slows growth in the DSLR and high-end compact markets and has a negative impact on prices.

Home appliances appear to be a stable business, but because we expect the mainstay Japanese market to be affected by a reaction to demand stimulus from the Eco-point program and a reaction to replacement buying from energy-saving demand following the Great East Japan Earthquake, we need to be cautious about the possibility of the business environment remaining severe through next spring. For example, real demand (in value terms) weakened sharply during October to November, with air conditioners down about 60% YoY and refrigerators down about 50%. The air conditioner market also merits attention on account of inventory issues at local manufacturers in the Chinese market.

Toyota Motor announced its 2012 production and sales targets for the Toyota and Lexus brands at +24％ and +20％ YoY, respectively. We anticipate high growth on a recovery from the earthquake and flooding in Thailand. Moreover, as the EV/PHEV market may finally take off, Panasonic seeks to achieve profits in its automotive batteries business in FY3/13 (profit contribution is still small). In the car electronics market, Pioneer, JVC, and other aftermarket makers seek to expand OEM business though the spread of dealer option business.

The Olympus incident has prompted greater interest in governance structures, and we expect the consumer electronics industry to see changes in top management (we look for specific actions around March). At Sony, we are focusing on a possible change in the board of directors' chairperson (Yotaro Kobayashi) and on the post of president, which is held concurrently by Chairman Howard Stringer. At Panasonic, we are focusing on reforms under President Fumio Ohtsubo at the critical juncture of the merger of Sanyo Electric and Panasonic Electric Works in January 2012. We expect both companies to sell non-core operations. Moreover, Panasonic will transition to a new domain management structure in

(4) Smart TVs and Apple TV take off

Smart TV spread a positive for higher resolution displays

Expansion of compact interchangeable-lens camera

and mirrorless camera markets

Home appliances undergo adjustment through next spring

Automotive market recovery

Business structure changes and structural reforms


10 January 2012 14

October 2012, and as we expect domain surpluses to come under unified management by the head office and large investment decisions to be made by the head office, we think a strong head office will be an essential factor.

Sector view

Electronic components sector: Masaru Koshita (1-Positive sector view) We expect sector share prices to exhibit different trends in the first half and second half of 2012. Share prices are likely to generally trade higher in the first half with support from a cyclical recovery and reconstruction from Thai floods. In the second half, however, we forecast a downturn and need for selectivity due to cyclical weakening and polarization of earnings outcomes. There is risk of an early arrival of a major stock price slump caused by removal of the technology sector premium and valuation contraction unless earnings and share prices recover in the first half of 2012. A worst-case scenario of sector share prices trading sharply below end-2011 levels at the end of 2012 thus remains a possibility.

We believe the technology sector follows a two-year cycle with a one-year upturn and a one-year downturn. While three setbacks in 2011 (Great East Japan Earthquake, concerns about a financial crisis triggered by Europe, and heavy flooding in Thailand) delayed the inventory cycle bottom from CQ2 to CQ4, we project advances through mid-2012 as the arrival of the two-year cycle’s upturn phase.

We forecast end-January to February as the timing for the start of a share-price upturn. Factors supporting this view are 1) exhaustion of bad news from soft CQ4 results announcements in Japan and the US, 2) an early Lunar New Year for the Greater China region in 2012 (23 January with holidays covering 22-28 January; versus February in 2011) and resulting low year-on-year and month-on-month hurdles for February, and 3) the likely removal of Thai flood impact (including normalization of HDD supply in Feb-Mar).

We expect the following factors to support a cyclical recovery in the first half of 2012 – 1) sales gains by iPhone4S, iPad3, Android 4.0 smartphones, and new tablets, 2) expansion of the Ultrabook format advocated by Intel (aided by the new IvyBridge processor likely to be released in April) and Windows8 rollout anticipated in CQ3), and 3) an end to the worst phase of the LCD TV slump (support from the UEFA European Football Championship and London Olympics).

We will be paying close attention to PC industry trends. The outcome of ultra-thin, very fast-starting Ultrabooks is likely to be an important test of whether PCs become a structural slumping product. However, production activity is likely to exceed real demand in CQ2-3 on gains in reaction to the Thai floods as suppliers increase output and replenish inventories following the removal of HDD supply shortages and the real challenge should come from CQ4. We will also closely monitor Intel and ARM processor trends as rivals following the Windows8 release.

Investors should watch out for slower volume growth rates and a shift to lower-end offerings after the cyclical recovery through mid-year due to a reversal from the sharp output recovery (particularly for PCs) and a phase change from expansion to cyclical growth for smartphones (with just limited impact from functional additions and LTE).

We utilize “post-Thai flood” in the first half and “polarization from a medium/long-term perspective” in the second half as guidelines for stock selection. We focus on Nidec and TDK in the first half on the prospect of market share gains for HDD parts linked to Thai

Cyclical recovery in the first half of 2012, polarization in the

second half


10 January 2012 15

floods. In the second half, we expect polarization of the group forced to implement major restructuring reforms and the group pursuing near-future business expansion via aggressive M&A activities. We will be monitoring Nidec, Murata, and Kyocera as opportunities unfold from expansion initiatives in 2011.

Precisions sector: Masahiro Nakanomyo (2-Neutral sector view) Within the precision equipment business in Japan in 2012, we expect the supply/demand gap for digital cameras to be a major point of interest in 1H . There are strong hopes for a sharp recovery in digital camera production from the beginning of the year as companies recover from the damage caused by the Thai floods, leading to particularly sharp growth for digital SLRs and mirrorless cameras, for which the companies have high growth expectations. We expect Canon to enter the mirrorless camera market from March. In contrast, in light of individual consumption trends in Europe and China we do not have high expectations for demand, particularly in 1H. The keys to growth will be expansion in the new user base in the developed countries and the sustainability of growth in the market for wealthy consumers in the developing countries. We also expect an improvement in video functionality in 2012, and this should also be the year when we get a clearer picture of the impact of smartphones, which affect household budgeting in pricing terms, on the digital camera market, particularly high-end compacts. As a result of these factors, there is now a risk of oversupply in the digital camera market.

In office equipment, we still do not expect demand to expand much. In the laser beam printer sector, we expect adjustment of inventories built up since last summer to continue through 1H. The key question now will be how rapidly the office equipment companies can respond to market change through cost reductions and business restructuring.

In SPE, we expect the increase in orders to continue in Oct-Dec and in the New Year after bottoming in Jul-Sep 2011, but if we assume that growth in semiconductor demand in 2012 will be towards the lower end of the single-digit range, then we expect semiconductor capex spending as a whole to be roughly flat, and expect orders to weaken from around the middle of the year.

We expect semiconductor capex to remain at a high level in 1H as the foundries and Intel strive to win orders from the smartphone and tablet PC sectors, but we expect orders at all companies in 2H 2012 through 2013 to be affected by fluctuations in capex. In 1H 2012 we also expect a final resolution of the problem of restructuring within the DRAM industry. If growth in DRAM demand continues to slow, restructuring and weeding out of weaker players within the industry may be difficult to avoid. However, we expect NAND capex to remain stable. Overall, we expect the semiconductor production equipment market to continue to track roughly sideways in 2013.

In the control equipment sector, we expect growth in demand in China, which has been the main driver for expansion, to continue slowing in the New Year. However, from April-May we expect the growth trend to resume. We expect the Chinese market for analytical equipment to continue to grow by around 20% in 2012, and expect the domestic market to also remain firm.

Stocks to focus on include (1) Shimadzu, where we expect profit growth to outstrip the consensus on the back of growth in China and increased competitiveness at the high end of the market, and (2) Hitachi High-Technologies, where we expect steady profit growth towards the achievement of the targets outlined in the medium-term business plan on the back of miniaturization of semiconductor demand and strong sales of medical equipment.

Fears on oversupply of digital cameras but expect growth in

China


10 January 2012 16

Consumer Electronics and Display Lighting sector: Yuji Fujimori (2-Neutral/1-Positive sector views) We expect the share prices of the main consumer electrical companies to continue to lag the market from the New Year through the announcement of 3Q results since we expect share price developments to be affected by expectations of downward revisions to earnings forecasts. The main reasons are that we expect the impact of the Thai floods to be greater than anticipated (with Panasonic not factoring in any impact into its earnings forecasts), the stronger yen (particularly against the euro) and the weak results in the year-end sales campaign. Accordingly, we continue to focus on stocks where the main driver for growth is the auto-related business, such as Pioneer and JVC Kenwood (where progress with the sale of Panasonic’s equity stake should be even more positive) and Nippon Electric Glass, which has been oversold and should benefit from the expected cyclical recovery in the food chain for LCDs. We maintain 1-OW ratings on all these stocks.

After factoring in the risk of disappointing short-term results, we expect the focus of attention to turn to the strength of medium-term recovery, but we expect increasing differentiation in performance among individual companies. Currently there is a question mark over how the consumer electrical industry will face up to the prevailing paradigm over the past fifty years whereby the product cycle is the key controller of growth. From FY3/08 the flat-screen TV cycle, which had been the main driver of growth in recent years, started to turn down, and while all the makers are still struggling to shrink losses in their flat-screen TV businesses, they are now in a transitional period where they are attempting to identify the next growth drivers (with the main growth opportunities currently appearing to be in smartphones and tablet PCs). We expect all the companies to attempt to restructure their unprofitable business through contraction, spin-offs, or disposals.

We expect different companies to show different responses. Sony has turned Sony Ericsson into a 100% subsidiary to capture growth in the B2C businesses such as smartphones and tablet computers. Sharp is attempting to grow its earnings by concentrating on the supply of LCD panels for smartphones and tablet PCs. Panasonic, meanwhile, is attempting to change the area in which it competes by concentrating on the B2B and solutions business.

We expect recovery at Sony (2-EW) to depend largely on the success or otherwise of Sony Ericsson. The company’s current stance is that, while there are still some opportunities, it is taking a wait-and-see attitude toward actual execution, and the key from now on will be seeing how integration of the tablet and PC businesses proceeds following the full consolidation of Sony Ericsson.

At Sharp, there are still problems with maintaining capacity utilization at the 10G panel plant, but we are concentrating on the potential merits from the move to higher resolution small and medium-scale LCD panels as a result of the expansion in demand for smartphones, tablet PCs, and Windows 8.

We expect the share price of Panasonic to lag the market. We expect new business areas such as automotive batteries to start contributing to earnings from FY3/13, but the AV business (primarily TVs) makes a major contribution to sales, and since the white goods business is currently seeing a setback in the domestic market, we get the impression that significant restructuring will take some time.

Major shares currently laggards and we expect increased

differentiation throughout FY2012


10 January 2012 17

Figure 8: Valuation (Electronic Components sector)

stock price (4/Jan.) EV (JPY bn) EBITDA (JPY bn) EPS (JPY) CFPS (JPY) BPS (JPY) ROECode Company （JPY） 3/11 3/12E 3/13E 3/11 3/12E 3/13E 3/11 3/12E 3/13E 3/11 3/12E 3/13E 3/11 3/12E 3/13E 3/11 3/12E 3/13E4062 Ibiden 1,568 159 174 171 74.5 54.5 75.6 137.2 44.5 138.1 420.1 339.9 454.4 1,861 1,852 1,921 7.4% 2.4% 7.2%5334 NGK Spark Plug 956 181 182 177 45.4 40.9 47.0 108.7 91.4 91.9 185.1 164.4 170.0 994 980 1,015 10.9% 9.3% 9.1%5991 NHK Spring 684 165 164 162 55.3 41.7 48.7 82.4 60.5 65.3 178.3 138.9 150.2 610 665 705 13.5% 9.1% 9.3%6594 Nidec 6,880 1,018 1,014 1,089 124.7 109.1 135.7 375.9 297.0 428.5 621.5 562.8 744.6 2,552 2,734 2,489 14.7% 10.9% 17.2%6762 TDK 3,385 489 472 455 141.4 112.9 134.5 350.9 156.5 291.4 952.4 777.4 920.7 4,142 4,128 4,389 8.5% 3.8% 6.6%6806 Hirose 6,950 143 138 131 27.6 25.7 29.7 330.2 348.8 407.7 488.1 523.5 613.5 6,697 6,659 6,902 4.9% 5.2% 5.9%6963 Rohm 3,615 145 185 185 70.0 35.7 65.6 88.1 -167.6 118.5 428.4 179.9 520.9 6,116 5,753 5,765 1.4% -2.9% 2.1%6967 Shinko Electric 534 8 17 20 25.0 13.9 18.0 17.8 -42.7 -3.1 168.8 110.5 130.2 1,001 901 898 1.8% -4.7% -0.3%6971 Kyocera 6,280 683 655 628 215.7 183.3 183.2 667.2 469.9 444.4 993.1 796.8 787.7 7,739 7,696 7,890 8.6% 6.1% 5.6%6976 Taiyo Yuden 593 71 100 100 28.1 12.4 21.1 -46.8 -150.3 -37.2 117.4 28.3 132.9 1,081 928 888 -4.3% -16.2% -4.2%6981 Murata Mfg. 4,085 759 780 784 139.3 114.3 127.4 249.2 185.0 222.4 537.1 469.2 506.6 3,904 3,952 4,155 6.4% 4.7% 5.4%

Market Cap EV/Sales (x) EV/EBITDA (x) P/E (x) P/CF (x) P/B (x) Dividend (JPY) Yield rateCode Company (JPY bn) 3/11 3/12E 3/13E 3/11 3/12E 3/13E 3/11 3/12E 3/13E 3/11 3/12E 3/13E 3/11 3/12E 3/13E 3/11 3/12E 3/12E4062 Ibiden 236.5 0.58 0.57 0.58 2.1 3.2 2.3 11.4 35.2 11.4 3.7 4.6 3.5 0.84 0.85 0.82 40 30 1.9%5334 NGK Spark Plug 213.7 0.74 0.68 0.67 4.0 4.5 3.8 8.8 10.5 10.4 5.2 5.8 5.6 0.96 0.98 0.94 22 22 2.3%5991 NHK Spring 166.9 0.41 0.36 0.36 3.0 3.9 3.3 8.3 11.3 10.5 3.8 4.9 4.6 1.12 1.03 0.97 15 15 2.2%6594 Nidec 998.1 1.73 1.47 1.53 8.2 9.3 8.0 18.3 23.2 16.1 11.1 12.2 9.2 2.70 2.52 2.76 85 90 1.3%6762 TDK 438.7 0.60 0.54 0.57 3.5 4.2 3.4 9.6 21.6 11.6 3.6 4.4 3.7 0.82 0.82 0.77 80 80 2.4%6806 Hirose 278.1 1.69 1.49 1.40 5.2 5.4 4.4 21.0 19.9 17.0 14.2 13.3 11.3 1.04 1.04 1.01 150 130 1.9%6963 Rohm 409.9 0.43 0.54 0.60 2.1 5.2 2.8 41.0 -21.6 30.5 8.4 20.1 6.9 0.59 0.63 0.63 130 60 1.7%6967 Shinko Electric 72.2 0.06 0.12 0.18 0.3 1.2 1.1 30.0 -12.5 -172.3 3.2 4.8 4.1 0.53 0.59 0.59 20 20 3.7%6971 Kyocera 1,201.4 0.64 0.52 0.52 3.2 3.6 3.4 9.4 13.4 14.1 6.3 7.9 8.0 0.81 0.82 0.80 130 130 2.1%6976 Taiyo Yuden 71.4 0.36 0.48 0.53 2.5 8.1 4.7 -12.7 -3.9 -15.9 5.1 21.0 4.5 0.55 0.64 0.67 10 10 1.7%6981 Murata Mfg. 920.2 1.43 1.26 1.31 5.4 6.8 6.2 16.4 22.1 18.4 7.6 8.7 8.1 1.05 1.03 0.98 100 100 2.4%

Average 0.79 0.73 0.75 3.6 5.0 3.9 14.7 10.8 -4.4 6.6 9.8 6.3 1.00 0.99 0.99 2.1% Source: Company data, Barclays Capital estimates.

