Earnings Call: Q3 2019

Jan 31, 2019

So now it's time for us to start to go electron financial announcement for the third quarter of the year ending in March 29 team. Thank you very much for joining us despite a very busy schedule. I am yet so the of IR department acting as a moderator for today's meeting. Now I'd like to introduce the attendees from our side. First, Mr. Tittsuneshi, Representative Director, Chairman of the Board. Next, Mr. Toshiki Kauai, Representative Director, President and CEO. And Mr. Ken Sasagawa, vice president accounting department. So first of all, Mr. Sasagawa, our vice president accounting department will give you the presentation on the consolidated financial summary. Good afternoon, ladies and gentlemen. Thank you very much for joining us despite her very busy schedule. I am SAS Agawa taking care of accounting department, So I'd like to make a presentation on the consolidated financial summary for the third quarter of year ending March 2019. Here you can see the financial summary. The up to 23rd quarter, the accumulated sales was hit the record high, thanks to the market growth and our market share growth, a 1,000,000,000 net sales for 3rd quarter decreased by 32.2% from 2nd quarter 1,000,000,000, the major reason for that are to be explained in next slide or latest slide The gross profit was JPY 109,700,000,000, gross profit margin was 14.9 percent SSG and A expenses was 1,000,000,000, including R and D expenses of 1,000,000,000. As a result, operating income was 700,000,000 net operating margin was decreased by 4.1 points from the previous quarter achieving 21.9%. Because of the decline of the sales, the ratio of the R and D expenses and SG and A expenses is increasing. These are useful as upfront investment for the growth of the next fiscal year. Income before income taxes was JPY 60,500,000,000. The bottom line net income attributable to owners of parent was JPY 48 point 8,000,000,000. This slide shows financial performance in the graphical representation. So I don't have to add any additional explanation for this. Next slide, please. Now you can see segment information. The third quarter SPE profit margin because of the declining sales we are now actively investment for the future growth and because of that ratios of R And D AC and expenses increases, because of that profit margin declined, spent same for the SPD because of the decline in sales, profit margin declined as well. But actually the profit margin is has already achieved our target profit margin planned in our midterm business plan and competition that net sale is shown over here on the right hand side of this slide. This slide shows SB division, new equipment sales by application. In the third quarter, memory composition is rather high around 73% for logic in the 2nd quarter, we had large amount of sales recognized because of that, composition of logic is rather low in the third quarter. However, customers' investment is relatively stable. As for the fourth quarter, we are expecting increasing sales by application as well for the 4th quarter, memory and logic foundry together expected to grow in the 4th quarter. Now this slide shows SPE sales by region. The 3rd quarter SPE sales compared with the previous 2nd quarter decreased by 1,000,000,000, especially in Korea and Taiwan sale for memory declined. In the European and America, the logic sales was recognized in larger amount in the second quarter because of that tentatively third quarter sales is rather small. This slide shows sales of the fuel solution. As you can see, sales fluctuate vary slightly contributing to the profit. On the quarterly basis, parts sales is increasing from quarter to quarter. When you look at the total sales, but feel so do as you can see over here because of the fluctuation of the sales of the used equipment notification that has some fluctuation for the total sales. The full year sales estimate is JPY 275,000,000,000 and we are proceeding steadily as planned. This shows balance sheet. On the left, you can see assets. The total was JPY 1,971,400,000,000. Which is decreased from the end of second quarter by JPY 67,100,000,000. The major closes for this on the top of this backlog, cash and cash equivalent decreased by JPY 82,600,000,000 from the 2nd quarter. Mainly for the payment of the dividends. Next, inventories, increased by 1,000,000,000 from the 2nd quarter and this is for the expected growth of the 4th quarter sales. On the light, you can see liabilities and net assets for the liabilities which is decreased by JPY39.4000000000 from the second quarter, including the income tax payable reduction. And also interim corporate tax payment November 2018 is a major reason and also bonus payment was another cause for the reduction of the liabilities. This shows inventory turnover and accounts receivable turnover. Let me start with the inventory turnover. Which is shown on the upper line, 102 days. And turnover was decreased by 6 days from the second quarter because of the reduction in sales in third quarter and expected growth of sales in fourth quarter the inventory turnover is increasing right now. As for the account receivable turnover, which was 40 days, as you can see over here, that you can see the improving trend over the quarters. This is my last slide. Cash flow is shown over here. As you can see, the 3rd quarter cash flow from operating activities were negative figures. The reasons include the decline of the sales and income before income tax are lower than the previous quarter. And also, this is a specific reason for the third quarter, the because of the payment of the interim corporate tax in Japan, and also increase of inventory and bonus payment are also the reason for this reduction on negative figures in the 4th quarter. The cash flow from operating activities is expected to grow drastically. 