This segment includes materials and equipment for graphic arts, medical imaging and information systems, LCD materials, and recording media. Consolidated revenue in this segment rose 5.7% to ¥724.3 billion, owing to such factors as the continued robustness of LCD materials sales.

Graphic Arts System Products

As the use of digital technologies in the graphic arts industry steadily increases, Fujifilm is striving to promote growth in the sales of such digital products as computer-to-plate (CTP) systems.

In electronic imaging (EI) equipment, we bolstered our lineup by launching the high-speed violet-laser digital platesetter Luxel V-9600 CTP in North America and Europe and the high-speed B1 digital colour proofer Luxel SPEEDPROOF 9000 in Japan.

To operate its graphic arts business in the Japanese market more rapidly and efficiently, in April 2003, Fujifilm combined the marketing division of Fuji Photo Film and Process Shizai Co., Ltd, one of Japan's largest distributors for the graphic arts industry, and formed a new consolidated subsidiary, FUJIFILM Graphic Systems Co., Ltd.

Regarding manufacturing, our U.S. manufacturing subsidiary, Fuji Photo Film, Inc., announced the construction of a new factory for the production of CTP printing plates in response to growing demand in North America. Construction is set to begin immediately, and Fujifilm aims to begin production before the end of 2004.

Medical Imaging Products

In medical imaging products, demand for electronic imaging systems and dry medical imaging film products increased against the background of a continued rise in health care facilities' use of digital diagnostic imaging technologies and information networks. Reflecting this, Fujifilm's sales of such products grew smoothly.

Regarding digital X-ray diagnostic system products, sales of the FCR series, offering a complete product lineup from the "popular" model to high-end machines, continued to be robust in the Japanese market. In North America and Europe, the introduction of SYNAPSE next-generation medical networking software progressed and sales of the FCR series and other digital medical equipment increased, enabling the Company to considerably expand its market share.

The general trend of replacing wet-process imager with dry imagers helped to maintain robust demand for dry imagers, and Fujifilm augmented its DRYPIX series of dry laser imagers with the launch of the DRYPIX 7000, which offers the top levels of high-speed, large-volume processing capabilities and high image quality in its class.

Having thus created an array of products that meets the diverse needs of customers ranging from large-volume users to small-volume users, we energetically worked to expand sales of those products.

Our U.S. manufacturing subsidiary Fuji Photo Film, Inc., which has been handling certain medical film operations, completed a new factory for the totally integrated manufacturing of dry medical imaging film in March 2003. This has enabled Fujifilm to provide the North American medical community with the highest quality and best medical imaging film in a more timely manner.

LCD Materials

The shift from cathode ray tubes (CRTs) to LCDs for personal computer monitors and the increasing size of LCD panels helped Fujifilm maintain strong sales of its WV Film, which is sued to widen LCD viewing angles. In light of projections of further strong growth in the market for LCD materials, Fujifilm reevaluated its supply capability and proceeded with plans to build new manufacturing facilities and expand existing ones. Our domestic manufacturing subsidiary FUJIFILM Opt Materials Co., Ltd., began operating a new FUJITAC production plant in March 2003.

Recording Media

Amid rising demand for high-density, high-capacity data storage systems, Fujifilm worked to expand sales of LTO Ultrium 1 data cartridges, which have become a leading mid-range computer backup tape product, while strengthening its data storage media product lineup with the launch of Super DLTAPET 1 data cartridges and LTO Ultrium 2 data cartridges. Fujifilm will continue to hold the leading position in the data storage media market.

In the professional-use videotape market, the shift to digital formats accelerated, and Fujifilm strove to expand sales of digital videocassettes, such as MPEG IMX and HDCAM.

In consumer media, the full-scale diffusion of video-use DVD recorders is expected to support a large rise in demand for DVD media. Accordingly, Fujifilm endeavored to strengthen its digital media product lineup including DVD disks, while working to expand sales of those products.

Drawing on our proprietary technology such as Advanced Super Thin Layer & High Output Metal Media (ATOMM) technology and next-generation NANOCUBIC technology, Fujifilm is playing an important role in the development of next-generation, high-capacity data storage systems and proactively moving forward with the marketing of recording media for those systems.

Notes:
1. LTO and Ultrium are trademarks of HP, IBM and Certance in the US, other countries or both.
2. Super DLTape is a trademark of Quantum Corporation.