Figure 9: Valuation (Precision Instruments sector)

Code Company RatingSharePrice

TargetPrice

(TP/Price)－1

PER PBR EV/EBITDA ROE Dividendyield

(JPY) (JPY) FY11 FY12 FY13 FY10 FY11 FY11 FY12 FY13 FY11 FY12 FY1101/06/2012 Co E BC E BC E BC E Actual BC E BC E BC E BC E BC E BC E BC E

Valuations

6645 Omron 1-OW 1,575 2,300 46% 12.8 12.0 9.1 7.9 1.1 1.0 4.8 3.9 3.5 9.3% 12.2% 1.9%7701 Shimadzu 1-OW 632 900 42% 18.6 16.9 11.7 9.8 1.2 1.2 6.4 5.3 3.8 7.2% 10.2% 1.3%4901 Fujifilm Holdings 1-OW 1,871 2,500 34% 16.7 18.0 10.0 8.2 0.5 0.5 3.1 2.9 2.7 2.9% 5.2% 1.9%8036 Hitachi High-Technologies 1-OW 1,661 2,000 20% 12.7 12.3 11.7 10.5 0.9 0.8 3.6 3.6 3.1 8.1% 8.0% 1.8%7735 Dainippon Screen Mfg. 1-OW 625 600 -4% 14.8 12.4 12.9 12.4 1.7 1.4 6.9 6.0 5.0 18.5% 13.1% 0.8%

6951 JEOL 2-EW 196 310 58% 76.7 490.0 10.9 6.1 0.6 0.7 4.5 6.3 5.2 0.1% 5.9% 2.0%7732 Topcon 2-EW 358 500 40% 41.4 red 12.7 8.7 0.9 0.9 8.8 7.0 6.1 -0.7% 7.1% 1.1%6590 Shibaura Mechatronics 2-EW 197 270 37% 0.0 48.7 10.8 8.8 0.6 0.6 5.4 4.3 3.8 1.2% 5.1% 1.0%7731 Nikon 2-EW 1,716 2,000 17% 12.4 11.9 12.1 11.3 1.7 1.6 4.9 5.1 3.6 15.3% 14.4% 2.0%6724 Seiko Epson 2-EW 1,014 1,250 23% 25.3 20.3 8.4 7.0 0.8 0.7 2.5 2.7 2.2 3.6% 8.9% 2.6%6728 ULVAC 2-EW 947 1,150 21% 15.0 48.9 29.2 11.7 0.5 0.5 7.7 8.1 6.6 1.0% 1.7% 1.4%7741 Hoya 2-EW 1,641 1,980 21% - 15.0 12.4 11.2 1.9 1.7 6.5 5.4 2.2 13.5% 15.1% 4.0%6856 Horiba 2-EW 2,259 2,700 20% 11.2 10.7 10.4 9.6 1.1 1.1 4.6 4.2 3.7 11.1% 11.0% 1.3%7752 Ricoh 2-EW 645 770 19% 46.8 46.8 15.1 9.5 0.5 0.5 8.5 6.5 5.3 1.0% 3.3% 5.1%7751 Canon 2-EW 3,365 3,800 13% 17.6 16.3 13.4 11.7 1.6 1.3 5.8 5.0 4.6 9.5% 11.8% 3.6%4902 Konica Minolta Holdings 2-EW 567 640 13% 15.8 16.7 13.7 12.0 0.7 0.7 4.0 3.9 3.8 4.3% 5.1% 2.6%7762 Citizen Holdings 2-EW 452 490 8% 16.3 17.2 14.6 13.8 0.8 0.8 4.6 4.4 4.0 4.5% 5.4% 1.8%8060 Canon Marketing Japan 2-EW 894 950 6% 34.1 29.2 18.0 15.7 0.5 0.5 -0.6 -0.7 -0.6 1.7% 2.8% 2.2%8035 Tokyo Electron 2-EW 3,880 3,800 -2% 17.4 16.5 16.2 13.9 1.2 1.1 6.3 6.0 5.3 8.0% 7.4% 2.1%

7733 Olympus 3-UW 1,053 900 -15% 15.6 23.4 12.6 9.4 1.7 1.7 9.0 6.7 5.6 5.6% 13.4% 2.8% Note: 12-month target prices Source: Company data, Barclays Capital estimates.


10 January 2012 18

Figure 10: Valuation (Consumer Electronics sector)

Code 6632 6752 6753 6758 6773 6839 6952

Company JVC Kenwood Panasonic Sharp Sony PioneerFunai

ElectricCasio

ComputerRating 1-OW 2-EW 3-UW 2-EW 1-OW 2-EW 2-EWShare price (¥, as of 1/6) 286 654 660 1,345 344 1,866 436Market cap (¥mn, as of 1/6) 39,754 1,604,296 733,061 1,351,237 112,176 67,412 121,653

P/E(X)　　FY3/07 -- 24.1 21.6 41.5 NM NM 25.5 28.2 (excl. restructuring cost) -- 21.8 21.6 30.9 NM NM 25.5 24.9　　FY3/08 -- 16.7 21.9 15.7 NM NM 37.1 22.9 (excl. restructuring cost) -- 18.0 21.9 14.3 NM NM 37.1 22.8　　FY3/09 NM NM NM NM NM NM NM NM　　FY3/10 NM NM 261.3 NM NM 13.2 NM 137.2 (excl. restructuring cost) NM NM NA 22.5 NM NA NM 22.5　　FY3/11 NM 18.3 37.4 -5.2 10.7 NM 20.6 16.4 (excl. restructuring cost) NA NA NA 13.8 NA NA NA NA　　FY3/12E 7.3 -3.4 NA -6.3 74.8 -19.8 31.7 14.0　　FY3/13E 5.5 11.5 12.3 14.8 8.6 19.8 12.0 12.1　　FY3/14E 5.1 10.8 14.8 8.4 7.0 13.5 10.9 10.1

P/B (X)　　FY3/07 -- 1.2 1.8 1.5 1.2 2.0 2.6 1.7　　FY3/08 -- 1.1 1.8 1.5 0.9 1.2 1.9 1.4　　FY3/09 5.1 1.3 1.2 1.0 1.0 0.6 1.5 1.7　　FY3/10 10.3 1.0 1.1 0.9 0.8 1.0 1.3 2.3　　FY3/11 0.8 0.5 0.7 0.5 1.3 0.5 0.8 0.7　　FY3/12E 0.9 0.6 0.8 0.6 1.4 0.5 0.8 0.8　　FY3/13E 0.8 0.6 0.7 0.6 1.6 0.5 0.8 0.8　　FY3/14E 0.7 0.6 0.7 0.6 1.3 0.5 0.8 0.7

P/CF(X)　　FY3/07 -- 10.5 6.9 10.0 9.6 160.3 14.9 35.3　　FY3/08 -- 8.4 5.9 7.3 9.6 NM 14.9 9.2　　FY3/09 NM NM 8.8 10.6 NM NM NM 9.7　　FY3/10 NM 14.2 4.6 8.2 NM 8.5 NM 8.9　　FY3/11 4.0 3.2 2.7 20.5 2.8 12.2 8.3 7.7　　FY3/12E 1.9 NM 3.0 10.0 3.6 26.5 9.4 9.1　　FY3/13E 1.7 3.2 2.3 3.2 2.7 18.7 6.4 5.5　　FY3/14E 4.3 3.9 2.4 2.7 2.7 12.7 6.1 5.0

EV/EBITDA(X)　　FY3/07 -- 6.3 5.9 10.6 6.1 12.3 9.6 8.5　　FY3/08 -- 5.4 5.5 6.5 4.9 65.0 7.3 15.8　　FY3/09 8.6 9.1 8.1 21.0 NM 1.0 14.3 10.4　　FY3/10 13.9 7.0 5.4 9.6 3.5 3.9 NM 7.2 (excl. restructuring cost) 13.9 7.0 5.4 5.2 3.5 3.9 NM 6.5　　FY3/11 2.3 3.2 4.3 3.0 2.6 1.1 6.5 3.3 (excl. restructuring cost) NA NA NA 3.0 NA NA NA NA　　FY3/12E 1.8 4.9 3.6 8.3 2.4 0.1 5.1 3.8　　FY3/13E 1.2 3.5 3.2 4.1 1.7 NM 4.3 3.0　　FY3/14E 0.6 3.7 3.3 3.2 0.9 NM 3.7 2.6

ROE(%)　　FY3/07 -- 5.6 8.9 3.8 -2.5 -1.9 11.8 4.3　　FY3/08 -- 7.4 8.4 10.8 -7.0 -3.1 5.2 3.6　　FY3/09 -42.3 -11.6 -11.0 -3.1 -72.9 -11.8 -11.2 -23.4　　FY3/10 -46.9 -3.7 0.4 -1.4 -59.0 7.5 -12.2 -16.5　　FY3/11 -8.2 2.8 1.9 -9.4 12.0 -0.9 3.6 0.3　　FY3/12E 12.7 -19.2 0.0 -9.0 1.8 -2.7 2.5 -2.0　　FY3/13E 15.7 5.7 6.2 4.1 17.8 2.8 6.7 8.4　　FY3/14E 14.6 5.9 5.0 6.9 21.2 4.1 7.3 9.3

OPM(%)　　FY3/07 -- 5.0 6.0 0.9 1.6 4.7 7.7 4.3　　FY3/08 -- 5.7 5.4 4.2 1.2 -0.9 6.1 3.6　　FY3/09 -0.5 0.9 -1.9 -2.9 -9.8 0.5 0.8 -1.9　　FY3/10 -1.6 2.6 1.9 0.4 -4.0 3.5 -6.8 -0.6　　FY3/11 3.7 3.5 2.6 2.8 3.5 0.3 3.5 2.8　　FY3/12E 4.3 1.6 2.9 -1.2 2.7 1.0 4.4 2.2　　FY3/13E 5.1 3.6 3.8 2.5 5.0 2.1 5.4 3.9　　FY3/14E 5.3 3.7 3.3 4.0 5.7 2.7 5.9 4.4

7 comp.Average

Source: Company data, Barclays Capital estimates.


10 January 2012 19

Figure 11: Valuation (Display lighting sector)

Code 5201 5202 5214 U:GLW F:GOB U:PPG TW:TGL

Company Asahi GlassNipponSheet

NipponElectric Glass

CorningSAINT

GOBAINPPG

TAIWANGLASS

7 comp.Average

Rating 2-EW 3-UW 1-OW 1-OWCurrency JPY JPY JPY USD EUR USD TWDShare price (¥, as of 1/6) 637 140 749 13 30 85 34Market cap (¥mn, as of 1/6) 755,931 126,497 372,714 20,871 15,893 13,055 70,659

P/E(X)　　FY2006 39.4 NM 20.5 19.1 12.1 15.4 15.9 19.0　　FY2007 26.5 NM 17.6 15.9 16.0 14.2 17.6 16.5　　FY2008 31.3 NM 25.5 8.3 9.1 15.9 34.7 19.0　　FY2009 40.0 NM 9.4 9.4 74.3 26.9 40.8 30.9　　FY2010 8.8 0.0 8.5 9.5 16.9 16.1 14.8 10.6　　FY2011(E) 8.9 11.6 10.8 7.6 9.2 12.3 15.9 10.5　　FY2012(E) 10.6 9.6 9.6 8.0 8.4 11.8 11.8 9.7　　FY2013(E) 10.6 8.9 7.6 7.0 7.2 10.9 10.5 8.6

P/B (X)　　FY2006 1.8 NM 3.0 4.7 1.4 3.3 1.2 2.3　　FY2007 1.8 NM 2.6 3.8 1.6 2.8 1.5 2.1　　FY2008 1.6 NM 1.6 1.5 0.9 2.5 1.2 1.4　　FY2009 1.0 NM 1.3 1.3 1.1 2.4 1.3 1.3　　FY2010 0.8 NM 0.8 1.1 0.9 3.7 1.7 1.4　　FY2011(E) 0.9 0.7 0.8 1.0 0.8 3.4 1.4 1.2　　FY2012(E) 0.8 0.6 0.7 0.9 0.8 2.9 1.3 1.1　　FY2013(E) 0.8 0.6 0.7 0.9 0.7 2.6 1.2 1.0

P/CF(X)　　FY2006 10.4 NM 10.6 13.9 5.9 10.1 7.8 9.0　　FY2007 9.0 NM 10.0 13.0 7.8 9.6 8.8 8.8　　FY2008 7.0 NM 8.2 3.4 4.3 9.3 8.7 6.2　　FY2009 5.1 NM 5.0 9.6 6.3 9.4 12.7 7.3　　FY2010 4.6 NM 4.8 8.1 6.7 9.4 7.5 6.4　　FY2011(E) 3.9 2.5 4.0 6.9 4.8 9.2 N/A 5.0　　FY2012(E) 4.1 2.4 3.7 7.6 4.5 8.8 N/A 4.9　　FY2013(E) 4.1 2.3 3.2 6.6 4.1 8.2 N/A 4.5

EV/EBITDA(X)　　FY2006 8.2 5.0 6.8 22.4 6.4 7.5 7.6 83.4　　FY2007 7.0 2.7 6.2 19.3 6.4 7.0 8.5 43.9　　FY2008 6.1 4.9 4.5 13.1 5.0 5.8 10.2 19.4　　FY2009 4.8 6.7 3.4 16.9 6.6 7.6 12.2 35.8　　FY2010 4.2 4.5 3.1 11.2 5.3 7.8 11.3 6.5　　FY2011(E) 3.6 6.9 2.5 5.9 N/A N/A N/A 4.7　　FY2012(E) 3.7 5.8 2.6 5.9 N/A N/A N/A 4.5　　FY2013(E) 3.7 5.5 2.0 5.3 N/A N/A N/A 4.1

ROE (%)　　FY2006 4.9 4.4 15.9 27.5 12.5 22.6 7.7 13.1　　FY2007 6.9 15.3 16.2 26.8 10.2 22.6 8.9 14.8　　FY2008 4.3 -8.4 6.2 21.0 9.4 14.4 3.3 7.0　　FY2009 2.5 -14.8 14.5 14.6 4.1 13.7 3.3 5.2　　FY2010 14.2 0.7 15.7 18.7 7.9 23.3 12.0 13.2　　FY2011(E) 9.3 0.8 7.2 13.4 9.5 28.2 10.4 11.2　　FY2012(E) 7.6 0.6 7.6 11.7 9.7 25.7 12.4 10.7　　FY2013(E) 7.3 0.6 9.0 12.8 10.5 27.4 11.8 11.4

OPM(%)　　FY2006 8.4 3.5 25.1 17.4 8.8 12.0 10.0 12.1　　FY2007 11.7 5.4 27.4 21.5 9.4 11.3 12.3 13.8　　FY2008 10.7 0.3 22.8 20.4 8.2 8.5 4.1 10.9　　FY2009 7.5 -2.9 29.6 11.8 5.9 8.2 -0.7 8.1　　FY2010 17.8 2.5 30.1 21.5 7.8 10.2 35.2 17.1　　FY2011(E) 13.7 4.0 20.4 23.3 8.1 12.2 13.3 13.6　　FY2012(E) 11.8 4.4 17.3 22.8 8.2 12.1 16.8 13.4　　FY2013(E) 11.3 4.6 20.4 23.8 8.8 12.5 17.7 14.0 Source: Company data, Barclays Capital estimates. Note: Non-coverage company estimates use Reuter consensus.