3rd quarter, when you look at the cash flow from financing activities, which was negative 1,000,000,000 because of the payment of the dividend. Thank you very much. That's all from my side. Now net Mr. Kawai, CEO, will give you the presentation on business environment and financial estimates. So Mr. Kawai, please. Good evening ladies and gentlemen. Once again, thank you very much. For joining us despite to a very tight schedule. I really appreciate your continuous cooperation and support for this year. Let me make presentation on our business environment and financial estimates. First of all, this shows business environment for SBE. 1st of all, Colon Dyer 2019 investment is expected to decline by 15% to 20% on year on year basis due to weaker demands for memory and the US China trade restrictions, though the CapEx for logic foundry will recover. Although capital investment in the first half of this year will be suppressed and as you know and many people say that it is expected to pick up from the second half of the year. And I got the same feeling for that. For FPD production equipment CapEx for TFT Array Process The calendar year 2019 demand for FPD production equipment is expected to drop by about 30% on the year on year basis. Investment for OLED panels used to in mobile applications will be we because of the mobile application is rather slow, but investment for large sized panel production will also be adjusted. The macro economy and US China trade friction also has some impacts because of that, the reduction about 30% is expected from the previous year. This shows the WFE market and business opportunity by application in calendar year 2019. For logic and foundry, About 25% increase is expected on year on year basis. Transition to the net generation will drive the capital investment. And capital for device node of 10 nanometer and beyond will accounts for 50%. And pilot line investment is expected start on the customer side. I mean, those circumstances, there are some business opportunities for businesses, if expansion for the increasingly complex patterning. We have the very wide product portfolio, including kota, etcher, cleaning machines and film deposition machines. And we are prepared for the customer evaluation for those systems. DRAM About 30% drop is expected on a year on year basis. The market condition CapEx for the 1y and 1z nanometer generation will account for 6% or more investment for the device shrink will be majority for the opportunity, the differentiation in the leading edge device nodes is really an opportunity, including combined patterning and integration process. So over the past few years, The courier is the major market for DRAM and we increased our share for EHA. And this year, we tried to ensure will solidify our position in this market. For the non volatile family, about 50% line is expected on the year on year basis. The CapEx for the 9x12x generation accounts for 80% or more. So for DRAM investment for the device drink is the majority and Novata memory, the investment for the multi layer stuck should be the majority. And we can see opportunities in differentiation in high value added etching and cleaning process. In particular, hark process and high aspect ratio, we can improve the hedging rate to improve productivity and also high controllability of patterning. In this way, we try to obtain the POR so that we are going to prepare it for the expected recovery of CapEx from the second half of this year. Next, SP business progress in year end in March 2019 from first quarter to 3rd quarter, obviously actual accomplishment. By and large, sales of strategic product grew proceeding steadily to our called in the year 2018 short target. And PORs in the next generation devices in the focus area including itching, film deposition and cleaning are advancing as planned. In particular, for processing integration, we proposed processing integration, which contributed to the increase of PORs for critical modules Device performance and yield have been improved through the mutual optimization of etching, cleaning and film deposition. These are the accomplishments. In particular, lithography, etching, film deposition and creaming, we have all of them. And Telco Elextron is the only company in the world to have all of those. So the mutual optimization will help the industry to improve device performance and yield, which is really high values for us. So we need to obtain PRs in those area and we try to use our combined technology and establish more solid position in the market. At the same time, the customer are developing next generation devices and they can carry out in situ adjustment leading to the early stage evaluation by providing mutual optimization. From that viewpoint, we'd like to focus on this area. Field Solutions Business has expanded, thanks to the expansion of the IoT application and increase of installed equipment base, as Mr. Sasagasir earlier about the fluctuation of the sales of solution business, the second quarter of this fiscal year, we enjoyed drastic increase of sales for field solution business. 