It's time for us to start Tokyo Electron financial announcement for the second quarter of the year ending in March 2019. Thank you very much for joining us today despite your very busy schedule. I am Hirayama of IR Department. I will be acting as the moderator for today's session. First of all, let me introduce the participants on our side. You can see 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, we'd like to ask Mr. Sasagawa to give us the information about the consolidated financial summary. Mr. Sasagawa, please. Good evening, ladies and gentlemen. Thank you very much for joining us, despite your very tight schedule.
I am Sasagawa, in charge of accounting. Please allow me to make a presentation about the second quarter consolidated financial summary. The first slide, please. Here you can see the highlights of the first half of this fiscal year. As you know, we have achieved the record high sales and profit on the half year basis. For SPE, memory devices drove our sales of new equipment. For FPD, the sales for the Gen 10.5 panel, where I can tell has the technological strengths, was very strong. Our installed base amounted to about 67,000 units. The Field Solutions sales increased by 17% on the year-on-year basis, amounting to JPY 139.3 billion to provide stable profit. Next, this slide shows the financial summary on the half year basis. In the middle, you can see the red color portion that shows the actual for the first half of this year.
Let me start with the net sales, JPY 691.0 billion. On the right-hand side, you can see the announcement made on April 25th. When you compare with this value, as for the net sales, we can see increase by JPY 1 billion, we are almost the same as the planned level. As for SPE net sales, JPY 638.4 billion, FPD sales was JPY 52.4 billion. You can see a drastic increase in both cases. Gross profit was JPY 284.1 billion. Again, almost the same as the initial expectation or forecast. You can see SG&A expenses, JPY 108.6 billion, operating income was JPY 175.4 billion, it was more than JPY 173 billion. The net income attributable to owners of parent, which is JPY 135.2 billion, is more than our initial forecast of JPY 128.0 billion. You can see increase and decrease on the year-on-year basis.
As for the sales, 33.7% increase, the 42.2% increase for the operating income, the operating margin was increased by 1.5 point increase, net income increased by 49.2%. You can see drastic and considerable increase in every case. You can see quarterly basis financial summary. In the red color, you can see the second quarter actual. For net sales, compared with the first quarter, again, 33.8% increase, JPY 395.4 billion, SPE JPY 358 billion, FPD sales was JPY 37.3 billion. You can see a drastic increase on the quarterly basis as well. Actually, SPE sales was increased by several drivers, including logic and memory manufacturers in Korea and China, logic and memory manufacturers. These are the major drivers of SPE sales increase. As for the gross profit, JPY 161.6 billion, the margin was 40.9%. Compared with first quarter, the margin declined.
This is because of the segment mix, specifically FPD segment mix has changed. This is one of the reasons, and also the ratio of the manufacturing cost per sales is increased. Next, the SG&A expense is JPY 58.6 billion, and JPY 31.2 billion is the R&D expenses. During the first quarter, there are some changes in market trend. Because of that, management decided to decrease the SG&A expenses for the second quarter by 10% to control costs. As for the operating income, JPY 103.0 billion, the operating margin was increased by 1.5 points from the first quarter. Income before income taxes was JPY 105.8 billion. Net income attributable to owners of parent was JPY 79.5 billion. Next slide. Now you can see the financial performance on the quarterly basis. All the information is already explained in the previous slide. For the quarterly basis, net sales and operating income hit the record high.
Next slide, please. Segment information is shown on this slide. For SPE sales, as I said earlier, JPY 358 billion. The segment income was JPY 105.8 billion. Segment profit margin was 29.6%, 1.6% point increase from the previous quarter, first quarter. For FPD, the sales was JPY 37.3 billion. Segment income was JPY 9.5 billion. Segment profit margin was 25.5%. The increase of the profit margin for both SBE and FPD is driven by the sales increase, and the proportion of the fixed cost was decreased. These are the major reasons. Next, we can see the new equipment sales by application for SBE division. As you can see here on this slide, the sales themselves increased from first quarter to second quarter. In particular, memory proportion is still high. DRAM and NAND increase is about 66%. When it comes to growth rate, logic, others, and foundry increased a lot.
