Earnings Call: Q2 2021

Oct 29, 2020

Thank you all for attending the fiscal year 2020 second quarter financial rebriefing of Atlantis Corporation. Participants from Adventist Corporation are Mr. Yoshaki Yoshida, President and CEO Mr. Asushi Hujita, CFO Mr. Kimiya Sacamoto, Executive Vice President of Sales Group and Mr. Yasuo Miyhasi, Executive Vice President of Corporate Planning. Today, Mr. Hujita will go over the financial results of fiscal year 20 22nd quarter followed by a presentation on business outlook This conference call is scheduled for about an hour. Materials are available from TD Net as well as the company's website Before we begin the conference call, let me make a cautionary statement. This presentation contains forward looking statements that are based on the company's current expectations, estimates, and projections. Forward looking statements are subject to known and unknown risks and uncertainties, and actual results may materially be different from those expressed or implied by such forward looking statements. Now Mr. Hujita, the floor is yours. Hello, everyone. This is Fujita speaking. I would now like to walk you through the financial results for our fiscal year 2020 second quarter. Please refer to Page 4 of the presentation material. This is the summary of the results. First of all, we would like to express our deep gratitude to all of our business partners and other related parties and to our own employees for their efforts to support our business amidst the COVID 19 pandemic. A quick look back at our forecast 3 month ago, Given the intensifying conflict between the United States and China and the impact of COVID-nineteen, we expected orders for second quarter to decrease from the first quarter. However, in queries for SOC testers, were stronger than expected and 2nd quarter orders ultimately exceeded the 1st quarter. Quarter on quarter, sales and profits came in higher than expected and exceeded the 1st quarter results. Compared to a year ago, while sales increased, profits declined because of smaller contribution of products with high gross profit margin I will explain orders, sales This is orders by segment. 1st, in Semiconductor And Component Test Systems business, Orders increased by 5.6 percent from the previous quarter to JPY 44,800,000,000. Orders for SoC testers were 1,000,000,000, an increase of 1,000,000,000 quarter on quarter. Tighter U. S. Regulations on a major Chinese smartphone maker are having ripple effects such as increased inventory build up and active jostling by competitors seeking to take advantage of the situation and inquiries for testers for application processors, image sensors and display driver ICs increased more than we expected. Demand for high performance computing related testers was also strong. In memory testers server related demand was robust throughout the first half of calendar year twenty twenty, but has now softened resulting in a quarter on quarter decrease in orders by JPY 8,500,000,000 in the megatronics systems Orders increased by 7.7 percent quarter on quarter to 9,200,000,000. Orders for EUV related nanotechnology products increased. And services, support and others, orders declined by 6% quarter on quarter to 1,000,000,000 System level test orders increased, compensating for a seasonal decrease in annual maintenance contract renewals, and the orders were roughly flatquarteronquarter. Please turn to the next page. Here you can see sales by segment. Sales of Semiconductor And Component Test Systems segment totaled 1,000,000,000, up 12.4% quarter on quarter. Sales of SoC testers for smartphone applications increased. Both DRAM and non volatile memory tester sales increased. Sales in Electronic Systems segment went up by 29 point 5% from the first quarter to reach 1,000,000,000. We have seen increase in sales across the entire segment Services support and others saw its sales increase by 15.4 percent quarter on quarter to 1000000000. SoC system level test system sales were steady. The next page shows quarterly orders and sales by region. 1st on orders by region in South Korea indicated in pink smartphone related orders increased. In Taiwan, triggered by U. S.-China conflicts orders declined due to test capacity adjustments at OSATs. Now on sales by region, as shown in the graph on the right. In South Korea, in addition to increased sales of SoC testers related to smartphones, sales of memory testers also increased against the backdrop of high orders received in the previous quarters. In the Americas system level test sales increased. Please turn to the next page. Page 8 shows operating income and other related items in the 2nd quarter. Gross margin posted 53.9% and sales mix fluctuations caused a quarter on quarter decline. SG and A expenses including total other income and expenses amounted to 1,000,000,000. Operating income totaled 17,400,000,000 with the operating margin at 22.6 percent. The operating income for the 2nd quarter includes a gain of approximately 1,000,000,000 from the transfer of Advantis probe card business. Please go to the next page. R and D expenses were 1,000,000,000 in the second quarter, representing 13.8% as a percentage