10 January 2012 20

Figure 12: Stock performance

(%)

Company CodeLast

12 monthsLast

6 monthsLast

3 monthsLast

1 monthPast week

DAINIPPON SCREEN MNFG. 7735 7.2 -8.3 40.4 5.7 2.5SHIMADZU 7701 3.1 -11.8 3.5 2.6 3.9PIONEER 6773 2.3 -5.9 9.4 -4.9 1.5HORIBA 6856 1.4 -11.6 -3.7 -4.0 1.4NIKON 7731 0.2 -8.3 -5.1 -2.5 3.5JVC KENWOOD 6632 -6.4 -36.3 -2.2 -19.2 1.5HITACHI HIGH - TECHS. 8036 -12.6 -6.6 14.0 0.3 4.3HOYA 7741 -15.1 -8.2 -4.2 3.2 4.1NIDEC 6594 -18.5 -10.1 6.0 -3.0 1.4CITIZEN HDG. 7762 -19.1 -2.9 29.0 1.8 6.9CANON 7751 -19.2 -10.4 0.9 -0.4 0.4SHARP 6753 -20.8 -9.1 5.3 -10.9 -1.7CANON MARKETING JAPAN 8060 -22.1 -1.1 -1.5 3.2 3.2NHK SPRING 5991 -22.7 -16.5 5.7 -4.6 3.5TOKYO ELECTRON 8035 -23.7 -9.6 14.4 -7.6 1.1NGK SPARK PLUG 5334 -24.8 -16.3 -3.7 -3.1 2.7HIROSE ELECTRIC 6806 -25.5 -15.0 -3.6 -3.2 4.2KYOCERA 6971 -26.2 -25.1 -0.6 -8.6 1.9OMRON 6645 -28.1 -30.6 0.7 -3.6 0.9TOPCON 7732 -28.1 -21.1 -0.3 0.5 6.4SEIKO EPSON 6724 -29.9 -24.8 16.4 -2.7 4.6MURATA MANUFACTURING 6981 -30.5 -26.1 -6.4 -11.4 0.3JEOL 6951 -30.7 -26.8 -7.0 -5.7 3.1KONICA MINOLTA HDG. 4902 -31.2 -12.8 19.8 1.4 3.3ASAHI GLASS 5201 -31.5 -30.6 -7.7 -1.8 2.2ROHM 6963 -32.3 -21.9 -11.6 -0.8 2.0CASIO COMPUTER 6952 -32.3 -20.0 -1.7 -5.2 -5.0NIPPON ELEC.GLASS 5214 -33.1 -24.7 19.5 -0.4 5.3FUNAI ELECTRIC 6839 -34.6 -12.6 21.9 12.9 10.3NIPPON SHEET GLASS 5202 -35.6 -42.5 -10.5 -4.6 1.4FUJIFILM HDG. 4901 -35.6 -23.8 13.1 1.8 5.5SHIBAURA MECHATRONICS 6590 -39.1 -36.6 -5.2 -8.6 2.6TDK 6762 -41.1 -23.9 33.0 -7.6 0.0IBIDEN 4062 -41.3 -35.9 1.0 -13.8 3.7SHINKO ELEC.INDS. 6967 -41.8 -28.5 0.9 -6.6 3.3PANASONIC 6752 -43.3 -33.4 -7.0 -8.5 3.6RICOH 7752 -44.2 -22.0 9.8 -2.5 1.0SONY 6758 -52.8 -34.1 -1.7 0.5 3.7TAIYO YUDEN 6976 -53.6 -43.4 11.7 -12.7 3.9ULVAC 6728 -56.5 -49.3 0.8 -12.0 5.7OLYMPUS 7733 -60.7 -64.0 -56.5 -9.4 3.6TOPIX -21.2 -16.2 -1.6 -2.7 0.1

Based on share price as of January 6

Source: Datastream, Barclays Capital.


10 January 2012 21

Figure 13: Technology sector market cap ranking

Code CompanyMarket Value

as of Jan 6, 2012Market Value

as of Jan 6, 2011YoY Chg(%) YoY Chg(JPY mn)

1 7751 CANON INC 4,488,114 5,701,839 -21% -1,213,7252 6954 FANUC CORP 2,811,828 3,106,423 -9% -294,5953 6501 HITACHI LTD 1,884,906 2,042,206 -8% -157,3004 6752 PANASONIC CORP 1,604,297 2,951,023 -46% -1,346,7265 6503 MITSUB ELEC CORP 1,563,163 1,883,096 -17% -319,9336 6758 SONY CORP 1,351,238 3,023,830 -55% -1,672,5927 6502 TOSHIBA CORP 1,313,657 2,008,623 -35% -694,9668 6971 KYOCERA CORP 1,174,639 1,662,478 -29% -487,8399 6861 KEYENCE CORP 1,005,995 1,335,431 -25% -329,43610 6594 NIDEC CORP 989,412 1,247,646 -21% -258,23411 6981 MURATA MFG CO 903,307 1,353,834 -33% -450,52712 6702 FUJITSU LTD 838,357 1,173,700 -29% -335,34313 6753 SHARP CORP 733,062 995,187 -26% -262,12514 7741 HOYA CORP 713,863 892,655 -20% -178,79215 8035 TOKYO ELECTRON 700,770 966,268 -27% -265,49816 7731 NIKON CORP 687,908 728,798 -6% -40,89017 4543 TERUMO CORP 670,277 985,847 -32% -315,56918 7752 RICOH CO LTD 480,468 899,854 -47% -419,38619 6762 TDK CORP 419,874 778,840 -46% -358,96620 6701 NEC CORP 414,152 672,021 -38% -257,86921 6963 ROHM CO LTD 402,003 644,527 -38% -242,52422 6645 OMRON CORP 376,616 534,675 -30% -158,05923 4902 KONICA MINOLTA H 301,454 458,295 -34% -156,84124 7733 OLYMPUS CORP 285,662 690,146 -59% -404,48425 6806 HIROSE ELECTRIC 268,139 376,595 -29% -108,45626 6448 BROTHER INDS LTD 265,602 348,030 -24% -82,42827 6869 SYSMEX CORP 253,138 286,541 -12% -33,40328 4062 IBIDEN CO LTD 236,398 412,000 -43% -175,60229 6965 HAMAMATSU PHOTON 224,071 254,646 -12% -30,57430 6923 STANLEY ELEC CO 204,120 285,429 -28% -81,30931 6724 SEIKO EPSON 202,615 303,123 -33% -100,50832 6723 RENESAS ELECTRON 189,792 411,285 -54% -221,49333 6841 YOKOGAWA ELEC 188,306 181,053 4% 7,25334 7701 SHIMADZU CORP 187,116 195,406 -4% -8,29035 7276 KOITO MFG CO 173,492 219,478 -21% -45,98636 6674 GS YUASA CORP 169,152 242,355 -30% -73,20337 6504 FUJI ELECTRIC CO 163,480 197,819 -17% -34,33838 6506 YASKAWA ELECTRIC 159,474 205,146 -22% -45,67239 7735 DAINIPPON SCREEN 158,734 161,782 -2% -3,04840 7762 CITIZEN HOLDINGS 158,360 204,607 -23% -46,24741 6925 USHIO INC 152,475 231,644 -34% -79,16942 6857 ADVANTEST CORP 140,894 382,170 -63% -241,27643 6479 MINEBEA CO LTD 127,334 213,954 -40% -86,61944 6592 MABUCHI MOTOR 125,808 179,857 -30% -54,04845 6845 YAMATAKE CORP 124,017 148,505 -16% -24,48846 6952 CASIO COMPUTER 121,653 196,431 -38% -74,77847 6770 ALPS ELEC CO LTD 95,682 178,473 -46% -82,79148 7757 NIDEC SANKYO COR 95,554 140,464 -32% -44,91049 6665 ELPIDA MEMORY IN 89,962 209,976 -57% -120,01450 6976 TAIYO YUDEN CO 72,048 160,361 -55% -88,313

Source: Barclays Capital based on Bloomberg.


10 January 2012 22

Figure 14: 4Q11 bottom for short-term cycle (LCD panel supply/demand model)

Panel basis supply demand model

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4E Q1E Q2E Q3E Q4E Q1E Q2E Q3E Q4E 2008 2009 2010 2011E 2012E 2013EOversupply/shortage (utilization based) -3.3% -9.5% -8.6% -9.2% -5.7% -6.0% -5.5% -10.9% 1.1% -13.4% -1.4% -1.0% -5.6% -6.6% -0.5% -1.1% 12.3% 7.6% 2.6% -17.3% -4.3% -8.1% -7.1% -3.5% -3.3% 1.1%Total supply ('000 m2) 12,900 17,370 20,702 21,939 23,053 24,832 25,310 25,428 25,554 25,044 26,607 27,790 26,883 29,221 31,175 32,878 32,785 35,555 36,228 35,757 57,744 72,911 98,623 104,996 120,157 140,325yoy % change -11.6% 12.7% 35.2% 76.4% 78.7% 43.0% 22.3% 15.9% 10.9% 0.9% 5.1% 9.3% 5.2% 16.7% 17.2% 18.3% 28.3% 42.0% 36.2% 28.7% 18.4% 26.3% 35.3% 6.5% 14.4% 16.8%qoq % change 3.7% 34.6% 19.2% 6.0% 5.1% 7.7% 1.9% 0.5% 0.5% -2.0% 6.2% 4.4% -3.3% 8.7% 6.7% 5.5% 18.0% 8.4% 1.9% -1.3% - - - - - -

Oversupply/shortage (capacity based) 30.6% 9.0% 2.3% 2.3% 6.4% 4.7% 11.6% 11.3% 21.3% 13.8% 21.3% 19.3% 17.3% 12.3% 15.0% 13.1% 22.6% 17.5% 12.6% -3.9% 12.3% 10.1% 8.7% 19.0% 14.4% 12.0%Total capacity ('000 m2) 19,188 20,891 23,026 24,520 26,046 27,616 30,194 31,773 32,130 32,934 34,267 34,786 34,358 35,505 36,856 38,253 37,152 39,832 40,376 40,376 68,688 87,625 115,628 134,117 144,972 157,736yoy % change 23.3% 27.1% 27.8% 31.3% 35.7% 32.2% 31.1% 29.6% 23.4% 19.3% 13.5% 9.5% 6.9% 7.8% 7.6% 10.0% 15.6% 20.9% 17.8% 16.1% 32.5% 27.6% 32.0% 16.0% 8.1% 8.8%qoq % change 2.8% 8.9% 10.2% 6.5% 6.2% 6.0% 9.3% 5.2% 1.1% 2.5% 4.0% 1.5% -1.2% 3.3% 3.8% 3.8% 6.8% 7.2% 1.4% 0.0% - - -

Industry utilization 67.2% 83.1% 89.9% 89.5% 88.5% 89.9% 83.8% 80.0% 79.5% 76.0% 77.6% 79.9% 78.2% 82.3% 84.6% 85.9% 88.2% 89.3% 89.7% 88.6% 84.1% 83.2% 85.3% 78.3% 82.9% 89.0%

Total demand ('000 m2) 13,324 19,018 22,487 23,967 24,367 26,316 26,705 28,192 25,278 28,391 26,968 28,061 28,398 31,137 31,324 33,245 28,754 32,843 35,297 41,949 60,223 78,796 105,580 108,698 124,104 138,844yoy % change -10.9% 21.1% 39.2% 78.7% 82.9% 38.4% 18.8% 17.6% 3.7% 7.9% 1.0% -0.5% 12.3% 9.7% 16.2% 18.5% 13.8% 15.7% 30.9% 49.5% 22.4% 30.8% 34.0% 3.0% 14.2% 11.9%qoq % change -0.6% 42.7% 18.2% 6.6% 1.7% 8.0% 1.5% 5.6% -10.3% 12.3% -5.0% 4.1% 1.2% 9.6% 0.6% 6.1% 2.5% 14.2% 7.5% 18.8% - - - - - -