Next slide. SBE division sales by region is shown over here. For volume wise, just in the middle, the South Korea orange color portion volume still remains rather high. As for the proportion, China accounts for 20%. Just like first quarter, China grows rapidly. Next slide, please. Now you can see Field Solutions sales on a quarterly basis. For SBE, JPY 73.4 billion. FPD, JPY 2.7 billion. In total, JPY 76.1 billion. Again, customer order increases. The parts and modification demand is rather strong, we are very happy to see the sales fluctuation as planned. Now you can see the balance sheet actual. On the left, you can see assets. The total compared with first quarter increased by JPY 53.4 billion. The major reason for this increase, on the top you can see the cash and cash equivalent increased by JPY 68.2 billion.
This is the major driver of the increase of assets. Also, for inventory, compared with first quarter, declined by JPY 37.5 billion because of merchandise and work in process. Next, the liabilities. The total of liability compared with the first quarter, JPY 388.9 billion, declined by JPY 23.8 billion. Customer advances of JPY 41.5 billion decreased. Next, net assets. Compared with the first quarter, increased by JPY 77.2 billion. The major reason for this increase is because of the increase of the retained earnings. You can see the increase of the shareholders equity by JPY 75 billion. Next, you can see inventory turnover and accounts receivable turnover. Along with the sales increase, you can see the improvement in turnover for both cases. For the accounts receivable turnover, thanks to the sales increase and customer mix, you can see three days improvement from the first quarter.
As for the inventory turnover, again, because of the increase of the sales, but because of the reduction in the shipment, inventory is decreased. As a result, you can see drastic improvement in terms of the inventory turnover. This is my last slide showing cash flow. The figures are shown on this slide. The cash flow from operating activity, plus JPY 84 billion. On the bottom, you can see cash flow from investing activities, minus JPY 12.2 billion. Cash flow from financing activity, minus JPY 5 billion. Because of the share repurchase for the purpose of the medium-term incentive, we have JPY 5 billion. That's all from me. Thank you very much. Next, Mr. Kawai, our CEO, will present business environment and financial estimate revisions. Mr. Kawai, please. Once again, I am Kawai.
Thank you very much for coming to our financial announcement despite your very busy schedule. As Mr. Hirayama said, I would like to make a presentation on business environment and financial estimate revisions. First of all, business environment is shown over here. For the SPE CapEx, continuously, memory demand is rather strong, especially DRAM investment is increasing. For WFE as a whole, we are expecting 5%-10% increase on year-on-year basis. The growth rate of WFE by application will be explained by using next slide. By and large, there are some push out of the customer's investment plan over the past three months compared with the previous meeting, the range was decreased by five points. However, investment level remains rather high.
For FPD production equipment CapEx for TFT array process, the equipment demand is expected to continue at the high level comparable with 2017, thanks to significant expansion of investment for Gen 10.5, despite some adjustment investment for small medium panels used for mobile application. For FPD, there have been no changes from the previous meeting over the past three months. We have two months to go for this year. Both SPE and FPD, the equipment market is driven by the very strong demands, and you can see the very high level investment continuing now. This slide shows the 2018 calendar year WFE market growth and business opportunities by application. First of all, as for DRAM. For DRAM investment, last year there was the growth of 70%, and this year as well, you can see additional 50%-55% growth is expected. DRAM spot price declines a little bit.
However, DRAM contract price remains high level. Continuously, strong demands continues, and investment for the purpose of increase of the capacity accounts for about 70% of total. Bit capacity per wafer is to be increased. For that purpose, 80% of investment is for the leading-edge device nodes. Drivers are for servers because of the high shipment level and the high average content. Our outlook is declined by 10 points compared with three months ago. The growth rate, as far as growth rate is concerned, this is the biggest application for growth rate. Next, non-volatile memory. There is no change from the previous meeting. Just like DRAM last year, non-volatile memory growth was about 70%. This year, you can see the same level that as last year, or plus 5% growth is expected. Again, high level of the CapEx is expected for non-volatile memory. NAND features very high price elasticity.
