Now it's time for us to start Tokyo Electron financial announcement for the third quarter of the year ending in March 2019. Thank you very much for joining us despite your very busy schedule. I am Yatsuda of IR Department, acting as a moderator for today's meeting. I'd like to introduce the attendees from our side. First, Mr. Tetsuo Tsuneishi, Representative Director, Chairman of the Board. Next, Mr. Toshiki Kawai, Representative Director, President and CEO. Mr. Ken Sasagawa, Vice President, Accounting Department. First of all, Mr. Sasagawa, 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 your very busy schedule. I am Sasagawa, taking care of Accounting Department.
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. Up until third quarter, the accumulated sales hit the record high, thanks to the market growth and our market share growth, achieving JPY 959.2 billion. Net sales for third quarter decreased by 32.2% from second quarter, JPY 268.1 billion. The major reason for that are to be explained in next slide or later slides. The gross profit was JPY 109.7 billion. Gross profit margin was 14.9%. SG&A expenses was JPY 51 billion, including R&D expenses of JPY 26.5 billion. As a result, operating income was JPY 58.7 billion. 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&D expenses and SG&A expenses is increasing.
These are used for as upfront investment for the growth of the next fiscal year. Income before income taxes was JPY 60.5 billion. The bottom line, net income attributable to owners of parent, was JPY 48.8 billion. This slide shows financial performance in the graphical representation. I don't have to add any additional explanation for this. Next slide, please. You can see segment information. The third quarter SPE profit margin, because of the decline in sales, we are now actively investment for the future growth. Because of that, ratios of R&D and SG&A expenses increases. Because of that, profit margin declined. Same for the SPE. Because of the decline in sales, profit margin declined as well. Actually, the profit margin has already achieved our target profit margins planned in our midterm business plan.
Composition of net sale is shown over here on the right-hand side of the slide. This slide shows SPE division new equipment sales by application. In the third quarter, memory composition is rather high, around 73%. For logic, in the second 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 fourth quarter. Memory and logic foundry together expected to grow in the fourth quarter. This slide shows SPE sales by region. The third quarter SPE sales, compared with the previous second quarter, decreased by JPY 118.5 billion, especially in Korea and Taiwan, sales for memory declined. In the European and America, the logic sales was recognized in large amount in the second quarter.
Because of that, tentatively, third quarter sales is rather small. This slide shows sales of the field solution. As you can see, sales fluctuate very stably, contributing to the profit. On the quarterly basis, part sales is increasing from quarter to quarter. When you look at the total sales of field solution, as you can see over here, because of the fluctuation of the sales of the used equipment and modification, there are some fluctuation for the total sales. The full year sales estimate is JPY 275 billion, and we are proceeding steadily as planned. This shows balance sheet. On the left, you can see assets. The total was JPY 1,971.4 billion, which is decreased from the end of second quarter by JPY 67.1 billion.
The major causes for this, on the top of this bar graph, cash and cash equivalent decreased by JPY 82.6 billion from the second quarter, mainly for the payment of the dividends. Next, inventories increased by JPY 24.2 billion from the second quarter. This is for the expected growth of the fourth quarter sales. On the right, you can see liabilities and net assets for the liabilities, which is decreased by JPY 39.4 billion from the second quarter, including the income tax payable reduction. 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. Turnover was increased by six 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 accounts receivable turnover, which was 40 days, as you can see over here, 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 third quarter, cash flow from operating activities were negative figures. The reasons includes the decline of the sales and income before income tax are lower than the previous quarter. This is specific reason for the third quarter. 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 fourth quarter, the cash flow from operating activities is expected to grow drastically.
Third quarter, when you look at the cash flow from financing activities, which was negative JPY 67.8 billion because of the payment of the dividend. Thank you very much. That's all from my side. Next, Mr. Kawai, CEO, will give you the presentation on business environment and financial estimates. Mr. Kawai, please. Good evening, ladies and gentlemen. Once again, thank you very much for joining us despite your very tight schedule. I really appreciate your continuous cooperation and support for this year. Let me make a presentation on our business environment and financial estimates. First of all, this shows business environment for SPE. First of all, calendar year 2019 investment is expected to decline by 15%-20% on a year-on-year basis due to weaker demand for memory and the U.S.-China trade frictions, though the CapEx for logic foundry will recover.
