It's time for us to start Tokyo Electron financial announcement for third quarter of the year ending March 2020. Thank you very much for joining us despite your very busy schedule. I am Yatsuda of IR Department, acting as emcee for today's session. I'd like to introduce the attendees on our side. Mr. Tetsuo Tsuneishi, Representative Director and Chairman of the Board. Mr. Toshiki Kawai, Representative Director, President, and CEO. We have Mr. Yoshikazu Nunokawa, Corporate Director, Executive Vice President, and General Manager of Finance Division. First of all, Mr. Nunokawa, Corporate Director, Executive Vice President will present the consolidated financial summary. Mr. Nunokawa, please.
Ladies and gentlemen, good evening. I'm Nunokawa. Thank you very much for joining us despite your very tight schedule. I'd like to present the consolidated financial summary for the third quarter. This page shows the financial summary for the third quarter on the right-hand side. The net sales was JPY 295.4 billion. Gross profit was JPY 117.5 billion. Gross profit margin was 39.8%.
Operating income was JPY 64.7 billion. Operating margin was 21.9%. Net income attributable to owners of parent was JPY 49.3 billion. I'd like to give you more details from now on. Next slide, please. Here you can see financial performance represented in the graphical manner. As you can see here, for third quarter, net sales was almost the same as the previous quarter, that is second quarter, almost the same. When it comes to the comparison between third quarter sales and fourth quarter sales. Actually, the third and fourth quarter, the third quarter is the starting quarter of the second half of the year. Usually, the third quarter is a kind of recess compared with second quarter sales.
The third quarter sales used to be smaller in size. This fiscal year, the third quarter sale was almost the same as the second quarter sales. I'll touch up on this issue on next page as well. The generated fixed costs in the third quarter is slightly smaller than that in the second quarter. The reason why the operating margin in the third quarter is higher than the one in second quarter. You can see segment information. On the left, SPE results are shown. Sales was JPY 282 billion. The segment income was JPY 72.5 billion. Segment profit margin was 25.7%. Just like the overall trend, compared with sales in second quarter, the sales in the third quarter slightly increased, also segment profit margin increased slightly. FPD sales was JPY 13.3 billion.
Compared with second quarter, the sales was declined a little bit in the third quarter. Segment profit margin was also declined in third quarter compared with the one in second quarter. On the right, you can see composition of net sales in the third quarter. SPE accounted for 95%, while FPD accounted for 5%. Next slide shows SPE division sales by region. On the right-hand side, you can see the results of the third quarter. The third from the bottom, the green portion, which represent Taiwan sales, you can see drastic increase for Taiwan sales, thanks to the strong sales to the foundry customers. Second from the top, that is the sales for the North America. Just like the second quarter, the sales to North America was very strong. Second from the bottom, the red color portion, which represents China.
For this, the global companies and local China companies, manufacturers, the sales for both global and local manufacturers was very good following the second quarter. Next slide, please. This shows SPE division new equipment sales by application. On the right-hand side, you can see the third quarter results. As you can see over here, the orange color on the bottom and green color. The logic and logic foundry. The sales increases further from the second quarter's sales, and the logic foundry and logic accounted for more than 60%. Next slide, please. Field solution sales are presented here. You can see the fluctuation of sales of the field solution here. The sales was JPY 74.6 billion, almost comparable with the sales in second quarter. We can proceed the solid sales of these field solutions. Next slide shows balance sheet.
As for the assets compared with second quarter, on the top, cash and cash equivalent slightly decreased from the second quarter. Inventories, just in the middle, the light blue portion, the inventories, just like second quarter, you can see slightly higher level of inventories in the third quarter as well. On the right, you can see liabilities and net assets. As you can see here, net assets for third quarter decreases from the second quarter. This is because of share buyback. In the third quarter, liquidity ratio was 65.4%. Next slide, please. Here you can see inventory turnover and accounts receivable turnover. On the top, the light green line represent inventory turnover. Just the same level as second quarter. The purple line on the bottom shows the accounts receivable turnover. Again, the turnover in the third quarter is almost the same as the one in the second quarter.
Next slide, please. Now you can see the cash flow over here. The cash flow from financing activities, as you can see, was minus JPY 84.4 billion, so a significant negative value. This is orange color bar. The JPY 45.4 billion for the share buyback, and JPY 39 billion for dividend payment and others. On the other hand, cash flow from operating activities were JPY 52.1 billion. Next slide, please. As I said earlier, the share buyback announced in May 2019 was completed on December 31st, 2019. The number of shares acquired was 8,392,000 shares. Total cost of acquisition was JPY 149,999 million. Out of which, today's board meeting, we decided to cancel 8 million shares of treasury stock, which represent 4.84% of issued shares. As a result of this cancellation, number of outstanding shares after the cancellation is 157 million shares, as you can see on the slide.
