Ladies and gentlemen, thank you very much for waiting. It is time for us to start Tokyo Electron's second quarter financial announcement. Thank you very much for joining us today despite there are so many financial announcement at different companies. I am Hirayama of IR Department. I will be acting as the moderator for today. From this month, I have succeeded from my predecessor, Mr. Sasagawa. From the viewpoint of the corporate value, I would like to make every effort to improve the IR activities. I really appreciate your continuous support. First of all, we would like to introduce the attendance from our side. We have Mr. Tetsuro Higashi, Representative Director, Chairman of the Board. Next, Mr. Toshiki Kawai, Representative Director, President, and CEO. Thank you very much for joining us today. Next, Mr. Tetsuro Hori, Representative Director, CFO, Executive Vice President.
First of all, we would like to ask Mr. Hori to make a presentation about the consolidated financial summary for the second quarter. Mr. Hori, please.
Now I would like to make a presentation about Tokyo Electron consolidated financial summary for second quarter of the year ending in March 2018. Today is Halloween, but I do not wear anything special. Next slide, please. You can see the second quarter highlights. The sales hit the record high at JPY 280.5 billion. On the quarter-over-quarter basis, you can see it increased by 19%. For SPE new equipment sales, 60% of them is for the memory customers, thanks to the strong demand for 3D NAND and DRAM devices. Next, the Field Solutions business sales has increased by 18%, achieving JPY 64.4 billion. For the second quarter, the profit margin increased steadily.
Operating profit margin was 24.4%, making a new record high on the quarter-over-quarter basis. The profit margin of FPD segment, actually in the first quarter, we saw some decline, but now we can see the recovery as expected. Later on, Mr. Kawai will be talking about more details, but because of the active demand for semiconductor devices, the full year sales and profit estimates has been revised upright. You can see the financial summary. For the net sales, for the second quarter, JPY 280.5 billion and gross profit margin was 42.1%. SG&A expenses, JPY 49.7 billion, operating income JPY 68.5 billion, 24.4%, and net income was JPY 49.4 billion, as you can see over here. Compared with previous quarter, all the figures have improved positively. Next slide, please. Now, quarter-over-quarter financial performance is shown here. You can see the sales, operating income, and gross profit margin.
For the sales, compared with ever since second quarter last year, you can see increasing trend. Profit margin is also increasing slightly, and operating margin now achieved 24.4%. We can see the high level of the operating profit margin. 24%-26% operating margin is a target shown in the mid-term business plan, and we are getting closer to the target level of the operating margin. You can see the segment information. On the left, you can see SPE profit margin. You can see the steady increase in terms of segment profit margin for SPE. In some cases, SPE, compared with sales increase, the segment profit margin does not increase so much. However, in the previous meeting, SPE profit was brought forward, and after that normalization process is taken, That is offset by the WFE sales, and the profit margin remains at flat.
This is not a big problem according to our understanding. As for the flat panel display, as I said earlier, first quarter this year, you can see slight drop because of the business of the low profit margin business. Now you can see in recovery, you can see the rather specific unique point of the profit margin for the first quarter. As for the composition of net sales, SPE accounts for 95% and FPD accounts for 5%. Next slide, please. Especially now, here you can see the sales by region. This time, second quarter, Korea sales was rather significant. First quarter, we also saw the big sales in Korea, but in second quarter, you can see more sales in Korea. It's not so conspicuous. However, the sales in Japan has been increasing steadily to some extent. Next slide, please.
Here you can see new equipment sales by application. The second quarter, as you can see over here, as for the amount, the purple portion, 3D NAND, non-volatile memory sales, accounts for large portion. When you look at proportion, actually sales in second quarter is rather big, so proportion itself is declined from 40% to 35% from first quarter to second quarter, but sales itself remains flat, unchanged, not much. Blue portion, DRAM sales, reaches 25% in second quarter. When you add them up, 60% for memory sales in second quarter. As you can see on the bottom, you can see some increase in DRAM sales to Korea and Taiwan, and Logic to Korea and U.S. On the other hand, you can see some decline in Taiwan foundry. That is overall trend of the sales composition by application in the second quarter of this year.