When price goes down, its market is expanding. Investment is focusing on the 96-layer, which is a leading-edge generation. Supply increases, and when the price goes down furthermore, the contents of SSD for PC and data center will be increasing. The number of layers is increasing from now on for NAND, and we have the etching system and cleaning system which feature high value added, and that's where we can differentiate ourselves from the competitions. As we said before, including film deposition and high-speed test system in all product range, we try to enhance our position in the non-volatile memory market. Next, logic and foundry. We are expecting minus 10%-15% from the previous year. For this outlook, compared with three months ago, we are declining our expectation for investment by five points.
For logic, there is no weakening trend of the demand for the product, but there is only some adjustment for the technological factors. When technological factors are solved, you can see increasing trend of WFE investment. For foundry, in the future, GPU market will be increasing, and the WFE investment will be increasing as well. The patterning and the scaling require much more complicated demanding technology, and we are providing diversified products. We think the larger opportunities for our business. There is no change in big picture, and semiconductors are essential to realize IoT society. Bringing that midterm, long term, the equipment market, SPE market, there should be no change at all. At present, mobile PCs are the major ones remaining still now. In the future, beyond 2020, we will see the tangible applications replaced by the intangible applications, especially for data application.
Therefore, midterm, long-term outlook remain unchanged. Next. This shows SPE business progress for this fiscal year. Our focus area includes etching, film deposition, and cleanings. In those areas, we are winning next generation PORs, especially for etching. Just like last year, we are winning the PORs to expect the improvement of share. We have been talking about the proposal for the process integration. Our proposal for process integration is contributing to winning PORs. I cannot share the information of details like application, but for critical module, it is necessary for us to see the mutual optimization among different processes. You can see some synergy effects, and we are winning POR from other processes as well. Along with the expansion of the IoT application, upgrade of equipment and used equipment sales are expanding steadily. In addition, you can see the increasing trend of the new equipment shipment.
In the beginning, Mr. Sasagawa talked about the shipment of the new equipment, but accordingly, you can see the demand of the parts and service, and you can see increasing sales. In the previous meeting, we announced the start of the operation in the distribution building in Miyagi factory. This time, we are very happy to announce that construction of the new development building is completed, and from next month and on, as we reported the other day, in Miyagi, we are going to increase the production line from one to two to increase the overall capacity of Miyagi factory. We talked about the midterm long-term outlook. Now in order to address the expanding etching market, we are making active investment to prepare for the increasing demands. Now you can see the flat panel business progress.
Sales of the Gen 10.5 equipment is rather big, and proportion of the sales is really big. Accordingly, we have the technologies necessary for Gen 10.5, and our profit margin is improving as well. In addition, the other day, we announced two new products. The first new product is about PICP etching system. For Gen 8, we did have the product, but we have the new equipment for Gen 10.5 as well. The other one is inkjet printing system for Gen 4.5 panel used for the OLED. We have released this new product. We are going to see the larger size TV with higher resolution. We expect the increasing sales of this new equipment. The business progress especially, we have been talking about improvement of profit margin, and we focus our efforts in the area. 20% of the profit margin is expected.
At the same time, we are going to register record high sales for this fiscal year. Now I'd like to talk about revised financial estimate for this fiscal year. In the beginning, we expected the sales of JPY 1.4 trillion, but because of the push-out of the customer investment in the second half, we have revised our sales outlook to JPY 1.28 trillion. As Mr. Sasagawa said earlier about the second quarter actual, as for the first half, we are very happy to say our actual for the first half is as planned. For second half, there is some downward revision, but when you look at full year sales, you can see 13.2% increase. We are going to see the three consecutive year record high results. As for the breakdown, SPE increased by 10.9%. FPD increased by 46.5%.
Gross profit increased from previous year by JPY 52.9 billion, achieving JPY 528 billion. Operating income increased by JPY 27.8 billion, achieving JPY 309 billion. Net income attributable to owners of parent increased by JPY 32.6 billion, achieving JPY 237 billion. Net income per share is JPY 1,445.2. SG&A expenses, we will not decrease SG&A expenses compared with previous year, even if there is some decline in the profit margin. In order to obtain the share in the expanding market, we should be well prepared. We are going to keep appropriate level of investment in the future. On this slide, you can see the SPE division new equipment sales forecast by application. As you can see here, just like the first half, also in the second half, memory is the driver, major driver.
