Thank you very much for joining MinebeaMitsumi financial result announcement session for Q2 of the fiscal year ending in March 2022. In attendance today are, from the right-hand side, Representative Director, CEO, and COO, Yoshihisa Kainuma. Director, Senior Managing Executive Officer, Katsuhiko Yoshida. Thank you very much. First of all, Yoshida will explain financial results. Then Kainuma will talk about business update and management strategy, which will be followed by Q&A. The meeting is scheduled to be finished at seven o'clock. For more details of financial statements, please refer to supplementary financial information and Tanshin reports uploaded on our website. On the screen you are looking at right now, there is a link for questionnaire. In order to provide us a valuable feedback for IR activities, may I ask you to respond to the questionnaire.
Today's session, inclusive of a Q&A, will be video-recorded for later viewing. Thank you for your kind understanding. Mr. Yoshida, the floor is yours.
This is Yoshida. Today, I would first like to explain the consolidated financial results for the second quarter of the fiscal year ending March 31, 2022. Consolidated net sales for this second quarter of this fiscal year was up 2.8% year-on-year and up 13.6% quarter-on-quarter to total JPY 281.955 billion. Operating income totaled JPY 25.005 billion, which was 42.8% up year-on-year and up 27.4% quarter-on-quarter. Profit for the period attributable to owners of the parent increased 54.4% year-on-year and 39.1% quarter-on-quarter, for a total of JPY 20.393 billion. Net sales, operating income, and quarterly profit all hit second quarter record highs.
We estimate the foreign currency translations have a year-on-year impact of +10.4 billion JPY in net sales and +2.8 billion JPY in operating income. Quarter-on-quarter impact was JPY +1.7 billion in net sales and JPY +1.5 billion in operating income. We made slight retrospective changes to last fiscal year's financial statements due to the PPA for ABLIC. Please note that the figures on the following pages are revised figures. Next slide, please. This is the summary result for the first half. For items, we have hit the first half record highs as well. Going to the next slide. This is the quarterly trend in net sales, operating income, and operating margins. The operating margin for the second quarter was 8.9%.
This was up 2.5 percentage points year-on-year and up 1.1 percentage points quarter-on-quarter. Next slide, please. This is the difference between the forecast as of August and actual results for net sales and operating income by business segment for the second quarter. Net sales for the Machine Components business segment was slightly lower than projected due to a slowdown in sales to the automobile industry caused mainly by a shortage of semiconductors. The Electronic Devices and Components business saw lower than expected net sales due primarily to lagging sales of automotive motors and backlights caused by a shortage of semiconductors. The Mitsumi business enjoyed higher than projected sales for mechanical components, optical devices, analog semiconductors, and so on. The U-Shin business experienced lower than expected sales due to a slowdown in automobile production.
Operating income for the machine components business segment was almost on par with the forecast. The electronic devices and components business experienced lower than expected operating income due to a decline in sales. The MITSUMI business operating income surpassed the forecast thanks to higher than expected sales of optical devices and semiconductors, as well as further improvement in the profitability of semiconductors. The U-Shin business experienced lower than expected operating income due to a decline in sales. Next slide, please. Now, let's take a look at the quarterly trend by segment, starting with the machine components business segment. On the left is a graph indicating quarterly net sales trends. On the right is a graph that shows on the bar chart for quarterly operating incomes along with a line chart for operating margins.
Second quarter net sales was almost on par with the previous quarter at JPY 44.3 billion. Ball bearing sales dipped 1.1% quarter-on-quarter to a total of JPY 31.9 billion. The monthly external shipment volume was down 2% quarter-on-quarter for an average of 241 million units. This is due primarily to a slowdown in sales to the automotive sector. Sales of aircraft bearings remain sluggish due to the stagnant market.
Sales of rod end and fasteners totaling JPY 6.5 billion were up 1.6% from the previous quarter. Sales of pivot assemblies increased 8% quarter-on-quarter to total JPY 5.9 billion. Operating income for the quarter totaled JPY 11.9 billion, and the operating margin continued to recover at 26.9%. Operating income rose 9% quarter-on-quarter, while the operating margin improved 2.1 percentage points. Looking at the results by product, we see that operating income for ball bearings and pivot assemblies increased quarter-on-quarter, while operating income for rod ends and fasteners was about the same with last quarter. For ball bearings, profit increased while sales decreased quarter-on-quarter, thanks to high utilization rates on top of improved productivity. Going to the next slide.
