Thank you very much. It's time for us to start Tokyo Electron, the fourth quarter financial announcement. Thank you very much for joining us today despite your very tight schedule. I am Hirayama from IR department, acting as a moderator for today's session. Let me introduce the members on our side. First of all, 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. Tsuneishi will give you the brief greeting. Thank you very much for joining us. I'm very glad to see so many people in this room. Actually, we are just sitting here silently and quietly. Today, it's not the announcement of the retirement, unfortunately, but this is the end of our fiscal year, so I'd like to give a few words to all of you.
Thank you very much for your support and cooperation on our business. This is the financial announcement for the fiscal year 55 of Tokyo Electron. You must be curious, but you may know about the financial settlement for our company. As for fiscal 56, financial estimate might draw more attention from your side. That's how I understand. From now on, Mr. Kawai and Mr. Sasagawa will give you the presentations in detail. Transistor business, looking back the history, I have been working in this industry for long years, ever since the invention of transistor. Actually, last year was 70th anniversary of transistor invention. Transistor was evolving into IC, VLSI, and ULSI. Going through various processes, now we have memory, logic devices, and other devices. All those devices have developed and grown rapidly, significantly.
I think this is the first time, however, that data volume and data traffic will become the market driver. In the past, PC, smartphones, all those hardware were drivers of the market growth. A device was the market driver in the past. But now data volume or data traffic are very important market driver. AI, big data, and IoT era has started. Now we are going to see a new era. Over the past 70 years registered the chapter one or phase one, and we are about to start the phase two of our history. I don't know if phase two will last 70 years or 100 years, but we have established the foundation in the phase one for the further growth for the future. That's how I view this market. We have very optimistic outlook for the market trend.
When you look at other markets, it's a bit difficult. For example, cars, automobiles, hardware, some visible products are driving the market growth. The number of things determine the size of the market. But when it comes to data volume traffic, they are invisible, and semiconductors support that kind of invisible things. We are going to see the further growth, and that growth will be more drastic than before. Our fiscal 56, fiscal period 56, we are going to see further increase of profit and income. But when you look at global level, we are just in the middle of the growth. We have many first-tier global players, the world-class first-tier players in this industry, quite a few actually. We want to get closer to those first-tier global players, and we'd like to make every effort to further improve our performance.
Thank you very much. Mr. Sasagawa, Vice President, Accounting Department, will give you the presentation about the consolidated financial summary. Thank you very much for coming over to our meeting. I am Sasagawa, in charge of Accounting Department. I'd like to talk about the consolidated financial summary for the year ended in March 2018. The first slide shows the highlights of the year ending in March 2018. In 2017, thanks to the rapid growth of the semiconductor market, our product competitive enhancement was successful, and we have increased market share. Our profitability was increased rapidly, as you can see over here. Net sales was increased by 41%, achieving JPY 1,130.7 billion. The profit margins growth, profit margin, operating margin, net income margin hit the record high. Operating income increased by JPY 125.4 billion, achieving JPY 281.1 billion. Operating margin achieved 24.9%.
Net income was increased by JPY 89.1 billion, 77% increase to JPY 204.3 billion. ROE was 29%. You can see the financial summary on the quarterly basis. In the fourth quarter, sales level, there might seem some concern about lack of the achievement of our guidance for the full year sales. However, we have achieved our plan, as you can see over here. This shows financial summary compared with fiscal 2017. The net sales is driven by the SPE sales growth, increased by JPY 331 billion, achieving JPY 1,130.7 billion SPE sales. Output from market growth, JPY 1,055.2 billion. FPD increased by 52%, JPY 75 billion. Gross profit margin was 42%. The gross profit margin for Etching, Coater/Developer, Film Deposition System, and Cleaning System are value-added products or high depreciate value come.
Marginal profit ratio has been increased because of that gross profit margin was increased. Along with the sales increase, you can see the reduction of the manufacturing cost per sales. SG&A expenses increased by JPY 27.2 billion, JPY 193.8 billion. R&D was increased by JPY 13.3 billion from previous year, JPY 90.7 billion. Other than R&D expenses, we have some increase in bonus and labor cost because of the increase of headcounts. However, the SG&A sales ratio has been dropped drastically for the extraordinary loss was JPY 5.4 billion. The third quarter, we made an announcement, the loss on division of the retirement benefit, JPY 3.2 billion. Loss on payment of goodwill of Nexx, which is the American subsidiary, JPY 0.9 billion was appropriated. Bottom line, net income attributable to owners of parent was increased by JPY 89.1 billion, achieving JPY 204.3.