Compared with the previous meeting, as for DRAM investment, you can see some trend of push out by and large. For non-volatile memory, there is no change from the beginning of this fiscal year. For logic and foundry, in the first year, there was no change from the initial forecast, but there is some trend of push out in the second half of this year for investment. This slide shows R&D expenses and CapEx plan. For R&D expenses, we are going to scrutinize all planned items. We are going to implement necessary item, but compared with the initial forecast, we are going to have the R&D expenses of JPY 116 billion, declined by JPY 4 billion. There is no difference in the CapEx plan and depreciation. We are going to carry out the proactive investment so that we can see the further growth in achieving the mid-term business plan.
Finally, let me talk about dividend forecast. There is no change in our shareholders' return policy. The interim dividend is JPY 413. The year-end dividend is JPY 311. Full year basis increased from the previous year by 16%. JPY 724, so we can see record high dividend over the past five years in a row. We are going to improve the shareholders' return by increasing our profit. Thank you very much for your kind attention.
Now we'd like to entertain questions from the floor up until 6:00 P.M. I'd like you to limit your question by one, with the follow-up question. Could you identify yourself by name and affiliation before asking question? Could you speak slowly and precisely? This financial announcement will be uploaded to the website. Could you raise your hand if you have any questions? Yes, the gentleman in the front row, please. Thank you very much.
I am Wadaki from Nomura Securities. I think that division is just the same level as we saw in the market, so I'm relieved. The market, or industry environment is getting worse. When you look at the utilization of factory or orders of materials, those things are announced, but I think we can see some bottom-out trend. How do you think about that? If you're just giving yes or no, it's not so interesting. Could you give us some reasons? If it's not yet bottomed out, could you let us know the timing of bottom out?
May I answer to that question? At present, when you look at the entire market trend, as I said in my presentation, memory is the major driver. At present, the mobile application is the largest portion. Data center should be second-biggest application.
For mobile application, the customer's productivity improvement is in good progress. There are some adjustments. For data center, CPU and memory, the supply-demand balance should be considered. The memory center investment is a bit delayed. That's the feeling I have. In the future, for CPU and logic as well, there are several challenges. If those challenges are resolved, maybe you can see some increase of the memory demand as well. I wonder when adjustment will be overcome or completed. If possible, the logic scaling might be proceeding in the second half of next year and in 2020. We want to see the big plan for investment. That is the wishful forecast for the future.
I have a follow-up question. Hitachi High-Tech and SCREEN announced that they have bottomed out, you can see some increase in orders.
Your suppliers as well, they said they have recovery in the orders. When also other competitors said in August there was some bottom out. If you also say you have already bottomed out, it is really encouraging comment. How do you view the situation?
It is generally said that there is already bottom out, you will see increasing trend in the future, there is a big expectation in the second half of next year, I don't disagree with or to that general perspective. The market is expected to control the balance of the supply and demand properly. I think there might be some shift by three months or six months, I'm not sure because it's not me myself to take care of the market, so I don't know about the shift by three months or six months.
When you look at the industry as a whole, we are in the charge period. The fab plan as well is expected be implemented as planned. By 2020, there is about 20 fab projects. I think evaluation is going on on the steady basis. Continuously, we have the big expectations, and we can have big expectations for the future. Thank you very much.
Thank you very much for your question.
I am Miyamoto from Mitsubishi UFJ Morgan Stanley Securities. On page 20, you can see WFE market by application, and I'd like you to give me some explanation by using this slide. The figures for 2018 has been changed from $56 billion to $58 billion, revises downward to $54 billion to $56 billion, which is understandable. In the previous meeting, you said there is no revision for 2019 and beyond, and you said $61 billion.
How do you view the trend beyond 2019? $61 billion, $62 billion, or $63 billion, that's what you said in the previous meeting. If you have any outlook beyond 2020, could you share that with us, please?
For the midterm business plan, let's say 2020, year 2020, we don't change our overall focus. 2019, we are getting into some adjustment period, just like the answer to the question given by Mr. Wadaki. At present, we are not able to give you some specific figures or number. It's too early for us to say the figures for year 2019. Okay. In the previous meeting you said there was no revision, and this time, for 2019, as of today, you can say maybe there could be some increasing possibility or decreasing possibility there.
