opment and seeks the early launch of the highest- performance microprocessors in the industry, with operating frequencies of above 1GHz. • February 2002: Successful design of LSI circuits using “X Architecture,” the world’s first design tech- nique that allows LSIs to be wired diagonally as well DISPLAY DEVICES & COMPONENTS COMPANY The Display Devices & Components (DDC) Com- pany produces a lineup of products that bring cutting-edge technologies to meet customer needs. To maintain our position at the forefront of technological innovation, we integrated our LCD business with that of Matsushita Electric Indus- trial Co., Ltd. in Toshiba Matsushita Display Tech- nologies Co., Ltd. in April 2002. This new com- pany will optimize the resources obtained from both parents to develop into a leading global com- pany. The DDC Company will continue to market appealing products as a company providing key technologies that support the digital and mobile age. Products under development and poised to make a difference include fuel cells for mobile terminals and surface-conduction electron-emit- ter displays (SEDs), which we are currently de- veloping with Canon Inc. We see SED technology as a major force in the next-generation large- screen displays. Price erosion in amorphous silicon TFT LCDs for portable PCs and displays made itself felt until the end of 2001. Sales prices also fell in small-sized dis- plays for cellular phones, as inventory levels remained high in Japan and many new suppliers entered the market. As a result, Toshiba’s sales declined to ¥125 billion (US$940 million), 17% down year-on-year. However, Toshiba is moving away from reli- ance on amorphous silicon TFTs, and is the clear technology and market leader in low-temperature polysilicon (LTPS) TFT LCDs. These offer richer satu- ration, higher resolution and faster refresh times than amorphous silicon TFT LCDs, and are better suited to display of video images on cellular phones and portable PCs and PDAs. They are also an essential stepping stone to next generation organic light emit- ting displays (OLEDs). Toshiba reinforced its posi- tion in LTPS TFTs with the June 2001 start of produc- tion of small-sized LCDs for cellular phone applica- tions at Fukaya Operations, in Saitama, Japan, and the October 2001 launch of a second line for larger displays there. The company expects to see strong demand for all its LTPS TFT products. The 17-inch organic light emit- ting display (OLED) developed by Toshiba Matsushita Display Technology is scheduled for mass production in calendar 2003. OLED will first find a mar- ket in small- and medium-sized displays. Fiscal 2001 saw us initiate a series of struc- tural changes that will promote the continued growth and prosperity of our LCD business. In August, we ended our joint venture with IBM Corporation, Dis- play Technologies Inc. (DTI). One of the longest lived and most successful JVs in the industry, DTI pio- neered development and manufacturing of amor- phous silicon TFTs, and brought great benefits to both partners. The decision to wind down the company was mutually agreed and reflected the strategic di- vergence of its parents. DTI’s Himeji Operations’ small- and medium-sized TFT lines in Hyogo, Japan, became a wholly-owned Toshiba subsidiary, TFPD Co., Ltd. A more extensive restructuring was initiated in October 2001, when Toshiba and Matsushita Elec- tric Industrial Co., Ltd. agreed to merge all aspects of their TFT businesses—from development through sales and marketing—into a new joint venture. This was brought to fruition in April 2002, when Toshiba Matsushita Display Technology Co., Ltd. (TMDT) started operation. The company will be a forceful presence in the global LCD market, and will reinforce as horizontally and vertically. Jointly developed with Simplex Solutions, Inc. of the U.S., this new design method achieves LSIs capable of operating 20% faster than their conventionally wired counterparts, while having a 10% smaller layout area. 29 DISPLAY DEVICES & COMPONENTS COMPANY President EISABURO HAMANO