Key assumptionsDemand summary

Sets Base

Shipment (000 units) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4E Q1E Q2E Q3E Q4E Q1E Q2E Q3E Q4E 2008 2009 2010 2011E 2012E 2013ENBPC 33,900 36,200 45,600 52,600 47,750 46,375 51,775 54,100 47,700 48,400 55,385 57,382 51,048 51,919 60,054 61,802 55,733 55,968 63,660 65,994 143,100 168,300 200,000 213,700 241,800 265,900Tablet PC -- -- -- -- -- 3,500 4,750 9,750 6,444 13,611 17,623 24,035 14,731 17,111 20,419 26,558 17,331 21,279 26,465 34,471 -- -- 18,000 61,713 78,819 99,547LCD monitors 35,000 44,700 46,000 43,000 41,400 43,800 45,600 44,900 42,200 44,700 46,500 45,800 43,100 45,600 47,400 46,800 43,900 46,500 48,400 47,700 162,200 168,700 175,700 179,300 182,800 186,500LCD-TVs 26,470 30,079 37,459 50,466 40,595 41,794 45,661 63,506 44,253 44,469 51,544 64,600 49,100 49,700 59,200 71,600 53,700 53,900 65,100 78,000 106,417 145,396 191,556 204,900 229,600 250,700

yoy % change NBPC 8% 15% 13% 33% 41% 28% 14% 3% 0% 4% 7% 6% 7% 7% 8% 8% 9% 8% 6% 7% 33% 18% 19% 7% 13% 10%Tablet PC -- -- -- -- -- -- -- -- -- 289% 271% 147% 129% 26% 16% 10% 18% 24% 30% 30% -- -- -- 243% 28% 26%LCD monitors -17% 4% 6% 27% 18% -2% -1% 4% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 0% 4% 4% 2% 2% 2%LCD-TVs 23% 25% 38% 49% 53% 39% 22% 26% 9% 6% 13% 2% 11% 12% 15% 11% 9% 8% 10% 9% 34% 37% 32% 7% 12% 9%

qoq % change NBPC -14% 7% 26% 15% -9% -3% 12% 4% -12% 1% 14% 4% -11% 2% 16% 3% -10% 0% 14% 4% - - - - - -Tablet PC -- -- -- -- -- -- 36% 105% -34% 111% 29% 36% -39% 16% 19% 30% -35% 23% 24% 30% - - - - - -LCD monitors 4% 28% 3% -7% -4% 6% 4% -2% -6% 6% 4% -2% -6% 6% 4% -1% -6% 6% 4% -1% - - - - - -LCD-TVs -22% 14% 25% 35% -20% 3% 9% 39% -30% 0% 16% 25% -24% 1% 19% 21% -25% 0% 21% 20% - - - - - -

yoy % change (scale base)NBPC 4% 11% 10% 30% 40% 28% 14% 4% -1% 4% 7% 29% 7% 7% 8% 48% 9% 8% 6% 24% 31% 14% 19% 11% 20% 14%Tablet PC -- -- -- -- -- -- -- -- -- 289% 271% 147% 129% 26% 16% 10% 18% 24% 30% 30% -- -- -- 243% 28% 26%LCD monitors -16% 5% 7% 30% 20% -1% 0% 5% 3% 3% 3% 4% 4% 4% 4% 3% 2% 2% 2% 2% 2% 5% 5% 3% 4% 2%LCD-TVs 31% 29% 39% 53% 56% 47% 27% 29% 10% 9% 20% 5% 13% 16% 19% 14% 13% 13% 14% 13% 43% 40% 37% 10% 16% 13%Total 12% 19% 25% 45% 45% 32% 19% 23% 8% 8% 16% 9% 12% 12% 15% 17% 11% 11% 11% 14% 27% 26% 28% 10% 14% 12%

qoq % change (scale base)NBPC -14% 6% 25% 14% -8% -3% 11% 4% -11% 1% 14% 26% -27% 2% 16% 72% -46% 0% 14% 100% - - - - - -Tablet PC -- -- -- -- -- -- -3% 8% -3% 3% 13% 61% -42% 2% 14% 81% -48% 0% 13% 92% - - - - - -LCD monitors 5% 28% 3% -7% -3% 6% 4% -2% -4% 6% 4% -1% -5% 6% 4% -2% -6% 6% 4% -1% - - - - - -LCD-TVs -21% 11% 25% 40% -19% 4% 8% 43% -31% 3% 19% 25% -26% 5% 22% 20% -26% 5% 23% 19% - - - - - -Total -15% 14% 19% 25% -15% 4% 8% 29% -25% 4% 15% 21% -23% 5% 18% 23% -27% 5% 19% 26% - - - - - -

as % of total demand NBPC 15% 14% 14% 13% 14% 13% 14% 11% 13% 13% 13% 13% 13% 12% 12% 17% 12% 12% 11% 18% 15% 14% 13% 13% 14% 14%Tablet PC -- -- -- -- -- -- 1% 1% 1% 1% 1% 2% 1% 1% 1% 2% 1% 1% 1% 2% -- -- -- 2% 2% 2%LCD monitors 25% 28% 24% 18% 20% 21% 20% 15% 19% 20% 18% 15% 18% 18% 16% 13% 17% 17% 15% 12% 27% 23% 19% 18% 16% 15%LCD-TVs 60% 58% 61% 69% 65% 65% 65% 72% 66% 65% 67% 70% 67% 67% 70% 68% 69% 69% 71% 68% 57% 63% 67% 67% 68% 69%

Panels

Shipment (000 units) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4E Q1E Q2E Q3E Q4E Q1E Q2E Q3E Q4E 2008 2,009 2,010 2011E 2012E 2013ENBPC 27,136 41,114 52,524 53,746 52,901 61,154 54,789 63,686 60,999 75,366 60,924 56,808 61,257 70,091 66,059 61,802 66,880 75,557 70,026 65,994 139,656 174,500 232,500 254,100 259,200 278,500Tablet PC -- -- -- -- -- -- 5,967 8,606 8,296 17,122 19,385 21,631 19,151 22,244 22,461 23,902 20,798 25,535 27,789 31,024 -- -- 18,000 66,435 87,758 105,145LCD monitors 34,651 47,136 49,603 45,378 49,523 50,868 46,631 51,958 49,443 50,973 50,220 45,800 47,410 52,440 54,510 46,800 48,290 53,475 55,660 47,700 173,574 176,800 199,000 196,400 201,200 205,100LCD-TVs 26,813 39,149 46,636 51,916 51,251 55,456 57,885 57,936 49,913 53,366 51,029 52,972 56,465 59,143 59,200 57,280 53,700 59,829 66,402 71,760 112,950 164,500 222,500 207,300 232,100 251,700

yoy % change NBPC -17% 10% 36% 74% 95% 49% 4% 18% 15% 23% 11% -11% 0% -7% 8% 9% 10% 0% 15% 16% 22% 25% 33% 9% 2% 7%Tablet PC -- -- -- -- -- -- -- -- -- -- 225% 151% 131% 30% 16% 10% 151% 49% 43% 43% -- -- -- 269% 32% 20%LCD monitors -26% -5% 14% 34% 43% 8% -6% 14% 0% 0% 8% -12% -4% 3% 9% 2% -2% 5% 11% 4% -2% 2% 13% -1% 2% 2%LCD-TVs -4% 40% 51% 95% 91% 42% 24% 12% -3% -4% -12% -9% 13% 11% 16% 8% 8% 12% 30% 35% 22% 46% 35% -7% 12% 8%

qoq % change NBPC -12% 52% 28% 2% -2% 16% -10% 16% -4% 24% -19% -7% 8% 14% -6% -6% 18% 13% -7% -6% - - - - - -Tablet PC -- -- -- -- -- -- 44% -4% 106% 13% 12% -11% 16% 1% 6% -13% 23% 9% 12% - - - - - -LCD monitors 3% 36% 5% -9% 9% 3% -8% 11% -5% 3% -1% -9% 4% 11% 4% -14% 5% 11% 4% -14% - - - - - -LCD-TVs 1% 46% 19% 11% -1% 8% 4% 0% -14% 7% -4% 4% 7% 5% 0% -3% -6% 11% 11% 8% - - - - - -

Panel/set ratioNBPC 80% 114% 115% 102% 111% 132% 106% 118% 128% 156% 110% 99% 120% 135% 110% 100% 120% 135% 110% 100% 98% 104% 116% 119% 107% 105%Tablet PC -- -- -- -- -- -- 126% 88% 129% 126% 110% 90% 130% 130% 110% 90% 120% 120% 105% 90% -- -- 100% 108% 111% 106%LCD monitors 99% 105% 108% 106% 120% 116% 102% 116% 117% 114% 108% 100% 110% 115% 115% 100% 110% 115% 115% 100% 107% 105% 113% 110% 110% 110%LCD-TVs 101% 130% 124% 103% 126% 133% 127% 91% 113% 120% 99% 82% 115% 119% 100% 80% 100% 111% 102% 92% 106% 113% 116% 101% 101% 100%

as % of total demand (scale base)NBPC 13% 14% 15% 14% 14% 15% 13% 14% 15% 17% 14% 16% 14% 14% 13% 20% 15% 15% 13% 19% 15% 14% 14% 16% 15% 16%Tablet PC -- -- -- -- -- -- 1% 2% 2% 4% 5% 6% 4% 5% 5% 8% 5% 5% 5% 9% -- -- 1% 4% 5% 6%LCD monitors 27% 26% 23% 20% 21% 20% 18% 19% 21% 19% 20% 17% 18% 18% 19% 15% 18% 18% 17% 12% 30% 23% 20% 19% 18% 16%LCD-TVs 59% 60% 62% 66% 64% 64% 67% 64% 61% 60% 61% 61% 64% 63% 63% 57% 62% 63% 65% 59% 55% 62% 65% 61% 61% 62%

yoy % change (scale base)NBPC -20% 6% 32% 70% 93% 48% 4% 19% 15% 23% 11% 9% 0% -7% 8% 50% 9% 8% 6% 24% 21% 21% 33% 14% 13% 13%Tablet PC -- -- -- -- -- -- -- -- -- -- 225% 207% 131% 30% 16% 52% 9% 15% 24% 50% -- -- -- 389% 46% 29%LCD monitors -25% -4% 15% 37% 45% 9% -5% 15% 1% 1% 9% -10% -3% 5% 10% 3% 2% 2% 2% 2% 0% 3% 14% 0% 4% 2%LCD-TVs 0% 42% 53% 100% 98% 49% 29% 15% -1% 0% -8% -6% 16% 15% 20% 12% -1% 5% 17% 30% 40% 49% 40% -4% 16% 13%Total -11% 21% 39% 79% 83% 38% 19% 18% 4% 8% 1% 0% 12% 10% 16% 18% 1% 5% 13% 26% 22% 31% 34% 3% 14% 12%

qoq % change (scale base)NBPC -12% 51% 27% 1% 0% 16% -11% 16% -4% 24% -19% 13% -11% 14% -6% 56% -35% 13% -7% 82% - - - - - -Tablet PC -- -- -- -- -- -- -- 44% -3% 106% 13% 36% -27% 16% 1% 78% -48% 23% 9% 116% - - - - - -LCD monitors 4% 36% 6% -9% 11% 3% -8% 10% -3% 3% -1% -8% 5% 11% 4% -15% 4% 11% 4% -14% - - - - - -LCD-TVs 0% 44% 22% 14% -1% 8% 5% 1% -14% 9% -3% 4% 6% 8% 1% -4% -6% 15% 12% 8% - - - - - -Total -1% 43% 18% 7% 2% 8% 1% 6% -10% 12% -5% 4% 1% 10% 1% 6% -14% 14% 7% 19% - - - - - -

2012

2012

2012

2013

2013

2013

2011

2011

2011

2010

2010

2010

2009

2009

2009

Supply/demand summary

Source: DisplaySearch, Barclays Capital estimates.


10 January 2012 23

Figure 15: Growth depends on ROW but possible scenario of replacement demand expanding in in EU/North America: LCD TV demand outlook by region

LCD Shipments by Region (000s) Barclays Capital(000s)

Region 2004 2005 2006 2007 2008 2009 2010 2011E 2012E 2013EJapan 2,685 4,170 5,705 7,721 8,768 12,534 23,388 18,200 10,900 10,900YoY -- 55.3% 36.8% 35.3% 13.6% 43.0% 86.6% -22.2% -40.0% 0.0%Out of total 30.6% 19.7% 12.4% 9.7% 8.2% 8.6% 12.2% 8.9% 4.7% 4.3%North America 2,189 5,564 13,716 24,240 30,065 37,319 38,291 38,600 41,700 43,400YoY -- 154.2% 146.5% 76.7% 24.0% 24.1% 2.6% 0.8% 8.0% 4.0%Out of total 25.0% 26.3% 29.8% 30.6% 28.3% 25.6% 20.0% 18.8% 18.2% 17.3%Europe 3,046 8,759 18,084 29,429 38,753 42,902 53,115 52,100 57,300 57,700YoY -- 187.5% 106.5% 62.7% 31.7% 10.7% 23.8% -1.9% 10.0% 0.7%Out of total 34.7% 41.4% 39.3% 37.2% 36.4% 29.5% 27.7% 25.4% 25.0% 23.0%Western Europe -- -- -- 24,908 29,321 33,264 38,714 35,200 37,000 35,200YoY -- -- -- -- 17.7% 13.4% 16.4% -9.1% 5.0% -5.0%Out of total -- -- -- 31.5% 27.6% 22.9% 20.2% 17.2% 16.1% 14.0%Eastern Europe -- -- -- 4,521 9,431 9,638 14,401 16,900 20,300 22,500YoY -- -- -- -- 108.6% 2.2% 49.4% 17.4% 20.0% 11.0%Out of total -- -- -- 5.7% 8.9% 6.6% 7.5% 8.2% 8.8% 9.0%China 203 1,525 4,788 8,746 13,373 29,296 37,930 43,800 48,200 51,600YoY -- 651.4% 213.9% 82.7% 52.9% 119.1% 29.5% 15.5% 10.0% 7.0%Out of total 2.3% 7.2% 10.4% 11.0% 12.6% 20.1% 19.8% 21.4% 21.0% 20.6%ROW 643 1,149 3,697 9,057 15,458 23,455 38,833 52,100 71,500 87,100YoY -- 78.8% 221.8% 145.0% 70.7% 51.7% 65.6% 34.2% 37.2% 21.8%Out of total 7.3% 5.4% 8.0% 11.4% 14.5% 16.1% 20.3% 25.4% 31.1% 34.7%Asia Pacific -- -- -- 5,108 7,169 10,259 14,423 20,700 29,000 34,800YoY -- -- -- -- 40.4% 43.1% 40.6% 43.5% 40.0% 20.0%Out of total -- -- -- 6.4% 6.7% 7.1% 7.5% 10.1% 12.6% 13.9%Latin America -- -- -- 2,505 5,482 8,226 16,123 20,600 25,800 32,300YoY -- -- -- -- 118.9% 50.1% 96.0% 27.8% 25.0% 25.0%Out of total -- -- -- 3.2% 5.2% 5.7% 8.4% 10.1% 11.2% 12.9%Middle East and A -- -- -- 1,445 2,807 4,860 8,287 11,900 16,700 20,000YoY -- -- -- -- 94.2% 73.1% 70.5% 43.6% 40.0% 20.0%Out of total -- -- -- 1.8% 2.6% 3.3% 4.3% 5.8% 7.3% 8.0%Total 8,766 21,168 45,990 79,194 106,417 145,506 191,556 204,900 229,600 250,700YoY -- 141.5% 117.3% 72.2% 34.4% 36.7% 31.6% 7.0% 12.1% 9.2%Out of total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%



10 January 2012 24

Figure 16: Growth depends on ROW but possible scenario of replacement demand expansion in EU/North America: LCD TV shipments by region