3rd quarter compared with 2nd quarter, you can see slight decline. However, as far as fuel solution business concerned, even for the third quarter, we can get closer to the sales of 2nd quarter. So this business is growing to the very stable profitable business for us. Expansion of the Miyaghi factory now the our new development building was completed in October, and now we have dual lines completed in November this year. So that we can meet For FPD business progress, there are 2 highlights. The first one is the sales of equipment for G10.5 Rude as planned. And second issue, We have launched new products and already got new orders for those new products. G1015 plasma HR, PICBA Chink, and as for the OLED display, for R and D purposes, we already got the orders for G4.5 inject printing system. We expect record high 4 year sales and profit margin growth as planned in line with our midterm business plan. Now you can see the financial estimates for fiscal 2019, this estimate remain unchanged from the previous announcement on October 31, 2018, things are going as planned. Here you can see the SP division, new equipment sales focused. Actually, actual up to to your 3rd quarter and the forecast for the 4th quarter. There is no major change in composition and we don't have to change the second half plan for this. This slide shows for this fiscal year, R and D expenses and CapEx plan. Again, there have been no changes from the previous announcement on October 31, 2018, We will continue upfront investment to achieve our midterm business plan and to seek further growth. This is my last slide showing the dividend forecast. Again, there is no change for our shareholder return policy, the focus for year end dividend remain unchanged from the previous announcement. From now on, we'd like to promote our profits so that we can improve the our show holder returns. Thank you very much for your kind attention. This concludes my presentation. Now I'd like to entertain question from the Could you identify yourself by your name and affiliation? And today's meeting will be uploaded to our Web slide. So could you speak your questions clearly and precisely? Could you raise your hand if you have any questions? Yes, the gentleman on the front Should please? I am Madaki from Nomura Securities. Thank you very much for your very active presentation. And I have one question Actually, the industrial environment is not so good, but there are many symptoms coming up for the expected recover on the second half of the year, do you detect any positive symptoms? Could you share with us about some positive symptoms? So what we expect a lot is in memory areas last week. There was semicon Korea, which was really active and our booth was booming, thanks to so many visitors. And I talked with top management of our customers there in Semicon Courier, And actually, in the industry, people say that some say about the directions and also top management of the customer have the very similar focus for the future trends. And about the timing of the recovery and people are now wait and watch the timing and we are supposed to be prepared for the on time delivery and we need to be prepared for that very carefully for that. Generally speaking, 5G and DRAM price reduction, because of that, people say the demand for data center might be recovering and shortage of CPU can be recovered a little by little for the future we'd like to expect a lot for the second half of the year. The largest market, which is in Korea and people have the very similar prospects for the future as ours, and we got the very similar in from the top management of the Korean customers. And I think that is positive symptoms in the market, follow-up question, So they every week you can see good news last week in Korea, the Samsung may have the drastic plan for the CapEx. That's one of the news from last week. And actually sometimes accelerate or distill the investment all absurd, but how do you think about that? Do you think Samsung may have some plan for drastic investment? Actually, this is the decision made by the customer top management. So I have no idea for the estimate for their decision. Thank you very much. Thank you very much for your question. Next question please. Yes, the gentleman in the second row, please. I mean, yeah, Motto from Mitsubishi, FJ Morgan Stanley Securities. On Slide 15, you can see the growth leg by application, I want to know