Earnings Call: Q3 2020

Jan 30, 2020

Now it's time for us to start total Electro And Financial Announcement for third quarter of the year ending in March 2020. Thank you very much for joining us despite a very busy schedule. I am Yatsouda of IR department acting as MC for today's session. Now I'd like to introduce the attendees on our side. Mr. Titusuneschi, Representative Director, Chairman of the Board. Next, Mr. Toshiaki Kawai, Representative Director, President and CEO. And we have Mr. Yoshikazu Nunokawa, corporate director, Executive Vice President And General Manager, Finance Division. So first of all, Mr. Nunaoka, our Corporate Director Executive Vice President, will present the consolidated financial summary. Mr. Nuno Kawa, please. Ladies and gentlemen, good evening. I'm Nuno Kawa. Thank you very much for joining us this fight. You're a very tight schedule. Now I'd like to present the consolidated financial summary for the 3rd quarter. This page shows the financial summary for the third quarter on the right hand side. The net sales was JPY 295,400,000,000. Gross profit was JPY 117,500,000,000, gross profit margin was 39.8 percent. Operating income was JPY 64,700,000,000. Operating margin was 21.9 percent. Net income attributable to owners of parent was 1,000,000,000. I'd like to give you Here, you can see financial performance represented in the graphical manner. As you can see here, for 3rd quarter, sales net sales was almost the same as the previous quarter that is 2nd quarter, almost the same. When it comes to the comparison between 3rd quarter sales and 2nd 4th quarter sales, Actually, the 3rd and 4th quarter, the 3rd quarter is that starting quarter of the second half of the year. Usually, the 3rd quarter is a kind of recess compared to the 2nd quarter sales, the 3rd quarter sales used to be smaller in size. However, this fiscal year, the 3rd quarter sale was almost the same as the 2nd quarter sales. On the other hand, out of the chip on this issue on next page as well, the generated fixed costs in the 3rd quarter is slightly smaller than the debt in the 2nd quarter. That is the reason why the operating margin in the 3rd quarter is higher than the 1 in 2nd quarter. Now you can see settlement information. On the left, SBE results are shown sales was jpy 282,000,000,000. The segment income was jpy 72,500,000,000, profit margin was 25.7%. Just like the overall trend, the compared with sales in 2nd quarter, the sales in the 3rd quarter slightly increased. And also, Circum and Profit margin increased slightly. FBT sales was JPY 13,300,000,000 compared with the 2nd quarter. The sales was declined a little bit in the 3rd quarter. And segment profit margin was also declined in 3rd quarter compared with the 1 in 2nd quarter. On the right, you can see composition of net sales, in the third quarter, SB accounted for 95% while FPD accounted for 5%. Next slide shows SPA division sales by region. On the written side, you can see the results of the 3rd quarter. The 3rd 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. And second from the top, there is a sales for the North America. Just like the second quarter, the sales to North America was very strong. And second from the bottom, direct collar portion, which represents China, sales in 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 SB division new equipment sales by application. On the right hand side, you can see the set quarter results. As you can see over here, the orange color on the bottom and green color, the logic and logic crownry. To sales increases further from the 2nd quarter sales and the LogicFoundry And Logic accounted for more than 60%. Next slide, please Now field solution sales are presented here. You can see the fluctuation of sales. Of the field solution here. The sales were JPY 74,600,000,000, almost comparable with the sales in 2nd quarter so we can proceed the solid sales of this field situation. Next slide shows balance sheet. As for the assets. Completely 2nd 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 2nd quarter, you can see slightly high level of inventories in the 3rd quarter as well. On the right, you can see liabilities and net assets. As you can see here, net assets for 3rd quarter decreases from the 2nd quarter. This is because of share buyback. In the 3rd 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 2nd quarter. The purple line on the bottom shows the accounts receivable turnover. Again, the turnover in the 3rd 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 84,400,000,000. So significant negative value, this is orange color bar. So the JPY 45,400,000,000 for the share buyback 1,000,000,000 for dividend payment and others. On the other hand, cash flow from operating activities were JPY 52,100,000,000. Next slide, please. As I said earlier, the share buyback announced in May 2019 was completed on December 31, 2019. The number of shares acquired was 8,392,000 shares. Total cost of acquisition was 149000000000 999,000,000. Out of which today's board meeting, we decided to cancel 8,000,000 shares of Treasury stock, which represent 4.84 percent of issued shares. As a result of this cancellation, number of outstanding shares after the cancellation is 100 57,000,000 shares, as you can see on the slide. The difference between 8,392,008,000,08,000 shares which is 392,000 shares, which were not canceled, are planned to be used for share subscribed write a stock linked compensation. We are going to keep them in treasure stock. That's all about my presentation