Earnings Call: Q4 2019

Apr 26, 2019

So it's time for us to start Doctor. Eric from financial announcement for fiscal year ending March 2019. Thank you very much for joining us despite a very busy schedule. I am Yetsadda of IRID partum acting as a moderator today's session. So first of all, we'd like to introduce the attendees on our side. Mr. Titsoetuneshe, she represented a Director, Chairman of the Board. Next, Mr. Toshiaki Kawai, Representative Director, President and CEO. And we have Mr. Kent Sysagawa, Vice President, Accounting Department, So first of all, the Michhta Sargawa Vice President of Accounting Department will present the consolidated financial summary. Good afternoon, ladies and gentlemen, thank you very much for joining us despite a very, very tight schedule. I am Sasagawa taking care of accounting department. Let me make a presentation on consolidated financial summary for fiscal year ending March 2019. The fat slide shows the highlight of fiscal year ending March 2019, for fiscal 2019 in the expanding SBE market, we have established our product competitive edge and we succeeded in this project. For FPD as well, we have succeeded expanding our share and consolidated sales increased by 13% on year on year basis and that was the record high for the profit, the gross profit operating income, net income attributable to owners of parents set new records high. And net income attributable to owners of parents was JPY 248,200,000,000 ROE was 30.1%. Sales was jpy 1,278,200,000,000, almost the same level as our estimates announced October 2008 1,000,000,000,000 to 1,000,000,000. FSP sales was driven by memory sales increased by 10.6 percent to 1,000,000,000. FPD sales thanks to the G10.5 sales increase increased by 48.2percent 111 1,000,000,000. The gross profit was increased by 10.8 percent, JPY 526,100,000,000. The gross profit margin was 41.2%. Gross profit margin was reduced by 0.8 points on year on year basis. This is because of the inventory of the last year was incorporating cost of goods. Also, we are investing for the future development and growth. And SG and A expenses increased by 1,000,000,000. The major reason for the increase, as you can see on the bottom of this chart, R and D expenses increased by 1,000,000,000 on on year basis, also increase of labor cost is another reason. And the SCA sales ratio was reduced by 0.2 points because of the increase of sales, as a result, operating income has increased by 10.5% 1,000,000,000, operating margin was 24.3%. The net income attributable owners of parent was increased by 21.5 percent to JPY 148,200,000,000 and earning per share was 513.58. Now you can see the quarterly basis summary. The 4th quarter sales was increased by 19.0 percent on quarter to quarter basis, 1,000,000,000 SPE sales was increased by 20.6%. FPD sales was increased by 5.6%. The gross profit margin was 41.5 percent, increased by 0.6 points on quarter basis. The SG expenses 1,000,000,000 increased from increased by 1,000,000,000 from the third quarter mainly because of the increase of R And D expenses of JPY 3,500,000,000. As a result, operating income of JPY 76,400,000,000 operating margin was JPY 20 4%, 2.1. Increase from the previous quarter. Now you can see segment information. For SPE sales, as you can see, on the left hand side, the segment profit margin was decreased by 1.8 points on year on year basis, 28.0 percent. Profit margin of product themselves increased But in order to prepare for the long term mid term market growth, we are now carrying out the strategic investment. That is the reason why you can see slight decrease from the previous year. We have PD sales and segment profit margin as shown over here as well, Therefore profit margin achieved a 21.8 percent for FTE segment, we hit the record high Our company's differentiation technology improved the competitive edge of the products. As a result, sales and profitability has increased because of that, the profit margin was increased by 1.1 points from the on the yearly basis. This slide shows SBE division, new equipment sales by application. As you can see, for foundrylogic sales, It's very steady. On the other hand, for memory, you can see drastically improvement. Next slide, again, the new equipment sales by product for SPA division. Due to the market share improvement, quota developer and etching sales increased in particular. As for the market share, later on, Mr. Kawayo will touch upon this issue later. This slide shows fuel solution sales. As you can see, the parts service sales is steadily increasing, the fuel solution sales achieved 1,000,000,000 The green portion, the used equipment modification sales decreased a little bit because of the reduction of the chamber cells. Those chambers are attached to the existing production line of the customer sites. So those chambers cells are not necessarily coupled with the sales of the new equipment. Anyway, this sector business, because of an increase of