Fiscal 1996 in Review

Computers are finding their way into all corners of the world and networking is advancing on a global scale. In the information and communications market, demand for communications systems and personal computers is expanding, and more and more client-server systems are being introduced. The global market environment has been favorable. However, with the world's markets uniting as globalization continues to speed ahead, competition is intensifying.
The Fujitsu Group aggressively responded to the expanding demand for communications systems and personal computers, and has vigorously pressed forward with the solutions business, providing optimal client-server systems to our customers. In semiconductors, the drop in memory IC prices affected us greatly. In response, the company is focusing on products with high added value, including the 64-Mbit synchronous DRAMs and system LSIs that will be the mainstream products of the future.
Sales grew significantly in the information processing and telecommunications groups, reaching 4,503.4 billion yen (up 20% over the previous fiscal year). Net income, however, was 46.1 billion yen (down 27%) due to difficulties experienced in overseas business, mainly in semiconductors.

Towards Becoming the Global IT Company

Network Computing
Network computing is changing the information society in profound ways, making it possible for everyone to share the same information freely. Fujitsu has the resources, experience and motivation to support every element of this culture-changing technology.

Server Systems
Servers are the key in network computing. The demand for enterprise servers is growing, and Fujitsu's leading edge CMOS semiconductor technology has put our servers into wide-ranging applications. We continue to strengthen network offerings and are now focusing on the development of next-generation servers.

Personal Computers
Our personal computers continued to attract customers in both the corporate and individual markets. In fiscal 1996, we shipped two million personal computers in Japan. Overseas, Fujitsu established two new personal computer companies, one in the U.S. in February 1996 and the other in the U.K. in July 1996. We also released a new lineup of notebook personal computers, marketing them under the same brand name in Europe and North America. The company will keep promoting the development, production and global sales of these increasingly important products.

Services and Software
In services, we focused on strengthening system integration, supporting the rapidly growing out-sourcing business and organizing total maintenance systems for our hardware, software and networks. We strengthened network services and content for the Internet. In software, the focus was on middleware for global operations. We developed and marketed application packages that grew out of our strong background in building systems and serving customers.

Network Infrastructures
Fujitsu will continue to expand its network business, focusing on fast-growing switching, transmission and mobile communications systems in Japan, market-leading SONET optical transmission systems and ATM switching systems in North America, and large-scale telecommunications networks in Asia. The company is committed to developing systems that support the infrastructures of next-generation networks.

Electronic Devices
The drop in memory IC prices brought total sales down in fiscal 1996. In response, we are focusing on products with high added value, including the 64-Mbit synchronous DRAMs and system LSIs that will be the next mainstream products. We are also developing 0.18-micron process technology for next-generation LSIs. In October 1996, Fujitsu began producing ImageSite brand plasma display panels, becoming the first company in the world to mass-produce 42-inch color plasma displays. The company will market the plasma display panels across a wide application spectrum as key devices for the multimedia age.

With this full commitment to all areas of technology, we are working to become a global information technology company, which will increase our growth potential and ensure continued profitability. We ask for your continued support.

Fujitsu Limited