Although capital investment in the first half of this year will be suppressed, as you know, many people say that it is expected to pick up from the second half of the year, 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 expected to drop by about 30% on the year-on-year basis. Investment for OLED panels used in mobile applications will be weak because of the mobile application is rather slow. Investment for large-sized panel production will also be adjusted. The macroeconomy and U.S.-China trade friction also have some impacts. 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 next generation will drive the capital investment. Capital for device node of 10 nanometer and beyond will account for 50%, pilot line investment is expected to start on the customer side. Under those circumstances, there are some business opportunities for business expansion for the increasingly complex patterning. We have the very wide product portfolio, including coater, 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 the majority. For the opportunity, the differentiation in the leading edge device nodes is really our opportunity, including combined patterning and interconnect process.
Over the past few years, Korea is the major market for DRAM, we increased our share for etcher. This year, we're trying to ensure or solidify our position in this market. For the non-volatile memory, about 50% decline is expected on the year-on-year basis. The investment here, the CapEx for the 9X and 12X generation accounts for 80% or more. For DRAM, investment for the device shrink is the majority, non-volatile memory, the investment for the multilayer stack should be the majority. We can see opportunities in differentiation in high value added etching and cleaning process. In particular, HARP process and high aspect ratio, we can improve the etching rate to improve productivity, 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. SPE business progress in year ending March 2019, from first quarter to third quarter, you can see actual accomplishment. By and large, the sales of strategic product group proceeding steadily toward calendar year 2018 share target. PORs in the next generation devices in the focus area, including etching, film deposition, and cleaning, are advancing as planned. In particular, for process integration, we propose process integration, which contribute 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 cleaning, we have all of them. Tokyo Electron is the only company in the world to have all of those. The mutual optimization will help the industry to improve device performance and yield, which is really high values for us. We need to obtain PORs 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. 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 solution business has expanded thanks to the expansion of the IoT application and increase of installed equipment base.
As Mr. Sasagawa said earlier about the fluctuation of the sales of field solution business, the second quarter of this fiscal year, we enjoyed drastic increase of sales for field solution business. Third quarter compared with second quarter, you can see slight decline. However, as far as field solution business concerned, even for the third quarter, we can get closer to the sales of second quarter. This business is growing to the very stable, profitable business for us. Expansion of the Miyagi Factory. Our new development building was completed in October. We have dual lines completed in November this year, so that we can meet the future growth of the demands. For FPD Business progress, there are two highlights. The first one is the sales of equipment for G10.5 grew as planned.
Second issue, we have launched new products and already got new orders for those new products. G10.5 plasma etcher, PICP etching. As for the OLED display, for R&D purposes, we already got the orders for G4.5 inkjet printing system. We expect record high full year sales and profit margin growth as planned, in line with our midterm business plan. You can see the financial estimates for fiscal 2019. This estimate remain unchanged from the previous announcement on October 31st, 2018. Things are going as planned. Here you can see the SPE division new equipment sales forecast. Show the actual up until third quarter and the forecast for the fourth quarter. There is no major change in composition. We don't have to change the second half plan for this. This slide shows for this fiscal year, R&D expenses and CapEx plan.
There have been no changes from the previous announcement on October 31st, 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 forecast for year-end dividend remain unchanged from the previous announcement. From now on, we'd like to promote our profit so that we can improve our shareholder returns. Thank you very much for your kind attention. This concludes my presentation. I'd like to entertain questions from the floor up until 6:30 P.M. I'd like you to limit your question by one question together with one follow-up question. Could you identify yourself by your name and affiliation? Today's meeting will be uploaded to our website, 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. Shoot, please. I am Wadaki from Nomura Securities. Thank you very much for your very active presentation. I have one question. Actually, the industrial environment is not so good, but there are many symptoms coming up for the expected recovery on the second half of the year. Do you detect any positive symptoms? Could you share with us about some positive symptoms? 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. I talked with top management of our customers there in SEMICON Korea.