Now let's look at the electronic devices and components segment. Net sales increased 3.6% quarter-on-quarter to hit JPY 93.7 billion. Looking at the results by product, we see the sales of motors increased 3% quarter-on-quarter to reach JPY 66.1 billion. Although sales was impacted by reduced automotive production due to semiconductor shortages, sales mainly for HDDs remained robust. Sales for electronic devices were on par quarter-on-quarter to total JPY 17.3 billion. Sales of sensing devices totaling JPY 9.3 billion were up 16.8% from the previous quarter. Operating income came to JPY 6.1 billion and operating margin was 6.5%. Operating income fell 23.2% quarter-on-quarter, while the operating margin dropped 2.2 percentage points.
Excluding the one-time recovery of costs from the past fiscal years, which was recognized in the previous quarter, and the impact of the one-time cost due to the effects of the COVID-19 and semiconductor shortages, profits would have substantially increased. Looking at the results by product, although the operating income for sensing devices was up, and the operating income for electronic devices was down, while operating income for motors about the same in the previous quarter. For your reference, figures shown on the fiscal year ending March 2021 was based on the classifications used before changes to the business segments were made. Please note that the same applies to the rest of the presentation. Next slide, please. Let's look at the performance for the Mitsumi business segment. Net sales increased 44.6% quarter-on-quarter to total JPY 111 billion.
As the seasonal demand picked up, so did the sales of optical devices and mechanical components, along with sales of analog semiconductors and other products, which were also boosted by strong demand. Operating income came to JPY 11.3 billion, and the operating margin was 10.2%. On a quarter-on-quarter basis, operating income increased 2.2 x, while the operating margin rose 3.6 percentage points. The primary factors behind these increases include a further increase in the profitability of analog semiconductors in addition to seasonal demand. Moving on to the next slide. Finally, let's look at the U-Shin business segment. Net sales were down 11.3% quarter-on-quarter to JPY 32.7 billion. This was due to production adjustments by some automakers due to the semiconductor shortage.
While our operating loss totaled JPY 0 billion, the operating margin was -0.1%. Next slide, please. The bar graph here shows the trends in profit attributable to owners of the parent, while the line graph charts changes in the profit for the period per share. The profit for the period was JPY 20.4 billion. Earnings per share was JPY 50.4. Next slide, please. Next, we have the quarterly inventory trend. At the end of the second quarter, inventory totaled JPY 214.1 billion, which is JPY 18.6 billion more than what it was three months ago. This was due to a strategic increase in the inventory of raw materials, et cetera, as well as a postponement in shipments of some products requested by the customers. Next slide, please.
The bar chart in this graph shows the trends in net interest-bearing debt, which is total interest-bearing debt minus cash and cash equivalents. The line chart indicates the free cash flow. At the end of the second quarter, net interest-bearing debt totaling JPY 90.2 billion was up JPY 5.8 billion from what it was at the end of the previous fiscal year. Moving on to the next slide. We made upward revisions to the full year forecast for the fiscal year ending March 31, 2022, which was announced in August. We expect JPY 1,050 billion for net sales and have revised the forecast for operating income to JPY 90 billion.
The estimated net sales figures for the machine components, electronic devices and components and Mitsumi business were revised up, while the estimated net sales figure for the U-Shin business was revised down since it will be significantly affected by the slowdown in automotive production due to the shortage of semiconductors. Overall sales forecast remains unchanged. After revising the estimated operating income figures in light of the revised sales figure estimates, we made an upward revision to the operating income forecast. The exchange rate assumption is JPY 110 to the US dollar. The next slide, please. This slide shows a forecast by business segment. Thank you for listening. Next, Mr. Kainuma, please.
From my side, I would like to give you the business update and the management strategy. This quarter, I think, things went very well. There were semiconductor issues. The lockdown of the supply chain at our clients, the logistics was disrupted. The material cost was skyrocketing. There has been various impacts on our business, but that said, we have been able to offset that. This is due to the cost down reductions that we have been seriously attacking, improving productivity, et cetera. Through these initiatives, we have been able to see effects out of this. In terms of the currency, to be frank, it was favorable for us, and so that is the reason why we have been able to achieve the forecast.
In September, we have been able to see a record high sales, so more than JPY 10 billion for the month. We have been able to achieve that. Monthly sales of JPY 10 billion since I have become president. Compared to when I have become the president, it is unthinkable. It is an unprecedented amount. From my point of view, I am very pleased at this outcome. If there wasn't the impact of COVID-19, I think we shouldn't be saying that. Because COVID-19 was impacting us, each plant, basically. Well, our plants didn't close down completely at all. The employees, maybe they were not all on the floor. There were various situations that we are facing, and the utilization went down. Yes, that happened.
