Thank you very much for joining Advantest Corporation's financial briefing for fiscal 2024, despite a busy schedule. I'd like to introduce attendees on our side today: Mr. Douglas Lefever, Representative Director, Senior Executive Officer, and Group CEO; Mr. Tsukui, Representative Director, Senior Executive Officer, President, and Group COO; Mr. Nakahara, Senior Executive Officer, CCO, and Executive Vice President of Sales Group; Ms. Takada. Commencing in April, Ms. Takada joins Advantest as Senior Executive Officer and CFO. I am Oike of IR Department, Corporate Strategy Group, serving as a moderator of today's session. In this financial briefing, Mr. Lefever will first report the financial summary. After that, Ms. Takada will report financial results for fiscal 2024, and Mr. Lefever will present the third midterm management plan progress and fiscal 2025 outlook before entertaining questions from the audience. We plan to close this session at 5:30 P.M. Japan time.
In today's financial briefing, we will use English-Japanese simultaneous interpretation. If you prefer to hear the original audio of both Japanese and English, you do not need to change the setting. Please join us with the default setting. If you prefer the Japanese language channel, you are kindly requested to click the globe icon on the lower left of the Webex screen and select Japanese in the menu of My Interpretation Language. If you slide the bar of balance to the right end, Interpreter, you will hear interpretation into Japanese when the original language is English. The today's presentation materials are posted on TDnet and our website. The audience joining us through a telephone line is kindly requested to download the materials.
Before we begin, we'd like to remind you that today's briefing contains forward-looking statements, all of which are subject to risks and uncertainties that may cause our actual result to be different from those in such forward-looking statements. Now, firstly, Mr. Lefever will present a brief summary including fiscal 2024 results and fiscal 2025 outlook. Doug, please go ahead.
Hello, everyone. I'm happy to welcome you all to our call. Let me start by providing an overview of today's presentation. Our FY 2024 sales, operating income, and net income all posted record highs on a full-year basis. Really great performance. Tester demand for AI-related high-performance semiconductors continued to perform strongly throughout the fiscal year due to increasing complexity of semiconductors. In order to meet such strong demand, we executed timely procurement and enhanced supply capabilities, which were achieved through long-term agreements and diversification of our supply chain for core parts. These are the main factors that contributed to our very strong results. We expect high level of tester demand to continue in FY 2025, driven by AI-related SoC semiconductors. At this time, we do not see any major direct impact from tariffs. We are actively monitoring developments which could potentially weigh on our business outlook for FY 2025.
Now, I will hand over to our new CFO, Hisako Takada, who joined Advantest on April 1st. Takada-san has an outstanding track record of achievements in her career in investment banks and operating companies. We are delighted to welcome her to our company. Hiroshi Mihashi did a great, great job and will now be able to focus on his role as Chief Strategy Officer. Takada-san, please go ahead.
Thank you for the introduction. I'm Hisako Takada. It is my pleasure to be here in FY 2024 amid strong tester investments from customers for AI-related applications. We have been striving to enhance our procurement of materials and product supply capabilities. The depreciation of the yen against USD also served as a tailwind, resulting in record high sales. In terms of profitability, in addition to the increase in sales, the improvement in the product mix has led to record high operating profit and net profit. Full-year sales exceeded the guidance issued in January 2025 by approximately JPY 40 billion, mainly due to greater than expected delivery of products to customers, particularly SoC testers. Core operating income that excludes one-off items was JPY 249.7 billion, and the core operating income margin was 32%, both of which significantly exceeded our guidance.
When including the one-time items such as an impairment loss, our operating margin and net profit did fall below guidance, but with these write-downs, the company goes into FY 2025 with a very clean balance sheet. Also noteworthy is the effective tax rate, which rose to approximately 28%, higher than expected due to impairment losses, which are not deductible for tax purposes. Combining our year-end dividend forecast of JPY 20 and the interim dividend of 19 yen already paid out, our annual dividend forecast is 39 yen. This slide shows our annual sales trend comparison by segment and by region. By business segment, HPC/AI-related applications drove the SoC testers. With regards to memory testers, sales grew for high-performance DRAM, particularly HBM. On the other hand, demand for semiconductors for applications other than AI has remained soft throughout the fiscal year.
By region, there was a notable growth in sales to Taiwan. This is mainly due to strengthened quality assurance requirements for high-end SoC semiconductors from several US-public companies, resulting in increased sales to the related foundries and OSATs. For high-performance DRAM applications, sales to South Korea increased. Sales to China accounted for approximately 22% of total sales. Next, I will give a summary of the quarter results. Our fourth quarter results are shown on this slide. Details of performance will be explained in the subsequent slides. Our fourth quarter sales results reached a record high on a quarterly basis. I will now explain the breakdown of each segment. I'll start with semiconductor and test component test systems. Please take a look at the right-hand side of this page. SoC tester sales were JPY 148.8 billion, an increase of JPY 35.8 billion QoQ.