are expected to see very stable sales. This shows balance sheet On the left, you can see assets. The total of asset is jpy 1,257,600,000,000. On the left hand side, you can see the the end of March 2018, they increased by JPY 54,800,000,000 Yen on year on year basis, you can see the details over here, in particular for inventories, which is increased by JPY 10,100,000,000 on year on year basis. This is because inventory of the equipment shipped shipped to be installed is declining. However, inventory of product brokerage and supplies at our manufacturing subsidiaries is increasing. In order prepare for the equipment was long term the time and to prepare for the future demand increasing, we are now increasing some inventory And tangible asset also increasing, mainly because of the development building in Miyagi and new production building in Tohoku Maneshi and purchase of the R and D tools. Next on the right hand side, you can see liabilities and net assets The liabilities was 1,000,000,000,000 decrease on a year on year basis Please refer to financial review for details. The major reason for deduction is reduction of accounts payable and customer advances. And the bottom you can see total net assets increased by 116 point 1,000,000,000, achieving 1000000 because of the increase of the net income. This slide shows inventory turnover and accounts receivable turnover on a quarterly basis. For the inventory turnover, because of the increase of the 4th quarter sales, the inventory turnover was 101 days decreased by 10 days on year on year basis. Account receivable turnover was 42 days, again, decreased by 10 days on a year on year basis. This is the last slide of my presentation showing cash flow. As you can see over here, the cash flow from operating activities was JPY 65,000,000,000. The cash flow from investing activity was minus JPY 4 1,000,000,000. As a result, free cash flow was 1,000,000,000. And on the lower rank of the table, can see the cash on hand at the end of the fiscal year, 1,000,000,000. Thank you very much. That's all for me. Next, Mr. Kawaii, President and CEO will make a presentation on business environment and financial estimate. Mr. Kauai, please. I am calling Next to meet you, everybody, once again, as introduced now, I'd like to make a presentation on business environment and financial estimate. The first slide shows the SBE business highlights for fiscal 2019 by product. You can see the information. For quarter developer, we improved existing high share. For the cleaning equipment, we differentiate ourselves by bevel cleaning and pattern collapse prevention technology, and we increased this share by 5 points in calendar year 2017, and we maintained that share for Wafer Prover, we achieved share number 1 for 2 consecutive years. For firm deposition, we increased our share by two points. And next year on, we will see the market grow in order to prepare for that, we are now building new production buildings to enhance our capacity. The major biggest market itching system, we increased our share by 4 points last year. And WFE share as a whole Tokyo Rakzone as a whole, we achieved the share of 15%, which is record high for us. The share improvement of every business unit contribute to the market share of 15%. So we are now focusing on high value added areas for FED business. Our net sales exceeded 1,000,000,000. As you can see on the right hand side, you can see sentiment profit margin. So our operating margin target in midterm business plan is 20% and we achieved 21.8% in actual. For segment profit margin. The sales of equipment for J10.5 expanded and this new product for G10.5 contributed to increase of sales and profit margin. As for the G10.5 PICP new product, was released. And for G4.5 inkjet printing system for OLED panels, We're also released and we obtained some orders. And that's all about the highlights of the panel business progress. Now you can see the calendar year 2018 SBE market share and FPD production equipment share for fiscal year 2019. Now you can see our market share. As I said earlier, for the SPE, last year for dry edge system, the share was increased by 4 points. Then for the partition system, the share was increased by 2 points. For FPD production equipment, G1015 investment ratio was increased. And thanks to that, we can see the 10 point increase of the quota developer market share. In order to achieve the midterm business plan, we are now focusing on RNG to provide best product the service and best solutions to the market. Now you can see the our business environment our perspective of the business environment, both for SP and FB sentiment, do not change so much from the previous financial announcement, but there are some positive information to indicate sign up recovery from different customers. So system on chip type application professor was more than embedded for 5Z communication and ICs for high performance computing, including MPU for datacenter, GPU