I think for this fiscal year, we will see the record high profit increase in both income and sales. Now we can see very high level of the business performance, and I think next year should be very similar to this year. Basically, there should be no change from this year to next year.
Remains flat?
Yes. Almost. Correct. Generally speaking, we are getting close to the bottom of the market. Maybe in the second half of next year, market trend will start recovering, and I don't disagree to that general comment or trend. However, if you asked us any exact numbers, there are various adjustments going on. Customer production capacity is increasing, and the logic scaling is also progressing. Those things impact the customer decision. Specific figures are not able to be shared today, and please allow me not to mention to any specific figures. Thank you very much.
Thank you very much. I am Ogawa from Goldman Sachs, Japan. I have a question about the share repurchase or buyback. When you look at the fluctuation of the stock price and you have revised your figures downwards, that could. I think the share buyback could be one of the options you could take, but you didn't carry out any share buyback. Why you didn't? If you have any plan, you always said flexibly address the share buyback. Could you just give us your feeling about the flexibility of your stance?
Let me answer to your question rather straightforwardly. I'm sorry, I cannot give you the very good answer, but various situations need to be considered, so we must remain flexible when it comes to the share buyback policy. All we can say is remain flexible in this policy.
Thank you very much. What do you think about M&A? Do you have any position or policy for the M&A? Are you thinking about M&A? If you have some idea, what is the range of the size or area? Semiconductor, FPD, any other areas, could you share your idea, please? For M&A, we have no reason to deny it. Stakeholders, our growth, and shareholders benefit, and technology innovation for our customers. When you think about all those things, if you can find some beneficial things, put option. Of course, we need to think about ROI. If there is some benefits, we can think about the option of M&A. Size of the M&A, needless to say, you need to think about the internal reserve as well, and you must make a decision by thinking about the balance against the internal reserve. We cannot give you any specific size.
Well, we cannot set any limitation, upper limit of the size of M&A. For M&A, we do not deny it. That's how I can answer to your question. Thank you very much. Thank you very much for your presentation.
I am Yoshida from Deutsche Securities. First question, once again, I'm sorry. Next year, WFE market trend, you said there should be no change from this year. However, when you divide next year by half, the first half and second half of next year, how do you think about the trend from the first half of next year against second half of this year? How do you see the second half of next year?
You don't have to give me any specific figures, but could you just share your idea with us, please?
For logic customers, from logic customers, in some cases, they ask us to bring forward the delivery date. I think customers are thinking about these issues right now. There could be the possibility of some pulling forward, or the initial plan might be followed as it is. As far as our company is concerned, we are supposed to be ready for any demand, even if there are changes in demands. As for the memory, so when you look at next year, first and second half, usually memory investment in first half is higher, but now you can see some push out to the second half. Do you think the investment will materialize in second half of next year?
If there is such kind of increase in second half, there might be some oversupply in early 2020. How do you see the investment for memory, first and second half of next year? For memory, it's being prolonged a little bit. Now on the customer side, productivity is already rather high. In that sense, honestly speaking, I have no idea, but continuously, the memory investment remains high. That's how I can answer to your question.
Just confirmation. First half next year for logic and foundry, the investment will increasing. You can see some peak. Second half of next year, maybe memory investment recover, getting closer to this year's level. Yes, that's correct. Some additional question. Now, you said in the middle of the second quarter, you detect some changes in the market and you reduced SG&A expenses.
For next year, when you look at the market trend, the R&D expenses, depreciation, and CapEx, how do you plan those things for next year?
Next year, once again, we need to think about next year's plan next year. If you see continuously high demands in patterning, scaling, and for structure, for example, high-k material or low-k materials, we need to address those approach. We also take some action for the new devices and packages as well. Every business potential exists, and we must optimize our investment to meet those business potentials. For the large manufacturing factory, for film deposition in Yamanashi and Tohoku region, specifically, we already announced the construction of new factory. Therefore, the area for investment should be new application. That should be the focus area of future investment from now on. Thank you very much. Hirakawa from Merrill Lynch Securities Japan.