Actually, in the industry, people say that some say about the directions. Also, top management of the customer have the very similar focus for the future trends. About the timing of the recovery, people are now wait and watch the timing. We are supposed to be prepared for the on-time delivery. 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. Shortage of CPU can be recovered 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. People have the very similar prospects for the future as ours. We got the very similar inputs from the top management of the Korean customers. I think that is positive symptoms in the market. Follow-up question. Every week we can see good news. Last week in Korea, Samsung may have the drastic plan for the CapEx. That is one of the news from last week. Actually, Samsung sometimes accelerate or decelerate their investment all of sudden. 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 on the second row, please.
I am Miyamoto from Mitsubishi UFJ Morgan Stanley Securities. On slide 15, you can see the growth rate by application. I want to know the money basis or month basis for logic foundry, memory, non-volatile memory for 2019. What sort of forecast do you have? What is the level of the denominator of pie size? I think there are various forecasts, but let's say 10%-15% negative growth. Maybe the denominator should be JPY 45 billion. If that is denominator, what is the composition for all those applications? Your question is about now we can say declining trend. Are you asking about the total amount of WFE market? I want to know the size of WFE market. I want to know the composition in terms of money amount for logic foundry, DRAM, and non-volatile memories. That is my question.
Figures from previous year, I think you do have some prospects for maybe 15%-20% reduction from that previous year's focus level, about $50 billion. My understanding is maybe 60% for logic and 40% for memory. Logic is slightly more than memory. That's the gut feeling of mine. Thank you very much. WFE market size in 2019, 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. We are now discussing the values or budget for next year.
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 for your presentation. I'm Yoshida from Deutsche Securities. About the WFE market prospect or forecast this year declined by 15%-20%. When you divide into first half and second half, the second half of 2018 compared with that, what will happen in the first half and second half of 2019? I would like 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. By 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 and foundry logic in the first half. How do you think about that? For logic, relatively speaking, logic is getting stronger and investment in pilot line will be increasing. From the first half to second half, logic investment remain very strong. As I said earlier, 15%-20% decline. As for DRAM, for DRAM, we just included the investment for the device shrink, but we may have some capacity investment for DRAM as well. We don't have so much expectations for the investment for DRAM capacity increase. In that sense, both logic and memory investment will be increasing or picking up in the second half of this year. In other words, first half of the year, market remain rather flat, suppressed. One follow-up question may I ask, for this fiscal year?
I think that's getting visible for the sales. How do you think about the progress of the shipment? We got some explanation earlier. For the fourth quarter. Are you talking about the fourth quarter? In my presentation on page 20. Is it correct? New equipment sales forecast. It is shown over here for the fourth quarter forecast. This is the page. We already shipped 60% of this forecast for the fourth quarter. Next question, please. Yes, the gentleman on the second row, please. Damian Thong from Macquarie Capital Securities. I have one question about field solution sales for this fiscal year. That is larger than the previous year, what it's about forecast for next fiscal year? Based on the current trend, how much size is this expected for next year? Again, just like the new equipment sales, we expect a lot for this as well.
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 fourth quarter. First quarter, second quarter, and third quarter, that was rather good, especially for the field solution business for SPE. What is the reason for that drop in the fourth quarter? Excuse me. Your question is about field solution business in this fiscal year, the fourth quarter forecast. Is that your question? Yes. SPE field solution, JPY 265 billion. The average of the second and third quarter is higher than JPY 70 billion. According to my calculation, the fourth quarter is JPY 64.6 billion. I don't know the details, but the fourth quarter, are there any reason for the decline in the fourth quarter? Field solution business is better than the expectation.
Yes, field solution business, we can enjoy very steady progress, and fourth quarter field solution business is expected to be very good. New equipment sales will drop in next fiscal year, but you can see increase in field solution. Sorry, could you say that again, please? Next year, market is expected to decline, but are there any possibility that field solution business will be growing next year? Yes. That's possible. May I say something to add? For this fiscal year forecast for field solution business, and up until the third quarter, the accumulated actual is about 77% of the budget. Field 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 I feel solution business grows steadily. Next question, please. Thank you very much.