The difference between 8,392,000 and 8 million shares, which is 392,000 shares which were not canceled, are planned to be used for share subscription rights as stock link compensation. We are going to keep them in treasury stock. That is all about my presentation, about third quarter finance summary.
Next, Mr. Kawai, our CEO, will present business environment and financial estimates. Kawai-san, please.
I am Kawai. Once again, thank you very much for joining us today. I would like to make a presentation on business environment and financial estimates. First of all, I would like to talk about business environment for this year. For WFE CapEx, as you can see here, for this year, the investment for logic and foundry remains solid, maintaining the trend from the previous year. In addition, memory investment is expected to recover. As a whole, we expect an increase of WFE CapEx on the year-on-year basis.
SEMI and VLSI Research said that WFE market is expected to grow by 5% on a year-on-year basis. Our company's view is a bit different. We think the growth rate is higher than 5%. We are now scrutinizing the condition of the market right now. For flat panel display, in calendar 2020, the production equipment CapEx is expected to increase by about 15% on a year-on-year basis due to solid investment for G10.5 LCD, as well as an increase of investment for G6 OLED for mobile and G8.5 OLED for TV. Now, we can see WFE market outlook and business opportunity by application. For logic and foundry, as I said earlier, high level of CapEx is expected to be maintained from the previous year, especially CapEx for the leading-edge node to 14 nm device node. For NAND, along with inventory adjustments, memory prices bounce back to the upward trend.
Investment is expected to start again gradually. For this year, investment for the transition from 9x-layers to 12x layers will increase. For DRAM, as memory prices bottomed out, and in early 2020, inventories will be normalized, restart of investment is expected. This shows FY 2020 business progress. This shows the result from first quarter to the third quarter of this fiscal year. SB business in the three focus area, we won additional PORs in those three focus area. For etching BU, we won PORs in expanding CMOS image sensor, IoT, and automotive sectors, and bookings increased. Film deposition for the equipment for ALD and T333, single wafer metal system, and batch tools. In all cases, we won additional PORs. For cleaning, promotion of bevel cleaning proceeds steadily. Bookings for new models and new areas increased.
Along with our growing installed base, which has exceeded 70,000 units, the field solution business maintains its momentum even in the face of adjustments in the WFE market. For flat panel display production equipment, the new product sales are moving steadily. We are now focusing on the high value-added area that we can introduce new products there. Sales of PICP G10.5 plasma etching system for high-resolution FPD is increasing. For inkjet printing system for promising OLED, we introduced the tools for R&D, and the evaluation tools have been installed to quite a few customers. That is the business progress from first quarter to third quarter of this fiscal year. Next, I'd like to talk about financial estimates for fiscal year 2020. There have been no changes for financial estimates from October 31st, 2019 announcements. We are progressing very well toward the financial estimates.
Next slide shows SPE division new equipment sales forecast. This shows the sales by application. The sales plan of the second half of this year remains unchanged. Sales to logic and foundry customers are strong, and sales to memory customers expected to increase from next fiscal year. This shows R&D expenses and CapEx plan. Again, there have been no changes from our announcement in October 31st last year. There are some updates. Now we are building two new production buildings. For those two production buildings, the operation expected to start from summer this year in order to take care of the increasing demands and to be prepared for the expanding orders for the future. For those two purpose, from this summer and on, we are going to start operation in these two new production buildings. This is my final slide. You can see dividend forecast for this fiscal year.
Year-end dividend forecast has been revised based on the results of the share repurchase, which is JPY 293. Thank you very much. This concludes my presentation.
Now I'd like to entertain questions from the floor up until 6:30 P.M. Could you limit your question to one, please, together with one follow-up question. Before asking question, could you identify yourself by your name and affiliation. Today's announcement meeting will be uploaded to our website. Could you make your question concise and clear? Really appreciate your cooperation. Could you raise your hand if you have any questions, please? Yes, the gentleman in the front row, please.
I am Wadaki from Nomura Securities. Thank you very much for very strong comments. I think Kawai-san could say + 11% or 10% growth, but actually yesterday's financial announcement, several companies said that Samsung flash investment started, and their suppliers cannot catch such kind of Samsung's demand. Is it possible for you to talk about two-digit growth rate?