EPS increased by 77.4%, JPY 1,245.48. You can see segment information. SPE segment, 29.8% segment profit margin was achieved. Thanks to the drastic capital investment and our product driven the segment profit margin. For FPD, especially Etching machine, our competitiveness is very high for the G8 and G10.5, and also for generation 6 PICP technology has been introduced. The new product ratio achieved 100%, which contribute a lot to the increase of the profit margin for FPD, and this 70.7% is record high. FPD profit ratio achieves 23% in the second half of last year, and the fourth quarter, 25.1%. We are very close there. We're exceeding our target value for the midterm business plan. On this slide, SPE new equipment sales by application is shown. For memory, you can see rapid increase, the NAND and DRAM accounts for 60% in total.
In particular, driven by the strong demand for servers and proactive investment in next-generation technologies, sales of DRAM and non-volatile memory increased more than twice from previous year. For logic device, thanks to the increase of semiconductor demand in community, there is investment for wide range of nodes, and we have increased our sales drastically. Now you can see SPE new equipment sales by product. This slide, actually, on the previous slide, I explained the new product sales by application, but here by product. In the past, we include modification parts, consolidated SPE basis. From this year and on, we are going to release the information of new equipment sales only. As you can see, due to investment in non-volatile memory and device shrink enabled by multiple patterning, sales grew in our focus area, including Etching, Film Deposition, and Cleaning. Here you can see Field Solutions sales.
In this focus area, sales has been steadily increasing. This year, the sales exceeded JPY 250 billion. In particular, parts sales increasing along with the increase of our product delivery and customer utilization increases, especially for the leading-edge memory line, we provide large amount of parts. The part sales increased by more than 30%, and this contribute a lot to the Field solution sales increase. Now you can see balance sheet. The customer investment is very active, our balance sheet reflects the future increase of sales and capacity. The details are shown in financial review. For example, inventory increased by JPY 107.8 billion. The breakdown includes inventory of JPY 67.8 billion, work in process is JPY 24.3 billion, and raw material was JPY 15.8 billion. Fixed asset is increased by JPY 30 billion to JPY 111.6 billion. Increasing of the tangible asset, JPY 25.5 billion.
Miyagi Logistics and R&D building construction in progress is included. In Yamanashi and Kumamoto, we have renovation cost as well. On R&D and production, we also increased the machinery for production and R&D. An increase of net assets, mainly from the JPY 122 billion increase for the retained earnings. As a result, equity ratio was 63.5%. Now you can see inventory turnover and accounts receivable turnover. As for the turnover, because of the rapid increase of the fourth quarter sales, the turnover is improved. The inventory turnover was 111 days, and accounts receivable turnover was 52 days. Compared with the third quarter, you can see improvement in the fourth quarter. Finally, I'd like to explain the cash flow. Cash flow from operating activities is increased by JPY 57.7 billion from the quarterly basis, achieving JPY 88.1 billion, increased mainly by the net income increase.
Cash on hand, which is composed of cash and deposits with periods to maturity of over three months, was JPY 373.8 billion. Thank you very much for your kind attention. The quarterly data by application and by region are shown in the appendix at your handout. The quarterly data by application and by region are shown on the appendix of your handout. Please refer to that handout later on. Now, I'd like to ask Mr. Kawai to make a presentation on business environment and financial estimates. Good evening. I am Kawai. For today, I'm very happy to see so many people coming to our financial announcement. We are very much honored, thank you very much for coming to our financial announcement despite your very tight schedule. As Mr. Hirayama said earlier, from me, I'd like to make a presentation about business environment and financial estimates.
First of all, I'd like to explain SPE business highlights in year ending in March 2018. There are four major highlights, as you can see on the slide. As you know, on July 1st, 2017, we have established Tokyo Electron Technology Solutions by merging Tokyo Electron Yamanashi and Tokyo Electron Tohoku. By building this new company, the rapidly growing film deposition market, the two companies' film deposition technologies are well merged, and that was the aim of the establishment of the new company. We are going to start shipment of the products, but we are now sharing technology on the steady basis. That will be helping us to further improve our potential. That's the first highlight last year. You can see some tangible results already. The sharing of the production space is the first tangible benefits, especially in Tohoku.
They are producing Vertical Furnace mainly in the past, but they have started module shipment of that product. By introducing module shipment, we have increased the capacity by twice compared with three years ago. That's the system we have right now. Now we have the new space created by this module shipment. We can increase the capacity, and we also introduce the production of the Single Wafer Equipment in Tohoku as well. This is the first highlight for SPE business. I'll talk about the overall market trend later on, but now we are working on the high improvement of the efficiency and space increase. We are going to carry out the further CapEx, because mid-term, long-term market outlook is rather optimistic. That's the reason why we have decided to carry out the CapEx.