and AI, all those Semiconductors are now promoting device shrink furthermore. For memories over the past 2 years, memory market grew rapidly. And because of that previous growth, we are now in the middle of the adjustment period, especially in NAND, the inventory adjustments are proceeding actively, and you can see some sign of recovery in the second half of this year. When you look at the midterm long term growth trend of Semiconductor market, we are getting very close to the bottom. And and possibly, we will see some recovery trend in the future. For flat panel display, mobile device shipment has slowing down and you can see some temporarily adjustment period for CapEx, but we have the Smartphone for 5G, flexible display and large size TV panel, including a K, those demands are increasing next year. In order to prepare for that demand increase, FPD production equipment might it is expected to recover from the second half of this year. This slide shows calendar year 2019 WV Market and our business opportunities by application. Our review market trend by application hasn't changed so much. But for non volatile memory, you can see some symptom of recovery in investment. I'll touch upon this issue later when I talk about the new equipment sales forecast. Next, I'd like to talk about financial estimates. SPE and FPD market is in the phase of adjustment. Net sales for the first half of this year, JPY 490,000,000,000, second half of this year 1,000,000,000. Full year sales is expected to be 1,000,000,000 and minus 13.9% on year on year basis is expected. Our sales performance is expected to be phase of the adjustment, we are going to continue our investment for growth in order to be prepared for this market recovery in next year. This slide shows SPE division new equipment sales forecast by application for fiscal 2020. For DRAM, we are going to see the demand, supplydemand adjustment towards the second half of this year. And full fledged recovery of the investment is expected to start in next fiscal year. For NAND, full fledged recovery is expected to start next fiscal year ahead of DRAM. There are some symptom recovery from the second half of this fiscal year. For logic and foundry, the sales increase is expected from previous fiscal year. In order to prepare for IOG society, the investment to the leading edge generation will be increasing And also, the investment to the technologically mature generation is rather solid. And proportion of the critical layer process that is our focus area is increasing. So for logic and foundry, the sales is expected to add per market trend. Now you can see the R and D expenses and CapEx plan for this fiscal year. R and D expenses is expected to be 1,000,000,000. CapEx is 1,000,000,000. Depreciation will be 1,000,000,000. So these are the budget for this fiscal year. IoT, AI and 5G, in order to prepare for the coming data centric era in the enhanced growth phase, we are going to achieve the midterm business plan, and we are going to further improve our market year, we'd like to continue our upfront investment. Finally, I'd like to show you our dividend forecast dividend per share of fiscal 2019 was higher than the focus by 4,000,000, achieving at JPY 758,000,000 for this fiscal year, although the net income is expected decline because of the market adjustment, but there is no change in the shareholder return policy. In the code on service dividend payout ratio of 50% to see a dividend per share will be jpy502. And from now on, we are going to focus on the shareholder return by increasing our profit as much as possible. Thank you very much for your kind attention. This concludes my presentation. Now I'd like to entertain questions from the follow-up then to 6:30. 1st of all, I'd like you to limit your question to one together with one follow-up Please identify yourself by your name and affiliation. And this financial announcement will be uploaded to our website. So please speak slowly and briefly. Now could you raise your hand if you have any questions? Yes, the gentle mind, the front row, please. Thank you very much. I am Madakiv of Nomura Securities. I'm very happy to hear a very good symptom of recovery in the near future. And now, Mr. Kawai reinforced that feeling, I'd like to share with us your feeling, I got some information from WFE Vendor A, they got the big orders and WFE Vendor B I've got some order from Taiwan as well. So could you share your idea with us about the market trend, please? Where should I start in answering your question? For data center, smartphone, actually data center is an actual big driver, actually, So memory not only memory, but also high speed Logix, In those areas, we have very strong inquiries from the customers. For CPU. And for 5G is now coming to prepare for 5G investment to 5 nanometer node. Is now being implemented within the foundries, in particular, not only 5G but also GPU and other high performance computing ICs. The investment in