LCD Shipments by Region (000s) by Barclays Capital estimates(000s) 2010 2011 2012 2013Region Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 E Q1 E Q2 E Q3 E Q4 E Q1 E Q2 E Q3 E Q4 EJapan 4,406 3,954 5,179 9,849 5,183 5,793 4,922 2,300 1,600 2,900 4,200 2,200 1,500 2,900 4,200 2,300

YoY 92.6% 57.9% 67.4% 111.8% 17.6% 46.5% -5.0% -76.6% -70.0% -50.0% -15.0% -4.3% -5.0% 0.0% 0.0% 4.5%QoQ -5.2% -10.3% 31.0% 90.2% -47.4% 11.8% -15.0% -53.3% -30.4% 81.3% 44.8% -47.6% -31.8% 93.3% 44.8% -45.2%

NA 7,318 8,622 9,647 12,704 7,301 7,953 9,154 14,200 8,400 8,700 9,900 14,700 8,800 9,100 10,400 15,100YoY -0.1% -5.3% 0.7% 12.3% -0.2% -7.8% 8.0% 12.0% 15.0% 10.0% 8.0% 3.5% 5.0% 5.0% 5.0% 2.7%QoQ -35.3% 17.8% 11.9% 31.7% -42.5% 8.9% 15.1% 55.1% -40.8% 3.6% 13.8% 48.5% -40.1% 3.4% 14.3% 45.2%

Europe 12,099 12,035 11,254 17,726 12,174 10,155 11,372 18,400 13,200 11,600 12,500 20,000 13,400 11,200 12,800 20,300YoY 37.7% 46.2% 10.8% 13.0% 0.6% -15.6% 3.0% 4.0% 8.4% 14.2% 9.9% 8.7% 1.5% -3.4% 2.4% 1.5%QoQ -22.9% -0.5% -6.5% 57.5% -31.3% -16.6% 12.0% 61.8% -28.3% -12.1% 7.8% 60.0% -33.0% -16.4% 14.3% 58.6%WE 9,153 9,402 7,648 12,511 8,696 7,166 7,364 11,966 9,000 7,900 7,700 12,400 8,600 7,100 7,500 12,000YoY 34.4% 42.2% -2.0% 4.0% -5.0% -23.8% -3.7% -4.4% 3.0% 10.0% 5.0% 3.6% -5.0% -10.0% -3.0% -3.2%QoQ -23.9% 2.7% -18.7% 63.6% -30.5% -17.6% 2.8% 62.5% -24.8% -12.2% -2.5% 61.0% -30.6% -17.4% 5.6% 60.0%EE 2,946.0 2,633 3,607 5,215 3,478 2,990 4,008 6,434 4,200 3,700 4,800 7,600 4,800 4,100 5,300 8,300YoY 48.8% 62.6% 51.4% 42.6% 18.1% 13.5% 11.1% 23.4% 20.0% 25.0% 20.0% 18.1% 15.0% 10.0% 10.0% 9.2%QoQ -19.4% -10.6% 37.0% 44.6% -33.3% -14.0% 34.1% 60.5% -34.7% -11.9% 29.7% 58.3% -36.8% -14.6% 29.3% 56.6%

China 9,017 7,199 9,926 11,788 9,586 8,617 11,934 13,700 10,900 9,500 13,400 14,400 11,700 10,000 14,300 15,600YoY 82.0% 31.0% 21.6% 10.3% 6.3% 19.7% 18.0% 16.0% 14.0% 10.0% 12.0% 5.1% 7.0% 5.0% 7.0% 8.3%QoQ -15.6% -20.2% 37.9% 18.8% -18.7% -10.1% 38.5% 14.8% -20.4% -12.8% 41.1% 7.5% -18.8% -14.5% 43.0% 9.1%

ROW 7,754 9,984 9,655 11,440 10,009 11,952 14,162 16,000 15,000 17,000 19,200 20,300 18,300 20,700 23,400 24,700YoY 104.9% 101.2% 48.0% 39.3% 29.1% 19.7% 40.0% 40.0% 49.9% 42.2% 35.6% 26.9% 22.0% 21.8% 21.9% 21.7%QoQ -5.6% 28.8% -3.3% 18.5% -12.5% 19.4% 18.5% 13.0% -6.3% 13.3% 12.9% 5.7% -9.9% 13.1% 13.0% 5.6%AP 3,050.0 3,383 3,648 4,341 4,278 4,590 5,635 6,197 6,400 6,900 8,500 7,200 7,700 8,300 10,200 8,600YoY 68.5% 57.3% 23.4% 29.9% 40.3% 35.6% 54.5% 42.8% 50.0% 50.0% 50.0% 16.2% 20.0% 20.0% 20.0% 19.4%QoQ -8.7% 10.9% 7.8% 19.0% -1.4% 7.3% 22.8% 10.0% 3.3% 7.8% 23.2% -15.3% 6.9% 7.8% 22.9% -15.7%LA 3,003.3 4,545 3,819 4,756 3,321 4,617 5,331 7,371 5,000 6,000 6,400 8,400 6,300 7,500 8,000 10,500YoY 142.1% 171.2% 80.6% 48.9% 10.6% 1.6% 39.6% 55.0% 50.0% 30.0% 20.0% 14.0% 25.0% 25.0% 25.0% 25.0%QoQ -6.0% 51.3% -16.0% 24.5% -30.2% 39.0% 15.4% 38.3% -32.2% 20.0% 6.7% 31.3% -25.0% 19.0% 6.7% 31.3%ME&A 1,701.2 2,056 2,188 2,343 2,409 2,745 3,197 3,519 3,600 4,100 4,300 4,700 4,300 4,900 5,200 5,600YoY 131.3% 100.3% 53.8% 39.7% 41.6% 33.5% 46.1% 50.2% 50.0% 50.0% 35.0% 33.5% 20.0% 20.0% 20.0% 19.1%QoQ 1.5% 20.8% 6.4% 7.1% 2.9% 13.9% 16.5% 10.1% 2.3% 13.9% 4.9% 9.3% -8.5% 14.0% 6.1% 7.7%

Total 40,595 41,794 45,661 63,506 44,253 44,469 51,544 64,600 49,100 49,700 59,200 71,600 53,700 53,900 65,100 78,000YoY 49.6% 38.0% 21.7% 25.6% 9.0% 6.4% 12.9% 1.7% 9.5% 13.0% 10.0% 10.8% 10.0% 10.0% 12.0% 8.9%QoQ -19.7% 3.0% 9.3% 39.1% -30.3% 0.5% 15.9% 25.3% -24.0% 1.2% 19.1% 20.9% -25.0% 0.4% 20.8% 19.8%


Figure 17: Smartphone production volume outlook (mn units)

2009 2010 1Q11 2Q11 3Q11 4Q11E 2011E 1Q12E 2Q12E 3Q12E 4Q12E 2012ENokia 68 100 24 17 17 20 78 18 20 22 28 88Samsung 7 24 13 19 29 36 96 37 40 43 45 165Apple 25 47 18.6 20.3 17.1 30.8 87 29 26 36 45 136HTC 12 25 10 12 13 12 47 11 13 15 18 57RIM 34 48 15 13 11 14 53 15 14 14 15 57LG Electronics 1 8 4 6 4 6 21 7 8 9 11 35Motorola Mobility 2 14 4 4 5 6 19 5 6 7 9 26Sony Ericsson 1 10 2 2 3 5 12 3 4 5 6 17Other vendors (Huawei, ZTE, others) 29 7 6 9 18 21 54 15 20 24 30 89Total Handsets 179 283 96 103 117 151 467 139 150 175 205 669YoY Growth 28% 58% 89% 76% 48% 60% 65% 45% 45% 50% 36% 43%


Figure 18: Mobile phone production volume outlook (mn units)

2007 2008 2009 2010 1Q11 2Q11 3Q11 4Q11E 2011E 1Q12E 2Q12E 3Q12E 4Q12E 2012E 2013ENokia 438 468 432 453 109 89 107 120 424 106 112 117 136 471 500Samsung 161 197 228 280 69 74 89 94 326 86 89 92 91 358 375Apple 4 16 25 47 19 20 17 31 87 29 26 36 45 136 170LG Electronics 80 101 118 117 24 25 21 25 95 26 26 28 32 112 131HTC 9 12 12 25 10 12 13 12 47 11 13 15 18 57 73RIM 11 23 34 48 15 13 11 14 53 15 14 14 15 57 57Motorola Mobility 159 100 55 37 9 11 12 14 46 10 12 12 15 48 50Sony Ericsson 103 97 57 43 8 8 10 11 37 9 10 11 12 42 44Other vendors (Huawei, ZTE, others) 186 213 293 369 111 120 121 122 474 110 116 118 125 469 485Total Handsets 1,153 1,226 1,254 1,419 373 372 400 443 1,588 402 417 443 488 1,750 1,884YoY Growth 16% 6% 2% 13% 16% 10% 12% 10% 12% 8% 12% 11% 10% 10% 8% Source: Company data, Barclays Capital estimates.


10 January 2012 25

Figure 19: Mobile phone production volume outlook by region (mn units)

(in millions of units) 2005 2006 2007 2008 2009 2010 2011E 2012E 2013E 2014EUnitsAsia Pacific 248 348 453 495 525 650 775 896 1,002 1,083Eastern Europe 77 85 87 97 87 95 98 100 102 103Western Europe 163 175 191 175 198 198 203 208 211 213Latin America 102 118 127 143 123 140 165 190 210 223Middle East & Africa 74 100 119 133 132 145 150 155 157 160North America 147 164 176 182 190 192 196 200 202 204Total 812 991 1,153 1,226 1,254 1,419 1,588 1,750 1,884 1,986YoY GrowthAsia Pacific 19% 40% 30% 9% 6% 24% 19% 16% 12% 8%Eastern Europe 16% 11% 1% 12% -11% 10% 4% 2% 2% 1%Western Europe 9% 8% 9% -8% 13% 0% 3% 2% 2% 1%Latin America 38% 16% 8% 13% -14% 14% 18% 15% 11% 6%Middle East & Africa 61% 35% 19% 12% -1% 10% 4% 3% 2% 2%North America 9% 11% 7% 3% 4% 1% 3% 2% 1% 1%Total 19% 22% 16% 6% 2% 13% 12% 10% 8% 5%


Figure 20: Tablet demand outlook

Units in (000) 2010 1Q11 2Q11 3Q11 4Q11E 2011E 1Q12E 2Q12E 3Q12E 4Q12E 2012E 2013E 2014E 2015EApple iPad Forecast 14,789 4,694 9,246 11,123 13,904 38,967 8,898 11,657 13,289 16,611 50,455 67,710 79,012 88,098 q/q change -36% 97% 20% 25% -36% 31% 14% 25% y/y change - 183% 166% 90% 163% 90% 26% 19% 19% 29% 34% 17% 12% % Unit Share 82% 73% 66% 60% 57% 61% 61% 64% 53% 51% 56% 60% 61% 62%Other Tablets 3,211 1,750 4,770 7,550 10,550 24,620 5,650 6,650 11,650 15,650 39,600 45,450 49,995 54,995 q/q change -28% 173% 58% 40% -46% 18% 75% 34% y/y change - 1974% 1243% 336% 667% 223% 39% 54% 48% 61% 15% 10% 10%Total Tablet Forecast 18,000 6,444 14,016 18,673 24,454 63,587 14,548 18,307 24,939 32,261 90,055 113,160 129,007 143,093 q/q change -34% -22% 190% 74% -41% -71% 71% 76% y/y change - - 300% 293% 151% 253% 126% 31% 34% 32% 42% 26% 14% 11%

ASP ($) 2010 1Q11 2Q11 3Q11 4Q11E 2011E 1Q12E 2Q12E 3Q12E 4Q12E 2012E 2013E 2014E 2015EApple iPad Forecast 622$ 565$ 613$ 580$ 570$ 582$ 555$ 547$ 547$ 537$ 545$ 511$ 476$ 452$ q/q change -6% 8% -5% -2% -3% -1% 0% -2% y/y change - - -4% -10% -5% -6% -2% -11% -6% -6% -6% -6% -7% -5%Other Tablets 410$ 500$ 525$ 415$ 390$ 432$ 390$ 380$ 370$ 360$ 371$ 347$ 327$ 312$ q/q change 16% 5% -21% -6% 0% -3% -3% -3% y/y change - - 35% 26% -9% 5% -22% -28% -11% -8% -14% -6% -6% -5%Total Tablet Forecast 584$ 547$ 583$ 513$ 492$ 524$ 491$ 486$ 464$ 451$ 468$ 445$ 418$ 398$ q/q change -2% 0% -6% -16% 0% -7% -5% -7% y/y change - - -7% -16% -12% -10% -10% -17% -10% -8% -11% -5% -6% -5%

Value (in $ millions) 2010 1Q11 2Q11 3Q11 4Q11E 2011E 1Q12E 2Q12E 3Q12E 4Q12E 2012E 2013E 2014E 2015EApple iPad Forecast 9,194$ 2,652$ 5,668$ 6,451$ 7,925$ 22,697$ 4,938$ 6,376$ 7,269$ 8,920$ 27,504$ 34,588$ 37,577$ 39,803$ q/q change -40% 114% 14% 23% -38% 29% 14% 23% y/y change - - 171% 139% 80% 147% 86% 13% 13% 13% 21% 26% 9% 6%Other Tablets 1,315$ 875$ 2,504$ 3,133$ 4,115$ 10,627$ 2,204$ 2,527$ 4,311$ 5,634$ 14,675$ 15,784$ 16,359$ 17,170$ q/q change -16% 186% 25% 31% -46% 15% 71% 31% y/y change - - 2692% 1589% 296% 708% 152% 1% 38% 37% 38% 8% 4% 5%Total Tablet Forecast 10,509$ 3,527$ 8,172$ 9,585$ 12,040$ 33,324$ 7,142$ 8,903$ 11,580$ 14,554$ 42,179$ 50,372$ 53,935$ 56,972$ q/q change -35% -22% 172% 47% -41% -73% 62% 63% y/y change - - 274% 232% 121% 217% 102% 9% 21% 21% 27% 19% 7% 6% Source: IDC, Gartner, Barclays Capital estimates


10 January 2012 26

Figure 21: Tablets account for growing share of PCs (tablet and PC demand outlook)

Units in (000) 2009 2010 1Q11 2Q11 3Q11 4Q11E 2011E 1Q12E 2Q12E 3Q12E 4Q12E 2012E 2013E 2014E 2015EApple iPad Forecast - 14,789 4,694 9,246 11,123 13,904 38,967 8,898 11,657 13,289 16,611 50,455 67,710 79,012 88,098 Other Tablets - 3,211 1,750 4,770 7,550 10,550 24,620 5,650 6,650 11,650 15,650 39,600 45,450 49,995 54,995 Total Tablet Forecast - 18,000 6,444 14,016 18,673 24,454 63,587 14,548 18,307 24,939 32,261 90,055 113,160 129,007 143,093 y/y change - - - 300% 293% 151% 253% 126% 31% 34% 32% 42% 26% 14% 11%