of sales. Capital investments totaled 1,000,000,000 and depreciation and amortization cost 1,000,000,000. As for the status of cash flow, free cash flow totaled 1,000,000,000. Cash flow from investing activities increased due to Adventist Capital participation in PDF Solutions, Inc. Announced in July. Please move to the next page Here you can see the balance sheet as of the end of September. Total assets stood at 1000000000 Cash and cash equivalents totaled 1,000,000,000, down 7,100,000,000 from the end of the previous quarter. Equity attributable to owners of the parent was 1000000000 and the ratio of equity attributable to owners of the parent was 65.2% unchanged from the end of the previous quarter. Share repurchase completed by the end of September amounted to 1,000,000,000 or 2,090,000,000 shares about 80% of the 2,500,000 share limit set. That's all from me. Thank you for your attention. This is Yoshiro speaking. I would like to share with you our business outlook for fiscal year 2020. First, to review the operating environment, please refer to page 12. This is our view on semiconductor test and market for calendar year 2020. 3 months ago, Adventist forecast weaker demand for maker. Subsequent developments were as expected, causing OSATs, our customers to prioritize test capacity adjustment. However, in the aftermath of enforcement of the new regulations, In addition to inventory buildup, other major smartphone makers have actively eyed the position occupied by the affected company. This has stimulated smartphone related test demand, pushing demand for application processor units, CMOS sensors, and display driver IC testers to a higher level than expected. As supply chain reconstruction progresses within the industry, our broad customer base and diverse SoC faster product portfolio have enabled Adventist to successfully capture additional demand from customers who are planning to increase In addition, as strong demand for high performance computing related products continues, it seems likely that OSATs will work through their testers' surplus by the end of calendar year 2020. Reflecting these changes in the market, we have revised our calendar year 2020 outlook for the SoC tester market to approximately $2,700,000,000. Although Adventist market share will decrease year on year due to the characteristics of our customer mix, we feel that we are well placed to respond to the anticipated scenario For memory testers, as forecast in July, memory demand for data center related investment is likely to level off in the short term, but this will also rebound in calendar year 2021, thanks to the anticipated tester market growth drivers such as DRAM process shrinks and 3 d NAND layer count increases. Please turn to page 13. This is our full Advantis has raised our full year forecast of orders received to 1,000,000,000 and sales to 1,000,000,000, operating income to 1,000,000,000, income before income taxes to 1,000,000,000 and net income to 1,000,000,000 yen. This forecast assumes exchange rates of and to a euro in the second half. For full year, we assume Gross profit margin is expected to decrease from 56.7 percent in the previous fiscal year to about 54% and operating income margin is also expected to decrease year on year. In addition to the impact of changes in our product mix, this is due to our commitment to ongoing R&D investment and customer support system reinforcement, which are key aspects of our preparation to meet the new test demand driven by customer needs for test reinforcement and highly sophisticated test methods for high performing semiconductor devices. Please take a look at page 14 where you can see the outlook by segment for fiscal 2020. Starting with the Semiconductor And Components Systems segment. Let me first discuss SoC tester business outlook for this fiscal year. Although also investment in new testers is currently weak due to the tightening of US regulations, on a major Chinese smartphone maker, competition among smartphone players is also understood to be stimulating demand for testers across a wide range of applications. OSATs are diverting surplus testers to different uses in line with the restructuring of the industry supply chain and we are proactively cooperating with their efforts We estimate that test capacity adjustments will turn the corner within the year. Based on these trends, we have raised our full year sales forecast for SOC testers to 1,000,000,000 1000000000 higher than our July forecast. There are also signs of recovery in and demand for automobiles, industrial machinery and consumer products heading into 2021. In preparation for growing demand, we are closely watching the timing of renewed full scale customer investments Moving on to page 15, which shows the memory tester business outlook In the first half of fiscal twenty twenty, investment in data centers boomed and demand for DRAM and 3 d NAND testers was strong. As server related memory demand has passed, TESRA sales are expected to be rated towards the first half. However, with the increasing acceptance of new normal lifestyles around the world Data traffic volumes are expected to increase further. Memory