those area will be implemented very actively in the future. For memory, flash memory, for example, maybe in this coming summer, the inventory will be running out. That's what our customers say. So The inventory adjustments will be completed and we will see new demand. Now we have the increase in productivity, but customers are now thinking about the new CapEx plan to meet the increasing demand toward the second half of this year. This is a kind of consensus in the industry. They are going to see some orders when the customer and we will shoot some equipment to customer for China, the memory investment actually. Last year, the China proportion was about 17% about our sales this year as well. Very similar level of orders expected from China customers, some fresh memory, local Chinese IC vendors placed order to us. Therefore, As I said earlier in that before, it is very close to the industry consensus for logic because of 5G remains very solid and we have memory demand added to that logic demand So we will see the reshaped recovery in the future. So we expect a lot for next year. I have one follow-up question. So you don't receive any orders or inquiries at all. Well, do you actually receive some orders inquiries? Yes, we do receive some orders. Thank you very much. Thank you very much. I am Yoshida from Deutsche Securities. For this fiscal year, on the you can see the new equipment sales focus by 6 months. Both foundry and logic, you can see drastically increase out performing market trend. That's to say in your presentation. But by product, are there any specific product which drives this increase, for example, EUV developer is a kind of driver. So because of that product, you can enjoy higher sales increase than other competitors. Is that correct? Sales of every application is expected to increase from the first half of this year and second half of this year for EUV Last year, that was a quite big investment, but not only for CPU, for high performance computing, we do need to have quota developer for the existing device nodes as well. So we do have the quota developer for EU Villasawwafi, but we also have the court inquiry for quota for existing conventional quota developed as well. And industrial and automotive application, for example, European customers. There is some increase in trend of the months basis. So when you look at competitors for memory, on the current databases for 2019, so there is rather flat trend between first and second half of this year. But for your fiscal year, you can see great increase in the second half of fiscal year because of the January, March period 2020 has a big contribution of the increase of the sales. Is that correct understanding? Yes, the gap of the 3 months between the calendar year, fiscal year should have a big impact. The customer tried to find out the right timing for investment. So there might be some gap or delay by 1 month or 2 months. For the quarter impact is rather big, in that sense, our competitors use its sales recognition standards based on the shipment, as you know, But in our case, we recognize ourselves based on the completion of setup and testing. Because of this difference in recognition, sales covency standards, the 3 months gap might be mitigated a little bit. So it's there is no big gap as 3 months, maybe the delay or gap it be 1.5 months? Is that correct understanding? Yes. Thank you very much. I am Umawa from Goldman Sachs, Japan. For the second half of this year, I have a question on the focus of this sales for memory. You expected you expect to increase from the first half of this year to second half of the year, but I want to understand the nature of this investment for NAND and DRAM is that the green field investment or investment conversion to the next technology node? So you are talking about the recovery timing of the memory investment, maybe in the beginning, the investment for convergence should be larger than the investment to the greenfield. That's what we expect for this fiscal year. If that is the case, in the second half, of this year. So conversion and greenfield investment will be coming up. But when you look at the ratio conversion investment to conversion is more than investment to the greenfield. Is that correct to understand? Yes, the major investment is for the conversion. My follow-up question is about the China local memory vendors. In the previous year, what is the proportion of their sales to the China local memory manufacturers and what is their contribution to the first and second half of this year? For the previous fiscal year, when you look at the appendix slide, Page 29, you can see the SPE sales to China. That was about 1,000,000,000 for actual basis. This is about China region, including the non Chinese IC vendors in addition to the China local IC vendors. For this fiscal year ongoing fiscal year, you can see slight decrease. Actually consolidated SPE sales also decreasing a little bit, but China sales to China declined a little bit, but that decline is not drastic. So there is no big difference between China and other regions in terms of the decreasing ratio. Next question, please. Yes, the gentleman next to the previous gentleman, please. Miamoto from Mitsubishi Gefemogen Morgan Stanley Securities. For slide 19, page 19, for current day year 2020, it's a bit too early to ask this question. So you said that there is a kind of big expectation for Logic, DRAM, nonvolatile memory, which device is most expected to grow rapidly it comes to the growth rate, which device is expected to grow most rapidly? 