New Medium-term Management Plan

April 1, 2012 to March 31, 2015

May 15, 2012TAIYO YUDEN CO., LTD.

1

Consolidated Performance for the Year Ended March 31, 2012

Review of the Previous Medium-term Management Plan

Structural Improvement Measures

2

Year ended March 31, 2012(01 Apr 2011 – 31 Mar 2012)

Increase(Decrease)

Unit: Millions of yenForecast

[as of Dec 26, 2011]Actual Amount %

Net sales 189,000 183,795 (5,205) (2.8)

Operating income (7,000) (8,010) (1,010) -

Ordinary income (10,000) (9,070) 930 -

Net income (19,200) (21,599) (2,399) -

Net sales: Sales fell amid stagnant demand for TVs, PCs and LCD panels, despite firm demand for smartphones

Net income: ¥21.5 billion loss mainly attributed to the following factors- Business structure improvement expenses ¥4.2 billion; Special extra

retirement payment for solicitation of voluntary retirement, etc- Income taxes- deferred ¥5.8 billion; Reversal of deferred tax assets, etc

Consolidated Performancefor the year ended March 31, 2012

( 20 ) ( 15 ) ( 1 0 ) ( 5 ) 0 5 1 0 15 20 25

Actu al

Com m u n ication d evices

Op tical m ed ia

Bu sin ess stru ctu re im p rovem en t

D ifferen ce in u n it p r ice

Loss on d isasters

Loss on foreig n exch an g e

Previou s m ed iu m -term m an ag em en t p lan

0

50

100

150

200

250

Previou s m edium -term

m anag em en t p lan

Actual

3

Year ended March 31, 2012

Capacitors Ferrite and applied products Modules

Optical media products Other electronic components + Others

Operating incomeBillions of yen

¥95 →¥79

・Great East Japan Earthquake・Floods in Thailand

Net sales Billions of yen

Previous Medium-term Management Plan ¥230.0 billion ¥20 billion

Actual ¥183.7 billion ¥(8) billion

Net sales Operating income

Review of the Previous Medium-term Management Plan

Negative Factors: Impact from yen appreciation, disasters and difference in unit price as well as downturn in optical media

Positive Factors: Gains in communication devices

4

Structural improvement measures (announced 10 Nov 2011)

Progress update

Structural reform・Optimal use of overseas sites（overseas production rate: 53%→70%）

・Withdrawal from unprofitable products・Restructuring of domestic and overseas sites and personnel reductions

・Full-scale shift of capacitor and inductor production overseas set tobegin in the first half of the year ending March 31, 2013・Eliminate all unprofitable products by the end of the year ending March 31, 2013 (plans already drawn up)・Implementing staff downsizing at TAIYO YUDEN and its consolidated subsidiaries in Japan and overseas

Restriction of capital investment(¥15 billion forecast for next FY)

・¥18.5 billion in capital investments for the year ending March 31, 2013（¥8.2 billion less than the previous fiscal year) ・Keep capital investments less than depreciation expenses during the implementation period of the new medium-term management planReduction of SG&A and other

expenses・Expect to reduce by ¥1.8 billion for the year ending March 31, 2013 (compared to the year ended March 31, 2012)・Implemented organizational changes to reform purchasing and logistics systems

Lowering of currency exchange rate influence (40% reduction)

・Reduced by 27% at the time the performance forecast is drafted

Reduction of fixed costs: ¥10 billion / year

Structural Improvement Measures for Returning Operating Income to the Black and Progress Update

Structural reforms progressing according to plan

5

New Medium-term Management PlanApril 1, 2012 to March 31, 2015

1 5 2 , 0 5 71 5 3 , 7 2 1 1 6 3 , 3 2 8

1 7 2 , 2 5 6

1 8 6 , 5 3 9

2 2 1 , 2 3 0

2 3 8 , 2 7 5

1 8 5 , 4 5 31 9 5 , 6 9 1

2 1 0 , 4 0 2

1 8 3 , 7 9 5

2 1 0 , 0 0 0

2 3 0 , 0 0 0

2 5 0 , 0 0 0

6 , 1 9 08 , 1 6 9

1 0 ,9 8 8

2 ,0 5 5

6 , 6 9 2

2 2 , 0 1 8 2 1 , 3 0 4

( 1 2 , 7 5 6 )

4 , 2 0 4

8 , 7 9 2

( 8 , 0 1 0 )