Total Notebooks (includes netbooks) 168,305 200,000 47,700 48,400 55,385 54,468 205,953 47,259 49,270 57,296 58,446 212,271 218,852 225,814 233,801 y/y change 17.7% 18.8% -0.1% 4.4% 7.0% 0.7% 3.0% -0.9% 1.8% 3.4% 7.3% 3.1% 3.1% 3.2% 3.5%

Notebooks INCLUDING Tablets 168,305 218,000 54,144 62,416 74,058 78,922 269,540 61,807 67,577 82,235 90,707 302,326 332,012 354,821 376,894 y/y change 17.7% 29.5% 13.4% 25.1% 31.0% 23.6% 23.6% 14.2% 8.3% 11.0% 14.9% 12.2% 9.8% 6.9% 6.2%

Total Netbooks 32,000 31,000 7,500 7,000 7,000 4,500 26,000 5,200 6,000 5,400 6,000 22,600 21,300 20,300 19,500 y/y change 204.5% -3.1% -16.7% 0.0% -3.4% -41.9% -16.1% -30.7% -14.3% -22.9% 33.3% -13.1% -5.8% -4.7% -3.9%

CORE Notebooks Excluding Netbooks & Tablets Entirely 136,305 169,000 40,200 41,400 48,385 49,968 179,953 42,059 43,270 51,896 52,446 189,671 197,552 205,514 214,301 y/y change 2.8% 24.0% 3.7% 5.1% 8.7% 7.8% 6.5% 4.6% 4.5% 7.3% 5.0% 5.4% 4.2% 4.0% 4.3%

Total PC Unit Forecast (includes netbooks) 295,400 340,470 81,260 83,904 92,340 90,540 348,044 78,806 83,549 93,523 94,876 350,754 359,416 365,953 371,473 y/y change 2.6% 15.3% 0.0% 3.3% 5.9% -0.3% 2.2% -3.0% -0.4% 1.3% 4.8% 0.8% 2.5% 1.8% 1.5%

Total PCs INCLUDING Tablets 295,400 358,470 87,704 97,920 111,013 114,994 411,631 93,354 101,856 118,462 127,137 440,809 472,576 494,960 514,566 y/y change 2.6% 21.4% 8.0% 15.5% 20.7% 14.4% 14.8% 6.4% 4.0% 6.7% 10.6% 7.1% 7.2% 4.7% 4.0%

CORE PCs Excluding Netbooks & Tablets Entirely 263,400 309,470 73,760 76,904 85,340 86,040 322,044 73,606 77,549 88,123 88,876 328,154 338,116 345,653 351,973 y/y change -5.1% 17.5% 2.1% 3.6% 6.8% 3.6% 4.1% -0.2% 0.8% 3.3% 3.3% 1.9% 3.0% 2.2% 1.8% Source: IDC, Gartner, Barclays Capital estimates

Figure 22: PC shipment estimates by area

Units in (000)Calendar Year 2009 2010 1Q11 2Q11 3Q11 4Q11E 2011E 1Q12E 2Q12E 3Q12E 4Q12E 2012E 2013E 2014E 2015EWorldwide 295,400 340,470 81,260 83,904 92,340 90,540 348,044 78,806 83,549 93,523 94,876 350,754 359,416 365,953 371,473

Y/Y 2.6% 15.3% 0.0% 3.3% 5.9% -0.3% 2.2% -3.0% -0.4% 1.3% 4.8% 0.8% 2.5% 1.8% 1.5%Q/Q -10.5% 3.3% 10.1% -1.9% -13.0% 6.0% 11.9% 1.4%

U.S. 70,000 74,830 16,400 17,694 18,550 19,081 71,725 15,801 16,966 17,771 18,814 69,351 67,280 65,222 64,191Y/Y 7% 7% -9% -5% 1% -4% -4% -4% -4% -4% -1% -3% -3% -3% -2%Q/Q -18% 8% 5% 3% -17% 7% 5% 6%

% of Total 24% 22% 20% 21% 20% 21% 21% 20% 20% 19% 20% 20% 19% 18% 17%

Western Europe 65,150 68,465 14,500 12,100 14,730 16,710 58,040 12,785 11,426 13,748 16,989 54,947 54,087 52,395 51,076Y/Y -1% 5% -17% -21% -11% -13% -15% -12% -6% -7% 2% -5% -2% -3% -3%Q/Q -24% -17% 22% 13% -23% -11% 20% 24%

% of Total 22% 20% 18% 14% 16% 18% 17% 16% 14% 15% 18% 16% 15% 14% 14%

Japan 13,505 15,650 3,760 3,785 3,840 3,883 15,268 4,143 3,566 3,566 3,615 14,890 14,424 13,975 13,541Y/Y -5% 16% -17% 4% 5% 2% -2% 10% -6% -7% -7% -2% -3% -3% -3%Q/Q -2% 1% 1% 1% 7% -14% 0% 1%

% of Total 5% 5% 5% 5% 4% 4% 4% 5% 4% 4% 4% 4% 4% 4% 4%

Asia Pacific 82,840 102,000 27,000 30,150 31,600 27,468 116,218 26,764 30,717 33,637 30,231 121,348 128,664 134,987 139,529Y/Y 14% 23% 15% 17% 16% 8% 14% -1% 2% 6% 10% 4% 6% 5% 3%Q/Q 6% 12% 5% -13% -3% 15% 10% -10%

% of Total 28% 30% 33% 36% 34% 30% 33% 34% 37% 36% 32% 35% 36% 37% 38%

Rest of World 63,905 79,525 19,600 20,175 23,620 23,399 86,794 19,313 20,875 24,802 25,227 90,217 94,961 99,375 103,136Y/Y -8% 24% 10% 13% 11% 4% 9% -1% 3% 5% 8% 4% 5% 5% 4%Q/Q -13% 3% 17% -1% -17% 8% 19% 2%

% of Total 22% 23% 24% 24% 26% 26% 25% 25% 25% 27% 27% 26% 26% 27% 28% Source: IDC, Gartner, Barclays Capital estimates


10 January 2012 27

Figure 23: HDD shipment estimates by area

Value in $M EstimatesCalendar Year 2009 2010 1Q11 2Q11 3Q11 4Q11E 2011E 1Q12E 2Q12E 3Q12E 4Q12E 2012E 2013E 2014E 2015EDisk Drive Units (in thousands)Mobile Units 233,611 277,529 70,919 75,027 76,555 55,120 277,621 67,246 79,350 88,872 90,650 326,118 339,454 347,365 351,619Desktop Units 231,467 255,353 62,640 62,033 62,561 41,916 229,150 51,976 59,772 66,347 67,674 245,769 254,441 251,521 248,822Enterprise Units 25,597 30,338 8,386 8,335 7,892 7,497 32,110 8,435 8,688 9,209 9,946 36,277 38,723 42,663 48,873Consumer Electronics Units 66,406 88,156 17,746 20,972 28,780 15,829 83,327 17,412 20,459 23,937 23,937 85,745 92,520 97,869 105,899Total Units 557,081 651,377 159,691 166,367 175,788 120,362 622,208 145,068 168,269 188,365 192,206 693,908 725,137 739,419 755,212

Year/Year changeMobile 24.4% 18.8% 2.7% 12.7% 9.5% -23.4% 0.0% -5.2% 5.8% 16.1% 64.5% 17.5% 4.1% 2.3% 1.2%Desktop -3.7% 10.3% -4.4% -1.1% -0.7% -34.6% -10.3% -17.0% -3.6% 6.1% 61.5% 7.3% 3.5% -1.1% -1.1%Enterprise -19.7% 18.5% 10.7% 14.7% 8.2% -8.7% 5.8% 0.6% 4.2% 16.7% 32.7% 13.0% 6.7% 10.2% 14.6%Consumer Electronics -15.5% 32.8% -11.1% -2.1% 20.9% -31.1% -5.5% -1.9% -2.4% -16.8% 51.2% 2.9% 7.9% 5.8% 8.2%

Total 3.4% 16.9% -1.5% 5.3% 7.2% -28.0% -4.5% -9.2% 1.1% 7.2% 59.7% 11.5% 4.5% 2.0% 2.1%

Quarter/Quarter changeMobile -1.5% 5.8% 2.0% -28.0% 22.0% 18.0% 12.0% 2.0%Desktop -2.3% -1.0% 0.9% -33.0% 24.0% 15.0% 11.0% 2.0%Enterprise 2.2% -0.6% -5.3% -5.0% 12.5% 3.0% 6.0% 8.0%Consumer Electronics -22.8% 18.2% 37.2% -45.0% 10.0% 17.5% 17.0% 0.0%

Total -4.5% 4.2% 5.7% -31.5% 20.5% 16.0% 11.9% 2.0%

Disk Drive ASPs ($ per unit)Mobile ASPs $48.00 $46.14 $43.58 $43.96 $45.11 $50.07 $45.40 $50.57 $49.56 $47.08 $45.67 $48.01 $44.76 $42.33 $39.54Desktop ASPs $48.89 $47.66 $45.09 $45.40 $46.96 $51.66 $46.89 $52.17 $51.13 $48.57 $46.15 $49.29 $45.00 $42.56 $39.54Enterprise ASPs $150.00 $144.66 $139.64 $139.80 $142.85 $167.14 $146.89 $168.81 $163.75 $158.83 $154.07 $161.02 $150.20 $143.50 $135.74Consumer Electronics ASPs $48.52 $46.09 $44.49 $44.77 $45.84 $50.43 $46.16 $50.43 $49.92 $48.43 $46.97 $48.78 $46.03 $43.87 $41.07Total Average ASPs $53.12 $51.32 $49.32 $49.40 $50.28 $57.96 $51.28 $58.00 $56.06 $53.24 $51.61 $54.47 $50.64 $48.45 $45.98

Year/Year changeMobile -13.9% -3.9% -12.1% -4.7% 2.3% 11.9% -1.6% 16.0% 12.7% 4.4% -8.8% 5.8% -6.8% -5.4% -6.6%Desktop -11.9% -2.5% -10.7% -3.8% 1.3% 11.1% -1.6% 15.7% 12.6% 3.4% -10.7% 5.1% -8.7% -5.4% -7.1%Enterprise 1.3% -3.6% -7.2% -2.9% 0.2% 17.9% 1.5% 20.9% 17.1% 11.2% -7.8% 9.6% -6.7% -4.5% -5.4%Consumer Electronics -12.7% -5.0% -11.2% -4.1% 1.4% 17.5% 0.2% 13.4% 11.5% 5.6% -6.9% 5.7% -5.6% -4.7% -6.4%

Total -13.0% -3.4% -9.9% -3.4% 1.5% 16.1% -0.1% 17.6% 13.5% 5.9% -11.0% 6.2% -7.0% -4.3% -5.1%

Quarter/Quarter changeMobile -2.6% 0.9% 2.6% 11.0% 1.0% -2.0% -5.0% -3.0%Desktop -3.0% 0.7% 3.4% 10.0% 1.0% -2.0% -5.0% -5.0%Enterprise -1.5% 0.1% 2.2% 17.0% 1.0% -3.0% -3.0% -3.0%Consumer Electronics 3.6% 0.6% 2.4% 10.0% 0.0% -1.0% -3.0% -3.0%

Total -1.2% 0.2% 1.8% 15.3% 0.1% -3.4% -5.0% -3.1% Source: IDC, Gartner, Barclays Capital estimates


10 January 2012 28

Figure 24: Japanese automaker production volume outlook (thousand units)

Worldwide 2006/3 2007/3 2008/3 2009/3 2010/3 2011/3 2012/3E 2013/3E 2014/3E

Nissan 7201 3,510 3,267 3,658 3,084 3,282 4,150 4,799 5,105 5,469Toyota 7203 8,360 8,962 9,604 8,077 7,947 8,180 8,440 9,282 9,541Mazda 7261 1,013 1,082 1,153 1,079 974 1,215 1,310 1,437 1,499Daihatsu 7262 1,194 1,368 1,396 1,406 1,318 1,299 1,450 1,649 1,680Honda 7267 3,443 3,703 3,955 3,572 3,304 3,575 3,269 3,876 4,088Suzuki 7269 2,200 2,411 2,637 2,494 2,545 2,878 2,969 3,102 3,321FHI 7270 572 595 599 566 557 624 630 638 662Total 19,099 20,020 21,606 18,872 18,609 20,622 21,417 23,440 24,581

Japan 2006/3 2007/3 2008/3 2009/3 2010/3 2011/3 2012/3E 2013/3E 2014/3ENissan 7201 1,365 1,192 1,263 1,051 1,025 1,073 1,288 1,175 1,117Toyota 7203 4,674 5,101 5,160 4,255 3,956 3,721 3,982 4,068 3,959Mazda 7261 904 967 1,047 899 828 867 898 1,007 1,087Daihatsu 7262 909 1,079 1,031 994 893 771 872 979 921Honda 7267 1,243 1,348 1,297 1,148 902 912 862 889 909Suzuki 7269 1,133 1,212 1,219 1,139 959 994 1,022 1,046 1,042FHI 7270 454 484 490 474 453 459 460 458 482Total 10,682 11,383 11,507 9,961 9,016 8,796 9,384 9,621 9,517

Overseas total 2006/3 2007/3 2008/3 2009/3 2010/3 2011/3 2012/3E 2013/3E 2014/3ENissan 7201 2,145 2,075 2,394 2,034 2,257 3,078 3,512 3,930 4,352Toyota 7203 3,686 3,861 4,444 3,822 3,991 4,459 4,458 5,214 5,582Mazda 7261 109 115 106 180 146 348 411 430 412Daihatsu 7262 284 289 366 412 425 528 577 670 758Honda 7267 2,200 2,355 2,658 2,423 2,403 2,663 2,407 2,987 3,179Suzuki 7269 1,067 1,199 1,418 1,355 1,586 1,884 1,947 2,056 2,280FHI 7270 119 110 109 92 104 165 170 180 180Total 9,611 10,005 11,495 10,318 10,912 13,124 13,482 15,467 16,743

North America 2006/3 2007/3 2008/3 2009/3 2010/3 2011/3 2012/3E 2013/3E 2014/3ENissan 7201 1,171 1,123 1,151 868 837 1,073 1,230 1,264 1,264Toyota 7203 1,571 1,570 1,663 1,243 1,432 1,427 1,352 1,695 1,781Mazda 7261 74 72 54 75 32 45 48 60 35Daihatsu 7262 - - - - - - - - -Honda 7267 1,370 1,394 1,441 1,251 1,156 1,291 1,243 1,507 1,510Suzuki 7269 0 22 28 7 0 - - - -FHI 7270 119 110 109 92 104 165 170 180 180Total 4,305 4,292 4,447 3,536 3,561 4,001 4,044 4,706 4,770