the money basis or month basis for logic foundry memory, non VADA, memory for 2019, what sort of, focus do you have? What is the level of the denominator a pie size. I think that are various forecasts, but let's say 10% to 15% group negative growth So maybe the denominator should be JPY 45,000,000,000 if that is denominated. What is the composition for all those applications? So your question is about so now you can say declining trend, and I'm asking about the total amount of WFE market. So I want to know the size of WFE market, and I to know the composition in terms of money amount for LogicFoundry, DRAM and non volatile anomalies? That's my question. So figures from previous year, I think you do have some prospects for maybe 15% to 20% reduction from that previous year's forecast level. About JPY 50,000,000,000, and my understanding is maybe 60% for logic and 40% for memory. So logic is a slightly more than memory. That's the that's filling of mine. Thank you very much. So WFE market size in 29 team, based on that, what is your company's profit ratio? Could you let me know the range of profit ratio based on your midterm business plan. Do you have any idea for that? What is the level? Actually, we are pursuing midterm long term growth from second half of this year to next year, we can see some expectations. For this year, for next fiscal year, we are now preparing the budget for next fiscal year. So we are now discussing the values or budget for next year. So we don't have any specific value for the profit margin. We are now investigating those figures. Thank you very much. Next question, please. Thank you very much. Representation Agiosheda from Deutsche Securities. About the WFE market prospect of forecast. This year declined by 15% to 20% when you divide into first half and second half, the second half of twenty eighteen compared with that, what will happen in the first half and second half of twenty nineteen, I would like you you to give me some image of future recovery. As I said in my presentation, I talked about the business environment, the first half of this year 2019, the market is rather suppressed toward the second half of this year, the market is picking up. Prior to publication investment to memory, will be weighted more in the second half of this year. That's what your competitor said, memory in the second half, foundering logic in the first half, how do you think about that? For logic, relatively speaking, logic is getting stronger, and investment in pilot pilot line will be increasing. So from the first half to second half, project investment remained very strong. As I said earlier, 15% to 20% decline as for DRAM So for DRAM, we just included the investment for the device shrink, but we might have some capacity investment for DRAM as well. But we don't have so much, expectations for the investment for DRAM capacity increase. So in that sense, post logic and memory investment will be increasing or picking up in the second half of this year. In other words, first half of the market remained rather flat suppressed. And one follow-up question, may I ask for this? Fiscal year. I think that's getting visible for the sales But how do you think about the progress of the shipment? We got some explanation earlier. For the fourth quarter, I talking about the 4th quarter. In my presentation, on page 20, Is it correct? New equipment sales forecast. It is shown over here for the 4th quarter forecast. This is the page we already shipped 60% of this forecast for the 4th quarter. Next question, please. Yes. The gentleman on the 2nd row, please. Damian Tonge from Macquarie Capital Securities. I have one question about field solution sales for this fiscal year. That is larger than the previous year, but what it's about forecast for next fiscal year based on the current trend, how much size is expected for next Again, just like the new equipment sales, we expect a lot for this as well. But currently, we are now working on the budget preparation and we don't have any finalized budget fiscal year forecast. I think there is some drop in the 4th quarter, but 1st quarter, 2nd quarter and 3rd quarter, that was rather good, especially for the fuel solution business for SPE, but what is the reason for that drop in the 4th quarter? Excuse, I mean, your question is about field solution business in this fiscal year the 4th quarter forecast. Is that your question? So SPE fee solution 265,000,000,000 The average of the second and third quarter is higher than JPY 70,000,000,000. So according to my calculation, 4th quarter is 1,000,000,000. I don't know the details, but this fourth quarter, are there any reason for the decline in the fourth quarter? I feel solution. Business is better than your expectation. Yes, food solution business, we can enjoy very steady progress and 4th quarter food solution business is expected to be very good. So new equipment sales will drop in next fiscal year, but you can see increase in fuel solution. Sir, could you say that again, please? So next year, market is expected to decline, but are there any possibility that so you business will be glowing