I would like to address my warmest greeting to the shareholders.
For your continued support especially, I would express my sincere gratitude.

The market environment surrounding your company and group during the current mid-term period showed steady trends in capital investments by semiconductor manufacturers in Asia, while the European economy remained in an unclear situation. As for Japan, we saw such imclinations as postponements of public sector projects.

In this situation, during the current mid-term period, your group saw steady plant and equipment investments by semiconductor manufacturers sustaining the field of Semiconductor Manufacturing Systems. This situation among others resulted in our consolidated achievements exceeding the mid-term figures last year in sales, operating profits, and ordinary profits. Additionally, one time profits were also posted with Kokusai Electric Korea Co., Ltd. as a consolidated subsidiary, resulting in higher interim net profits as well.

The dividends for shareholders are determined on the basis of maintaining stable dividends with a consideration to performance, cash flow status, and other circumstances. Regarding interim dividends, considering the performance during the current mid-term period, we have decided to add 2 yen to the 4-yen dividend forecast per share as announced in April of this year to set the rate to 6 yen (compared to the 4-yen interim dividend for the last year). As such, the yearly dividend is scheduled to be 14 yen per share (with a year-end dividend of 8 yen).
In celebrating the tenth anniversary of Hitachi Kokusai Electric, we set a Medium-Term Plan under the title “HK-AV10” in May 2010, thereby setting new managerial targets.

Prior to the setting of the Medium-Term Plan, your group initiated “HiKQ innovation activities” as part of a new reform campaign launched August 2009. In order to establish a brand of confidence that satisfies our customers, we expanded our range of activities for quality improvement campaigns and business process reforms, toward the promotion of reforms in all tasks. We will cultivate a corporate culture where we implement our tasks, reactivating internal and external communications, and achieving customer satisfaction as the primary target.

Based on these efforts, we will take various measures, create products and systems with high added value that achieve customer satisfaction, and work to increase our performance further on.

We hereby request the shareholders to grant the continued support to the company and its operation.

November 2010
Manabu Shinomoto
President and Chief Executive Officer