about her quarter finance. Summary. Next, Mr. Kawwa, our CEO, will present business environment and financial estimates. Karissa, please. I am Kawaii. Once again, thank you very much for joining us today. I'd like to make a presentation First of all, I'd like to talk about business environment for this year. For WFE CapEx, As you can see here, for this year, The investment for logic inventory remains solid, maintaining the trend from the previous year. In addition, memory investment is expected to recover. As a whole, we expect an increase over WFE CapEx on the year on year basis. Semi and VLSI Research said that WFE market is expected to grow by 5% on year on year basis, but our company's view is a bit different. We think The growth rate is higher than 5%. And we announced scrutinize 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 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 you can see WFE market outlook and business opportunity by application. For logic confoundry, 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 nanometer device node. For NAND, Along with inventory adjustments, memory price is bounced 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 a result from 1st quarter to 3rd quarter. Of this fiscal year. SB Business in the 3 focus area we want additional PORs in those three focus area for hedging VU, the wave on PORs in expanding CMOS image sensor, IoT and Automotive sectors and bookings increased. Firm deposition for the equipment for LLD and T333, single wafer metal system and batch tools, in all cases, we want additional QRs. For cleaning, promotion of double 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 Solutions business maintains its momentum even in the phase of assessments in the WFE market. For flat panel display production equipment, the new product sales are moving steadily the we are now focusing on the high value added area so that we can introduce new products there. So PIC sales of PIC PG10.5 plus a matching system for high resolution FPD is increasing. For inkjet printing system for promising all that, we introduced the tools for R and D and the evaluation tools have been installed to the 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 estimate for fiscal year 2020. There have been no changes for financial estimates from October 31, 2019 announcements, we are progressing very well toward the financial estimates. Next slide shows SBA Division, new equipment sales forecast. This shows the sales by application. The second 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 year, next fiscal year. This shows R and D expenses and CapEx plan. Again, there have been no changes from our announcement in October 31 last year. There are some updates. Now we are building 2 new production buildings. For those 2 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 2 puppets, from this summer and on, we are going to start operation in these 2 new production buildings. This is my final slide. You can see dividend forecast for this fiscal year, year end dividend Focused has been revised based on the results of the share repurchase, which is 290 3, questions from the floor up to until 6:30. Could you limit your question to one, please? Together with this one follow-up question. Before asking question, could you identify yourself by your name and affiliation? And today's announcement meeting will be uploaded to our website, which will 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'm Madaki from Nomura Securities. Thank you very much for very strong comments. I think Kawazan could say positive 11% to a 10% growth. But actually yesterday's financial announcement, several companies set that Samsung Flushing business started and supply their suppliers cannot catch up such kind of Samsung's demand. But it is impossible for you to talk about 2 digit growth rate. I think that is a big opportunity of our growth for the future. And I've seen those figures or whether the BFE market expect it to grow rather positively 2 digit growth is your question. Actually, American competitor talked about the 2 digit growth rate focused, and That view is not so much different from our view. I hope this answers to your question in directory. I hope you understand it. My follow-up question, there are some concerns yesterday. One competitor revised the financial estimate downward, and you are rather conservative as well. I wonder there are something Rome taking place, for example, in China, the investments are not so active, for example, do you see any risks? Do you feel any risks No. I don't think there is nothing negative happening right now. Thank you very much for your answer. I'm relieved. Next question, please. I am Miamoto from Mitsubishi, FSE Morgan Stanley Securities. I'm sorry. I'm talking about your Midtown business plan of 2 years ago, at that time, you link your WFE market and sales size. And at that time, WFE was 58 $1,000,000,000 and expect your sales of JPY 1,400,000,000,000. But after that, the competitive market environment has been changed. I know there is no linkage between your sales 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 JPY 1,400,000,000,000 if WVM market grows to $58,000,000,000? Or 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 2 years. And for us, We are providing high value added products and technologies and 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. But within 5 years, we are going to achieve JPY 2,000,000,000 sales 30% for operating profit margin and ROE of 30%. For those figures