Next, Field Solutions sales are shown over here. You can see the steady increase, although there have been some fluctuation. Second quarter this year, Field Solutions sales achieved JPY 64.4 billion. Field Solutions sales has been increasing steadily so far. Next slide, please. Balance sheet is shown over here. The second quarter, as you can see over here, the total assets exceeded JPY 1 trillion. This is first time for us. JPY 1 trillion, we don't say that is big enough to be good. We don't say such kind of thing, but on the left you can see the assets. The cash and cash equivalent was JPY 129.9 billion. Inventory JPY 283.4 billion, quite huge portion for the inventory. In our company, we have the very unique recognition system for the sales, as I said before.
The equipment which are already shipped, but waiting for the installation. Actually, one third of the shipped equipment are just waiting for the installation at customer sites, and quite a few equipment already shipped just waiting for the installation at the customer site. That is the reason why you can see the huge amount of inventory. On the right, you can see liabilities. We don't have any debt, so the profit of the first half is just recognized as net assets, and net asset increased, and equity ratio used to be 67% at the end of March 2017, and now we have 68% of equity ratio in second quarter, one point increase. Next slide, please. Inventory turnover and accounts receivable turnover are shown over here. As for the accounts receivable turnover, because of the big sales, 54 days.
Our midterm business plan set the target of 60 days, we are just below our target. As for the inventory turnover, 107 days, slight decrease from previous quarter. Our target in the midterm business plan was 95 days, but I said earlier, one third of the shipped equipment are just waiting for the installation at the customer sites. The size of inventory itself is following our plan. Now you can see cash flow. As you can see here, the free cash flow second quarter was JPY 34 billion for the second quarter. The orange color, the cash flow from the financial activities are just payment of the dividend. We achieved JPY 43.4 billion for cash flow from operating activities.
You can see slight decrease in the free cash flow in the first quarter because of the increase of the inventory attributed to the increase of the shipment, as I said earlier. Increasing number of equipment is now waiting for the installation. As for the free cash flow, in a sense, we can see the very good conditions on the steady basis. Thank you very much. That's all about my presentation of the financial summary for the second quarter. Now we have Mr. Kawai, our CEO, make a presentation about our business environment and financial estimate revisions. Mr. Kawai, please. Once again, thank you very much for joining us today. Now I'd like to make a presentation about the business environment and revision of financial estimates. First of all, let me start with the WFE market outlook.
As you can see here, there are some drivers for future growth, they are driving the growth for the future, along with the start-up of the high-performance computing and data-centric society. Now we can see semiconductor market growing rather rapidly right now. Accordingly, WFE market is reaching $45 billion or more. That is the trend in this market. For next year, DRAM, 1X nanometer, 1Y nanometer, and 3D, 9X generation. For logic, 7 nanometer and pilot line for 5 nanometer. Because of those factors, you can see the continuous and steady growth of the market is expected for next year as well. 2019 and beyond, you can see the full-fledged introduction of 5G. As we said before, the equipment market will step up to a next phase. That's our recognition. Amid those circumstances, this year's business environment is shown on this slide.
First of all, for WFE CapEx. In the previous meeting, I said that 3D NAND and DRAM demand drove the market, growth rate of 10% or more was expected. That's what I said in the previous meeting. However, recently, I got the information from customers, you can see some positive upward revision can be shown. I said in the previous meeting, we may revise our forecast in the revision of budget. Actually, you can see the 25% growth from previous year. That is our new forecast for this CapEx, year 2018 as well. This year, you can see 25% increase. On top of that, the 2018 you can see equal or more than this year's CapEx. I'm looking forward to next year, me myself.
As for the FPD production equipment CapEx for the TFT array process, again, the demand in 2017 is expected to increase by 30%, driven by the continuous investment in small and medium panels for mobile applications and set up of G 10.5. As for FPD production equipment as well, CY 2018, thanks to G 10.5 investment expansion, you can see 20% more growth than this year. That is our expectation for next year. Next. 2017 market growth and business opportunities by application. Let me start with NAND. In the previous meeting, I talked about 30% market growth ratio, but actually now you can see the market growth of 50%. That is our revision of the market trend future. As for the CapEx, 6X 7X generation investment accounts for about 70%. NAND bit growth is supported.
