The Year in Review

The U.S. economy maintained a favorable rate of growth in fiscal 1995, ended March 31, 1996. A high growth rate was also seen in most of the Asian economies. Europe, however, despite being on track for a recovery the previous year, saw a general slowdown. In Japan, although there were some signs of recovery in private sector capital investment and personal consumption, the Japanese economy failed to make a full recovery and the economic climate continued to be severe.
In the information and communications market, demand for network systems and personal computers increased globally with the advancement of networks and the continued move toward rightsizing. In turn, this led to an increased demand for semiconductor products used in these systems.
Fujitsu responded aggressively to the increased demand, and also pushed its solutions business with emphasis on the growth areas of open systems, services and software, and multimedia products. In semiconductors, the company concentrated on strengthening production capacity and on developing new products. Management restructuring continued with a reorganization of production systems and a further increase in overseas procurement.
The result of these efforts is reflected clearly in the figures for fiscal 1995, with sales of 3,761 billion yen (up 15% over fiscal 1994) and net income of 63 billion yen (up 40% over fiscal 1994), far exceeding the figures for the previous fiscal year.

Leading the World in Information Technology

Network Business
Information is now exchanged on a global scale, with "networking" the watchword of the age. Fujitsu is strengthening its network business, with particular emphasis on the rapidly growing trunk line business in Japan, the expansion of mobile communications markets, SONET transmission systems and ATM switching systems to support new multimedia networks in the U.S. and large-scale networks in Asia.

Client-Server Business
The networking revolution has increased demand for servers to act as the core of modern information systems. From large-scale enterprise servers, through middle-range and small-scale PC-based systems, Fujitsu's aim is to build flexible client-server systems that meet the full range of client needs.

Personal Computer Sales
Sales of the FMV Series grew significantly, both for corporate and private use, propelling Fujitsu into second place overall in the Japanese PC market. To promote international sales, Fujitsu established two new PC subsidiaries in 1996-one in the U.S. in February and one in the U.K. in July. We will continue to strengthen our product development, production and marketing capabilities to support rapid expansion in the global PC market.

Services and Software Business
In fiscal 1995, Fujitsu significantly strengthened the company's capability to provide total support for information systems, networks and software products. In the expanding software market, we have paid particular attention to enhancing our middleware products, which support open systems architecture. The company is also leveraging its vast experience in systems integration to develop and market more application software packages.

New Multimedia Markets
Fujitsu successfully teamed with CompuServe to launch a new communications service that uses animation and virtual reality techniques. The service can now be accessed from 150 countries throughout the world. Fiscal 1995 also saw the launch of our new electronic magazine on the Internet. We will continue to use our network know-how to develop new services that will, in turn, create new markets.

Electronic Devices
Demand for 4-Mbit and 16-Mbit DRAMs expanded rapidly in fiscal 1995, fueled by market demand for personal computers. With a watchful eye on supply and demand, Fujitsu has responded to this highly volatile market by shifting to 16-Mbit DRAM production and preparing for volume production of 64-Mbit synchronous DRAMs. We are also concentrating on ICs for microcontrollers and ASICs, devices with growing demand and high added value.

To achieve our objectives, we will continue to promote innovation at all levels of management --- innovation that will lead to new technologies and products. We believe that this will inevitably position Fujitsu as a world leader in information technology, and ensure profitable and stable growth in the years ahead.

Fujitsu Limited