that we market is expected to be to $70,000,000,000. We have 3 different financial scenarios, but in order to achieve them, we need to come up with new product with high value added. In order for us to achieve the financial model, we need to enhance our own technology. It may take some time, but within 5 years, we try to satisfy our financial model. And there have been no changes in the competitive situation. But if WFE market grows too quickly, It's not possible for us to provide the products, which means a market condition. We need to think about PORs as well, but in order to address such 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 5 years to come. My follow-up question is you said that you have very similar viewpoint as American competitor, but for application, By application, you have a similar prospective NAND flash, recovery is biggest in this year. That's what your competition set. 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. So 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. Yeah. The gentleman just behind please. I'm Hiroa Gawa from Meliudin Chapa Securities. I heard the conference call of American Competitor, but actually in China, that 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, but 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. Therefore, I don't think there is big impact on our business performance. Thank you very much. As for your business performance, Nunaoka san said earlier, the sales in the third quarter was higher than the sales in the 2nd quarter. So the 2nd and 4th quarter sales have been higher than the sales of the 3rd and 1st quarter, but 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, so we are doing every effort to level off the production and also you can see increasing trend of the demands. And we are addressing customer requests to start up our system sooner. So two aspects to come up with the result in the 3rd quarter. Sorry. I was not so good at asking question, when you look at next year for leveling production, do you think it's possible for you to level off the production level? Or still in fiscal year ending in March 2021, do you see higher sales in second and full quarter as well? So we'd like to achieve the labeling as much as possible. However, the customers are very active in the investment So still, that might be some fluctuation in our sales, but it's not negative trend, but 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. So 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. And at the same time, we do have a good organization to prepare for shared in demands, but what we are doing right now. Actually, there is 2 things the leveling of production and leveling of sales, those 2 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 sanzaria, we try to achieve the leveling of production as much as possible. There might be some increase or decrease of inventories. However, we try to improve efficiency by limiting 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 1 in the first half of this year. So 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 3rd quarter and estimate for 4th quarter by application, but when you compare it with the original second half of this year focused, the total of the logic inventory in NAND, actually, the total sales was higher than the original guidance, but DRAM sales was smaller than the original focus. Could you let me know the reasons why, please? For the details, It is necessary for us to check the details, but as for the big trend, the logic was very strong. Proportion of 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. So logic and foundry, when you divide logic and foundry, which sales was revised more what word upward? As for my impression, the sales toward foundry customers are higher, yes, the sales to the foundry a bit strong. However, the sales logic customers is getting stronger than our original expectation. The sales to the DRAM customers was regarding 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. A present to 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 Damien Tong from Macquarie Capital Securities. In the third quarter, solution sales to SP customers was 1,000,000,000. Area SPE sales in the 3rd quarter was relatively strong. Fuel Solution Sales was in good trend as well. Continuously, so annual full year guidance used to be JPY 278,000,000,000, but when I look at the results of the 3rd quarter, you may exceed your plan for full year sales for field solution. How do you think about that? Field solution business is growing steadily. As you said, JPY 278,000,000,000, that is our initial guidance for the sales And by the end of third quarter, we have achieved 79% of the initial guidance. If we assume, what we say is just uniform that by the third quarter, we are supposed to achieve 75%. So 79% is higher than 75% we are doing much better than our plan, and we think we can exceed our initial full year guidance sales. I have a follow-up question. The 4th quarter and next fiscal year. I think the trend is getting stronger. How do you think about the growth rate of the fuel 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. And IoT, 5G and AI, actually 5G is the main driver. Mobile and infra investment is going on. And utilization of the customer's tools are getting closer to their maximum level, then that will contribute to the sales of our parts as well. Therefore, we can expect a lot for the fuel solution business in the future. So in principle, we need to look at the installed base. When