Actually, 45% bit growth is expected, but about half of that is attributed to the demand for the SSD, and especially SSD for data center. That growth is very active right now. For this year, 3D NAND CapEx, when you look at capacity, as you can see on the right-hand side, 700,000 per month. That level of capacity is to be reached this year, according to our forecast. As for the business opportunities, the etcher slit process should be our opportunity. Next year, as I said earlier, 9X generation investment will start, including that 3D NAND capacity achieves 1.1 million level per month. This year, for slit process, actually two companies. We won POR for two companies, out of which one company adopted our etcher for the high volume production.
For next year, the second customer also use our system for the high volume production process. We expect the growth according to that trend. DRAM, 50% increase is expected. For CapEx, 1X nanometer node, the leading-edge node, accounts for 60% of the investment. Drivers include average DRAM content in mobile device will increase by 25%, and DRAM contents in servers will also grow by 40%. Business opportunities, once again, etching system. In particular, the combined patterning and back-end of the line, the interconnect process. Those two are the opportunities for us, and major leading two companies have adopted our system. That constitute our business opportunity. Next, logic and foundry. We are projecting the same level as the previous meeting. You can see increasing difficult patterning, and miniaturization, and device shrink.
We are providing the diversified range of the products. We'd like to make a steady progress. That steady progress has been confirmed so far. Next, 2018 SPE business progress by segment is shown over here. In particular, we are focusing on three areas, etching, film deposition, and cleaning. For each area, we are increasing our shares. We have been providing high value-added products to address next generation technologies. When you add them up, you can see the increase of share by several points in every area. For memories, for etching, film deposition, cleaning, on average, we have doubled for the growth. 3D NAND high-speed testing system, that is called Multi-Cell Test System. In other words, Cellcia is a product name, and you can see the three times of growth from the previous year. By and large, SPE business strategy has been followed as planned.
Next, FPD business progress is shown over here. Again, you can see very steady progress. There are three issues. Number one, generation 10.5. We are establishing leading position for G 10.5, and we have the ICP etching system having high uniformity and low power consumption, and that sales is rather good. We have the new platform, MetaleX, having that ICP chamber. We had three chambers before, but now we have increased number of chambers to five, from three chambers to five chambers. We have released this new platform, MetaleX-based etching system, from July this year as planned. In particular, for the profit, we are focusing on improvement of the profit, and we can see the steady increase of the profit. Based on that background, for fiscal 2018, we have revised our financial estimates. Here you can see the result of the estimates.
Thanks to the customer investment increasing and increasing market share, we have revised our financial estimate upward. The sales for full year was increased by JPY 150 billion from the previous estimate, exceeding JPY 1,130 billion. The gross profit margin was 41.3%. Operating margin will be 24%. Our financial model for midterm plan is getting closer based on our results. FPD, as you can see here, SPE, JPY 1,054.7 billion. FPD sales is expected to be JPY 75 billion. The net income attributable to owners of parent is JPY 198 billion. We are going to revise our record high drastically. EPS will be JPY 1,206. Now you can see the SPE division new equipment sales forecast. This show new process tool sales forecast by application, and you can see proportion of them. The blue color shows DRAM. Purple represents non-volatile memory.
Green color represents logic foundry, and orange color represents the logic and others. As you can see over here, for the second half of this year, the DRAM, just because of the tight supply, you can see sharp increase in investment. 3D NAND is also very steady. 9X generation equipment is to be delivered from the second half of this year. Logic and foundry, 10 nanometer and seven nanometer investment continues. Solid investment also continues for the previous nodes before 28 nanometer. As I said earlier, this is about the new equipment sales forecast. As for the Field Solutions, the first half of this year, JPY 110 billion. Mr. Hori earlier talked about second quarter. The first quarter and second quarter in total, actually the first quarter is JPY 118.8 billion. Second half is JPY 130 billion. Full year should be JPY 250 billion.
That's our plan for this Field Solutions. Next, fiscal 2018 R&D expenses and CapEx plan is shown over here. R&D expenses is increased from JPY 94 billion to JPY 100 billion or more. CapEx as well, used to be JPY 42 billion, but we have now upward revision to JPY 50 billion. JPY 8 billion increase for the CapEx is for R&D tools. Especially in order to differentiate ourselves, we are developing the next generation technologies to address the process integration. This is my final slide. Dividend forecast is shown over here. As you can see here, we are expecting to raise dividend per share more than 70% year-on-year basis. The dividend reached new record high for four consecutive years. We are going to focus on the profit increase so that we can improve our shareholder return activities. Thank you very much. That's all about my presentation.
