Nichia's sales and profit figures were hit by a slump in prices for white LEDs used predominantly in the backlights of color screens for mobile phone handsets. The market for LEDs in 3.5 inch or smaller displays is expected to shrink from 150 billion yen in 2004 to 100 billion yen this year.
To retain its competitiveness in terms of price and performance, Nichia intends to invest about 30 billion yen (US$ 277 million) in plant and equipment and spend around 17 billion yen (US$157 million) on R&D in each of the four years.
The company expects LEDs for phone screens and other small displays to account for 25% of its total sales in the 2008 business year, with LEDs for large displays representing 18% and LEDs for automotive illumination applications contributing 15%. Nichia also said that it believes LEDs for cars will represent a major proportion of sales in or after 2010.
Nichia's business plan also calls for aggressive hiring, expanding the work force from 3,700 employees to 5,000, including part-time workers, in 2008.
Last week, the Nihon Keizai Shimbun said that Nichia plans to commence selling backlight LEDs for medium- and large-sized LCD screens. Specifically, it will ship LEDs for computers with 10-inch screens and car navigation systems with 5- to 8-inch displays.
Subsequently, Nichia will supply LED backlights for PCs with 15- to 20-inch monitors. The company plans to produce white LEDs with a brightness of 200 candelas per square meter for this application.