demand is predicted to grow in 2021 and thereafter. Advantage will comprehensively capture the growing demand for memory testers in response to DRAM process shrinks the shift to LP DDR5 and DDR5, the expansion of memory demand for high performance computers and increases in three d NAND density. Let me go on to page 16. Where I will discuss the outlook for mechatronics and services, support and other business. In our mechatronics segment, Advantage forecast full year sales of 1,000,000,000 centered on device interface products. In our services, support and other segment, we expect solid field service sales as well as increased sales of system level test products. Therefore, we have revised our forecast for segment sales upwards by 1,000,000,000 to 1,000,000,000. The growth of the 2 system level test businesses one acquired from Astronics of U. S. And the other being SI of U. S, which we acquired will compensate for the decline in SoC tester sales resulting from U. S.-China conflicts. Let us move on to page 17. This is my last slide. To sum up, despite significant uncertainties such as the COVID-nineteen pandemic, U. S.-China conflict and negative global economic growth, customers' motivation to invest has not trended downwards as much as was feared In light of our second quarter results, which exceeded our plan and our second half outlook, Advantage has revised our full year orders and sales forecast upwards by 1,000,000,151,000,000,000,000, respectively. Although the impact of tighter U. S. Regulations on the major Chinese smartphone maker has had a market impact on the SoC test supply chain, supply chain restructuring is underway. Adventist broad customer base and diverse product portfolio enable us to capture the new demand created by the structural change in the smartphone market and will compensate for the decline in SoC tester demand related to U. S. China conflict. The impact of federal U. S regulations is expected to turn the corner by the end of the year. And SoC test demand for automotive semiconductors and other devices is on a recovery trend. Business conditions are expected to improve in calendar year 2021, although the prospects of the global economy remain uncertain. Advantage System level test business, which has been strengthened through M and As over the past 2 years, is steadily growing and contributing to overall sales. Both SoC and memory devices will continue to evolve in calendar year 2021 and thereafter. Advantis will continue to invest in R&D and strengthen our customer support system to ensure we capture the growing demand for testers driven by semiconductor performance and reliability improvements. Last but not least, I would like to take this opportunity to thank our customers and business partners who supported us with our production system under the pandemic of COVID-nineteen and our employees who performed their duties steadily under the environment that was unfamiliar to them. That is all. Thank you for your attention. We would now like to move on to from Mr. Wataki of Nomura Securities. This is Wataki from Nomura Securities. Thank you very much for the very detailed explanations today. Market environment is changing so rapidly and it looks very different from 3 months ago. Around when or in which month did you see title change in the market? Yes. Let me answer your first question. Business environment is indeed changing so drastically even after the U. S.-China friction began and got escalated causing much confusions. Many things have been happening. Amid such circumstances, it was quite recent in October or actually in the latter half of October that we became confident to raise our full year forecast. Market dynamics are moving so fast. As the impact of the US regulation became quite significant and the conditions surrounding smartphone market, became more definitive in mid September, OSAT's activities started to pick up suddenly and divert excess testers to new customers. As a result, reallocation of excess testers progressed relatively well. And we are now starting to see some additional demand by the end of the year. So the market is changing quite significantly in our view. So in short, it was quite recent when we observed the significant changes in the market. I have another question. Under the current circumstances where difficulties against one company are helping other players to gain strength, I assume competitive situation and customer portfolio become quite important. I would appreciate it if you could describe the current competitive landscape for iPhone applications exynos, snapdragon, other media techs, as well as competition by Teradyne in memory tester business to the extent possible. I am not able to disclose specific numbers about specific customers. But as you are all aware, I'm afraid we continue to be rather weak in the North American major smartphone manufacturer business for application process unit business, I must say. However, all the other customers you just mentioned are using our testers extensively. And on top of that, we have many customers for display driver ICs and other baseband processors. So aside from the North American major smartphone