The second highlight is collaboration with customers. We are accelerating development of solution for process integration. The device shrink. Along with device shrink, we need to align processes to prevent defocus, for example, and also for film deposition, we need to do some alignment as well. Technologies are very important in this area. We need to take some approach for that. Cost reduction is also important. For that purpose, process integration is essential. For both cost and technology viewpoints, process integration needs will be increasing furthermore. We can see the collaboration with customers in many increasing areas. That's the second highlight. Number 3, as Mr. Sasagawa said earlier, last fiscal year, net sale was JPY 1,130 billion, increased by 41%. Our growth outperforms market growth.
For each product value, technology value increased, and profit ratio was increased by 5.4 points compared with previous fiscal year in terms of profit margin. That is a third highlight. Next, Miyagi plant expansion. That is the business expansion, in other words. The operation of the new logistics building started as planned from early this year. Also in this coming autumn, as we announced earlier, we are going to add one more production line to increase the capacity by twice. That's our plan for this coming autumn. At present, for parts, we are now working on the introduction of the automation for warehousing business in the production building. Maybe in the middle of this year, we can introduce automated warehousing activities for parts.
As you know, in the case of WFE, thousands of parts are to be used to build wafer fabrication equipment, we can improve the production efficiency by introducing automation for parts warehouse. For Etching, whose application we're expanding, we have started construction of new developing building. This development building, construction is completed in this coming September. These are the highlights for last year. For flat panel display business highlights. For flat panel business, we try to achieve the same level of the profit margin as FPD. By introducing highly value-added technology, we are going to increase the profit of FPD business. In particular, as you can see over here, the new technology like PICP Etching, we are now working on the business strategy smoothly and steadily. As Mr. Sasagawa said earlier, in the second half of last year, flat panel display profit margin achieved 23%.
We are getting closer to the midterm business target for operating margin, profit margin of 20%. We don't think 20% is a ceiling. We are going to further improve operating profit margin more aggressively in the future. You can see the calendar year 2017. Semiconductor production equipment market share. We are now using the completion of startup and testing base instead of shipment bases. You are concerned about the Q4 sales, Q4 sales is not included, for calendar base, etcher market share increased by three points. For Cleaning System, five points increase in market share. For the Deposition System, because of the product mix, we are not able to increase the share. However, for our focus product, ALD, we have increased our market share by two points. Flat panel display production equipment market share is shown on this slide.
This slide has been shown to you several times before. I'm very sorry for that. This shows outlook of the WFE market. The big picture is presented on this slide. In addition to the previous driver, you can see new driver, including IoT, AI, RPA, machine learning, autonomous driving, and blockchain. All those things are getting closer or more familiar to us. That trend is to be accelerated for the future. Because of that trend, semiconductor demand will be increasing exponentially. Accordingly, WFE is getting into the new phase of growth. Based on that market trend, now you can see our business environment outlook for this year. As for the WFE CapEx, in the previous meeting, we announced a 10% increase in the WFE CapEx. However, we can see very strong memory demand, especially for DRAM demand is very high, we can add 5 more %.
Now, WFE CapEx is expected to grow by about 15% on year-on-year basis. For flat panel display production equipment Last year, we saw a rapid increase of growth, in the previous meeting, I talked about 20% increase in CapEx for FPD. As you know, the capital investment for small and medium panel for mobile applications are now undergoing adjustments. Despite of that situation, you can see rapid increase last year, we can see 10% more increase this year. That's our outlook or forecast. Now you can see WFE market and business opportunity by application. Here you can see the summary. For DRAM, last year, the 70% growth was achieved. For this year, you can see the 6% more increase. DRAM market is expected to grow by 60% this year, 70% of investment is going for new fabs.
In order to increase bit capacity per wafer, 80% of investment is for the 1x/1y nanometer device nodes. The number of servers is increased, and also average DRAM content in server increases. These are the driver of DRAM demand. For DRAM etching share, we can see some increase in share in etching, and DRAM increases furthermore this year, so we can see more potential for growth this year. Non-volatile memory. The same level forecast from last year. The leading edge next generation investment will be accounting for 50% of the total market. There are some adjustments, however, the Chinese market and other non-volatile memory demand are strong. As a whole, in the non-volatile memory, you can see the same level for investment CapEx for non-volatile memory. Number three, logic and foundry. The ever-increasing complexity is shown in patterning technology.