next year? Yes. That's possible. May I say something to add? So for this fiscal year forecast for field solution business. In up to the 3rd quarter, the accumulated actual is about 77% of the budget. So food solution business has been growing steadily, so we don't see any factors to suddenly stop this momentum. In particular, parts business is growing steadily. So next year, fuel solution business grows steadily. Next question, please. Thank you very much. I am Hirogava from Merrill Lynch Japan Securities earlier for 2019 WFE market by application and in particular, logic it to grow in 2019. That's what you said earlier, but your target market how much WFE growth is expected. If you have any figures or some image, could you share your image with us, please? That's my first question. So it is possible for us to outperform the market growth, our company, as I said earlier, several times, We are we have several focus areas where we can make best use of our technology where technology innovation is expected continuously and also market expansion is expected to continue So these are the area we try to focus our efforts on. So for the future, for logic and foundry. More and more device shrink is to be pursued below 10 nanometer 7 nanometer and 5 nanometer. For evaluation or R and D, the customers are working on much smaller device miniaturization and our product value added will be increasing furthermore. As I said earlier, we can provide mutual optimization of our different product portfolio etching, cleaning, film the position by adjusting those things, the value added is increasing to improve yield and also approach to device shrink, those mutual optimization is getting more and more important and we are very active in that area So compared with the journal devices, I think we can outperform market growth. That's how we view the market trend. Just for clarification, I want to get part of the market, especially beyond 2019, because of the introduction of EUV, non AOB product market might be negatively effective, if I affect it. Detailed has quota developer for the AOB Resoglafi, but including that, So 2019, the logic foundry increases in the market and do you think the further growth is expected for your products in 2019 and beyond. Is that correct? Yes, thank you very much. Next question please is, I'm Nakano from Jefferies Japan Limited. I have one question. For the second half, you can see the sales composition application, and there have been no changes from the previous announcement. That's what you said. But in industry, people said, memory pickup is delayed, but by and large, How do you view? So you are reaching our focus was rather conservative was for the sales in the second half of this year, it's not so much affected. Could you give us some comments on that issue, please? So could you repeat that question once again, please? I was not able to understand what's the repetition in the industry So the memory investment plan is being delayed, actually it has been delayed. I think But there is another delay for memory investment plan compared with 3 months forecast, and there is no change in your competition. How do you think about that trend. After until this March, this fiscal year, for the sales, we do adopt the criteria of completion of setting up and testing. So on the quarterly basis, you can see some decline in the third quarter, but you you will see increase in sales in the fourth quarter. That is because of the contribution of the sales increase of memory And also there are increase of the logic in the Europe and America. So impact is very limited for the near future sales forecast. Thank you very much. So we don't use the shipment based criteria. We use the criteria of completion of setup and testing. That could be one of the reasons for that. Thank you very much. Amishino from Tokai Tokyo Research Center. So recovery expecting second half of this year, I think many people recently talk about that pick up in the second half, the investment to the WFE. So when you went to Korea, and could you share your idea with us, please? If you have some discussion, so the driver of the demand should include smartphone or data center. So those are the final driver of the investment into the WFE but recently recently, I see vendors for data center say data center demand is getting weaker. Well, because of the US China trade trade friction, the Chinese smartphone manufacturers have some difficulty to sell their products in European markets. But from the viewpoint of the final consumption, How do you view the investment, including the Korean market? Do you have any idea? And could you share your idea with us, please? That, several factors. I don't know if this is correct answer to your question or not. So one thing, for example, 3 d NAND, the bit growth exists, but this time, there is a major change is the transition, what changed in structure from 2dto3d. And now we have 3 destocking, yield enhancement, productive enhancement. So 3 d NAND bit growth there are some factors to drive the increasing trend. And there are some tentative peak. So tentatively, we see