the utilization remains unchanged, then fuel solutions sales increase is in proportion with the number of units delivered within 1 year. But if customer changes for just their production parts and service sales might be adjusted. But for the time being, There have been no information. We got that the customer is going to adjust their production. But how many units have been installed so far? We have our installed base is higher than 17,000 units. Thank you very much. I'm Mauriyama from JP Morgan Stanley, Japan. I have a question on Slide 17. You are talking about product strategy and for itching, cleaning system or for EUV lithography, Kota and developer, I have some question for etching for 3 d NAND haul. Itching. How do you see the business opportunity? And 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 3 d NAND to see the possibility of the orders, what is the next timing that you can tell? The orders come for itching for cleaning and kota developer I have some question. For Clean Inc, you said you got orders for the new models. Could you just explain what is new model? Please? And 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, you eagerly saw graphy, SML has shipped 18 unique systems, 26 systems and for this year, 35 systems already But as you pointed out before, by shifting to EUV lithography, as a result, the What is the growth of the quarter double op sales in amount of money do you think you can see increase or decrease of your quota developed business or sales? As for your itching, question on itching, The number of applications are now increasing. In principle, the Hark, high aspect ratio contact business is supposed to be captured. That's what we are targeting on. And partially, you can see some good results. Next to 120 layers, when we think about our hedge rate, and our hedging performance for the high aspect ratio holes, I think we can get some positive results but it depends on customer's device structure, whether it goes 1 tier or 2 tiers. That also affects the timing, but according to our current midterm business plan, instead of 120 plus layers, but we should target on the next generation, that's where we can see a full adoption of our system. But even before that, the hike, I should say, hike, we can see the positive results for the Halk process so far. That's for the cleaning, the VIVEL 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. So 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. And the bevel system is adapted in China as well. In Chinese market, our system is contributing to their yield enhancement activities as well. And our new model, the model with increased number of chambers and temperature SPM. These are our new models. And as for your question on EUV lithography, for our quota and development, It depends on specifications, but in principle, we are focusing on high value added area. An EUB lithography system, we must not make any mistake there. And we must have proper control And by having proper control, we can enhance our value of system. And by introducing a u b lithographies, we will see more and more solutions that have positive impact on customers CapEx as a whole. Therefore, not only quota developer, but also in other applications, we'll see the positive impacts on customers' CapEx. Thank you very much for your very thorough answer. Next question, please. Thank you very much for your presentation. I'm Siggira from Daiwa Securities. As I have a question on Logix And Foundry. So page 16 of the slide, you are talking about 14 nanometer So I'm interested in personally the investment to 14 nanometer. The second, the first half of 2020 or second half of calendar year 2020. So when you compare 2019 2020, so how much contribution 14 nanometer investment to WFE market increase or growth. Could you share your idea, please? The 14 nanometer investment is about China customer, the customer in China. So yes, Hassan will give you some details. So 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. But when it comes to the 5G, but 5g related devices, there have 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 and half of next year, correct, we are not able to release any information as of today. Next question, please. Yes. The gentleman is signed. The second row from the front, please. I am Mishina from Total I took your research center. I have a question for For Logic And Foundry, I have a question on Logic And Foundry. The 7,000,000,000 this year, the 7 nanometer node will be shifting to 5 nanometer node and also 3 nanometer node is coming in within our site at that time, what is your business opportunity? How do you think about your business opportunity in the era of the 3 nanometer 3 nanometer node from the viewpoint of your business opportunity? So in the 3 nanometer, now even for the 5 nanometer, technology level is going up, And I think your RNG investment will be going up. So in the 3 nanometer, note, do you think you are going to enhance the R and D investment furthermore? Our R and D investment for 5 nanometer, 3 nanometer, and beyond 3 nanometer. We are now looking at the multiple device nodes and customer share their roadmap from N plus N2N+4 generation in our company, This provides us with the great opportunities because our company's product portfolio, as you know, we have the dysography related products, also for in lithography, the firm deposit and etchings, creaming. So we have all products for the 4 major patterning processes. And we have been building long good relationship with our customers and also extendability of the installed based 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 divestitures of advantage for the future. In particular, for quota and developer, we have more than 80% market share for year over year geography. Our share is 100% So all the semiconductor devices have been treated within our system, So 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. 