March 07, 2008 Corporate strategy conference

Now, I would like to talk about our in-house production initiatives.

We have been making steady progress in switching from external procurement to in-house production, primarily for key printer parts.

Even for parts which are already produced in-house, the significant increase in production volume has resulted in greater benefits for Canon. For example, the in-house production of high-density packaging for digital cameras has provided the significant benefits of lowered costs and shorter lead times.

Also, starting in the latter half of this year, a new CMOS sensor operations base will go on line at our Kawasaki office. It is hoped that this will be a key to helping Canon further differentiate its products from its competitors', even in the rapidly changing realm of high definition video cameras.