For this fiscal year, I want to ask some question about the vision of your financial estimates. For memory and CPU balance should be the major reason of the push of the investment. That's what you said. When it comes to logic foundry, there is also revision. What is the reason why the push out was necessary for logic foundry as well?
The customers has technical challenges, and they are working on those technical challenges. It really depends on the progress of that. So foundry and 10 nanometer, is that what you mean? I'm sorry. I cannot give you any specific comment on that. Please allow me not to comment on that.
I am Maekawa from Credit Suisse Securities Japan. I have a question about the cash and cash equivalent as of the end of March, and for free cash flow focus for this fiscal year.
That's the first question. I also have some follow-up question later.
As for the cash flow, I'm sorry, in our company, cash flow and cash and cash equivalent, we are not allowed or supposed to make any comment on that. We are not allowed to disclose that information. Compared with the end of September, there is some declining trend? Yes, that's correct. There is a decreasing trend from the end of September to the end of March. Thank you. Relevant question. Up until 2017, suppliers didn't increase or make any investment, for example, by carrying out two-shift work to take care of the expansion of the market. After that, the other companies announced the construction of new factory, and you also announced very aggressive suppliers have made decision for investment. And by now, I think suppliers have invested some money, and they hire some employees, increased fixed costs.
At that timing, your company announced downward revision. When it looked at the sales for the second half, the 17% reduction in the first half, maybe supplier side 35%-40% reduction in demands. In such a case, from your company, for example, to shorten the payment period conditions, or in order to help suppliers to maintain their operation, you may have some inventory. Do you have any plan to provide any relief to the suppliers? I'm asking this question, how much money you have for the purpose of the share repurchase? At present, we don't have any decision made for that. But in our company, we have been taking very flexible approach for every aspect, and our corporate culture remain unchanged. So we try to remain flexible to take care of any issues coming up. So you are kind or very soft to your suppliers?
It's a bit difficult for me to answer to such kind of emotional question, but we try to remain flexible in every aspect. We think our suppliers are our partners. Suppliers, therefore, in each factory, we hold Suppliers Day to communicate with suppliers. In addition, also in the head office, we hold the Suppliers Day to share the market trend and our policy and direction with the suppliers. As for the new technology, in many cases, we receive proposal from those suppliers because they are partners. In order to realize customer's idea to make it business, we need to support customer properly, and that will make customer happy as well. Suppliers are very important partners, and we are going to respect our suppliers from now on as well.
I'm Nakanomyo from Jefferies, Japan. For memory supply-demand balance, I have a question on that respect.
Calendar year 2018, at the end of this calendar year, at the end of December, when it comes to supply capability, if there is full yield level for DRAM and NAND, how much bit supply increase is expected? How do you see the supply level of DRAM and NAND in bit level?
For bit demand for both DRAM and NAND, almost the same as this year, a little bit higher than this year. That's the demand we are expecting. 2018. I'm not talking about demand, but I want to ask about the supply of DRAM and NAND at the end of 2018 calendar year. For supply, for NAND, between 40%-45% for this year. For DRAM, again, 20%-25%. Probably in the market, there is a concern in the market. Actually the supply capacity will be increasing because of the multilayer or scaling.
However, demand might be declining in especially first half of next year. Supply-demand gap will be increasing, and that gap remain unfilled for years, for a long time. That's a concern in the market. But do you see the supply much larger than that? It's better for us to think about demand supply separately. As Kawai-san said earlier, I think there is a stronger concern for NAND, but NAND features very high price elasticity. The supply-demand balance should be considered, and customer remain flexible in changing or deciding their investment. Thank you very much. Thank you very much. I'm Hanaya from SMBC Nikko Securities. I have one question. As for the entire picture of the picture, currently we have the U.S., China trade war. Are there any risks and opportunities? Opportunities might be difficult to be identified, but could you share your idea, please?