1 0 , 0 0 0

1 5 ,0 0 0

2 0 , 0 0 0

-2 0 , 0 0 0

-1 0 , 0 0 0

0

1 0 , 0 0 0

2 0 , 0 0 0

3 0 , 0 0 0

4 0 , 0 0 0

0

5 0 , 0 0 0

1 0 0 , 0 0 0

1 5 0 , 0 0 0

2 0 0 , 0 0 0

2 5 0 , 0 0 0

3 0 0 , 0 0 0

Year en d ed

Mar 2 0 0 2

Year en d ed

Mar 2 0 0 3

Year en d ed

Mar 2 0 0 4

Year en d ed

Mar 2 0 0 5

Year en d ed

Mar 2 0 0 6

Year en d ed

Mar 2 0 0 7

Year en d ed

Mar 2 0 0 8

Year en d ed

Mar 2 0 0 9

Year en d ed

Mar 2 0 1 0

Year en d ed

Mar 2 0 1 1

Year en d ed

Mar 2 0 1 2

Year en d in g

Mar 2 0 1 3

Year en d in g

Mar 2 0 1 4

Year en d in g

Mar 2 0 1 5

Net sa les Operating incom e 6

Year ending March 2015Net sales ¥250,000 million, Operating income ¥20,000 million, ROE8%

Year ending March 2016Positive net cash position (positive CF for each FY to improve financial indicators)

Net sales (Millions of yen )

・Lehman Brothers bankruptcy

・Structural reforms in the Optical media products business

・Great East Japan Earthquake・Floods in Thailand

Operating income (Millions of yen )

New Medium-term Management Plan:Management Targets

・Collapse of IT Bubble

1 5 %

2 5 %

2 %

9 %4 %

4 5 %

4 0 %

1 6 %

3 %

6 %5 %

3 0 %82.8

100

( + 21% )

27 . 9

40

( + 4 3 % )

46 . 1

75

( + 6 3 % )4 . 1

7. 5

16. 2

15

6. 8

12. 5

0. 0

50. 0

100. 0

150. 0

200. 0

250. 0

300. 0

Year ended March 2012 Year ending March 2015

Others

Op tical m ed ia p roducts

Other electron ic com ponen ts

In teg rated m odu les & d evices

Ferr ite and app lied p roducts

Capacito rs

7

Net Sales by Product Category

Year ended March 2015

Year ended March 2012

¥183.7 billion

¥250 billion

Establish balanced business structure

(Billions of yen)

8

Valu

e of

dem

and

Industrial equipment Automotive Environmental energy Healthcare

Market (Devices) (*) Field Application Engineer

Raise visibility/ presence in markets

Strategies aiming at earnings growth☆Launch super hi-end line up☆System solutions☆Expand sales channels

MarginMargin

AllianceM&A

High growth markets・smartphone・tablet PC

•Concentrate sales•Bolster FAE(*)

Main sales markets in the past

Capture top market share by rolling out super high-end products •Roll out high-value

products•System solutions

•Rep sales•Expand number of distributors (E-commerce)

Market Strategy

5 %1 5 %

22%

20%

30%

22%

0%

20%

40%

60%

80%

100%

Year ended

March 2012

Year ending

March 2015

Com ponen ts

Com m un ication equ ipm en t

In fo rm ation equ ipm ent

Consum er p roducts

Au tom otive, I n dustr ial

equ ipm en t and Healthcare

9

Ratio of Net Sales by Equipment

Break free of dependence on existing markets

Grow sales in new markets

0

2 0 0

4 0 0

6 0 0

8 0 0

1 , 0 0 0

1 , 2 0 0

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

10

Roll out super high-end products for the high growth smartphone marketIncrease number of main clients using these products/ Augment production capacity

Expansion of super high-end products

Multilayer ceramic capacitors

High-frequency multilayer chip inductorsMultilayer chip beadsExpand lineup into EIA01005 size (0.4×0.2×0.2 mm)

Embedded-parts multilayer wiring substrate EOMIN®Expansion into FEM

SAW filters, Duplexers and FEMExpansion of production capacity to meet growing demand

Strengthen Real Time Clock backup applications

Ceramic type polyacene capacitors

Smartphone

LCD TV

DSC

HDD

Feature phone

PC(incl. tablet PC)

Commercialize “MCOIL®”using metallic new material

Compact large-current power inductors

TAIYO YUDEN calculation

Growth Strategies~toward the growing smartphone market~

(number) 3G feature Smartphone

MLCC 300~400 400~600

Power L 8~10 15~20

SAW・Dup 4~6 6~8

High-frequency L 20~40 40~60

Beads 15~25 30~40

Kit@ index Using 1 Greater than 1.5x

Production Volume (millions of units)

TAIYO YUDEN forecast

11

Key target marketsExpansion of sales in automotive, industrial equipment

and healthcare marketsEntry into environmental and energy markets

•Strengthen products for energy devices•Solutions business centered on energy management technologies

•Enhance high reliability product line-up(electronic components, archiving media)

Develop structure for creating new businesses

Establish “New business planning development division”

Smart gridSmart grid

Lighting equipment

Fuel cellEnergy storage system

Electric bicyclesElectric motorbikes

Electric vehicles

Smart meters

High-reliability media (ISO media)

Growth Strategies~Break Free from Our Focus on Existing Markets~

Aggressive alliance/ M&A strategySpeed up expansion into other business domains by

casting aside standalone approach in favor of partnerships

0%

10%

20%

30%

40%

70

80

90

100

110

Year ended

March 2012

Year ending

March 2013

Year end ing

March 2014

Year ending

March 2015

Sa les of capacitors Super h ig h-end p roduct sales ratio

12

Firmly maintain major share of the super high-end marketExpand in high-quality markets (automotive, industrial equipment and healthcare)Enhance production efficiency through maximum use of overseas production