I think there is a big opportunity of our growth for the future, and I think those figures, or WFE market is expected to grow rather positively. Two-digit growth is your question. Actually, American competitor talked about the two-digit growth rate forecast. That view is not so much different from our view. I hope this answers to your question indirectly. I hope you understand it.
My follow-up question, there are some concern. Yesterday, one competitor revised their financial estimate downward, and you are rather conservative as well. I wonder, there are something wrong taking place? For example, in China, the investments are not so active, for example. Do you see any risks? Do you feel any risks?
I don't think there is nothing negative happening right now.
Thank you very much for your answer. I'm relieved.
Next question, please. Yes, the gentleman in the next island, please.
I am Miyamoto from Mitsubishi UFJ Morgan Stanley Securities. I am sorry. I am talking about your midterm business plan of two years ago. At that time, you link your WFE market and sales size, and at that time, WFE was $58 billion and expect your sales of JPY1.4 trillion. After that, the competitive environment has been changed. I know there is no linkage between your sales and WFE market, but when you think about the following changes in the competitive market, do you think it's possible for you to achieve the sales of JPY1.4 trillion in yen if WFE market grows to $58 billion? Do you think this kind of combination of figures might change because of the change in the market condition?
I think the competitive situation hasn't been changed over the past two years. For us, we are providing high value-added products and technologies, we are prepared to create WFE market. That's what we are determined. That's the reason why we do not link our sales and WFE market size. Within five years, we are going to achieve JPY 2 trillion in yen sales, 30% for operating profit margin, and ROE of 30%. For those figures, WFE market is expected to be $65 billion-$70 billion. We have three different financial scenarios, in order to achieve them, we need to come up with new product with high value add. In order for us to achieve the financial model, we need to enhance our own technology. It may take some time, within five years, we try to satisfy our financial model. There have been no changes in the competitive situation.
If WFE market grows too quickly, it's not possible for us to provide the product which meets the market condition. We need to think about PORs as well. In order to address that kind of situation, we are now developing high value-added products. There might be some deviation, but anyway, we try to satisfy our financial model within five years to come.
Thank you very much. My follow-up question is, you said that you have very similar viewpoint as American competitor, but for application. By application, you have very similar perspective. NAND flash recovery is biggest in this year. That's what your competitor said, and DRAM market does not recover. Is that your viewpoint as well?
I think there is a possibility for DRAM market as well. The investment plan, so NAND inventory adjustment going on faster, therefore, I think the investment for NAND will start first. However, it depends on the progress of customers' production situation. For example, if the DRAM capacity is not good enough or sufficient enough, the DRAM investment may come first. Actually, the inventory situation and investment situation are not exactly in line with each other.
Thank you very much.
Thank you very much for your question. The gentleman just behind, please.
I'm Hirakawa from Merrill Lynch Japan Securities. I heard the conference call of American competitor. Actually, in China, there is the coronavirus outbreak. How do you see the impact of that coronavirus outbreak right now? Now you have positive results for the third quarter, you haven't changed your full-year financial estimates. Is that because of the potential impact of the coronavirus? Could you let me know your viewpoint, please?
I hope that the people who have been affected by coronavirus will recover soon. When it comes to its impact on our business performance, I think that it should be only minor impact on our business. Business itself exists, and the startup schedule adjustment is going on. I don't think there is big impact on our business performance.
Thank you very much. As for your business performance, Nunokawa-san said earlier the sales in the third quarter was higher than the sales in the second quarter. The second and fourth quarter sales have been higher than the sales of the third and first quarter. Have you ever taken any countermeasures to level out your sales all through the year, or do you see only the demands in the third quarter?
I think both of them. We are doing every effort to level off the production, and also you can see increasing trend of the demands. We are addressing customer requests to start up our system sooner. Two aspects to come up with the result in the third quarter.
Sorry, I was not so good at asking question. When you look at next year for leveling of production, do you think it's possible for you to level off the production level? Still, in fiscal year ending in March 2021, do you see higher sales in second and fourth quarter as well?
We'd like to achieve the leveling as much as possible. However, the customers are very active in investment. Still, there might be some fluctuation in our sales, but it's not negative trend. That is positive trend. Fortunately, our supply chain has been enhanced. Therefore, we are able to take care of the sudden increase of the demands.