maker, current situations are positive to our business. Just to clarify, as for the companies that I mentioned earlier, may I understand that your market share is higher? I know that you cannot comment in detail, but any color you can add? Based on a number of customers, it is clear that we have higher market share. But even if we excel in terms of the number of customers, size of the business of the smartphone maker that I mentioned earlier is quite significant and it has a considerable impact on annual test driven market shares and drives the significant changes in the market share each year. But in terms of a customer account, we believe we are doing better. How about the memory tester business now? Your competitor is claiming that their business is growing quite rapidly. For the memory tester business, our peers started off with a small market share. Therefore, their business looks to be growing quite significantly, but our market share has been consistent somewhere between high 50s 60%. So we don't have a recognition that we are losing market share significantly. It is certainly true that our peer entered into the backend business for DRAM, which was traditionally our stronghold. But we don't think that is going to change the market share dynamics overall significantly. In the memory business, in addition to the North American peer, we are also competing against our Korean flayer. Under the customer's dual sourcing policy, we have maintained the market share of around 60%. And we are now competing against a different peer over the customers with dual sourcing arrangement, but we believe that our market share is successfully maintained. Very well understood. Thank you. That is all for my questions. Mr. Waraki, thank you very much for your questions. Next question is from Mr. Yoshida of CLSA. Thank you for the explanations. I am Yoshida from CLSA. My first question is, You have raised the full year guidance on orders from JPY 240,000,000 to JPY 260,000,000. To break this down by segment or by product, which business contributed to the upward revision by JPY 20,000,000,000. Also, this guidance suggests your expectations of the orders in the second half to exceed the first half result how do you think the orders will trend in the 3rd And Fourth quarters, respectively? Orders for SOC testers and SLT are expected to increase. I see. So the Upward revision of JPY 20,000,000,000 is attributable to SoC testers and SLT. That is correct. Any color you can add in terms of the split between the two about half and half? Clearly, the contribution of SoC testers is bigger. So rather than SOT, it is SoC which is expected to grow significantly. I see. And how are you projecting the order level in the 3rd And Fourth quarters in the second half, respectively. We think the orders will trend flat from the third quarter into 4th quarter. I see. So this JPY 134,000,000,000 is split almost half and half between 3rd fourth quarter. Is that correct? Yes. Well, there are a lot of activities taking place in the market at the including 2nd wave of COVID-nineteen, but we believe orders in the 4th quarter will reach the level projected in the third quarter, so half and half between the two quarters. So even after taking into account the uncertainties, you still project the orders to reach the 3rd quarter level. And if things go well, is it possible that the 4th quarter will exceed 3rd quarter Yes, that is correct. I see. Thank you. My second question is concerning SLT. Along with the upward revision on orders, you raised the sales forecast of services support and others by JPY 2,000,000,000. I know you don't disclose the forecast on services, support and others alone, but I believe orders for SLT were very high last year. So what is your expectation this year? Also heading into the next fiscal year, I believe demand for high performance computing is going to increase. Can we expect the order to exceed the last year's level? This is Mihashi speaking. Your questions are about the order expectation on SLT on the year on year basis. Out of the orders for services support and other segment overall, SLT contribution is expected to remain almost unchanged from last year as the overall order volume increases, From last year, SOD orders are also steadily growing. As for high performance computing applications, we think it accounts for roughly 20% of SoC total addressable market or TAM. And since the supply of advanced node wafers to our customer will increase, We also So may I understand that SLT orders are increasing this year from last year and expected to grow further next year? It seems that the contribution within the overall services support and others will stay almost flat year on year but just singling out the order volume of SLD alone, may I understand that the orders are growing this year than last year and expected to increase the next year. Mr. Yoshida, my apologies. I was referring to different data points. As for orders, orders for system level test is expected to decline to some extent in fiscal year 2020 from fiscal year 2019. Please allow me to correct my earlier statement. But within the services support and other segment, sales