Again, you can see the same level of business is expected as last year. According to understanding, 2017, WFE market was $51 billion. That's what I thought. That's our understanding. For this year, $58 billion is to be achieved, according to our forecast. Fiscal year 2019 financial estimates. The net sales for the first half of this year is JPY 690 billion. Second half is JPY 710 billion. In total, JPY 1,400 billion. Sales is increased by 23.8% from the last full year basis. You can see the breakdown for SPE, FPD on the slide. For operating income, for full year basis, JPY 366.0 billion and operating margin will be 26.1%, 1.2 point increase from the previous fiscal year for operating margin.
As you can see for the sales, our sales growth will exceed the market growth, we can also improve the operating margin, we can record profit high. We can record high profit for third consecutive year this year. You can see SPE new equipment sales forecast by application. This year as well, continuously 3D NAND will be the biggest driver. For DRAM as well, you can see increase in investment. Purple represents 3D NAND and other NAND non-volatile memories. The blue color represent DRAM. For DRAM, as you know, the DRAM supply is very tight, so new equipment investment will be increasing rapidly. For 3D NAND, the demand for SSD is rather well, and also this year and last year, next generation investment will be starting up, and you can see high potential. For logic and foundry, 10 nanometer and 7 nanometer device node investment will continue.
In parallel, the investment is also strong for classic device nodes of 28 nanometer and before. This shows fiscal 2019 R&D expenses and CapEx plan. R&D expenses will be JPY 120 billion. For this, just like before, we are now focusing on film deposition, etching, and cleaning, we'd like to continue investment for further sustainable growth for entire product portfolio. More than last year, we'd like to invest money for the R&D so that we can promote the further growth for CapEx. Last year, for etching was the major area of CapEx. As I said in the beginning, film deposition, we are now working on various measures to enhance efficiency. This year we can see increasing demand, future demand is also increasing, more applications are also considered.
In Yamanashi and Tohoku, we are going to build the new production buildings that is necessary. In those two area, for Film Deposition, Gas chemical etching, and Test system, for those areas, we are going to construct the new production buildings to meet the very strong demand. At the same time, we need to enhance the efficiency of production. This is the last slide, the dividend forecast. Thanks to the very rapid increase of the sales, our dividend per share increased by 32% on year-on-year basis. We are going to enhance the profit increase so that we can provide the shareholder return more than before. Thank you very much for your kind attention. Now I'd like to entertain questions from the floor up until 6:30 P.M.
I'd like you to limit the question to one for each person, followed by another question, and please identify yourself by name and by affiliation. Please speak slowly and articulately when you ask questions. Could you raise your hand if you have any questions? Yes, the gentleman on the front row, please.
Thank you very much. I'm Wadaki from Nomura Securities. Thank you very much for a very positive business admit, and congratulations for the third market share according to Gartner survey. I have a question for the market outlook. There are some adjustments, that's the rumor I heard. Specifically, Samsung investment might be increased, or Hynix is rather pessimistic in their investment. Do you think it's okay for the market? Be really happy if you say no to the weak trend or rumor for the investment for the future.
I'm not able to make any comment for each individual customer, as a whole in the market, as I said in my presentation, the market will be increasing steadily for the new moving on to the new phase. I have very positive forecast for the future and my message remain unchanged at all. This industry is now getting into very stable growing phase because of the background of some customers. The number of customers and also players are now fixed in this industry, so customers can have the outlook of the entire market. As the SPE vendors, we are very happy to see that kind of trend of the customers. When I talk with many customers, As for the detail issues, customers are now getting very critical view for the market trend.
However, when I talk with various customers, they may take some short-term investment adjustment only for short period, only for quarterly basis. There should be no, can I say, trend of the adjustment at all in the investment by the customer. I have one follow-up question. On page 23, you can see the sales forecast. Memory will be decreasing slightly in the second half of this year. I think, could you give me your forecast for next year, next fiscal year?
We have very positive outlook for the future, please wait for May when we make announcement of our midterm business plan. That's when we are going to make announcement of our medium-term outlook. Thank you very much. Thank you very much. Any other questions? Yes, the gentleman on the front row as well, please. Thank you very much. I am Ogawa from Goldman Sachs Japan.
