News Release

December 17, 2008
Canon Inc.

Notice regarding delay in construction, start of operation of Nagasaki Canon

TOKYO, December 17, 2008—Canon Inc. announced today that it would delay the construction and start of operation of Nagasaki Canon Inc., the manufacturing base in Higashi Sonogi-gun, Nagasaki Prefecture, established in July this year.

Since 2000, demand for digital cameras has continued to increase rapidly. As demand is expected to continue growing in the future, Canon recognizes the need to expand its production capacity for both digital SLR and compact digital cameras.

Upon newly establishing Nagasaki Canon, original plans had called for starting construction in January 2009 and commencing operation in December 2009, carrying out production operations in collaboration with Oita Canon Inc., also located in Kyushu.

Recently, however, growth in demand for digital cameras has rapidly declined compared with original projections due to the global economic downturn triggered by the failure of major U.S. securities firms, which has necessitated a revision of earlier production plans. This serious drop in demand is expected to continue for a period of time. These factors led to the company's decision to delay the start of construction and operation of the new manufacturing site.

With regard to future construction and operation plans for Nagasaki Canon, Canon will watch market developments for the time being and announce a revised schedule once the timing has been determined.

This decision will have no impact on the hiring of individuals that have already received employment offers and are scheduled for hire from January 2009, including new graduates in April 2009. These individuals will undergo training at Oita Canon as originally planned and will be assigned work at Nagasaki Canon sometime following the start of operations at the new site.