We had to wear a mask, we have to wear gloves, and we have to prepare those supplies. The reduction of the utilization and the cost we have to spend for the supplies is about JPY 5 billion. In the first half, we have spent for these initiatives. The semiconductors, there have been issues around the semiconductors. The profit that we should have been getting, for instance, the inventory has gone up, so the JPY 5 billion of profit that we have lost through this impact. If these were, if this has not happened, JPY 55 billion-JPY 56 billion of operating income we should have been able to achieve in this first half. The second half currencies, 110 yen to the dollar is what we are anticipating.
In this forecast that we are using from January for the semiconductor supply, we are assuming that it's going to gradually recover. That is our assumption. Today's Nikkei newspaper has re-reported that Toyota next month, or maybe this month, record high production. They will be aiming for the record high production. We have been starting to hear this news. For the automotive sector, there are areas that are patchy. Maybe some OEMs are suffering from this kind of situation. Our assumption is that from January, gradually the situation is going to improve. That is our assumption. This JPY 90 billion will be our outlook. I think this is a comfortably conservative figure from my point of view. Let's go to the next slide.
This is the ball bearing business. The ball bearings in the second half and this half, yes, it was impacted with semiconductor. But in terms of the inventories, they look like at low level. Well, I have to confess that JPY 100 million of air freight cost is being spent. This time around, we would like to optimize inventory, and by doing so, for the longer inventory lead time, we want to have more inventory. More precise inventories and standards should be implemented so that we can achieve healthy growth. As you can see here, this roadmap we are showing you. What is happy is, we have 315, 325, 345. There's JPY 10 billion improvement.
We have been able to do that through the improved profitability. There's a JPY 10 billion of investment. Well, the machines is going to be installed, but because of this equipment, due to the semiconductor issues, I think basically it's being delayed a bit. We do have issues. That said, in August next year, by August next year, we want to start operating all the lines. It means that the 345 million units can be achieved. Previously I have told you is that another JPY 10 billion yen investment is going to be conducted, meaning that 365 million, up to 365 million, we will be increasing our production capacity.
By doing so, for the ball bearings, we want to have a dominating supply capability or the competitiveness, and we want to enhance this side of our business by doing so. The aircraft components, unfortunately, for the second half of next fiscal year, maybe two years from now, overall on a monthly basis, we'll be going back to the pre-COVID-19 level. That is our forecast. This is quite interesting. You can see the left-hand side photo on the bottom. The aircraft, when you have your pushback. You have this kind of a truck that is on the front wheels, and they push the aircraft backwards. Going forward, this will be electrified. Within the wheels, the motors will be equipped, and using electricity, the aircraft will be pushed back.
This is going to start. This is a photo showing that landing gear. These oscillating bearings, so that way ceramics are very light and it rotates very smoothly. This has been utilized. This is a very interesting trend that we have started to see. For motors, as I've always been saying, JPY 270 billion will be our target in terms of sales. This is going very smoothly. If we look at the history of the motor business, you can fully understand how robust and strong the motor business is. In terms of the driver, will be automotive. I think that the automotive sector is going to be the driver for motors.
For the non-automotive sector, the DC brush motors that can be used for various applications. For fan motors, it's going to grow even more. Our capacity is going over 10 million. For the motor business, going forward, it will increase the production steadily going forward. For the Mitsumi business, thankfully, it has become an excellent company. The game business, well, basically, they was concentrating on the game business alone in the past, but we have the OIS productivity. With us coming in, we have improved the productivity. The analog semiconductors, well, maybe this can be considered as a joke for Mitsumi. When we integrated Mitsumi, analog semiconductors, maybe we were thinking about, you know, disposing the analog semiconductors that we...
As you can see, this is one of our Eight Spears actually, and you can see that, it is very successful right now. Ten billion within half a year. The full year is about JPY 20 billion of sales. I think, the MEMS business, it looks bright for the future. We have been able to get that business from Omron. The people working on this floor is very motivated. This analog semiconductor business, the sales is going to grow even more going forward. For next year, the Shiga plant will start gradually to contribute. The analog semiconductors, OIS, this will be the major drivers. The game business, our forecast is next year will remain steady.
In terms of the analog semiconductors, we will be proactively if there are opportunities for M&A, we will be participating. For this analog semiconductors business, we want to make it into the core of the Mitsumi business. That is our idea. Going to U-Shin. This was unexpected. The automotive production dropped this far. We can't do anything, to be frank. At all OEMs, about 20%-30% of sales has been reduced. This section is 100% focused exposure to automotive. I think if you consider, take that into consideration, it did well, more or less. These type of situations, if the automobile business starts to recover, this will start to generate profit.