contribution from system level test became quite high in this second quarter, which we just ended this fiscal year, compared to last year and that is expected to be the case on a full year basis as well. So SLT's sales contribution is expected to increase from last year. I understand. Thank you. Thank you, Mr. Yoshida. Next question is from Mr. Nakamura of Goldman Sachs. Thank you very much as always. This is Nakamura from Goldman Sachs. I would like to ask 2 questions. First, when you earlier explained about SoC Business, I mentioned that demand is recovering slightly, you touched upon inventory buildup smartful manufacturers other than Huawei become quite aggressive in making investment, isn't there a risk that tester demand is inflated to the level above real demand. This is my first question. On your first question, production level was raised backed by the built up inventory through mid September or till September 15th when the tighter U. S. Regulation came into effect. And until then, all sets were very busy. And because of a concern that after September 15th, some of our testers will become idle, we weren't that bullish on the order outlook from the first quarter through August or early September investment stance was very cautious. However, since September 2 date, demand is growing further. In our view, this is not inflated demand competing over the position enjoyed by the affected vendor, we believe additional demand is coming through, supported by real demand. While the idle testers will be utilized, testers are still expected to become short further down the road. That is why we think our order volume is starting to increase. The estimate may include some business over the same opportunities, but we don't think that this increase is due to double ordering. I see it was very clear So smartphone related demand doesn't seem to be that bad at the moment, so we shouldn't be concerned about a significant drop in the fourth quarter or next fiscal year from the current high level. Is that right? Right. And also, new device launch is scheduled toward the next fiscal year. Back in July August, we were concerned that surplus testers could be distributed in the second hand market, but our concern didn't materialize fortunately. That is because our customers would like to secure production capacity in view of next generation and therefore didn't decide to sell testers in secondhand market in our view. Thank you for the very clear answer. My second question is a bit early to ask, I believe but concerning tester market outlook for the next year 2021, we are expecting market growth toward next year according to your explanation earlier, but in the case of SoC, for instance, how much growth are you foreseeing from $2,700,000,000 projected for this year. I would appreciate it if you could share your views by application, Also, you project the memory tester market to grow to $1,000,000,000 this year, but what is your outlook toward next year? This is Sakamoto speaking. As for next year's outlook, we will put together our forecast on TAM early next year based on market situations customers' investment schedules as well as many other factors. As you are aware, due to the US China tension and second wave of COVID-nineteen and associated uncertainties into the future. We have not been able to that demand is recovering toward next year related to 5g base stations whose schedule were stalled due to COVID-nineteen and smartphones and high performance computing and AI application demand continues to be strong and we are starting to see industrial equipment and customer electronics, as well as the most advanced process for smartphones, or rather high performance computing applications. So it is our current view that SOC TAM will grow further from 2020. For memory testers, from calendar year 2020 through 2022, while not very significant, we're still expecting some growth due to the introduction of EUV and me atrialization of DRAM, chip count will increase. Also, tests will become more sophisticated leading to longer test time and 3 d NAND density will also increase. In addition, our customers are planning to expand their fab and reinforce their investment in memory business in China among other factors. So the memory tester market is also expected to grow towards 2021 and we certainly would like to capture the growth opportunities. That was very clear. Thank you for giving me a very detailed response. Thank you very much, Mr. Nakamura. The next questionnaire is Mr. Damien Tom from Macquarie Capital Securities Japan. Damian Tom from Macquarie Capital Securities, Japan. Can you hear me? Yes. My question has to do with the margin of the semiconductor testers of your company. In the first half of this fiscal year, it was about 27% or 28% on the average. When I derived margin by looking at your guidance for the second half, it would be about 26%, which struck me as hitting the bottom more or less. Earlier, you gave us comments on expected demand for SoC testers next year. If you can steadily grow every year, do you see possibility of getting back toward the previous peak levels such as 30% which you did reach in the past? Obviously, the