2 years ago, Semiconductor Device Market was $468,800,000,000, but year 2030, it might become $1,000,000,000,000 market. 2 years ago, WFE portion was about 12%. But in year 2030 toward year 2030, If the proportion remains unchanged, WFA portion will be growing furthermore. I think our R and D investment goes up but demands and sales also increase are increasing rapidly. Therefore, we don't think R and D cost will become our burden. Thank you very much. I have a follow-up question. In the future, EAB receivable will be introduced 1 more. And according to the company in the near and initially they said, the number of itching process will be decreasing, along with the introduction of the UV lithography, because of the debt replacement. However, recently, the number of hedging process are not decreasing, but might be decreasing. Instead. And this time, you said you are going to enhance the capacity of the production. So you talked about the market size of $1,000,000,000,000, but it's too early to say that. But what how do you view one year term perspective in the future. The comment made by the company in the Netherlands, is a bit different from our comment slightly, but we don't think the number of etching process will be decreasing at all. I think rather introduction of EUV, the Philadelphia will help us to increase the number of other processes. Which are positive impacts on our business. And I don't know why the person from Dutch companies such kind of comment, but as you know, introduction of UV, we saw what I feel will help us to improve our business in all tools. It is true that there are some process of which might decrease because of the introduction of AOB Retigraphy, But there are some other processes which are not dependent on the EUB refill graphic. 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. So maybe we can ask second question from the gentleman field, who already asked questions. So yes, the gentleman in the front row, please. I'm Hirokawa from Merrill Lynch, Japan Securities. As of the end of December, you have completed your share buyback. And you are very confident about the growth of the midterm long term period. But 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 your our short answer, it was the great timing that we decided to carry out share buyback. The hindsight, we could have decided much earlier, but that's only behind site. But when you think of a future growth, I think that was the great timing that we made a decision of carrying out the share buyback. So we our self evaluation was very positive for the share buyback. As for the future, we just followed the conventional ongoing direction policy. We try to carry out the share buyback, flexibly, at direct timing, at direct 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 a first option to use the cash. And if it leads to midterm, long term growth, there's a possibility for us to invest money for M and A. For the share buyback where we purchased, Actually, we have committed to achieve the 30% or higher ROE. And 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 2nd row, please. I am Ashino from Tokai Tokyo Reside Center. And I have a question on page 17 about FPD. For the G10.5, so major manufacturing cholar presented, we announced that they are going to decrease their investment for G10.5 by half. How do you think about that? And for quantum dot display for TV, the investment of that system started But how do you see the opportunities for compared with SBE panel displays, investment has been more fluctuating. That's how we view the FPD investment, but if the investment will not disappear, there is just the shift in timing when you look at the future, along with the introduction of OLED, the manager will be shifting to display And because of the design flexibility of OLED, I think there will be expanding demand for Olette 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 FD 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. As for inkjet printing system, from the viewpoint of the cost in our target area, is the OLED display for which sizes are bigger than the 14 mobile application. And quite a few customers for the carrier to use inkjet printing system are now adapting RIG.4.5 inkjet printing system for their development activities, and they are actively evaluating the system. Which is very positive trend for Thank you very much. Any other questions from the floor? Yes, the gentle mind, the front row, please. I am Miya Motofu Mitsubishi, FA Morgan Stanley Securities. So according to your competitor, this year, the inquiries from China local manufacturers will be growing rapidly by about 40% to 50% for this year. That's what they said. How do you view the systems? Do you think 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 yes, as I said earlier, 14 nanometer investment, yes, we can expect a lot from that. By and large, the American competitor's comment sounds somewhat 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 and D in order to catch up with overseas competitors. But 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 a very busy schedule. Thank you very much.