If everything goes well all across the board, there's no room to stretch. For these type of business, for the future, this will be a driver for us for the future. From my point of view, we want to have to wait for the recovery of the auto production. We have decided what we are going to do. That will be the employees' attitude in Europe has started to change, and I think the orders we have been able to increase the order intake steadily. By doing so, the other day, I said we have been able to get a big order from a major OEM. We will steadily appeal about our technological capability and grow the business.
Structural reform in Europe is progressing steadily, but some customers are saying that they want us to extend the production period, and we will be charging the cost for them. Although this business is something that we were planning to exit, and we will continue in some parts, but we will never be making losses because of this. The risk hedge, as we always talk about, even if auto business goes down, it can be sustained by other businesses and vice versa. Risk hedge is becoming very effective once again. The image for next fiscal year, and in May of next year, I will give you more details as usual. JPY 100 billion is becoming very achievable.
If in fact we achieve JPY 90 billion this year, JPY 100 billion will be no problem.
The three spears plus one, bearings, and motors, and OIS, these are promising products are very clearly defined. The U-Shin will be break-even point or JPY 2 billion or JPY 3 billion. In that sense, the automotive business, the inventories is going low. Therefore, if semiconductor problems are resolved, I think it will grow significantly. U-Shin will be growing for sure next year. On top of that, bearings production capacity will be increased, and motors, centering around automotive business, it'll grow. The semiconductors, Shiga plant will be the growth driver, and OIS will grow 1.2 x. No questions about that. U-Shin will be put on all of that.
I think we are very close to achieving JPY 100 billion. The problem is, what about beyond JPY 100 billion? Many people who are rather impatient are asking me this question quite often. I would like to talk about that today. Beyond zero, I will talk about this later. I came up with this phrase, beyond 1,000 or JPY 100 billion. I would like to share with you the image I have about this. Bearings, the 40 million units capacity increase is planned, and the aircraft will come back to pre-COVID-19 period. Motors will be growing steadily based on the track records.
Kainuma, as you know, the Shiga plant for semiconductors will be making more and more products. Then, the JPY 25 billion, because of a JPY 10 billion investment that is planned, and OIS will grow further. The customers other than the ones that we are already dealing with, we will be delivering products to additional customers. Plus the JPY 10 billion here, it says, but U-Shin will become profitable and resilient. Sensing devices, connectors and power supplies out of Eight Spears, these are the next candidates for the future growth. Taking a conservative view, if we achieve JPY 90 billion, then plus JPY 40 billion, or I would say, plus JPY 50 billion.
Let's be conservative and say JPY 40 billion additional in March 2025, but we should be able to achieve this. In May of next year, I will share with you more details about this plan. Last time, I talked about JPY 115 billion in 2024, but looking at the momentum of semiconductor business as well as Forex. Based upon the current conditions, it will be far beyond JPY 115 billion. It will be exceeded for sure. That is something I wanted to share with you. Today, I prepared three special slides in order to explain to you our determination. QCDES, we already announced, but as a part manufacturer, we would like to tackle with the societal issues, resolving societal issues very seriously.
That is what I explained to you previously, and this is something I repeatedly tell my people, my employees. The two things are written here. The first one is the carbon neutrality, and in fiscal 2030, the 30% reduction shall be achieved. This is a target. 30% may seem low to some of you, but I will explain about this later. Beyond Zero, this is extremely crucial. From this point onward, each and every part towards the decarbonization, how we can contribute to that by increasing accuracy and reducing power consumption. By doing so, the customers who use our products and their customers will be able to save energy by reducing power consumption. That is what we call Beyond Zero, and we are aiming to increase that by 30%.
We appointed a CGO and under his leadership, various things are being contemplated. We will be seriously tackling this. Not just about increasing profit, but resolving a societal issue. As a part manufacturer, we will be very serious about it. Super precision is what we profess. By increasing precision even more, we should be able to achieve these targets. Moving on to the next slide. 30% down, you may think this is low. That is the reason why I prepared this slide. Sales towards 2030. Well, in March 2029, JPY 2.5 trillion is the target that we announced, and therefore, emissions will be increasing. 850,000 tons will be 600,000 tons, 30% reduction.