development cost to your company has been increasing, but I would assume the product mix may have been improving as well. Therefore, on a net basis, do you think you'll be able to reach the historical peak of the margin. Are you asking whether our operating margin which was 22.6 in the second quarter and slightly over 20% in the first half can go back to higher levels next fiscal year and thereafter. Yes, what I want to know is the margin for semiconductor sais testers which is a bit higher around 27%. Previous speaks as far as I remember, our 35% or 36% which was recorded in the first half of 1 year ago, if I remember correctly, if your sales recover to the level of the previous year, do you expect the margin to get back to around 35% or 36%. If you can take a look at page 14 of the presentation material that I explained about earlier and compare the yellow portions of the bar chart of fiscal 20192020. Indicating sales of SoC testers. You can see there was a drop of about 1,000,000,000. Since this is something that everyone knows already, I think it's okay for me to say this. So our high end SoC testers are commanding a high margin. And those sisters have fallen this much in sales wild product families that are compensating for the gap such as system level test products are growing significantly. Or memory testers are also filling the gap. Since that is how the product mix is, the resultant fall in the gross margin is a fact that we should accept. Now If you ask us whether the operating margin can recover to extremely high levels, if not fully to what it used to be, If sales of SLC testers start to grow significantly again, we believe it will steadily go up but cannot make any commitment because exactly to what extent it will recover also depends on the mix of other products at least what we can say is that if the sales of vessel C testers get back to what they were in 2019, a fair degree of improvement in the operating margin can be expected. Now SLT or system level test products are showing a bit lower margin for now, but this is because of the initial development cost burden and tremendous man hours spent in production. Obviously, the gross margin for new products such as SOT will be improved through our efforts to improve the operation of the company. At least I believe that if sales of SoC testers get back to what they used to, the operating margin will improve. Although we say we are making upfront investments. They are really designed for generating new sales, incremental sales from new product families should aim for better margins than the existing products. So you are correct in assuming that an increased share of SOC testers in sales will naturally push up the operating margin. The next question is from Mr. Hiroawa of Merrill Lynch Japan Securities. Thank you very much. Hirakawa from Merrill Lynch Japan Securities. I have two questions. My first question is about the 1,000,000,000 upside in orders for the second quarter over year forecast. Could you give us the background and breakdown? For example, while there are demand for SoC with advanced process nodes or new applications for smartphones, if you can explain by referring to which applications that contributed that would be appreciated. So Kamoto speaking, the actual result of orders in the second quarter exceeded are forecast by slightly more than 1,000,000,000 in SOC testers. Of the 1,000,000,000 overshoot, Automotive, Industry Machinery and consumer products together accounted for a half and another 40% was from display driver ICs. Thank you. So those will add up to 90% Thank you. My second question is about the size of the 5G related tester market. If I remember correctly, last year it was worth US500 $1,000,000. I may be wrong but that is what I remember. But what is your assumption of its size this year and how much of that will be accounted for by sales of your company? And how do you see that market to change next year? You do not have to touch upon the estimate for yourselves I would like you to share with us your estimate for the size of the 5G rated tester market this year and next and possibly your sales out of the total. Sakaamoto speaking, in terms of 5G related demand, we assumed 800,000,000 to 1,000,000,000 was as a TAM. Conflicts between U. S. And China changed the lineup of our customers. But in light of those changes, we came up with this net of 1,000,000,000 approximately. Then what has been incorporated in our estimate for 5G smartphone related demand? In the case of SOC devices, application processor units, baseband processors, RF seamless image sensors and display driver ICs. Roughly speaking, we expect to capture about 40% to 50% of the market for now. And that will be for this year of fiscal year ending March 2021. Or is 2020 more accurate? Yes, then what about next year? As has been discussed, base stations and smartphones which had been stagnant under the pandemic of COVID-nineteen are expected to grow as we head into 2021. Furthermore, as was said, in the competitive market, those that can enjoy higher margins will be obviously high end smartphones and semiconductors designed for them will probably be supplied. If that