some peak in the bit growth. That's what I heard, not only in Korea, but also in other countries as well. That's one thing After a while, when things are stabilized, then you can see another increase of demand starting that should be the trend for the future are present. When I look at the final products, data center, and 5G applications. And as for the data center you mentioned, In EU, there is stronger or stricter regulations on the private information handling, and we need to have a close look at that trend and for DRAM, you can see the increasing demand and we need to look at the ROI and high speed CPU, high speed communication server release is now being waited So there are various factors. So if those things are getting stabilized, And also for the smartphone, and CPU shortage will be corrected in the future. From the viewpoint of the memory. Thank you very much. So you talked about high speed server for data center. So called Gaffer, they think existing specifications are rather problematic because of very, very high power consumption. So GALFA, those companies tried to revise data center system to develop new system. So there might be drastic change or replacement of the system to new and within this this year. So there might be some demand for replacement of the system in data center. So I think system change should be the very big issue for GALFA Have you heard of that issue as well? We didn't heard such kind of specific topic. Thank you very much. Thank you very much for your question. Next question please. Yes, the gentleman in the front row, please. Thank you very much. I'm Ali Tommi from 0.72 Asset Management. Earlier, you talked about your comment or viewpoint of FPU by application was very easy to understand, but by area, how do you view the WFE market, United States, Korea and Taiwan? I think we can expect some to some extent, but when it's to China, in particular, memory or native memory, And how do you view the trend in China for 2019? Again, the U. S.-China trade friction might have some impacts in 2019. And the actually there is the impact of that. And to prepare for that, Chinese customers. Are now carrying up some review. Therefore, for China I think there is a general trend of growing, but there are some revision or review of their current plan. Last year from summer last year, I think there are some visible impacts in the market. Actually, there are impacts actually in China. Specifically to what extent impacts will be going on, how much impact do you expect? Do you have any comment on that? I think it depends on customer. And also political issues are involved, so it's better not to think so much about impacting that area. For me, for year 2019. Actually so far the market has been growing drastically with very high speed, but now it is good timing for us to be prepared for the future growth on the midterm long term basis we need to make between China and U. S. Is one of the topics. But for that issue, we need to be prepared to take appropriate action at appropriate timing. So we need to enhance our overall structure in this year. Yes, the gentleman in the front row, please. I am I Bharr from Nomura Asset Management. Thank you very much for presentation. For first of all, for 2019, the FWE market will be declined by 20 sent going below $50,000,000,000. So now we are facing down term Although tell is outperforming market growth, but actually, market itself will be in the downturn trend. Is it possible for you to realize or achieve your financial model? Mr. Sisargawa, I have one question to you. To intend to suppress or reduce SG and A expenses and also for R and D expenses, there are increasing number of items to for R and D, but if you increase R and D expenses, you may hit the very same program. So next fiscal year 2019, the market is going into downtown trend, but how do you think about your company's financial model. So as we presented the financial model for year ending March 2021, we do have some time about 2 years to go by the end of this financial model. So we are thinking about the growth of the company and also the further growth beyond ending in March 2021. And now you can see the potential growth of the market. So we need to incorporate mid term, long term market growth. So all top management of our company is determined to pursue the original plan of R&D issues and also some new items for R&D, we will not decrease or suppress R and D expenses. That is a basic position of TEL that is because we want to pick up our momentum But of course, we need to control our company's profit margin. But as a company, we have many resources including human resources size, development and capacity increase. So this year, we are investing quite large amount of money for those resources and I think basic sense remain unchanged for next fiscal year, but how much profit margin it is necessary? Now we have 2 months before we complete next year budget, but we try to satisfy the market expectation so that we can set the appropriate target of the profit margin by theendofMarchthisyear. Thank you very much. My second question, may I ask another question? It's