I am Hirakawa from Merrill Lynch Japan Securities. Earlier for 2019, WFE market by application, and in particular, logic and foundry is expected to grow in 2019. That's what you said earlier. 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. It is possible for us to outperform the market growth. Our company, as I said earlier several times, 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 continue. These are the area we try to focus our efforts on. For the future, for logic and foundry, more and more device shrink is to be pursued below 10 nanometer, seven nanometer, and five nanometer.
For evaluation or R&D, the customers are working on much smaller device miniaturization, and our product value add will be increasing furthermore. As I said earlier, we can provide mutual optimization of our different product portfolio, etching, cleaning, and film deposition. By adjusting those things, the value add 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. Compared with the general 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-EUV product market might be negatively affected.
TEL has coater developer for the EUV lithography. Including that, 2019, the logic foundry increases in the market. 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 the gentleman in the middle, please. I'm Nakanomyo from Jefferies Japan Limited. I have one question. For the second half, you can see the sales composition application. There have been no changes from the previous announcement. That's what you said. In industry, people say memory pickup is delayed, but by and large, how do you view? Your original focus was rather conservative, whilst 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? Could you repeat the question once again, please?
I was not able to understand what's the repetition in the industry. The memory investment plan is being delayed. Actually, it has been delayed, I think. There is another delay for memory investment plan compared with three months forecast. There is no change in your composition. How do you think about that trend? Up until this March, this fiscal year, for the sales, we do adopt the criteria of completion of setting up and testing. On the quarterly basis, you can see some decline in the third quarter, but you will see increase in sales in the fourth quarter. That is because of the contribution of the sales increase of memory. Also there are increase of the logic in the Europe and America. Impact is very limited for the near future sales forecast. Thank you very much. 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. I'm Ishino from Tokai Tokyo Research Center. Recovery expected in second half of this year. I think many people recently talk about that pickup in the second half, the investment to the WFE. When you went to Korea, could you share your idea with us, please, if you have some discussion? The driver of the demand should include smartphone or data center. Those are the final driver of the investment into the WFE. Recently, I see vendors for data center say data center demand is getting weaker. Well, because of the U.S.-China trade friction, the Chinese smartphone manufacturers have some difficulty to sell their products in European markets.
From the viewpoint of the final consumption, how do you view the investment, including the Korean market? Do you have any idea? Could you share your idea with us, please? There are several factors. I don't know this is correct answer to your question or not. One thing, for example, 3D NAND, the bit growth exists, but this time, there is a major change, is the transition or change in structure from 2D to 3D. Now we have 3D stacking, yield enhancement, productivity enhancement. 3D NAND bit growth. There are some factors to drive the increasing trend. There are some tentative peak. 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, we can see another increase of demand starting. That should be the trend for the future, at present. When you look at the final products, data center and 5G applications. As for the data center you mentioned, in the E.U., there is stronger or stricter regulations on the private information handling, and we need to have a close look at the trend. For DRAM, you can see the increase in demand, and we need to look at the ROI. In high speed CPU, high speed communication server release is now being Waited. There are various factors. If those things are getting stabilized, and also for the smartphone, CPU shortage will be corrected in the future from the viewpoint of the memory. Thank you very much. You talked about high speed server for data center. So-called GAFA.
They think existing specifications are rather problematic because of very high power consumption. GAFA, those companies, try to revise data center system to develop new system. There might be drastic change or replacement of the system to new one within this year. There might be some demand for replacement of the system in data center. I think system change should be the very big issue for GAFA. 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 Ari Tommy from Point72 Asset Management. Earlier, you talked about your comment or viewpoint of FPD by application. It was very easy to understand.