Amidst the continued robust demand for HPC AI-related tester demand, we achieved significantly higher sales compared to the previous quarter. Memory tester sales were JPY 35.1 billion, a decrease of JPY 19.5 billion due to the progress in product delivery in the previous quarter. Next, mechatronic systems. Sales of device interface products decreased in tandem with lower sales of memory testers. Lastly, service support and others. In addition to the stable booking of service sales, system-level test sales for high-end SoC applications increased. This slide shows Q4 sales by ship to region. For Taiwan, sales increased significantly quarter and quarter, primarily driven by SoC testers. For South Korea, sales of memory testers and related device interfaces, as well as SoC testers, declined. Next, I will explain quarterly sales growth, profit, and operating income. Gross margin increased by approximately 5% quarter and quarter as a result of product mix improvement.
SG&A, including the total of other income and expenses, has increased by JPY 25.6 billion quarter on quarter, and the operating income margin was 27.6%. This is mainly due to the booking of impairment loss by approximately JPY 24.1 billion for a portion of goodwill and intangible assets of other expenses. This impairment loss is related to a ESSAI socket business, which we acquired in FY 2019. Softness in sales for a major customer and delays in expanding sales to new customers were taken into consideration for the booking of this impairment loss. With this impairment loss, the value of goodwill and intangible assets related to the acquisition of ESSAI have been reduced to zero. Next are the expenses and cash flow. You can see the R&D capital expenditure and depreciation on this slide. We executed investment and development initiatives to grow our business further.
On the right-hand side, you can see our cash flow status. In the fourth quarter, there were cash outflows due to our investment in Technoprobe Form Factor and Micronics Japan. On the other hand, amidst high levels of sales and profits, operating cash flow and free cash flow increased significantly. Operating cash flow and free cash flow for FY 2024 reached a record high as do sales and profits. Finally, balance sheet for the period ended March 31, 2025. Cash and cash equivalents were JPY 262.5 billion, and inventory assets were JPY 209.7 billion as of the end of March. We will continue to work on cash allocation and balance sheet management while optimally balancing growth investment and capital efficiency. This concludes my presentation. Now, I will hand over to Doug.
Thank you, Takada-san. Now, let me give you an update of our midterm plan. In the third midterm management plan, we have defined and executed four strategies to expand the value we provide to stakeholders over the mid to long term while maintaining the strong position we have built. We believe that in the first year, we have a good start, both in terms of financial performance and in the execution of these strategies. In the next two slides, you can see the summary of our first year's progress. First, in our core market, key growth opportunities arise from increasing production volumes and advancing performance of semiconductors and growing semiconductor complexity.
In FY 2024, we succeeded in preserving a majority share in the semiconductor tester market by expanding products with strong customer appeal that address changes in technology in our test trends, as well as through key customer and regional strategies. I will give market share details later in the presentation. In FY 2024, we launched several new key test solutions, such as a new power supply for HPC applications and several new memory test systems to address next-generation memory devices. We are also aggressively implementing R&D investment and marketing initiatives, addressing the future developments in semiconductor technology. With regard to our strategy of expanding adjacently and developing new businesses, as shown on slide page 15, we were able to make progress in our automation of test initiatives. With the launch of PSYONIC, a groundbreaking automated silicon validation solution, we will continue to expand our business opportunities.
Furthermore, we have established successful partnerships with three probe card manufacturers necessary to develop a high-performance test solution. In order to strengthen our test engineering service capability, we acquired Salland Engineering, a company based in the Netherlands. Continuing on, in FY 2024, we have reinforced our capabilities to respond to robust test demand by enhancing our supply chain management. This has resulted in our record high sales booking. In order to drive our operational excellence initiatives, we are also working towards proactive execution through IT investments and improving employee engagement to strengthen our human capital. Lastly, let me touch on the enhancement of our sustainability initiatives. Advantest's long-term management goals are to expand the value we provide to stakeholders in a well-balanced and multifaceted manner. In FY 2024, we renewed our basic policy and action plan on sustainability and established new midterm KPIs.
This page is from our midterm management plan presentation and illustrates Advantest's holistic view of the backend test flow. Due to increasing device complexity and the associated test challenges, we continue to add the necessary pieces to drive automation of tests through the distributed backend test flow while maintaining the ATE test cells as our core. Again, this is something we showed in our midterm management plan last year and remains a focus for the company. Now, for some remarks on our midterm plan financial progress. As this slide shows, results for the first year of our third midterm plan exceeded target figures for all management metrics, which are set as three-year averages for the duration of the management plan.
As the increasing test content for AI devices has significantly boosted the demand for testing, we have gradually enhanced our product supply capabilities, resulting in a substantial increase in sales of associated products. Although the underlying trend towards increasing semiconductor complexity remains intact, we do perceive that external uncertainties surrounding our business environment are growing, and the situation remains unpredictable. We plan on updating our MTP3 financial targets and model in October, which would be halfway through the midterm plan. Especially with the current geopolitical environment and concentration in HPC, we felt it best to wait another six months to get more clarity for the second half of our three-year plan. Next, let's take a look at our ATE market share.