2020. Year 2020, right? Yes. Device is expected to grow. One moment please. ProLogic remains solid in growing, For memory, considerable increase is expected. For DRAM, 3 d NAND, both of them toward next year. In next year, you can see drastic increase. What's significant increase is expected. Last year, WFE Gartner said $59,000,000,000 if my memory serves. So that could be the good balance for calendar year 2020. Just confirmation, for DRAM this year, on Page 19 declined by 30%, non VATA Memory is it declined by 50%. But is it possible for those 2 devices to turn to the positive value? So what is level of recovery for both DRAM and nonvada memory. So the negative portion will be canceled. Is that what you want to ask? Yes, plus 30% and plus 50%. Is that correct and astounding? So it depends on customer CapEx plan, but we do have very similar fit into yours. But nonvolodial memory investment recovers more strongly because of strong decline in sales. Is that correct? Yes. So non flat, primarily investment recovery will start earlier than DRAM investment recovery. So I have the same question. Page 15, you can see the share by product, but toward 2020, which portion shows a drastic increase in share and which product doesn't grow so much. For Kota developer, we will maintain this high share level. That's what we expect. For itching system, for memory areas, we obtained some share. Last year, we won some share for memories, but actually For example, sleep processes and memory patterning processes, we gained some market share. However, that share increase contribute to the sales increase only partially. So when you see the investment in memory, you can see some increase. So we can expect a lot from etching system. For logic, for 5G, our share of itching system is rather high, and we can expect some demands for this year. And we don't have any pessimistic focused for future. I shouldn't say at all, but we have rather positive focused on perspective for the future of the market. For film Deposition System, for same batch system, we added some PORs last year. And that will be used for the high volume production. So you can see some increase also for cleaning system. Productivity is enhanced. That is one with a major challenge of the customer. And what is important is enhancement of E. O. In that cents, our company's bevel cleaning system. That application will be increasing rapidly, so expect a lot in this area as well. Therefore, our company's strategy, while my own strategy is to focus on the following areas, the areas where continuous technology innovation is expected and areas where new products are to be launched and areas where value added are provided and areas where market expansion is expected and areas, our companies know how or expertise can be utilized or leveraged. So these are our focus areas. And our strategies worked effectively. So toward next fiscal year, we do have the very positive perspective. Gentlemen, the top floor I am Mishina from Tokai Tokyo Research Center. On page 18, you explained the issue, demand demand is now increasing while the inventory will be decreasing. That's what you said. Yesterday and today, Intel made the financial announcement and demand from data center is not so good. That's what I heard. I mean, those circumstances, so non recovery comes rather fast, how do you view this trend? And in the future, why DRAM recovery is rather delayed? And DRAM recovery what sort of symptoms should we see to check or find out the recovery of DRAM demand? The memory inventory is decreasing. So this there are quite good adjustment going on at the customer sites for the capital investment. They do keep manufacturing anomalies, but supplydemand balance There are some shortage. So that's what we heard from our customers. And in the future, when we get into the data centric area, we will see 5G communication, high speed CPU, is to be increased, then large capacity, high resolution, high speed communication is necessary. In that word, high speed data consumption will take place. That's where memories demand are expected. Because of that non Vlada memory and DRAM for both of them, we will see the increasing trend in the demand. So I have one more question. For NAND, which is below cash cost. So none of NAND vendors are at making profit at all. So from the buyer's viewpoint, state NAND, which is