CapacitorsOperating profit margin:

Greater than 10%

CapacitorsOperating profit margin:

Greater than 10%

～1000 Super High-End

～100 High-End SuperHigh-End

～10 High-End SuperHigh-End

～1uF High-End

SuperHigh-End

EIA (JIS)

1210 (3225)

1206 (3216)

0805 (2012)

0603 (1608)

0402 (1005)

0201 (0603)

01005 (0402)

Ratio of super high-end product sales

Worldwide product rollout

Korea

Niigata, Japan

Gunma HQ, Japan

ChinaMalaysia

Product Rollouts~Super High-end MLCC~

Capture top market share of over 50% for super high-end products

(Billions of yen)

13

Improve profitability through enhanced line-up of new productsStrengthen IC reference products/ Develop new products that meet market needs

Bring next generation high power, super high-end metal type inductors to market

Aim to double power inductor sales: FY ended Mar 2012 ⇒FY ending Mar 2015Capture the top of more than 50% market share for metal inductors used in smartphonesCapture top market share for high-Q, high frequency inductors

PMIC

CPU

Core1

Core2 CPU

Core1

Core2

Core3

Core4

Dual Core Quad Core

Core power supply demand : 2x

0

10

20

30

40

50

100 1000 10000コ

イル

Ｑ0

10

20

30

40

50

100 1000 10000コ

イル

Ｑ

TAIYO YUDEN conventional ratioQ performance increased by more than 20%

Increase in total number/ larger currents ⇒ Growing demand for compact metal solutions

2.4mmSquare size

2mmsquare size 1.6mm

square size

Larger current

TAIYO YUDEN Ferrite

MetalMCOIL®

Bring super high-end compact, hi-Q inductors for high frequency applications to market

Product Rollouts~Super High-end Inductors~

Ferrite and applied productsOperating profit margin:

Greater than 10%

Ferrite and applied productsOperating profit margin:

Greater than 10%

Coi

l Q

CurrentmA

mm3

14

Create black box by integrating communication devices and embedded-parts multilayer wiring substrate EOMIN®

Double in sales of communication devices(Year ended March 2012 ⇒ Year ending March 2015)

Low Profile MLCCHigh-Q HF inductor

Embedded-parts multilayer wiring substrate EOMIN®

SAW FilterFBARDuplexerRF Module

FBAR vs. SAW

0.2

1.0

0.5

0.3 1.0 3.02.0 5.0

Dur

abili

ty (W

)

Center Frequency(GHz)

SAW FBAR

PCSWCDMA 

AMPSGSM

W‐LANWiMAX

SAWor

FBAR

•Multi-channel high-frequency trend continues as smartphones move to LTE.

•FBAR needed for high frequency ranges.

Product Rollouts~Super High-end High Frequency Devices~

Shift business structure from modules to integrated modules & devices

Enhance presence in the high-frequency business and power supply/ energy business etc.

Integrated modules & devices

Operating profit margin:Greater than 5%

Integrated modules & devices

Operating profit margin:Greater than 5%

15

Increase (Decrease)

Unit: Millions of yenYear ended March

31, 2012(01 Apr 2011–31 Mar 2012)

Year ending March 31, 2013(01 Apr 2012–31 Mar 2013) Amount %

Net sales 183,795 210,000 26,205 14.3

Operating income (8,010) 10,000 18,010 -

Ordinary income (9,070) 9,000 18,070 -

Net income (21,599) 5,500 27,099 -

Operating income: Fixed cost reductions and growing demand for super high-end products help increase sales and significantly boost profitabilityExchange rate: Estimated average yen exchange rate to the US dollar: ¥80.00Drop in unit prices: Projected 12% decrease in unit prices of single item components

Consolidated Earnings Forecastfor the year ending March 31, 2013

16

Basic policy: Stable annual dividend of ¥10 per shareAnnual dividend for the year ended March 31, 2012 was reduced to ¥5 per share due to a rapid weakening in financial standing

Policy on Shareholder Returns

Plan to offer an annual dividend of ¥10 per share for the year ending March 31, 2013 thanks to an anticipated improvement in earningsTotal return ratio(*) set at 30% once the targets of the new medium-term management plan have been achieved(*) payment of cash dividend + purchase of treasury stock/ net income

17

This document contains information about the plans, business results, and

strategies of TAIYO YUDEN CO., LTD. and the TAIYO YUDEN Group. These

forward-looking statements other than historical facts represent judgements made

by the Company based on information available at present and are inherently

subject to a variety of uncertainties. TAIYO YUDEN cannot provide any guarantee

as to the attainment of certain figures in the future. The Company’s actual

activities and business results could differ significantly due to changes including,

but not limited to, changes in the electronics market in which the Company’s

business activities are centered. Readers should not overly rely on the information

contained in this document. The unauthorized reproduction or transfer of this

document is strictly prohibited.