In that sense, we are prepared to address the demands either from logic customers or memory customers whenever it comes. Accordingly, there might be some increase or decrease of the sales a little bit, but in principle, we are going to improve our production efficiency. At the same time, we do have a good organization to prepare for the fluctuating demands. That's what we are doing right now.
Actually, there is two things, the leveling of production and leveling of sales. Those two are different. As for the sales, it depends on the customer demands. The sales fluctuation is affected by customer demands. When it comes to the production itself, as Kawai-san said earlier, we try to achieve the leveling of production as much as possible. There might be some increase or decrease of inventories. We try to improve efficiency by leveling off the production. That's what we are making effort right now.
Let me add one more comment. Even in the initial guidance, the sales in the second half of this year is higher than the one in the first half of this year. There is another reason for that. Next question, please.
Yes, the gentleman again in the front door, please.
Thank you very much. I'm Yoshida from CLSA Securities Japan. As for the new sales, I have a question on new sales. This time you showed us the actual for third quarter and estimate for fourth quarter by application. When you compare with the original second half of this year forecast, the total of the logic and foundry and NAND, actually, the total sales was higher than the original guidance, but DRAM sales was smaller than the original forecast. Could you let me know the reasons why, please?
For the details, it is necessary for us to check the details. As for the big trend, the Logic was very strong, and proportion of the sales to Logic customers is rather high. I'm sorry, I'm not answering to your question because it's necessary for me to check the details.
Logic and Foundry. When you divide Logic and Foundry, which sales was revised more, what way? Upward.
As for my impression, the sales toward Foundry customers are higher. Yes, the sales to the Foundry a bit strong. However, the sales to the Logic customers is getting stronger than our original expectation. The sales to the DRAM customers was weaker than our expectation because of the delay in the production adjustment.
I have one more follow-up question. Your Japanese competitor talked about the delay in orders. At present, do you feel the similar situation, the delay in orders?
I'm not prepared to give any comments on the competitor statement, but we don't see anything happening about the orders. Next question, please.
Yes, the gentleman in the front row, please.
I am Damian Thong from Macquarie Capital Securities. In the third quarter, field solution sales to SPE customers was JPY 72.2 billion. Earlier, SPE sales in the third quarter was relatively strong. The field solution sales was in good trend as well, continuously. Annual full year guidance used to be JPY 278 billion. When I look at the results of the third quarter, you may exceed your plan for full year sales for field solution. How do you think about that?
Thank you very much. Field solution business is growing steadily. As you said, JPY 278 billion, that is our initial guidance for the sales. By the end of third quarter, we have achieved 79% of the initial guidance. If we assume quarterly sale is just uniform, that by the third quarter we are supposed to achieve 75%. 79% is higher than 75%. We are doing much better than our plan. We think we can exceed our initial full year guidance sales.
I have follow-up question. The fourth quarter and next fiscal year, I think the trend is getting stronger. How do you think about the growth rate of the field solution business? Could you share your idea with us, please?
The figures for next fiscal year are not yet disclosed. Maybe in next meeting, we are going to announce our financial estimates for next fiscal year.
Having said that, essentially, the field solution business has been growing very steadily. IoT, 5G, and AI, actually 5G is the main driver. Mobile and infra investment is going on, utilization of the customer's tools are getting closer to their maximum level. That would contribute to the sales of our parts as well. Therefore, we can expect a lot for the field solution business in the future. In principle, we need to look at the installed base. When the utilization remains unchanged, then field solution sales increase is in proportion with the number of units delivered within one year. If customer changes or adjust their production, parts and service sales might be adjusted. For the time being, there have been no information we got that the customer is going to adjust their production. How many units have been installed so far?
Our installed base is higher than 70,000 units. Thank you very much.
I'm Moriyama from JP Morgan Stanley, Japan. I have a question on slide 17. You are talking about product strategy and for etching, cleaning system or for EUV lithography, coater and developer. I have some question. For etching, for 3D NAND hole etching, how do you see the business opportunity? What is the timing of your business from 96 layers to 128 layers? I think for this year, business has been determined already, but next year and beyond, in which generation of 3D NAND do you see the possibility of the orders? What is the next timing that you can tell the orders come for etching?
For cleaning and coater developer, I have some question. For cleaning, you said you got orders for the new models. Could you just explain what is new model, please? Also, and market share, there have been no changes for the market share. Just in case I want to get some clarification on market share. As for the product-related question, EUV lithography, ASML has shipped 18 unit systems, 26 systems, and for this year, 35 systems already. As you pointed out before, by shifting to EUV lithography, as a result, what is the growth of the coater developer sales in amount of money? Do you think you can see increase or decrease of your coater developer business or sales?