below cash costs, we will not see any decline, further decline of the price of the NAND. That is the reason why NAND demand will be increasing. On the other hand, DRAM, every DRAM manufacturer enjoy 30% level profit margin. And DRAM price will continue decline in the future. How do you think about this market trend? There is demandable memory. And actually our customers are considering thorough about what you have set, and they are trying to find out what to do against that. In principle, memory demand is increasing. So each vendor tried to find out a good timing to accelerate their production. So we have a lot of expectations in this field. However, the inventory itself is being consumed Therefore, so demands and needs when demands and needs are increasing, I think the customer will we start, resume the investment once again. When it comes to the symptom or trigger to recover the investment, So the now you can see the inventory decreasing and the increasing number of buyers and NAND price will be below cash costs. So customer will purchase NAND even if the price is going up. So the trigger to see the recovery of investment is the improvement of supply demand situation. Is that correct understanding? Yes, I do not disagree with you. From the floor. Yes. The gentleman in the middle, please. I am Yamamoto from Mizuho Securities. I have very simple question. Could you me you are focused for SG And A expenses for the first half of this year and full year basis. For our forecast for this fiscal year, for SGA expenses, 2 1,000,000,000 on a full year basis, as you can see on the slide, at JPY 107,000,000,000 for the first half of this year. Second half of this year, JPY 114,000,000,000 to JPY 121,000,000,000 on the full year basis. Thank you very much. General reminder, front row, please. I'm Damien from Macro Capital Securities. I have a question. One question about field situation. I want to know about the forecast for this fiscal year, solution for SPE business, what is the level of your forecast? And also, additionally, Global Foundry announced to sell the FS to own Semiconductors. And because of this, there are quite a few used equipment coming out. Into the market. What sort of impacts does this announcement of global foundry have on talent fuel solution business. How do you view? I think there are some positive impact on our fuel business. How do you view this? As for your first question, Let me answer to your first question. That's our financial estimate. Field Solutions sales for this fiscal year is about JPY 278,000,000,000. WFE sales is expected to decrease by 15% to 20%. That's our forecast. But for this Fuel Solution Segment, the sale should be almost the same as the previous year. High level of sales is expected for field solution. I have one follow-up question. For the gross profit margin, what is the level of the gross profit margin? I'm sorry, we are not supposed to disclose our profit ratio sorry for that. For this used equipment for foundry for 300 millimeter wafer fab, that's of our global foundry announcement. They are going to sell their fabsip own SIM conductors and fixed solution. You have there might be some expanding opportunity for upgrade or modification of the equipment. In every area, there are some potential used equipment business. And we also have the parts business and parts business sales accounts for about 50% of the total sales of your solution. As you know, the number of the equipment installed this increase year by year increased this year and expected increase next year, and IO application, you have increasing opportunities for sales of used equipment and upgrade and modifications. So there is business opportunities for every area. So about your question, so there are so many factors to increased distribution sales on the steady basis. Any other questions from the floor? Yes, the gentle minder middle, please. Thank you very much for your presentation. I'm Suryura from Dallas Securities. I have a question of a gross margin. The Slide 21. 2nd half of this year, gross profit margin is expected to be 40.8%. You can see some improvement from the first half of this year to the second half of this year. However, still lower than the previous fiscal year. Towards the next fiscal year, if the utilization ratio will be improved. Do you think profit margin? Or in second half of this year, are there any negative temporally factors which suppressed improvement of the gross profit margin. So I want to understand why in the second half of the year there is no such great improvement in the gross profit margin. Maybe is it possible to come back to 41% level? Are there any potential for that? That one point level on a year on year basis, there are several factors. Number 1, customer mix. Number 2, product mix. And also next fiscal year, the market will be improving and we are getting into the further enhanced growth phase. Therefore, we can expect a lot and also our share will be