Asia 2006/3 2007/3 2008/3 2009/3 2010/3 2011/3 2012/3E 2013/3E 2014/3E

Nissan 7201 424 400 597 682 921 1,366 1,588 1,928 2,308Toyota 7203 1,030 1,085 1,394 1,551 1,670 2,189 2,228 2,503 2,708Mazda 7261 35 44 52 105 114 303 363 370 377Daihatsu 7262 284 289 366 412 425 526 576 669 757Honda 7267 539 646 791 834 941 1,085 901 1,156 1,340Suzuki 7269 907 988 1,138 1,088 1,406 1,720 1,769 1,888 2,112FHI 7270 - - - - - - - - -Total 2,935 3,162 3,972 4,261 5,052 6,663 6,849 7,846 8,844

Europe 2006/3 2007/3 2008/3 2009/3 2010/3 2011/3 2012/3E 2013/3E 2014/3E

Nissan 7201 509 507 594 450 445 571 613 602 602Toyota 7203 708 794 796 580 532 449 454 552 596Mazda 7261 - - - - - - - - -Daihatsu 7262 - - - - - - - - -Honda 7267 190 191 247 175 99 139 138 138 140Suzuki 7269 - - - - - - - - -FHI 7270 - - - - - - - - -Total 1,407 1,492 1,637 1,204 1,076 1,160 1,205 1,292 1,338

4,719Other 2006/3 2007/3 2008/3 2009/3 2010/3 2011/3 2012/3E 2013/3E 2014/3E

Nissan 7201 41 45 52 33 54 66 80 135 178Toyota 7203 377 411 591 448 357 394 424 464 498Mazda 7261 0 0 0 0 0 0 0 0 0Daihatsu 7262 0 0 0 0 0 1 1 1 1Honda 7267 101 125 179 163 206 148 125 187 190Suzuki 7269 160 189 252 260 180 164 179 168 168FHI 7270 0 0 0 0 0 0 0 0 0Total 679 769 1,075 905 798 774 809 955 1,034



10 January 2012 29

Figure 25: LCD TV maker volume targets converging on realistic level (main TV makers)

(mn Unit) (mn Unit)

Samsung LGD Sharp CEC AUOChimeiInnolux

Panasonic CPT BOE IVO TCL TotalYoY(%)

Samsung 20.0 1.0 7.5 10.0 1.0 1.0 1.5 42.0 11%

LG Electronics 20.0 0.3 6.0 1.0 1.0 1.0 29.3 19%

Sony 12.0 2.5 0.1 1.5 5.0 21.1 5%

Sharp 1.5 1.5 13.5 0%

Philips 0.8 5.5 1.0 1.0 7.5 0%

Toshiba 4.5 5.0 4.0 2.5 16.0 8%

Panasonic 3.5 0.5 3.0 5.0 12.0 9%

Vizio 3.0 1.0 1.0 5.0 0%

Insignia 2.0 2.0 4.0 14%

Funai Electric 1.0 0.3 5.0 0.5 6.3 0%

Sanyo 2.5 0.5 0.5 3.5 -8%

Hisense 2.5 2.0 0.3 0.5 3.5 0.5 1.0 10.3 16%

TCL 3.0 0.2 0.3 1.5 0.3 5.0 10.2 25%

Skyworth 4.5 0.3 0.5 3.0 0.5 8.8 15%

Haier 0.8 0.5 2.8 1.5 1.0 6.5 18%

KONKA 1.5 2.0 2.5 0.5 1.0 7.5 19%

Changhong 1.3 1.5 2.5 1.0 1.0 7.3 32%

China major 6 9.0 10.7 0.8 7.8 11.8 0.5 0.5 4.5 0.0 5.0 50.4 21%

Others 8.0 7.0 1.5 1.5 5.0 0.5 2.5 2.5 28.5 46%

Total 55.8 57.2 17.1 35.5 47.8 7.5 2.0 9.5 0.0 9.0 241.3 15%

LCD TV



10 January 2012 30

ANALYST(S) CERTIFICATION(S)

We, Yuji Fujimori, Makoto Bizen, Masaru Koshita, Masahiro Nakanomyo and Yoshihiko Nishizawa, hereby certify (1) that the views expressed in this research report accurately reflect our personal views about any or all of the subject securities or issuers referred to in this research report and(2) no part of our compensation was, is or will be directly or indirectly related to the specific recommendations or views expressed in thisresearch report.

IMPORTANT DISCLOSURES CONTINUED

When an equity research report covers six or more subject companies, Barclays Capital generally does not include specific conflict of interest disclosures regarding the subject companies and instead provides the reader with instructions about how to view or obtain the applicable conflictof interest disclosures. In order to comply with the requirements of the Korea Financial Investment Association, specific disclosures aboutsubject companies with securities listed on the Korea Exchange are included herein. To access important disclosures, including, where relevant,price targets, regarding other companies that are the subject of this research report, please send a written request to: Barclays Capital ResearchCompliance, 745 Seventh Avenue, 17th Floor, New York, NY 10019 or refer to http://publicresearch.barcap.com or call 1-212-526-1072.

The analysts responsible for preparing this research report have received compensation based upon various factors including the firm's totalrevenues, a portion of which is generated by investment banking activities.

Research analysts employed outside the US by affiliates of Barclays Capital Inc. are not registered/qualified as research analysts with FINRA.These analysts may not be associated persons of the member firm and therefore may not be subject to NASD Rule 2711 and incorporated NYSERule 472 restrictions on communications with a subject company, public appearances and trading securities held by a research analyst’saccount.

Analysts regularly conduct site visits to view the material operations of covered companies, but Barclays Capital policy prohibits them from accepting payment or reimbursement by any covered company of the their travel expenses for such visits.

In order to access Barclays Capital's Statement regarding Research Dissemination Policies and Procedures, please refer tohttps://live.barcap.com/publiccp/RSR/nyfipubs/disclaimer/disclaimer-research-dissemination.html.

Barclays Capital produces a variety of research products including, but not limited to, fundamental analysis, equity-linked analysis, quantitative analysis, and trade ideas. Recommendations contained in one type of research product may differ from recommendations contained in othertypes of research products, whether as a result of differing time horizons, methodologies, or otherwise.

Materially Mentioned Stocks (Ticker, Date, Price)

Samsung Electronics (005930.KS, 04-Jan-2012, KRW 1080000.00), 1-Overweight/3-Negative

Ibiden Co., Ltd. (4062.T, 04-Jan-2012, JPY 1568), 1-Overweight/1-Positive

FUJIFILM Holdings Corp. (4901.T, 04-Jan-2012, JPY 1912), 1-Overweight/2-Neutral

Konica Minolta Holdings Inc. (4902.T, 04-Jan-2012, JPY 592), 2-Equal Weight/2-Neutral

Asahi Glass Co., Ltd. (5201.T, 04-Jan-2012, JPY 659), 2-Equal Weight/1-Positive

Nippon Sheet Glass Co., Ltd. (5202.T, 04-Jan-2012, JPY 145), 3-Underweight/1-Positive

Nippon Electric Glass Co., Ltd. (5214.T, 04-Jan-2012, JPY 791), 1-Overweight/1-Positive

NGK Spark Plug Co., Ltd. (5334.T, 04-Jan-2012, JPY 956), 2-Equal Weight/1-Positive

NHK Spring Co., Ltd. (5991.T, 04-Jan-2012, JPY 684), 2-Equal Weight/1-Positive

Shibaura Mechatronics Corp. (6590.T, 04-Jan-2012, JPY 201), 2-Equal Weight/2-Neutral

Nidec Corp. (6594.OS, 04-Jan-2012, JPY 6880), 1-Overweight/1-Positive

JVC KENWOOD Corporation (6632.T, 04-Jan-2012, JPY 265), 1-Overweight/2-Neutral

OMRON Corp. (6645.OS, 04-Jan-2012, JPY 1614), 1-Overweight/2-Neutral

Seiko Epson Corp. (6724.T, 04-Jan-2012, JPY 1055), 2-Equal Weight/2-Neutral

ULVAC Inc. (6728.T, 04-Jan-2012, JPY 982), 2-Equal Weight/2-Neutral

Panasonic Corporation (6752.T, 04-Jan-2012, JPY 665), 2-Equal Weight/2-Neutral

Sharp Corporation (6753.T, 04-Jan-2012, JPY 676), 3-Underweight/2-Neutral

Sony Corporation (6758.T, 04-Jan-2012, JPY 1404), 2-Equal Weight/2-Neutral

TDK Corp. (6762.T, 04-Jan-2012, JPY 3385), 1-Overweight/1-Positive

Pioneer Corporation (6773.T, 04-Jan-2012, JPY 349), 1-Overweight/2-Neutral

Hirose Electric Co., Ltd. (6806.T, 04-Jan-2012, JPY 6950), 2-Equal Weight/1-Positive

Funai Electric Co., Ltd. (6839.OS, 04-Jan-2012, JPY 1830), 2-Equal Weight/2-Neutral

HORIBA Ltd. (6856.T, 04-Jan-2012, JPY 2317), 2-Equal Weight/2-Neutral

JEOL Ltd. (6951.T, 04-Jan-2012, JPY 199), 2-Equal Weight/2-Neutral


10 January 2012 31


Casio Computer Co., Ltd. (6952.T, 04-Jan-2012, JPY 455), 2-Equal Weight/2-Neutral

Rohm Co., Ltd. (6963.OS, 04-Jan-2012, JPY 3630), 2-Equal Weight/1-Positive

Shinko Electric Ind. (6967.T, 04-Jan-2012, JPY 534), 3-Underweight/1-Positive

Kyocera Corp. (6971.T, 04-Jan-2012, JPY 6280), 2-Equal Weight/1-Positive

Taiyo Yuden Co., Ltd. (6976.T, 04-Jan-2012, JPY 593), 3-Underweight/1-Positive

Murata Manufacturing Co., Ltd. (6981.OS, 04-Jan-2012, JPY 4110), 2-Equal Weight/1-Positive

Shimadzu Corp. (7701.T, 04-Jan-2012, JPY 659), 1-Overweight/2-Neutral

NIKON Corp. (7731.T, 04-Jan-2012, JPY 1751), 2-Equal Weight/2-Neutral

TOPCON CORP. (7732.T, 04-Jan-2012, JPY 366), 2-Equal Weight/2-Neutral

Olympus Corp. (7733.T, 04-Jan-2012, JPY 988), 3-Underweight/2-Neutral

Dainippon Screen Mfg. Co. Ltd. (7735.T, 04-Jan-2012, JPY 653), 1-Overweight/2-Neutral

Hoya Corp. (7741.T, 04-Jan-2012, JPY 1695), 2-Equal Weight/2-Neutral

Canon Inc. (7751.T, 04-Jan-2012, JPY 3430), 2-Equal Weight/2-Neutral

Ricoh Co., Ltd. (7752.T, 04-Jan-2012, JPY 674), 2-Equal Weight/2-Neutral

Citizen Holdings Co., Ltd. (7762.T, 04-Jan-2012, JPY 463), 2-Equal Weight/2-Neutral

Tokyo Electron Ltd. (8035.T, 04-Jan-2012, JPY 3970), 2-Equal Weight/2-Neutral

Hitachi High-Technologies Corp. (8036.T, 04-Jan-2012, JPY 1686), 1-Overweight/2-Neutral

Canon Marketing Japan Inc. (8060.T, 04-Jan-2012, JPY 911), 2-Equal Weight/2-Neutral

Corning Inc. (GLW, 04-Jan-2012, USD 13.17), 1-Overweight/2-Neutral

Other Material Conflicts

4901.T: Barclays Capital is acting as a financial advisor to FUJIFILM Holdings Corporation in the potential acquisition of SonoSite, Inc. which wasannounced on 15 December, 2011.

Guide to the Barclays Capital Fundamental Equity Research Rating System:

Our coverage analysts use a relative rating system in which they rate stocks as 1-Overweight, 2-Equal Weight or 3-Underweight (see definitions below) relative to other companies covered by the analyst or a team of analysts that are deemed to be in the same industry sector (the "sector coverage universe").

In addition to the stock rating, we provide sector views which rate the outlook for the sector coverage universe as 1-Positive, 2-Neutral or 3-Negative (see definitions below). A rating system using terms such as buy, hold and sell is not the equivalent of our rating system. Investorsshould carefully read the entire research report including the definitions of all ratings and not infer its contents from ratings alone.

Stock Rating

1-Overweight - The stock is expected to outperform the unweighted expected total return of the sector coverage universe over a 12-month investment horizon.

2-Equal Weight - The stock is expected to perform in line with the unweighted expected total return of the sector coverage universe over a 12-month investment horizon.

3-Underweight - The stock is expected to underperform the unweighted expected total return of the sector coverage universe over a 12-month investment horizon.

RS-Rating Suspended - The rating and target price have been suspended temporarily due to market events that made coverage impracticable orto comply with applicable regulations and/or firm policies in certain circumstances including when Barclays Capital is acting in an advisorycapacity in a merger or strategic transaction involving the company.

Sector View

1-Positive - sector coverage universe fundamentals/valuations are improving.

2-Neutral - sector coverage universe fundamentals/valuations are steady, neither improving nor deteriorating.

3-Negative - sector coverage universe fundamentals/valuations are deteriorating.

Below is the list of companies that constitute the "sector coverage universe":

Asia ex-Japan Semiconductors

Hynix Semiconductor (000660.KS) Samsung Electronics (005930.KS) United Microelectronics Corp. (2303.TW)

Advanced Semiconductor Engineering (2311.TW)

Siliconware Precision Industries (2325.TW) TSMC (2330.TW)

MediaTek Inc. (2454.TW) Visual Photonics Epitaxy Co., Ltd. Win Semiconductors Corp. (3105.TWO)


10 January 2012 32


(2455.TW)

Kinsus Interconnect Technology (3189.TW) MStar Semiconductor, Inc. (3697.TW) Vanguard International Semiconductor (5347.TWO)

Nan Ya Printed Circuit Board (8046.TW)

Japan Consumer Electronics

JVC KENWOOD Corporation (6632.T) Panasonic Corporation (6752.T) Sharp Corporation (6753.T)

Sony Corporation (6758.T) Pioneer Corporation (6773.T) Funai Electric Co., Ltd. (6839.OS)

Casio Computer Co., Ltd. (6952.T)

Japan Display & Lighting

Asahi Glass Co., Ltd. (5201.T) Nippon Sheet Glass Co., Ltd. (5202.T) Nippon Electric Glass Co., Ltd. (5214.T)

Japan Electronic Components

Ibiden Co., Ltd. (4062.T) NGK Spark Plug Co., Ltd. (5334.T) NHK Spring Co., Ltd. (5991.T)

Nidec Corp. (6594.OS) TDK Corp. (6762.T) Hirose Electric Co., Ltd. (6806.T)

Rohm Co., Ltd. (6963.OS) Shinko Electric Ind. (6967.T) Kyocera Corp. (6971.T)

Taiyo Yuden Co., Ltd. (6976.T) Murata Manufacturing Co., Ltd. (6981.OS)

Japan Precision Instruments

FUJIFILM Holdings Corp. (4901.T) Konica Minolta Holdings Inc. (4902.T) Shibaura Mechatronics Corp. (6590.T)

OMRON Corp. (6645.OS) Seiko Epson Corp. (6724.T) ULVAC Inc. (6728.T)

HORIBA Ltd. (6856.T) JEOL Ltd. (6951.T) Shimadzu Corp. (7701.T)

NIKON Corp. (7731.T) TOPCON CORP. (7732.T) Olympus Corp. (7733.T)

Dainippon Screen Mfg. Co. Ltd. (7735.T) Hoya Corp. (7741.T) Canon Inc. (7751.T)

Ricoh Co., Ltd. (7752.T) Citizen Holdings Co., Ltd. (7762.T) Tokyo Electron Ltd. (8035.T)

Hitachi High-Technologies Corp. (8036.T) Canon Marketing Japan Inc. (8060.T)

U.S. Display & Lighting

Aixtron AG (AIXG) Cree Inc. (CREE) Corning Inc. (GLW)

IPG Photonics (IPGP) SemiLEDs Corp. (LEDS) Orbotech (ORBK)

Veeco Instruments Inc. (VECO)

Distribution of Ratings:

Barclays Capital Inc. Equity Research has 2149 companies under coverage.