I also have a question about SPE market outlook. For this year's sales increase is expected for 22% for SPE. Yesterday, your competitor made announcement of financial results, and also there are some other overseas competitors. Their outlook is the same or more than your estimates for the increase in sales, and you are now increasing share, and you have some product mix advantages, so you may outperform the market growth. Are there any reasons why your outlook is behind your competitors? For this year's CapEx timing, investment timing is one of the issue, but slightly our sales criteria is one of the factors of our sales outlook. Continuously, we are going to increase share and profit. I'm sure the increase of those three areas, especially for DRAM area, last year, we saw the successful results, and you can see steady increase in DRAM market.
Especially, the growth of DRAM is really big in terms of potential, so we have very positive outlook for the future. Mr. Wadaki talked about the Gartner survey results, and our application orders is really high, so I think we can have a positive impact. There, if there is any difference between our outlook and competitor's outlook, that is partly because of the difference of the sales criteria. Our competitor's financial announcement and our outlook might be different because of the different viewpoints, so I cannot give you anything in detail. Based on the last year's performance, our performance this year or outlook this year is not behind our competitors. I have one follow-up question about the Chinese semiconductor market outlook. Do you have any comments on that? In 2019, JPY 3 billion WFE is expected for 2019.
What was the results for 2017, and what sort of outlook do you have for 2018 and 2019?
In principle, our explanation remain unchanged from the previous meetings, and there is no major changes in our outlook. Customers' startups activities are a little bit delayed, and schedule delay might take place. However, their plan remains unchanged, and future growth of Chinese market will be steady, as I've explained before.
Thank you very much.
T hank you very much for your question.
Next question, please. Yes, the gentleman next to the person who asked the question earlier.
Thank you very much for your presentation. I'm Yoshida from Deutsche Securities. I have a question on slide 23. You have the new equipment sales forecast by application on the six-month basis. When you calculate on the year-on-year basis, DRAM increases by 80%, NAND increases by 10%, foundry increases by 30%, and logic remains flat.
For foundry this year or this fiscal year, you can expect 30% increase in foundry. Could you just explain why you expect 30% increase in foundry? Excuse me, could you repeat your question once again, please? On page 23, you can see the new equipment sales forecast. When I calculate the full year basis for foundry, about 30% increase is expected from previous year. That's what I understand. I want to understand the background of the increase, and I want to see the investment. 7 nanometer plus or beyond will be increasing, or 5 nanometer pilot line will make a big contribution. Next year, do you see some further potential in the investment for the foundry? Could you explain your background, please?
There is no one single word to explain the reason why the 30% increase for foundry, but there are some investment for the shortage of the supply, while also investment for the future generations. Some process under development are to be completed and which start contributing to business increase. Many things are just contributing to the increase of foundry by 30%. Last year, foundry was rather weak. Do you think there is the sustained recovery trend for the foundry for this year? On this slide, the green portion represent the foundry. For logic and others, logic foundry, next year, you can see the high potential, good potential for next year. Thank you very much. I have another question, follow-up question for FPD. The second half of last year, the profit margin of 23% has been achieved.
For this year, the sales is basis profitability of FPD, but what sort of profitability do you expect for FPD based on this year's sales? I want to ask about the FPD profitability.
Profitability of the FPD by segment, profit margin is not disclosed, you can see very similar image. I think the size of sales will be increasing and product mix doesn't change so drastically, you can see good prospects for the FPD business as well. That's maybe almost the same as the second half of last year. Is that correct understanding? I'm sorry, we do not disclose any information of segment-based information. Thank you very much for your question. Next question, please. Yes, the gentleman on the front row, please. I am Hirakawa from Merrill Lynch Japan Securities.
The first question is about on the balance sheet, I want to ask about the concept of the cash. Now you have the cash of JPY 370 billion. On the other hand, your sales is increasing. How much cash do you need at this moment? What is the appropriate size of cash that you have? If you have any figure, please let me know that. Well, probably your question is about our approach for the share buyback or share repurchase, our policy for share repurchase hasn't changed. Actually, I myself have been talking with the top management of the various global customers, there are so many potentials for growth. On the other hand, when you look at macroscopic economy, there are various factors in macro economy, I should say. It is so difficult to make some forecast for the future.
Many things might happen in our economy and society, SPE area is sure to grow further and more, we'd like to think about the way to continue our investment so that we can promote further growth. We need to think about the best approach to our shareholders, we also think about sustainable growth, we also need to think about the corporate value. We'd like to make agile use of the cash. That is our policy for our internal reserve, that policy hasn't changed. Previously, we talked about JPY 250 billion, we don't think about that. At present, you don't think about any appropriate cash level of JPY 250 billion. At that time, maybe I answered to your question in that way. However, maybe when I was asked that question in the past, maybe I dared to say the cash level.