increasing. So we are promoting for the application evaluation. We are doing a lot of promotion for application evaluation although top line declines a little bit, but we do carry out promotion and knees for upright enhanced performance, and there is the R and D expenses in cost of goods. So custom mix, product mix and further growth promotion for further growth and for upgrade, we have R and D expenses in cost of goods. So we are incorporating investment for next fiscal year. So that's the factors to impact this figure. Question, just clarification I want to get for 2020 WFE will be coming back to the level of fiscal 2018 So your profit gross profit margin or gross profit can be increased furthermore. Is that correct understanding? Yes. From slightly different viewpoint, I'd like to add some more comments over the past 2 to 3 years, we will actively invest in the facilities and human resources as well. For this fiscal year, we are now controlling the investment to resources. And we can see some increase of the human resources The cost of the resources added last year will have impact on our gross profit margin throughout this year. That is one of the factors to reduce the profit margin. But if next year, we will see the increase in sales, we can see the increase in trend of the profit margin as well. Now we have the new financial model. We'll meet, business plan. And when you based on this midterm business plan, we are now implementing activities. So from the viewpoint of the operating income, operating income is expected to improve. So together with coupled with the operating income, not everything is coupled with that, but even for the gross profit margin. As I said earlier, is expected to increase or improve for the future. Any other questions? We do have 10 more minutes. So maybe you can ask the second question, if any. Yes, please. Thank you very much. I'm Christina from Talkite Total Research Center. I have a question for FPD on Page 16. You can see the FPD business highlights on Page 16, when I look at the industry, large panel, like G10.5 Hey, Faye or China star operates the factories for JPY 10.5, which was good, but for JPY 65,000,000,000 in panel used to be $400, but now $200. So they cannot make any profits at all with that level of the price. So 10.5g101.5 factory the every many of the panel manufacturers try to change a reaction. Demo cell carcinoma for silicon cannot be used any longer need to be changed or replaced by this oxide. So many of the leading companies try to stop the production of G10.5 shifting to the G8.7 and probably I don't think there is any big impact on your business, but how do you view the investment to the large size panels, there's some change in direction. So on the other hand, size of number of masks will be increasing. That create some business opportunities for you. How do you think about that? It is true that J10.5 needs is rather high right now. However, according to your question, so what happens if the demands one is for GPN.5 is declining. So PICP, the plasma control, technology do have the high advantages and our customer appreciate that technology a lot. And not only for G10.5, that technology can be used in various applications. So PICP plasma Technologies can be used not only for itching system wide technology. But when we have the processes without using hydrogen, this technology can be used in various manners. And For each application, we are now preparing for the launch of the new products, right now. In that sense, the high definition panel, flexible panel for different viewpoint we think the ongoing technology innovation, and we are now preparing for that technology innovation. So we should not rely only on DG can point 5 when we prepare the strategy and prepare for the future market trends. Thank you very much. I am Madaki from Murata Securities. I also have a question for FPD. In 2019, there are quite a few investment plan for the small and medium sized panel, but there's only one now that are pushed out to 2020, but recently China Star BOE Tiamma and Visionox, all those companies made some announcements. So maybe you can see some symptom recovery for the small and medium sized panels that what I expect. But what do you think about that for the generation 6 panel? I, myself, not talk with customer directory, but there are quite a few CapEx plans for the small, medium panels So maybe you can see some recovery in long term. So we our company has fact trees in many places, including Kunshan, for example, And the utilization ratio of those factories are now improving. That's how I can answer to your question. And for small, medium sized panels, there is a means for gaming, e sports. I think that is increasing trend needs over there. That's what we can some increased recovery. Any other questions from the floor? Since there is no more questions, this concludes our financial announcement. Thank you very much for joining us despite a very busy schedule.