Even if sales reach JPY 2.5 trillion, we would like to still achieve 600,000 tons. That is our target. You may think it's impossible to achieve, but the biggest point here is to decarbonize the power source, solar power panel, hydrogen power generation. There will be various alternatives. The solar power panel will not be able to resolve the problem. Maybe several percentage points of energy saving may be possible by reducing fossil fuel usage, but it will not solve the problem. We need to use a decarbonized power supply. It may be a nuclear power generation, although there are some political issues. It's not up to us to decide what will be good and what will not be. We would like to include these things in our plan.
The plan includes updating and replacing outdated facility and equipment in order to reduce power consumption of machines. That is something we would like to make sure we do a good job. In order to do that, we need a profit. By generating profit, we should be able to return the benefits to the society. That is quite important in my view. QCDS. Talking about QCDS. Carbon neutrality and Beyond Zero. When we put these two together, what will be the contribution? For 2020, here in 2020. Well, I don't have my reading glasses. I can't see the numbers clearly. Sorry. This is a very busy slide. But 2020, we. 0.85 million tons, we reduce it to the. That's our emission against that.
With the current existing products, compared to the older products, how much can power consumption contribute? How much CO2 emission is being reduced? This is the blue bar you see there, eliminating this. If you net these all off on a net basis, this is the level of reduction that we'll be doing. By 2030, in 2030, this will be shown in the next slide. The ball bearings that have the three times the precision. By utilizing these types of ball bearings, how are we going to contribute to Beyond Zero, and by doing so, achieve carbon neutrality? How much these factors can offset each other. This is a slide that talks about the image.
What I want to focus here is that in any case, our products, this will be deeply engaged in all types of power-saving types of products. Decarbonization cannot be achieved without using our components. That is the type of company that we want to be. From analog semiconductors, ball bearings, you have various products. Motors, as you know. It's about half of the power consumption all around the world is coming from motors, globally. This ultra-precision technology, by utilizing that technology, it will actually contribute to society. That is what I believe. Personally, I call the super bearings, or internally, we call the super bearings. This is a very precise ball bearings. It's three times as precise compared to existing ball bearings.
This is used for all of the air conditioners' borders. By using in air conditioners, about 0.13 million tons of CO2 emission can be reduced. Well, for instance, the 50 million Japanese cedars is stored. The 15,000 Japanese people will emit CO2 emission annually. This is a kind of reference. We want to accelerate these type of initiatives going forward. Lastly, this is about dividends. The previous year, we had JPY 8 commemorative dividend. This year, we think that the dividends is going to be around this level. 70-year anniversary commemorative dividend is what we achieved. This is a 10% payout ratio is the image. JPY 36 is the forecast for our annual dividend. That's all for me.
Thank you for your attention. Next, we would like to have Q&A and take questions from the institutional investors and analysts who have registered with us for a call conferencing system in advance. Please press asterisk one if you have a question. If you want to cancel your question, please press asterisk two. I will be appointing one by one, and when your name is announced, please ask a question. Please ask one question at a time. The first question is from Goldman Sachs. Mr. Takayama, please begin.
Thank you very much. I have three questions. One. Machines or components, Q3, Q4 profits from Q2 to Q3, it seems flattish. Can you hear me?
Yes.
Because of the Thai plant, I suppose, it will be increasing and therefore a profit. I would assume a profit will be growing more. In Q3 and Q4, what is the profit situation?
This is Yoshida. I would like to respond. As you pointed out, Q3 and Q4, the production base compared with Q1 and Q2, the production base will be expanded significantly. Recently, the auto production remains very uncertain. As Kainuma explained previously, although there is an assumption for an auto business, the operating profit, we have taken a conservative view in Q3, JPY 12 billion, and for Q4, JPY 12 billion. This may be conservative, but this is our assumption. And U-Shin.
OEMs that we deliver our products to, and, their production status is rather difficult, for us to explain specifically. Q3 and Q4, particularly towards Q4, they will be increasing production. They are prepared to that. That is what we heard. This type of number we should be able to achieve. That is the reason why we came up with this number.
I see. My second question is for Mr. Kainuma, slide 23 or 24, about next year onwards. There are two things I want to ask you. The motors, driver and OP margin. I think you have been wanting to achieve a 10% OP margin.
In the second half, there are some negatives, but the next year onwards, how do you plan to increase other than the volume and OIS 1.3 x? And are you planning to deliver to known major customers?
Yes. About the motors, yes, we want to achieve a 10% OP margin as soon as we can. This fiscal year, there are various issues occurring simultaneously, like increase in material cost and copper price increase and the electromagnetic steel and so forth. Therefore, we have no choices but to wait for a longer timeframe, because these are probably structural issues, and these are beyond our control. Like vessels that cannot depart the port and that created logistics problems.