I answered that way. But now we are in the new phase of further growth in the market, and the answer I made previously is just in the past. I don't think there is any misunderstanding, JPY 250 billion. About one year ago, Mr. Hori was CFO, and he talked about JPY 250 billion could be comfortable level. However, when you look at balance sheet, we don't think we must have JPY 250 billion. It's not necessary, yes. Our top priority in terms of use of cash, first of all, I'm sorry, this is rather conceptual answer. We'd like to make investment into further growth of our company. In short-time basis, you may see the accumulation of cash, increase of cash. That's how you understand our cash level.
However, mid-term, long-term basis, the cash is to be used for the further growth, return to the shareholders, or share buyback policy, including those possibilities. We'd like to make right decision for the cash usage at the right timing. That's our way of thinking. That's the reason why we try to be flexible in terms of the share repurchase. Anyway, the money we have needs to be invested for further increase. M&A could be one of the possibilities or options. Also, we may purchase technologies by using cash. That could be another option. We might have some business partnership. There are various ways to use cash. The investment for growth should be the answer I need to give to you. That is the area that we place top priority.
In the capital market, we are working in the capital market, and there are basic rules for business with the shareholders, relationship with shareholders, or engagement with shareholders, that we need to abide by those basic rules properly so that we can have the global standard approach in terms of use of our cash. I'm sorry, my answer is rather qualitative.
Thank you very much for your answer. Thank you very much for your question. Next question, please. Yes, the gentleman on the first row, please. I am Miyamoto from Mitsubishi UFJ Morgan Stanley Securities. I have a question on slide nine. I can see new equipment sales by product based on this. For this fiscal year, new equipment itself, 25% sales increase is expected. If that's the middle, then for each product, which product sales increase more than 25%, which product sales were below 25% increase?
Could you let me know about the image of that sales level of different products? For market environment, DRAM growth will be driving the WFE sales. That's what I said in my presentation. As for our products, for DRAM and other products, there is no major changes according to my understanding. Therefore, product mix will remain unchanged so much, especially the DRAM greenfield investment will be the major area. The incremental will be for our Film Deposition System, Coater/Developer, Etching and Cleaning System, and our customer understand the value of those products, and we have increased value and market share as well. I think all the product promote our sales, and there is no major change in the product mix either. Thank you very much for your answer. When I talk with the investors, your company's sustainable growth is highly expected by the investors.
In the beginning, Mr. Tsuneishi talked about your intention to getting closer to the global tier 1 players. On the other hand, you have eliminated position of CFO, and the CFO also, Mr. Hori resigned from CFO. I think CFO is critical function, but when you, in the board of directors meeting, what sort of pros and cons, what sort of discussion was going on for the elimination of position of CFO? Could you share your idea with us, please? Discussion in the board of directors meeting cannot be disclosed in today's meeting. The position of CFO was established in fiscal 2018 for the first time in our company. During fiscal 2018, the CFO position was eliminated, so I understand many of the investors get some concerned.
I can say at this moment, we have short-term, midterm, long-term strategy for the further growth of the future. In order for us to optimize our growth strategy, we have decided to eliminate the position of the CFO as the best top management team. That's our best conclusion for that. Having said that, Mr. Hori is expected to further contribute to the improve of corporate value of Tokyo Electron, he is very precious human resource for our company. We haven't lost Mr. Hori at all. Another point I'd like to emphasize is up until fiscal 2017, there was no such position as CFO. Function of CFO is necessary, and it might be better for us to have position of CFO. Maybe in the future, sometime, we may assign a person for the position of CFO.
I don't know when. There is a possibility. That's my personal expectation. I think the function of CFO will be necessary. There are so many factors like cultural factors. As I said earlier, we have short-term, midterm, long-term business strategies. Under the Mr. Kawai, CEO, we have the appropriate optimum management team for as of today. Tomorrow, we may have different decision. That's how we are going to promote our growth for the future. I'm sorry. Now you are getting closer to global first tier 1 company. For that purpose, you think your current management team is the best way, best decision? Positions or human organizational structure, we need to catch up and exceed global first tier 1 companies. For that purpose, we need to achieve the superiority in product and technology, which is important. Of course, management quality is really important.