happens, then the higher sophistication in semiconductors will require advanced process nodes to be used and testing time to be extended. From those 2 perspectives, we believe our time will become even larger. Thank you. I want to ask more I want to ask 2 more follow-up questions if I may. You mentioned 5G Smartphones. Does that mean that $1,000,000,000 you referred to does not include 5G base stations. And the other question, when you look at the market in 2021, I believe the customer mix will probably be favorable to your company and therefore expect your market share to grow further from 40% to 50%. If I'm wrong in having this expectation, please let me know. What I refer to does include base stations. When you say 40% to 50% Is it 40% to 50% out of the smartphone market or 40% to 50% out of the $1,000,000,000 market? It's 40% to 50% out of the $1,000,000,000 market. I believe the customer mix in 2021 will help you expand your market share in that year. Those who supply products to smartphone manufacturers, while not every one of them, are part of our broad customer base. Moreover, besides application processor units and baseband processes, if sales related to smartphones increase, seamless image sensors and display driver ICs among others become also relevant. Since our product portfolio is diverse enough to cover those items, we can hope for increased demand across the entire spectrum of our product. Thank you very much for your question. The next question is from Mr. Moriyama from JP Morgan Securities. Thank you very much, Mariama from JP Morgan Securities. My first question has to do with the SoC tester market estimate you raised back to the level you originally forecasted back in January. You lowered the estimate to 1,000,000,000 once in July, but ended up bringing it back up to 1,000,000,000 which was your estimate at the beginning of this year. If you look purely at numbers, Though there were issues such as US regulations over a Chinese smartphone manufacturer, the estimated size of the market wound up at the level focused it at the beginning of the year. In today's presentation, there were different offsetting factors mentioned But to put it in extreme manner, despite various negative factors, am I correct to understand that things got back to where they were at the beginning of this year ultimately. To look more closely as the gap left after Huawei dropped off, has been being fueled by Xiaomi, Vibo, and Oppo, are you saying it was enough to offset the gap or though that was not enough, are you saying that other applications such as automobiles and display driver ICs have grown more than expected and turned out to be enough to bring the market back to the originally estimated level. In other words, if I can add more, would it be fair to say that even though none of the players in your customer mix managed to make inroads into Apple Business, the size of the market has been brought back to where it was in the end. Sakamoto speaking, we brought back our estimate from 1,000,000,000 to 1000000000, which meant that there was an increase of 1,000,000. The breakdown is the following application processor units represent 1,000,000 seamless image sensors, 1,000,000, display driver ICs another 1,000,000 in total, 1,000,000. Increments from application processor units are benefiting both our gross and the growth of our peer, while We advanced are the one who benefits from the increments from CMOS image sensors and display driver ICs. Seamless image sensors and display driver ICs are growing more than expected at the beginning of the year. And the growth is being captured Another question on the market estimate on slide 12. In response to a question asked earlier, you responded in qualitative terms that SoC test market is expected to be mostly flat in 2021 while memory tester market is estimated to show growth in 2021 as part of the longer term process of moderate growth toward 2022. But fiscal 2020 is expected to achieve a 10% year on year growth if you do the math. Aside from how your company defines the word moderate, the memory system market has grown at 50% this year and if there is a 50% increase in the next two years, that would give you a 20% increase in a single year. Now does your company see that as moderate Generally speaking, when you say moderate, you may associate that with levels like 5% to 6% based on the 10% growth of the tester market this year? What kind of growth for next year do you think would seem reasonable at this moment considering the memory customer market as well? Mihashi of COBRA Planning speaking. Your question is hard to answer, but Our estimate is probably a single digit growth or in other words, mid to high single digit growth. Is our estimate. Are you talking about combined market vessel C and memory testers or are you just referring to memory tester market? We're talking about each of the two markets. So you can also apply that to the total market. Okay? So at this moment, your estimate is a single digit plus growth. Can be seen for each market is my understanding correct? Yes, I see. That's all. Thank you. Thank you for the questions. That concludes today's conference call.