We made some parts for customers, but customers cannot receive semiconductors, and they therefore no longer need our products. Things like that. If it were not for such problems, we should be able to achieve bigger profits for motors. 10% OPM is one of the biggest targets, or it's one of the important targets for us. We would like to supply lots of motors to the market in order to solidify our position, and the volume is quite crucial to discount prices. Therefore, I am not taking this too seriously, not just yet. That is how I would like you to understand the situation. Another question, what was it?
OIS.
OIS.
We are making hard efforts on OIS, and unfortunately, I cannot describe the details, but this is likely to increase next year as well, according to the information we have. We are selling OIS to various customers, and we have positive reactions. This is as much as I can tell you right now. Simply said, it will be greater than second half times two, I mean, next year. Next year, the image for next year and the next year shows the three years from now. The next year, the customers already told us how many units they are likely to use. Page 23 shows the situation of the next year, and page 24 shows the situation of two or three years from now.
Volume will keep growing, plus we will have new customers, and therefore, we should be able to achieve this level.
I see. Understood. Lastly, the last three pages contain the valuable information. These initiatives, because of these initiatives, do customers want to buy your products even more, leading to increased market share? Emission reduction. Coming up with specific numbers and being committed to the targets, do you think it will have an impact on your business?
This is something we will be working on going forward. The entire society is facing towards carbon neutrality and Beyond Zero. A time like that is coming.
The whole nation is committed to such a target, and investors are wanting to invest in companies who are serious about that. It was QCDS previously, and I changed it to QCDES. In other words, E is now included. Environmental performance is one of the specifications required by customers. It is going to be like that. Otherwise, we cannot aim for carbon neutrality. Just because prices are cheap, customers will not be buying from us, and we want to take a preemptive strike. We want to be proactive so that the customers will be saying, "We only use MinebeaMitsumi's bearings." That is our strategy. QCDES. When I talked about this for the first time, I said that this will be at the core of our strategy.
That is what I talked about in May, according to my recollection. We will be working on this very seriously and faithfully so that customers will approve us, and we shall be able to sell more and generate bigger profits and leading to power and energy reduction. Positive cycle. This is going to happen in the future rather than happening already. Bearings, the customers do not fully understand yet, and super bearings, the mass production, the moment that we verified the feasibility, we would like to prepare the collaterals or materials.
Okay, thank you.
Let's go to the next question from Morgan Stanley MUFG Securities, Sato-san, please.
This is Sato from Morgan Stanley Securities. I have a question about ball bearings at Mitsumi. First, about the ball bearings. I would like to go into detailed numbers. July, August, September, internal and external sales production, and October, November, December, the same numbers. Can you mention that? Compared to August, the non-automotive sector, what type of changes have you seen in the market? Can you mention that as well?
For the ball bearings production, let's start from July in millions. 312, 296, 295.
From October onwards, JPY 298. November, JPY 330. December, JPY 324. Going next year, January, JPY 334. JPY 295. JPY 336. That is our forecast. That's for external sales. Starting from July, JPY 245. JPY 237. JPY 240, October. JPY 232, November. JPY 241, December. JPY 248, January. JPY 251. JPY 234. JPY 250. Internal sales, July, JPY 69. August, JPY 89. JPY 65. JPY 67. JPY 71. December, JPY 68. January, JPY 66. JPY 61. JPY 68. That is our plan.
In terms of the qualitative information I can give you is that for the first quarter, when we ended the first quarter, the ball bearings external sales compared to that, it is lower than that. That's the current number. This is basically the automotive production has slowed down, and I think that is the reason. From the third quarter onwards, we have to consider how far the recovery is going to be achieved. At the same time, the semiconductor shortage is having some impact on the non-automotive market, and we have to consider that. We are forecasting a slightly conservative number in terms of our plans.
Thank you very much. The non-automotive sector, compared to the August assumption I had, the trend hasn't changed that much.
Well, rather than the demand side, it's the reason is in the supply side. For the semiconductors, there are some industries that are suffering from these semiconductor shortages, so we are looking at a slightly conservative way.
Thank you. My second question is about MITSUMI. By main products, from first quarter to second quarter, what type of changes have you seen? The full year forecast in August, compared to what you have said in August, sales is JPY 1 billion, operating profit is JPY 3 billion. You made an upward revision. Compared to the forecast for August, in the major products for the full year, in terms of outlook, what is the change compared to August?
What is the second quarter results for the consignment and the third quarter and onwards, forecast?