I understand that issue. We are in the high technology industry, and what we need to do is to enhance product performance and technology in order to fight against many competitors. We need to further enhance our current performance. At the same time, we need to create new, highly value-added products. Now we have increased R&D expenses drastically, which is because we think the development of the new products is really important. Mr. Kawai, do you have any comments to add to my comment? As Mr. Tsunei said earlier, in particular, our market has high potential for further growth. Fortunately, hardware, FPD, SPD, is expected to have high hardware technology and software technologies. On top of that, wafer process technology is essential. From now on, we need to focus on after-sale service as well.
Those four are really important. Those four areas require high experience, long-term experience. Otherwise, we are not able to do good job in those four areas. For technology criticality, our position is to be enhanced further more, and the market expectation is rather high. In order to meet customer expectation with high speed, we need to establish appropriate organizational structure. At the same time, for the future operation, rather than each one in each individual contribution, but we need to make the best use of the organizational capability so that we can focus on our growing area. Agile, flexible operation is really necessary for us to provide value added to the customer and for us to continue growth. That's what we need to think for the future growth. Thank you very much for your question. Next question, please.
Yes, the gentleman in the front row, please. Thank you very much, representations.
I am Moriyama from JPMorgan Securities Japan. I have a question about Etching market share. I'd like to get some clarification from your side. Last year, 2017, a 3-point increase in market share for Etching. That's what you say in the presentation. Previously, you talked about this leading NAND slit area. What about market share? That is the major driver or DRAM area. You have enhanced the market share for Etching system. I think DRAM area should be the major driver to increase the Etching market share. That's my speculation. For this year, what sort of strategy do you have to further increase market share of Etching? It was the DRAM area which made the significant growth last year.
In our case, for the slit process, we won the orders, but we need to win each application one by one from now on. Last year, the mass production phase contribution, I think the DRAM area should be the major contributor to increase our market share for the Etching process, and we want to see the continuous level for this year. For slit process, we won the new application. We have another customer, and another customer will start the investment this year. There, we want to see some positive factor for the 3D NAND. Thank you very much. Thank you very much. Next question, please. The gentleman on the second row, please. I am Yasui from UBS Securities Japan. I also have a question on market share. For this year's guidance, you presented the sales focus by application.
Also on page 23, when I do some calculation, from fiscal 2018 to 2019, DRAM sales is expected to increase 76%. Earlier you said DRAM WFE is a 6% increase, you expect this share increase. NAND remains almost flat for WFE. On the other hand, your sales guidance is a 10% increase. For both cases, you can see increase for the market share. Is that because of the improvement in customer mix, or is that because of the technology factor that you can The TAM is increased and product mix is increased, and your sales seems to be increased. Could you explain the reason or mechanism for this year? You can see the increase of market share for the future. For this fiscal year, yes, that's correct. As for the memory, we expect the increase of the market share. That's your question. Is that correct?
For etching system, as I said earlier, in Korea, some growth is expected. As for 9X generation investment, slit process application has been won, and that should be one of the contributors. These are the positive factors. Also, for Cleaning System, in particular for 3D NAND, batch cleaning application has been won. Single wafer process as well. New application has been won by our company. These are the reason why we have increased our market share by 5%. Memory-based investment is expected to continue this year as well. For Cleaning System, the Japanese competitor won the order from the major IC vendor. Does that impact your business? Rather than impact, our company ourselves, we are always very careful to look at the trends or situation of the competition under evaluation.
Needless to say, we have grown rapidly so far, and our competitors are taking appropriate approach to further enhance their business as well. We need to work hard to challenge to the market. I'm sorry. What you mean is you haven't lose your share because of the order given to your competitor by the major IC vendor? You are talking about the future, right? Your question is, we are not going to lose any share. Is that your question? That's correct. We don't have any intention to lose our market share. Thank you very much for your question. It's time, actually. However, there are so many people who are raising hands, so we'd like to extend our question and answer session by five minutes or 10 minutes. Yes, the gentleman in the middle, please. Close to the wall, please. I am Nakanomyo from Jefferies (Japan).
I have a question on DRAM. Midterm, long-term outlook. This year, the DRAM is expected to grow significantly. The market and your sales is expected to grow by 60%-70%, but on the other hand, big growth is only limited to 20%-30%. The DRAM price doesn't increase so much compared with last year. IC vendors investment efficiency will be deteriorating in the future. Maybe two to three years from now, in the future, what sort of outlook do you have for the DRAM market? Do you think the DRAM remain flat at high level, or do you expect some crash in the middle? The DRAM price will drop, and investment will stop. Last year, when you look at the midterm perspective, do you think current level is sustainable? How do you think about the future outlook of the DRAM?