As for your etching, question on etching. The number of applications are now increasing. In principle, the HARC, High Aspect Ratio Contact business is supposed to be captured. That's what we are targeting on. Partially, you can see some good results. Next to 120 layers, when we think about our etch rate and our etching performance for the high aspect ratio holes, I think we can get some positive results. It depends on customer's device structure, whether it goes 1 tier or 2 tiers.
That also affects the timing. According to our current midterm business plan, instead of 120+ layers, we should put target on the next generation. That's where we can see a full-fledged adoption of our system. Even before that, the HARC, I should say HARC, we can see the positive results for the HARC process so far. As for the cleaning, the bevel system, and also high throughput system with multiple chambers, that's another area we are focusing on, and also another application is mid-temperature SPM business. In addition, Chinese market, we are introducing cleaning system in China market as well.
For the market share, we have penetrated into Chinese market. That should have very significant positive impact. The new model application, increase of applications, and bevel system will become more and more important to increase the yield. The bevel system is adapted in China as well. In Chinese market, our system is contributing to their yield enhancement activities as well. Our new model, the model with increased number of chambers and mid-temperature SPM, these are our new models.
As for your question on EUV lithography, for our coater and developer, it depends on specifications, but in principle, we are focusing on high-value added area. EUV lithography system, we must not make any mistake there, and we must have proper control. By having proper control, we can enhance our value of system. By introducing EUV lithographies, we will see more and more solutions that have positive impact on customers' CapEx as a whole. Therefore, not only coater developer, but also in other applications, we will see the positive impacts on customers' CapEx.
Thank you very much for your very thorough answer.
Next question, please. The gentleman in the middle of the room, please.
Thank you very much for your presentation. I'm Sugiura from Daiwa Securities. I have a question on logic and foundry. Page 16 of the slide, you are talking about 14 nm. I'm interested in, personally, the investment to 14 nm. Does it come the first half of 2020 or second half of calendar year 2020? When you compare 2019 and 2020, how much contribution 14 nm investment to WFE market increase or growth? Could you share your idea, please?
The 14 nm investment is about China customer, the customer in China. Yatsuda-san will give you some details. This is about the financial estimate for next fiscal year. We haven't issued our guidance yet, so we are not able to give you any answer about first half or second half of next year. When it come to the 5G-related devices, there has been increasing needs for 5G mobile. Demand is going up. That's how we understand the market situation.
Even for the WFE market situation, you cannot announce any information on first half or second half of next year?
Correct. We are not able to release any information as of today. Next question, please.
Yes, the gentleman this side, the second row from the front, please.
I am Ishino from Tokai Tokyo Research Center. I have a question. For logic and foundry, I have a question on logic and foundry. Within this year, the 7 nm node will be shifting to 5 nm node and also 3 nm node is coming in within our sight. At that time, what is your business opportunity? How do you think about your business opportunity in the era of the 3 nm node from the viewpoint of your business opportunity? In the 3 nm, now even for the 5 nm technology level is going up, and I think your R&D investment will be going up. In the 3 nm node, do you think you are going to enhance the R&D investment furthermore?
Our R&D investment for 5 nm, 3 nm, and beyond 3 nm, we are now looking at the multiple device nodes, and customer share their roadmap from N to N+4 generation.
In our company, this provides us with the great opportunities. Our company's product portfolio, as you know, we have the lithography related products, also for lithography, the film deposition and etching, cleaning. We have all products for the four major patterning processes, and we have been building long, good relationship with our customers, and also extendibility of the installed base products more than other competitors. We are in a good position to share customers' roadmap together for the quality enhancement of chamber-to-chamber matching as well. We are trusted by our customers. The more critical technology becomes, the more we can make the best use of our advantage for the future. In particular, for coater and developer, we have more than 80% market share. For EUV lithography, our share is 100%. All the semiconductor devices have been treated within our system.
We'd like to make the best use of our continuing relationship with customer when we try to further enhance our growth. IoT and 5G, two years ago, semiconductor device market was $468.8 billion. By 2030, it might become $1 trillion market. Two years ago, WFE portion was about 12%, in 2030, toward 2030, if the proportion remains unchanged, WFE portion will be growing furthermore. I think our R&D investment goes up, demands and sales also are increasing rapidly. We don't think R&D costs will become our burden.