44% have been assigned a 1-Overweight rating which, for purposes of mandatory regulatory disclosures, is classified as a Buy rating; 54% ofcompanies with this rating are investment banking clients of the Firm.

41% have been assigned a 2-Equal Weight rating which, for purposes of mandatory regulatory disclosures, is classified as a Hold rating; 49% of companies with this rating are investment banking clients of the Firm.

13% have been assigned a 3-Underweight rating which, for purposes of mandatory regulatory disclosures, is classified as a Sell rating; 39% of companies with this rating are investment banking clients of the Firm.

Guide to the Barclays Capital Price Target:

Each analyst has a single price target on the stocks that they cover. The price target represents that analyst's expectation of where the stock will trade in the next 12 months. Upside/downside scenarios, where provided, represent potential upside/potential downside to each analyst's pricetarget over the same 12-month period.

Barclays Capital offices involved in the production of equity research:

London

Barclays Capital, the investment banking division of Barclays Bank PLC (Barclays Capital, London)

New York

Barclays Capital Inc. (BCI, New York)

Tokyo

Barclays Capital Japan Limited (BCJL, Tokyo)

São Paulo


10 January 2012 33


Banco Barclays S.A. (BBSA, São Paulo)

Hong Kong

Barclays Bank PLC, Hong Kong branch (Barclays Bank, Hong Kong)

Toronto

Barclays Capital Canada Inc. (BCC, Toronto)

Johannesburg

Absa Capital, a division of Absa Bank Limited (Absa Capital, Johannesburg)

Mexico City

Barclays Bank Mexico, S.A. (BBMX, Mexico City)

Taiwan

Barclays Capital Securities Taiwan Limited (BCSTW, Taiwan)

Seoul

Barclays Capital Securities Limited (BCSL, Seoul)

Mumbai

Barclays Securities (India) Private Limited (BSIPL, Mumbai)

Singapore

Barclays Bank PLC, Singapore branch (Barclays Bank, Singapore)


10 January 2012 34


Samsung Electronics (005930 KS / 005930.KS) Stock Rating Sector View

KRW 1080000.00 (04-Jan-2012) 1-OVERWEIGHT 3-NEGATIVE

Rating and Price Target Chart - KRW (as of 04-Jan-2012) Currency=KRW

Date Closing Price Rating Price Target

Closing Price Target Price Rating Change

Jul- 09 Jan- 10 Jul- 10 Jan- 11 Jul- 11 Jan- 12

400.0K

500.0K

600.0K

700.0K

800.0K

900.0K

1.0M

1.1M

1.2M

1.3M

08-Nov-2011 993000.00 1-Overweight 1250000.00

Link to Barclays Capital Live for interactive charting

Barclays Bank PLC and/or an affiliate trades regularly in the securities of Samsung Electronics.

Valuation Methodology: Our 12-month price target of KRW1.25mn for SEC is based on a cyclical context historical P/B valuation. In ourvaluation, we apply a target P/B multiple of 1.9x to our estimate for the BVPS for 2012. Our target multiple is the stock's historical average for the past five years. We use the average P/B since 2006 to reflect the ongoing de-rating of the P/B multiple since 2006. However, we believe that the de-rating will stop from 2012 and that a re-rating will start from 2013 assuming a successful launch of a large-size OLED business, which might significantly improve SEC's ROE profile on a long-term basis. Our price target is roughly equivalent to a P/E of 12.3x for 2012, which is slightlylower than the stock's historical average P/E for the past five years of 12.9x.

Risks which May Impede the Achievement of the Price Target: Key risks to our positive call on SEC include: 1) double dip in global economy,which might impact demand across the board; 2) much slower-than-expected (flexible) OLED ramp up, which is the key to market share gains in smart devices, in our view; and 3) materially negative results from any kind of lawsuit.

DISCLAIMER:

This publication has been prepared by Barclays Capital, the investment banking division of Barclays Bank PLC, and/or one or more of its affiliates as provided below. It is provided to our clients for information purposes only, and Barclays Capital makes no express or implied warranties, and expressly disclaims all warranties ofmerchantability or fitness for a particular purpose or use with respect to any data included in this publication. Barclays Capital will not treat unauthorized recipients ofthis report as its clients. Prices shown are indicative and Barclays Capital is not offering to buy or sell or soliciting offers to buy or sell any financial instrument.

Without limiting any of the foregoing and to the extent permitted by law, in no event shall Barclays Capital, nor any affiliate, nor any of their respective officers, directors,partners, or employees have any liability for (a) any special, punitive, indirect, or consequential damages; or (b) any lost profits, lost revenue, loss of anticipated savingsor loss of opportunity or other financial loss, even if notified of the possibility of such damages, arising from any use of this publication or its contents.

Other than disclosures relating to Barclays Capital, the information contained in this publication has been obtained from sources that Barclays Capital believes to bereliable, but Barclays Capital does not represent or warrant that it is accurate or complete. The views in this publication are those of Barclays Capital and are subject tochange, and Barclays Capital has no obligation to update its opinions or the information in this publication.

The analyst recommendations in this publication reflect solely and exclusively those of the author(s), and such opinions were prepared independently of any otherinterests, including those of Barclays Capital and/or its affiliates. This publication does not constitute personal investment advice or take into account the individual financial circumstances or objectives of the clients who receive it. The securities discussed herein may not be suitable for all investors. Barclays Capital recommends thatinvestors independently evaluate each issuer, security or instrument discussed herein and consult any independent advisors they believe necessary. The value of andincome from any investment may fluctuate from day to day as a result of changes in relevant economic markets (including changes in market liquidity). The information herein is not intended to predict actual results, which may differ substantially from those reflected. Past performance is not necessarily indicative of futureresults.

This communication is being made available in the UK and Europe primarily to persons who are investment professionals as that term is defined in Article 19 of theFinancial Services and Markets Act 2000 (Financial Promotion Order) 2005. It is directed at, and therefore should only be relied upon by, persons who have professional experience in matters relating to investments. The investments to which it relates are available only to such persons and will be entered into only with such persons.Barclays Capital is authorized and regulated by the Financial Services Authority ('FSA') and member of the London Stock Exchange.

Barclays Capital Inc., U.S. registered broker/dealer and member of FINRA (www.finra.org), is distributing this material in the United States and, in connection therewithaccepts responsibility for its contents. Any U.S. person wishing to effect a transaction in any security discussed herein should do so only by contacting a representativeof Barclays Capital Inc. in the U.S. at 745 Seventh Avenue, New York, New York 10019.

Non-U.S. persons should contact and execute transactions through a Barclays Bank PLC branch or affiliate in their home jurisdiction unless local regulations permitotherwise.

This material is distributed in Canada by Barclays Capital Canada Inc., a registered investment dealer and member of IIROC (www.iiroc.ca).

Subject to the conditions of this publication as set out above, Absa Capital, the Investment Banking Division of Absa Bank Limited, an authorised financial servicesprovider (Registration No.: 1986/004794/06), is distributing this material in South Africa. Absa Bank Limited is regulated by the South African Reserve Bank. Thispublication is not, nor is it intended to be, advice as defined and/or contemplated in the (South African) Financial Advisory and Intermediary Services Act, 37 of 2002, or any other financial, investment, trading, tax, legal, accounting, retirement, actuarial or other professional advice or service whatsoever. Any South African person orentity wishing to effect a transaction in any security discussed herein should do so only by contacting a representative of Absa Capital in South Africa, 15 Alice Lane,Sandton, Johannesburg, Gauteng 2196. Absa Capital is an affiliate of Barclays Capital.

In Japan, foreign exchange research reports are prepared and distributed by Barclays Bank PLC Tokyo Branch. Other research reports are distributed to institutionalinvestors in Japan by Barclays Capital Japan Limited. Barclays Capital Japan Limited is a joint-stock company incorporated in Japan with registered office of 6-10-1 Roppongi, Minato-ku, Tokyo 106-6131, Japan. It is a subsidiary of Barclays Bank PLC and a registered financial instruments firm regulated by the Financial ServicesAgency of Japan. Registered Number: Kanto Zaimukyokucho (kinsho) No. 143.

Barclays Bank PLC, Hong Kong Branch is distributing this material in Hong Kong as an authorised institution regulated by the Hong Kong Monetary Authority.Registered Office: 41/F, Cheung Kong Center, 2 Queen's Road Central, Hong Kong.

This material is issued in Taiwan by Barclays Capital Securities Taiwan Limited. This material on securities not traded in Taiwan is not to be construed as'recommendation' in Taiwan. Barclays Capital Securities Taiwan Limited does not accept orders from clients to trade in such securities. This material may not bedistributed to the public media or used by the public media without prior written consent of Barclays Capital.

This material is distributed in South Korea by Barclays Capital Securities Limited, Seoul Branch.

All equity research material is distributed in India by Barclays Securities (India) Private Limited (SEBI Registration No: INB/INF 231292732 (NSE), INB/INF 011292738(BSE), Registered Office: 208 | Ceejay House | Dr. Annie Besant Road | Shivsagar Estate | Worli | Mumbai - 400 018 | India, Phone: + 91 22 67196363). Other research reports are distributed in India by Barclays Bank PLC, India Branch.

Barclays Bank PLC Frankfurt Branch distributes this material in Germany under the supervision of Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin).

This material is distributed in Malaysia by Barclays Capital Markets Malaysia Sdn Bhd.

This material is distributed in Brazil by Banco Barclays S.A.

This material is distributed in Mexico by Barclays Bank Mexico, S.A.

Barclays Bank PLC in the Dubai International Financial Centre (Registered No. 0060) is regulated by the Dubai Financial Services Authority (DFSA). Barclays Bank PLC-DIFC Branch, may only undertake the financial services activities that fall within the scope of its existing DFSA licence.

Barclays Bank PLC in the UAE is regulated by the Central Bank of the UAE and is licensed to conduct business activities as a branch of a commercial bank incorporatedoutside the UAE in Dubai (Licence No.: 13/1844/2008, Registered Office: Building No. 6, Burj Dubai Business Hub, Sheikh Zayed Road, Dubai City) and Abu Dhabi(Licence No.: 13/952/2008, Registered Office: Al Jazira Towers, Hamdan Street, PO Box 2734, Abu Dhabi).

Barclays Bank PLC in the Qatar Financial Centre (Registered No. 00018) is authorised by the Qatar Financial Centre Regulatory Authority (QFCRA). Barclays Bank PLC-QFC Branch may only undertake the regulated activities that fall within the scope of its existing QFCRA licence. Principal place of business in Qatar: Qatar Financial Centre, Office 1002, 10th Floor, QFC Tower, Diplomatic Area, West Bay, PO Box 15891, Doha, Qatar.

This material is distributed in Dubai, the UAE and Qatar by Barclays Bank PLC. Related financial products or services are only available to Professional Clients as defined by the DFSA, and Business Customers as defined by the QFCRA.

This material is distributed in Saudi Arabia by Barclays Saudi Arabia ('BSA'). It is not the intention of the Publication to be used or deemed as recommendation, option or

advice for any action (s) that may take place in future. Barclays Saudi Arabia is a Closed Joint Stock Company, (CMA License No. 09141-37). Registered office Al Faisaliah Tower | Level 18 | Riyadh 11311 | Kingdom of Saudi Arabia. Authorised and regulated by the Capital Market Authority, Commercial Registration Number:1010283024.

This material is distributed in Russia by OOO Barclays Capital, affiliated company of Barclays Bank PLC, registered and regulated in Russia by the FSFM. Broker License #177-11850-100000; Dealer License #177-11855-010000. Registered address in Russia: 125047 Moscow, 1st Tverskaya-Yamskaya str. 21.

This material is distributed in Singapore by the Singapore branch of Barclays Bank PLC, a bank licensed in Singapore by the Monetary Authority of Singapore. Formatters in connection with this report, recipients in Singapore may contact the Singapore branch of Barclays Bank PLC, whose registered address is One Raffles QuayLevel 28, South Tower, Singapore 048583.

Barclays Bank PLC, Australia Branch (ARBN 062 449 585, AFSL 246617) is distributing this material in Australia. It is directed at 'wholesale clients' as defined byAustralian Corporations Act 2001.

IRS Circular 230 Prepared Materials Disclaimer: Barclays Capital and its affiliates do not provide tax advice and nothing contained herein should be construed to be taxadvice. Please be advised that any discussion of U.S. tax matters contained herein (including any attachments) (i) is not intended or written to be used, and cannot be used, by you for the purpose of avoiding U.S. tax-related penalties; and (ii) was written to support the promotion or marketing of the transactions or other mattersaddressed herein. Accordingly, you should seek advice based on your particular circumstances from an independent tax advisor.

Barclays Capital is not responsible for, and makes no warranties whatsoever as to, the content of any third-party web site accessed via a hyperlink in this publication and such information is not incorporated by reference.

© Copyright Barclays Bank PLC (2012). All rights reserved. No part of this publication may be reproduced in any manner without the prior written permission of BarclaysCapital or any of its affiliates. Barclays Bank PLC is registered in England No. 1026167. Registered office 1 Churchill Place, London, E14 5HP. Additional informationregarding this publication will be furnished upon request.

US08-000001

Documents

TECHNOLOGY INDUSTRY UPDATE · 2012-01-10 · We are also focusing on new technology proposals, such as the iPhone5 release (currently projected for 3Q 2012) and Samsung Electronics’