For U.S.-China trade friction, I think it is necessary for us to have a close look at it. In particular, short-term movement requires very close attention. However, when it comes to mid-term, long-term perspective, needless to say, data will be growing, and that requires large number of semiconductors. The IoT trend remain unchanged in mid-term, long-term basis. I don't have any major concern in the longer perspective. As far as our company is concerned, we try to provide valuable, innovative technologies and service to the market. For short-term, there might be various impacts, so we must pay close attention. However, for mid-term and long-term perspective, demand is expected to grow continuously. I'm Shibano from Citigroup. I have related question to the previous question. Let's say American manufacturers are not allowed to deliver their product to Chinese market. Is it possible for TEL to deliver your product to Chinese market?
The American government has its own policy. Japanese government has its own policy. Those two are not directly linked to each other at present. That's how I view. However, the American-made parts or American people are not allowed to go to Chinese market, for example, or American equipment, American-made equipment, including metrology equipment, if they are not allowed to be exported or delivered to the Chinese market, that might have significant impact, because in order to come up with fabricate devices, you need to use multiple tools. One single process tool cannot make any devices. It might be possible for us to review or revise our plan in the future. Just like the previous question, we need to think about those possibility, and we must be careful to have a close look at the situation of the trade frictions. I am Danielle Tong from Macquarie Capital Securities.
I have one question about Field Solutions business. I want to know the forecast for this year and outlook for next year. Earlier, you talked about the number of shipment, which is increasing. Installed base also increases. The orders for new equipment is declining. For example, next year, installed base, you may see some possibility of having some recurring business increase. As for your first question, Field Solutions sales forecast for this fiscal year, about JPY 280 billion is expected. At present, we have achieved JPY 140 billion, just in the middle level. Installed base, we will see the increasing trend for the installed base. A new demand is decreasing a little bit compared with our forecast, but we see 2-digit growth rate in 2020, including modifications. Customers will be very active for investment, including modification. Field Solutions business is expected to grow steadily.
Thank you very much. Those figures for SPE and flat panel display, could you give us those figures, please? On the full year basis, JPY 275 billion. First half, JPY 140 billion. Second half, JPY 135 billion. FPD accounts for JPY 100 billion, and remaining is SPE, meaning JPY 265 billion for SPE. Thank you very much. I want to ask question about FPD because there is no questions for FPD so far. For OLED Gen 4.5, usually G 6.5 is the majority, but Gen 4.5 may have different application, or you may have finalized orders. Could you make some comments on that? I want to see the future stability. Inkjet printing system will be applied, that will be scaling. Also, as you made an announcement in OLED conference, G8.5 is another possibility.
Not only Gen 4.5, you may see the further development, including application for TV as well. Gen 4.5, as you said, it is for pilot purpose. In order to promote the technology innovation, they are using Gen 4.5 for the trial basis. At this moment, they are supposed to verify the manufacturability for the mass production that they can move on to the larger size. The higher resolution demand is rather high continuously. Inkjet technology, actually, we have increasing inquiries for inkjet technology. That's how I can answer to your question. Thank you very much for your presentation. I am Shibamura from Daiwa Securities. My question is a bit related to the previous question. For R&D expenses and fixed cost, I have a question. 2020 and beyond, market expect to grow furthermore. You said there is no change in your focus for the future growth.
For example, when you look at WFE market in 2019, let's say it's declined, let's say 10%-15%, you continue investment by looking at the future growth beyond 2020. Or if market is declining, in order to come up with profitability for each individual fiscal year, are you going to reduce R&D cost? Could you share your idea about flexibility of R&D investment? For the new big trend, you can see increasing trend by and large. Me, myself, short term, mid-term, and long term, we'd like to pursue optimum performance. That's what we are seeking for. Of course, we may suspend, but not urgent, not necessary investment. When it comes to the mid-term, long-term investment, we try to continue our original plan.
For internal reserve, we can make the use of the internal reserve for that purpose, I think the market will be expanding furthermore. In order to address such kind of increasing trend, we are continuously investing for our future growth. For the current development, long-term elements and also short-term elements. There are different elements when development long term and short term. When it comes to the creation of something new, it may take several years. For that long-term investment should not be suspended. Thank you very much. Thank you very much. That's all for today's session. This is the end of today's financial announcement. Thank you very much for joining us despite your very busy schedule. Thank you very much. Thank you very much