Thank you very much. I have a follow-up question. In the future, EUV lithography will be introduced more and more, according to ASML, initially they said the number of etching process will be decreasing along with introduction of the EUV lithography because of the replacement. However, recently, the number of etching processes are not decreasing, but might be de-increasing instead. This time, you said you are going to enhance the capacity of the production. You talked about the market size of JPY 1 trillion, but it's too early to say that. How do you view more near term perspective in the future?
The comment made by company in the Netherlands is a bit different from our comment, slightly. We don't think the number of etching processes will be decreasing at all. I think rather, introduction of EUV lithography will help us to increase the number of other processes which have positive impacts on our business. I don't know why the person from Dutch company said such kind of comment, but as you know, introduction of EUV lithography will help us to improve our business in all tools.
It is true that there are some processes which might decrease because of the introduction of EUV lithography, but there are some other processes which are not dependent on the EUV lithography. Therefore, I think the market is moving along with our perspective.
Thank you very much.
Thank you very much for your question. Any other questions from the floor?
We have 10 minutes to go. Maybe we can ask second question from the gentleman who already asked questions. Yes, the gentleman in the front row, please.
I am Hirakawa from Merrill Lynch Japan Securities. As of the end of December, you have completed your share buyback. You are very confident about the growth of the midterm, long-term period. How do you view the results of this share buyback, and what's your plan for the future? Could you let us know that, please.
As for our short answer, it was the great timing that we decided to carry out share buyback. The hindsight, we could have decided much earlier, that's only the hindsight. When you think about future growth, I think that was the great timing that we made a decision of carrying out the share buyback. Our self-evaluation was very positive for this share buyback. As for the future, we just follow the conventional ongoing direction policy. We try to carry out the share buyback flexibly at the right timing, at the right size. Of course, when it comes to the use of the cash, the primary use of cash is to invest the money for further growth, including R&D or CapEx for development activities. That is the first option to use the cash.
If it leads to mid-term, long-term growth, there is a possibility for us to invest money for M&A. For the share buyback or repurchase, actually, we have committed to achieve the 30% or higher ROE. That's our commitment to all of you. Therefore, management of balance sheet might become necessary for us in some cases, and that policy remains unchanged for years.
Thank you very much for your question. Yes, the gentleman in the second row, please.
I am Ishino from Tokai Tokyo Research Center. I have a question on page 17 about FPD. For the G10.5, major manufacturer presented or announced that they are going to decrease their investment for G10.5 by half. How do you think about that? For quantum dot display for TV, the investment of that system started, but how do you see the opportunities for your inkjet system?
Compared with SPE, flat panel displays investment has been more fluctuating. That's how I view the FPD investment. FPD investment will not disappear. There is just the shift in timing. When you look at the future, along with the introduction of OLED, the monitor will be shifting to display. Because of the design flexibility of OLED, I think there will be expanding demand for OLED in the future. Regardless of the timing of the investment done by customer, it is clear that demand will be increasing constantly. There should be no problem in the FPD market. As long as we are working on the technology innovation to provide the high value added product to the market, there should be no problem.
Inkjet printing system, from the viewpoint of the cost and our target area is the OLED display, which size is a bit bigger than the one for mobile application. Quite a few customers who declare to use inkjet printing system are now adopting our G4.5 inkjet printing system for their development activities. They are actively evaluating the system, which is very positive trend for the future.
Thank you very much.
Any other questions from the floor? Yes, the gentleman in the front row, please.
I am Miyamoto from Mitsubishi UFJ Morgan Stanley Securities. According to your competitor, this year, the inquiries from China local manufacturers will be growing rapidly by about 40%-50% for this year. That's what they said. How do you view the systems? Do you have the very similar feeling or slightly different from your competitor? Our view is not so much different from their view. The same level of the growth rate do you expect?
I'm sorry, I cannot give you specific values for next fiscal year, as Yatsuda said earlier. 14 nanometer investment, yes, we can expect a lot from that. By and large, the American competitor's comment sounds not so much different from ours. I have one additional comment. For this year, what we're expecting this year is the investment to increase the capacity. In the past, the Chinese manufacturers have been investing a lot to the R&D in order to catch up with overseas competitors. From now on, they are going to invest a lot to increase their capacity. In that sense, we can expect a lot this year.
Okay. There seems to be no more questions from the floor. We'd like to conclude today's financial announcement. Once again, thank you very much for joining us today despite your very busy schedule.
Thank you very much.