In terms of the consignment, the second quarter, 224. That is, oku, so JPY 22.4 billion. Third quarter, JPY 19.5 billion. Fourth quarter, JPY 9.1 billion. And going to by product. The MITSUMI's first quarter sales is JPY 76.7 billion. The second quarter is JPY 111 billion. It is growing. The growth was most pronounced in the OIS optical devices. And OIS sales was more than JPY 40 billion. And the game console related business for the mechanical parts, this is including growing. And semiconductors, it is growing as well. I think that is the breakdown.
For the fourth quarter onwards, in terms of the smartphone related products, some customers within their supply chain has been seeing disruptions due to COVID. Because of this, there has been some delay in the business. In the third quarter and the fourth quarter, I think basically we'll be able to catch up with this delay. I think that is our assumptions currently. In that sense, for smartphone related business, compared to the first quarter, it is unchanged. The semiconductors currently is very strong. For the Chinese smartphone customers, there are some slowdown in the Chinese smartphone customers. In the other businesses, we have been able to get good orders, and we think this trend will continue going forward.
In terms of profit, the semiconductor business is very robust, and the OIS related business is strong as well. That is the current status that we have in mind.
Thank you. This is one confirmation. For the smartphone business or the actuators, so I don't know whether it's the third quarter, fourth quarter. Compared to the second quarter, how is the third quarter going to change, and how this is going to trend further into January to March quarter?
Well, from the second quarter to this quarter, sales is going to further increase. That is our assumption. For the fourth quarter, this will be, of course, a slowdown due to seasonality. Compared to normal years, I think the decline will be milder. That is our forecast.
Understood. Thank you very much.
Let us move on to the next question. Mr. Goto from Mizuho Securities, over to you.
This is Goto from Mizuho. Can you hear me?
Yes.
Thank you very much. There are two questions that I want to ask you. The first of all, about the risk. The market as a whole is likely to peak out or if in fact it peaks out, how should we take it? It's about the cyclicality. Considering the low level of bearings inventory, even if a peak out happens, the impact may be negligible. That is the feeling I got after having listened to you. What is the impact you are assuming at this point in time on your business? That is my first question. Also, Omron.
From Omron, you have taken this Shiga plant, and it is starting to contribute starting next year, which I think is rather early. How is it going to contribute to your business?
First of all, I would like to respond about the risk situation. As you may know, basically, we are seeking for growth in various fields. As you can see from our track record, when something goes down, something improves. Generally speaking, that is what has been happening. However, in a case like a Lehman shock, every single business is impacted, that is an exception. However, what is the background of a peak out? If it is a COVID-19, then the COVID. If COVID subsides, airline industry will be revived.
The same thing will happen to the related industries. When something is pushed down, something else will emerge. That is what we have been seeing. I am not too concerned. But whether everything can be covered by aircraft, I don't think so. The current trend is the automobiles are shifting towards EV, and therefore electronic parts and motors are increasingly adapted. When the environment proceeds in that direction, the precision part manufacturer like ourselves will become even more important. We started small, and gradually we shifted to bigger things. The precision is at the center of our competitive edge, so it's at the center of our portfolio.
Rather than starting big and shifting to small, we did it the other way around, starting small and shifting to bigger ones. We have a competitive edge based upon that. Therefore, even if a peak out happens, in terms of the environmental performance, we shall be the front runner, and I think we are fully prepared. I feel safe in saying that we are fully prepared for that. That is the general situation. Responding to your second question, Omron. Semiconductors, I'm not so knowledgeable, but prototypes, they keep making from the front end to the back end, making a fine tuning. That is the analog semiconductors processes, very meticulous and time-consuming, but that is the competitiveness, and it makes it hard to be replaced by competitors.
What Shiga plant will be doing, we have planned everything. It's not that we will be planning from this point onward. We had a plan and therefore we wanted Omron's plant. We are running at full speed right now. Of course, we cannot complete everything at one time, but things will be increasing little by little. Omron was in a MEMS business more aggressively.
We think that to revitalize that business will be a quickest solution. We are exerting lots of efforts into that. Based upon that assumption, in the second half of next year, this business or Shiga plant will be starting to make a profit contribution.
I see. Thank you.
Going to the next question from UBS Securities, Hirata-san, please.
I'm Hirata from UBS Securities. Can you hear me?
Yes, we can.
Thank you. First of all, the first one is about U-Shin business. In the second quarter, due to automotive production decline, the sales has dropped considerably and profit hasn't changed that much. In the first quarter, there has been some special one-off issues, but I think basically you have been able to hold the operating income. In the second half, the profit is actually going to turn profitable substantially. Can you explain this always with the catch-up production of the major client, but you have been putting in measures for cost reduction. Is that going to show up effects?