First of all, under the current model, the customers are now promoting device shrink, and accordingly, the number of processes is increasing, and price of equipment will be increasing as well. That's the main area of concern, and I think you're asking about that issue. It is true that we need to think about appropriate approach to these concerns. As for that issue, as I said earlier in my presentation, process integration should be essential to help customers produce their products at low cost. When I talk about the entry barrier after sales services or fab operations, we need to help our customers to increase their uptime ratio or enhance the yield. That's another approach we need to work on. These are the area that we can find business opportunities. Also, the value of semiconductor themselves are expected to change little by little.
That's the gut feeling that I have. In the past, the semiconductors were the product to be mounted onto PC, but from now on, the value of semiconductors will be increasing in order to create good experience. We need to enhance service furthermore. Also, we must make the best use of high technology so that we can come up with good service model. We need to make the best use of our knowledge so that we can help customers to improve uptime ratio, improve yield. We also provide some business opportunity to come up with the low-cost devices through process integration. We also provide the high-performance devices. In this way, we can continue growing furthermore. Thank you very much. Next question, please. Yes, the gentleman behind, two to three rows behind, please. I am Yoshikawa from Morgan Stanley MUFG Research, Japan.
You have very positive and very strong financial estimates. Compared with American competitor, your financial estimate is really strong and positive, especially when you compare first half and second half, maybe difference in between calendar year and fiscal year. In your case, the second half of fiscal year, the sales is expected to grow or higher, and that could be stronger compared with American competitor. By application, the strong DRAM investment will continue. That should be the strong message from your announcement. As Mr. Sasagawa said earlier, this year, DRAM greenfield investment will be taking place. In the second half of this year, you see even in the second half of this year, we will see the continuous investment for the DRAM greenfield. First half and second half, are there any changes in terms of the investment for DRAM?
As Mr. Sasagawa said earlier, the new production line, new investment, and new equipment. Investment to new lines and new products will continue this year as well. You also announced the construction of new plants. That's set for 2019, 2020. You said WFE will exceed $60 billion. Maybe you can give us more detailed information in May. Is that correct understanding? The market size will be determined by the expansion of applications, share increase, and market trend. Based on the overall comprehensive decision will be made. In May, we are going to make some official announcement of our mid-term business plan. You can tell our implications from our decision to build new manufacturing plants. Maybe we can take one or two questions more. Yes, the gentleman next to the person who asked questions previously. I am Damian Thong from Macquarie Capital Securities (Japan) Limited.
I have only one question on EUV lithography. ASML announced their key messages. Your company is Coater and Developer, and etchers two to three years to come. What sort of trend do you see? What is the impact of EUV lithographies on your products? For the EUV lithography, we do have a lot of expectations for this technology. There are some remaining issues in terms of EUV lithography technology. When the EUV lithography process is completed and established, you can see the technology innovation breakthrough. That is the major impact. It's not only the demand for PC and hardware, also you can see demand on the society. We have this kind of technology innovation, our business opportunities will be increasing furthermore, not only our Coater and Developers. This kind of technology innovation will help us to expand our business in all applications.
We'd like the EUV lithography to be widely adopted by the clients. Thank you very much. Thank you very much. The gentleman in the middle, please. Please. I'm Yamamoto from Mizuho Securities. I have a question about the resignation of CFO. We got the press release, but I would like you to give us some comments. I don't know this is the reason or result, but according to the organization chart, the departments under CFO are now reporting directly to Mr. Kawai, and that will accelerate the speed of management. Why can you accelerate the speed of the management by having those department under Mr. Kawai? Could you explain that area, please? First of all, Mr. Hori has the diversified knowledge, which is really critical for me and important for me. We have a close communication with Mr. Hori in all areas.
Our offices are close to each other, so we can discuss each other at any point. We are prepared to address any changes, and we can take that sort of action individually. In addition, me myself right now are taking care of corporate strategy planning department and accounting departments. Mr. Sasagawa is over here, so rather than one person's driver, but now we have very big business size, so we have a kind of one brain. As for the decision to be made for the organization, we need to have organizational decision rather than the individual decision. We can accelerate the decision by having organizational approach. We'd like to communicate my message throughout the world. That's the decision we made.
From the viewpoint of the governance, I'm afraid your organizational structure is getting weak, as I hope you can come up with some fruitful result by accelerating the speed of your management. Thank you very much. Any other questions? There is one housekeeping information. We already informed you by email. On May the 29th in this room, we are going to hold the mid-term business plan announcement meeting. If you have any time, please join us in that meeting as well on May the 29th. Thank you very much. That's all about today's meeting for the financial announcement. Thank you very much for joining us today.