As for the calendar year 2024, the semiconductor test market size is estimated to reach approximately $4.1 billion for SoC testers and $1.9 billion for memory testers, totaling around $6 billion. This exceeds the recent market size peak of approximately $5.6 billion recorded in 2021. For calendar year 2024, we estimate that the target market size grew by about 36% year over year. While semiconductors such as automotive and industrial equipment remained soft, demand for AI-related semiconductors, including HPC devices for data centers and high-performance DRAM, have driven the growth in the semiconductor market. The test demand for AI-related high-performance semiconductors also contributed to the expanding test market significantly. Amidst the market expansion, Advantest's overall market share estimate is approximately 58%. In the SoC market, we estimate that our market share was down by about 3 percentage points.
While we continue to maintain strong share in the high-end SoC market, which is our main focus, the growing presence of local suppliers, especially from China in the low-end market, has weighed down our overall share. On the other hand, in the memory test market, we have secured a market share exceeding 60%, maintaining our competitive edge with industry-leading customers in the rapidly growing high-performance semiconductor sector. As we look into 2025, the semiconductor market is expected to continue to be driven mainly by AI-related demand. In addition to the growth of semiconductor unit volume, increasing device complexity, including the adoption of advanced packaging, is driving increased test content. On the other hand, the business environment is increasingly uncertain due to ongoing geopolitical risks and the risk of rapid exchange rate fluctuations.
For calendar 2025, under such a business environment, we will maintain our January outlook that the market size for the semiconductor market does expand for two consecutive years. While recovery of tester demand for automotive and industrial equipment is expected to take more time, we do expect AI-related tester demand to remain at a high level. Now let me give you our FY 2025 forecast. As shown on this slide, our FY 2025 forecast is as follows: Sales of JPY 755 billion, operating income of JPY 242 billion, income before tax of JPY 240 billion, net income of JPY 179 billion, and a basic earnings per share of JPY 243.96. The exchange rate assumption is JPY 140 for the US dollar and JPY 155 to the euro.
The latest forecast for the impact of exchange rate fluctuations on our operating profit for FY 2025 is an increase of JPY 1.9 billion for every JPY 1 of depreciation against the US dollar and a decrease of JPY 0.3 million against the euro. On a constant currency basis, our FY 2025 sales are estimated to grow slightly year over year. We expect high level of demand to be continued in FY 2025, driven by AI-related SoC semiconductors. The gross profit for the gross profit margin for the full year is expected to be around 58%, a high level as in FY 2024, and we expect solid EPS growth. Next, I'll explain the details of the sales forecast, but first I wanted to share this slide.
It shows the trend in our annual sales alongside our core market size, which now not only includes existing ATE market, but also other markets such as SLT, consumables, and data infrastructure, which we have expanded into. In order to present comparable sales growth, we have applied an exchange rate of JPY 140 per dollar to convert annual sales from FY 2021 through FY 2024. Stripping the exchange rate impact, you can see that FY 2025 sales are expected to increase compared to the previous fiscal year. Meanwhile, our core market is also expected to grow further, driven by rising demand as a result of the increasing complexity of semiconductors, among other factors. In other words, we remain on a growth trajectory. Now let's look at our different business segments, starting with semiconductor and component test systems.
SoC sales are expected to be comparable to the last fiscal year, sustaining a high level. While recovery in tester demand for automotive industrial equipment is expected to take more time, AI-related tester demand remains elevated against a background of increasing complexity and growing production volume of semiconductors. Also, FY 2025 is a major HPC transition year for traditional players and also for ASIC and cloud service providers, as they are bringing up several new devices that will translate to sales in 2026. On the memory side, our FY 2025 memory sales are expected to remain elevated, particularly for AI-related high-performance DRAM. We also expect demand for the next generation memory to come along. Next, in our mechatronics system sales, similar to testers, we anticipate continued high demand, particularly centered around device interface products, despite limited visibility to device transitions.
In our last segment of service, support, and others, we expect to generate steady sales growth. For our support services, firm demand is likely due to the steady growth of our installed base. In the SLT business, sales are expected to be flat year over year, although smartphone demands remain uncertain. Here in SLT, we are continuing our efforts to expand mid to long-term sales growth. In areas such as HPC, the increasing complexity of semiconductors and high reliability requirements are driving up demand for SLT, burn-in, and high-quality device interfaces. Next, I want to mention about production capacity. Over the last few years, we have reached the point where we can fully meet all customer demand through measures such as timely materials procurement and capacity expansion.
As we look ahead in anticipation for a continued rise in complexity and the resulting increase in demand over the mid to long term, we will work on expanding our production capacity even further. Through the transformation of our supply chain capabilities, we ensure the growth and reliance of our business while simultaneously supporting the timely launch of high-performance semiconductors, thereby providing great value to our stakeholders in the medium to long term. Lastly, I'd like to address our shareholder returns. Our shareholder return policy aims for a cumulative total return ratio of 50% or more over the three years of the third midterm management plan. Having conducted a share repurchase last fiscal year, we will again plan to enhance shareholder returns and capital efficiency through a repurchase program of up to JPY 70 billion.
Under this program, the total number of shares to be repurchased will be up to 19 million over a five-month period from May to September 2025. Please note that the EPS forecast for FY 2025 shown on page 19 on this slide does not reflect the impact of this share repurchase program. Okay, this concludes my presentation. Thank you for your attention.