I think it's both actually.
Of course, cost reduction measures, we are putting in a lot of measures, but if you don't have any orders, and basically the production goes down by 20%-30%, there's nothing that we can do. I think that has been unavoidable. If the semiconductor supply recovers or the necessary units are provided, then of course, the production will go up and our production will go up. I think that would be the biggest point.
Thank you very much. My last question is that, Mr. Kainuma, you talked about the M&A for semiconductor. You will be looking at opportunities. More specifically, what type of M&A are you considering? Will it be like Omron buying up plants or going into new areas of semiconductor? Can you give us a hint?
Well, of course, I can't go into details, but of course, if the current analog semiconductors business want to make this stronger. You don't have to buy. It's not the case that we buy only plants. We want to buy a going concern. We didn't buy, we didn't need sales. We just bought our plants and the technicians and some MEMS development technicians they came with the plant. But originally, if you consider the future growth of the company, the technological capability and of course the production capacity, if that is there, of course, that will be our candidate for M&A. My message is that rather than M&A, this to making the semiconductor business stronger will make the MITSUMI business foundation stronger.
The former Minebea foundation was ball bearings. Because we had the ball bearings business, we have been able to conduct various challenges. We have been able to acquire a lot of businesses, but everything was, I was able because we had the ball bearings business. In terms of horizontally deploying the same thing, Mitsumi's focus or the foundation will be something that will not disappear, not volatile, and be able to tackle solving societal issues. That's the analog semiconductors. That's the only thing that I should focus on. Mitsumi should seriously be focusing on analog semiconductors. I hope you understand my intent.
Understood. Thank you very much.
Let us move on. Mr. Akizuki from Nomura Securities.
This is Akizuki from Nomura Securities. Thank you for this opportunity. Thank you. I also have three questions. First of all, the projection for this fiscal year, particularly about Mitsumi business. Mitsumi, the drive, mechanical and optical and semiconductors. Those are three segments compared with last year's actuals. I'm asking only about the sales. How much upside are you planning on? If it is possible, please share with me. That is my first question.
Optical, it will double. Almost double.
Double? Wow.
Well, almost double.
Mechanical?
Rather difficult to explain. Last year, it was quite booming.
This year, the outlook for this year, there is a slight downside according to the announcement. We are taking a conservative view in accordance with such an announcement. That is about the mechanical. The semiconductors, more than double-digit growth in sales, is anticipated.
I see. About optical, in Q3, it was already at high level, and a drop in Q4 was rather modest. 1,400 to 1,300, the higher end of 1,300. Am I roughly right?
I cannot speak about the specific numbers, but you are not so off the mark.
If that is the case, my second question is as follows.
1.3 times bigger than that number, because the starting point is big, I think it's going to be quite big growth. Among the major customers, and the share increase or something, I don't know, and are they asking you to handle a certain volume? Or is it because of the new customers?
The new customers included in the plan. I cannot share with you the details, but the image I can share with you right now about the next year. There are various backups and supports, and I did not put together numbers imagining the situation. The customers that you handled in the past are coming back and adding to the numbers. Is it a likely scenario?
Including something like that, I cannot share with you the details of the plan. More or less, according to our projection, this is the likely figure.
Cambodia will be growing, right?
Cambodia, yes. Of course, Philippines too. Philippines will grow as well.
Sorry about asking you a difficult-to-answer question. My third question is analog semiconductors. If I may ask you such a question, the Chinese analog semiconductor manufacturers are mostly targeting consumers. They are shifting to in-house production and fab production lines. Most of them, the Chinese manufacturers already have. I mean, I'm talking about the MITSUMI's production lines, but Chinese analog semiconductor manufacturers, what about the competition, and to what extent have you been able to differentiate yourself?
Very little competition, almost nonexistent, because our quality is far better than theirs, backed up by a long history. The safety is a top priority. Mitsumi products and ABLIC products have excellent quality and excellent reliability, just like ball bearings. I mean, bearings, lots of bearings are sold in China, but the quality is extremely different, and we are receiving lots of orders. Just like that, at this point in time, no problems at all. I see. They are saying localizing, they will be localizing production, and it's happening for automobiles. I don't think it will be that easy, but I mean, at this point in time, I do not feel any threats from Chinese manufacturers at all.
I see. Understood. Thank you.
Let me repeat.
There seems to be no other further questions. We will end the Q&A session. Again, from the link on the screen, please answer our questionnaire. Thank you very much for participating in this meeting.