By area, how do you view the WFE market, U.S., Korea, and Taiwan? I think we can expect to some extent. When it to China, in particular, memory or native memory vendor, how do you view the trend in China for 2019? Again, the U.S., China trade friction might have some impacts in 2019. Actually, there is the impact of that. To prepare for that, Chinese customers are now carrying out 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. Well, 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. It's better not to think so much about impact in that area. For me, for year 2019, actually, so far, the market has been growing drastically with very high speed. Now it is good timing for us to be prepared for the future growth on the midterm, long-term basis. We need to make a solid effort so that we can take care of the future growth. The trade friction 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. We need to enhance our overall structure in this year. Yes, the gentleman in the front row, please. I am Aiba from Nomura Asset Management. Thank you very much for your presentation.
For 2019, the WFE market will be declined by 20% going below $50 billion. Now we are facing downturn. Although TEL is outperforming market growth, actually market itself will be in the downturn trend. Is it possible for you to realize or achieve your financial model? Sasagawa, I have one question to you. Do you intend to suppress or reduce SG&A expenses? Also for R&D expenses, there are increasing number of items for R&D, but if you increase R&D expenses, you may hit the very same problem. Next fiscal year, 2019, the market is going into downturn trend. How do you think about your company's financial model? 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.
We are thinking about the growth of the company and also the further growth beyond year ending in March 2021. Now you can see the potential growth of the market, we need to incorporate midterm, long-term market growth. 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&D expenses. That is a basic position of TEL. That is because we want to pick up our momentum. Of course, we need to control our company's profit margin. As a company, we have many resources, including human resources, sites, development, and capacity increase. This year, we are investing quite large amount of money for those resources, and I think basic stance remain unchanged for next fiscal year. 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 expectations so that we can set up the appropriate target of the profit margin by the end of March this year. Thank you very much. My second question. May I ask another question? It is just out of curiosity, I want to ask one question to you. Samsung financial announcement, in some time the DRAM or NAND market will recover or pick up. Which comes first in recovery? I have no idea for that. Almost the same timing, that could be the truth, but you said the market will start picking up in the second half of this year. Which comes first, DRAM or NAND? I have no idea. That might some shift by quarter or 6 months. Also, customers at present are investigating the possibilities. That is the current status.
I have no idea about the timing, I am 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, 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 Sugiura of Daiwa Securities. I was a bit late, you may have made comments already. I am sorry for that, if any. Now WFE DRAM is expected to decline by 30%. If that is assumption, the DRAM bit base supply capability, what will happen to that? How much increase do you view for year 2019?
Mr. Kawai earlier said in the second half of this year, DRAM recovery is not incorporated in your forecast of WFE market. That's what you said earlier. 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 that regard? I think bit growth is steadily increasing about 20%. 3D NAND, about 40% growing ratio. I think the steady growth is expected continuously. That's how we view the market trend. Sorry, are you talking about the supply side or demand? I talked about the DRAM bit growth. Demand increase? Yes, that's correct. Demand increase. In second half of this year, you don't expect any drastic recovery. That means the DRAM supply capability will be increasing, so oversupply condition will remain also in the second half of this year.
Are you conservative right now and you don't expect any big recovery? Could you get me some specifics, please? Yes. I think growing trend remains unchanged. The leading memory device manufacturers have different strategies, and macroeconomy factors also impact the market. Business viewpoint and macroeconomy viewpoints, we need to think about those two, and customer try to find out the timing of decision. In the major trend, we need to communicate with our customers more 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. The gentleman in the front, please. Once again, please. Second question, sorry for that. I'm Ishino from Tokai Tokyo Research Center. Not SPE, I have a question on FPD market.
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 recovery is expected. At present, mobile OLED or large size panel are under adjustments. That's what you said in your presentation. 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 about that, could you share your idea with us, please? 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 large size panels. However, as I said earlier, because of the macroeconomy factors and U.S.-China trade friction, our customers are revising the investment into the large panel lines.
They may have some idea what to do, and we are expecting our customers to fix 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 is expected to decline by 50%, DRAM expected to decline by 30%. As for the capacity increase investment for DRAM, investment is expected to pick up in the second half of this year, that portion is not incorporated in your forecast. That's what you said earlier. In that sense, DRAM has more room for upward revision, 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. 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 seems to be no more questions. That concludes our financial announcement. Thank you very much for joining us today despite your very busy schedule. Thank you very much.