just out of curiosity, I want to ask one question to you. Samsung Financial Announcement. So in some time, the DRAM or NAND market will recover a pickup, which comes fast in recovery, I have no idea for that. Almost the same timing, that could be the truth, but due you said the market will start picking up in the second half of this year, but which comes first, DRAM or NAND, I have no idea So that some shift by quota or 6 months, also customers present are investigating the possibilities. That's the current status. I have no idea about the timing, but I'm sure they are picking up sometime. Almost the same timing. Is that right? There might be some close to each other. Thank you very much. Thank you very much for your question. Any other questions from the floor? We have 10 minutes to go. So you may ask second question if you have Could you raise your hand if you have some additional questions? Yes, the gentleman in the middle, please? Thank you very much for your presentation. I am Sugira of dialer securities. I was a bit late, so you may have made comments already. I'm sorry for that, if any. So now WFE DRAM is expected to decline by 30%. If that is assumption, the DRAM bit pay supply capability, what will happen to that? How much increase do you view for year 2019? Mr. Kawai earlier set in the second half of this year, DRAM recovery is not incorporated in your focus on WHE market. That's what you said earlier, but DRAM bit demand is still below the DRAM supply. Is that how you view the market trend? Could you share your idea with us please on the regard? I think bit growth is steadily increasing about 20%. So three d NAND of a 40% growing ratio So I think the steady growth is expected continuously. That's how I review the market trend. Sorry, are you talking about the supply side or demand? I talked about the DRAM bit growth, demand increase, Yes, the scrap demand increase. And in second half of this year, you don't expect any drastic recovery. That means the DRAM supply capability will be increasing. So all the supply condition will remain Also in the second half of this year, or are you conservative right now and you don't expect any big recovery Could you give me some specifics, please? Yes. I think growing trend remains unchanged. And the leading memory device manufacturers have different strategies and macroeconomic factors also impact the market. So business viewpoint and macroeconomic viewpoints So we need to think about those 2 and customer tried to find out the timing of decision. But in the major trend, We need to communicate with our customers and my precisely to find out the right timing to understand the decision or trend of the customers. Thank you very much. Thank you very much for your question. Are there any other questions? Yes. Second question, sorry for that. I'm Mishino from tokai Tokyo Research Center. Not SPE, but I have a question on FPD it on slide 14, you said that for this year, demand is expected to reduce by 30% on page 14. From second half of this year, some recoveries expected. That present, mobile OLED or live site panel are under adjustments. That's what you said in your presentation. But second half of this year, you are expecting some pickup or recovery. What is the direction or more precise contents of that recovery if you can say something that. Could you share your idea with us, please? So now we have some adjustment for the large size panel demands is higher than the mobile demands in the market. There is relatively big demand for the life size panels. However, as I said earlier, because of the macro economy factors, and US China trade friction. Now our customers are revising the investment into the large panel lines, but they may have some idea what to do and we are expecting our customers their investment plan in the second half of this year. Thank you very much for your question. Any other questions from the floor? Yes, the gentleman in the front row, please. Yoshida from Deutsche Securities. I have one question to get some clarification for memory. For 2019, WFE, for NAND, it's expected to decline by 50%. DRAM expected to decline by 30%. As for capacity increase, investment for DRAM investment is expected to pick up in the second half of this year, but that portion is not incorporated in your forecast. That's what you said earlier. In that sense, DRAM has more room for upward revision, but NAND may take some more time to start recovery. Is my understanding correct? My question is very similar to the previous answer which comes first. You're asking about that I have no idea which comes first. It really depends on the decision made by the customers. Earlier, you talked about DRAM as an example, but same thing can be applied for NAND. Or did you just think about DRAM when you answered to my question earlier? Both have possibilities. Thank you very much. Thank you very much for your question. Are there any other questions from the floor? Okay, there are simply no more questions. That concludes our financial announcement. Thank you very much for joining us today despite to a very busy schedule. Thank you very much.