Thank you very much. I'd like to start the question and answer session up until 6:30 P.M. Could you raise your hand if you have any question, and identify yourself by your name and affiliation before asking question. Today, we have so many attendees, I would like you to limit your question to one, followed by another question. This question and answer session webcast is to be uploaded on our website. Please make your question concise, and please speak slowly. At your hand you have the questionnaire survey, and really appreciate your support for this as well. Could you raise your hand if you have any questions? Yes, the gentleman in the front row, please. Thank you very much. I'm Wadaki from Nomura Securities. I am getting very happy when I come here, and today I become very excited today. I have one question.
My major question is about 2018 outlook. That is my major concern. Actually, TSMC investment, I have some concern about TSMC investment for the future, you have the four different categories according to your system. You have another factor, like China. How do you see the growth next year? How do you see the market next year as well?
In principle, as I said in my presentation, we will see next year as equivalent or more than this year. However, me myself talked with top management of different customers, and I can get the very positive information from our customers. Therefore, there is some possibility that the market condition will be revised upward.
When you adapt everything, you can see the drastic increase in market, I think on the balance, we came up with the presentation and focus, next year's market should be the same as this year or more than this year. There is some potential. As I said in the middle of my presentation, I'm looking forward to seeing the condition for next year as well. By application, how do you see the market condition? For example, logic foundry declining, DRAM increasing 3D NAND increasing furthermore, or what happens in China? Could you let us know your focus by application, please?
For DRAM and NAND, both of them will grow steadily, according to our understanding. For logic foundry as well. For the time being, you can see slight decline, according to your understanding, maybe because of the number of the mobile devices to be shipped. Next year, we'll see the seven nanometer and five nanometer pilot line. You can expect the same level as this year or more than this year. The same or more than this year. We don't have any negative outlook in any case. Thank you very much. Thank you very much. Next question, please. Yes, the gentleman on the front row, please. Thank you very much.
I am Ogawa from Goldman Sachs Japan. I have a question about share for etcher. In 2017, you said you're going to increase the share, what will happen in 2018, 3D NAND 9X and 1Y nanometer for DRAM will be coming out. Do you see some increasing trend? In addition, if there is some increase, what the change rate from 2016 to 2017? What about the rate of change from 2018 to 2019? I really appreciate your comments.
As I said earlier, for this year, several points increase in our share. Next year as well, several points increase is expected. I'm sorry, I just said several points. We are sure that we can see another several point increase next year as well because actually logic in the beginning, we have established certain position for logic. In addition, for DRAM as well, when you have the patterning or interconnect process, we won POR from two companies, and for the third company, they are planning to place order to us. That is the current condition. Slit process for 3D NAND. We won the PORs from two companies. This year, etch growth is rather significant, but there is only one company that will contribute to the high volume manufacturing.
Next year, second company will start investment to high volume manufacturing, especially they are going to start investment to 9X generation. We are going to enhance our positioning by several points next year.
Thank you very much. Your company, 2016, the 23% share, but 2019 you can achieve 30% or higher. That is your target. Little by little, you are increasing your market share steadily. Is that correct?
Yes, that's correct. Thank you very much.
Yes, the gentleman on the front row, please.
I am Moriyama from JPMorgan Securities Japan. I had asked the same question in the previous meeting. Customers' business opportunity, when you get the business opportunities from a customer back in 2000, there was some excitement and duplication of orders happened back in 2000. Customers, in order to defeat against the competitor, they placed orders more than necessary. That sort of situation doesn't happen this year. You can see very sound orders according to the demands. Is that correct understanding?
Yes, that's correct. Actually, the governance has been well established, and our customers are taking account of shareholders' values very seriously. In reality, for customers, each segment, logic, foundry, and memory, to some extent, the leading companies are now working on this area, and number of customers has been narrowed down. Many customers did have some experience. Therefore, they are controlling the governance properly. Also data traffic. Many people said in IoT world, data traffic is increasing. Setup of data traffic in IoT, I investigate that area. I think that sort of trend supported the market, and you can see the steady increase. Thank you very much. Thank you very much. Next question, please.
Yes, the gentleman in the front, on the front row, please. Thank you very much for your presentation.
I am Miyamoto from Mitsubishi UFJ Morgan Stanley Securities. I have a question on page 22, I'm sorry to ask some repetitive question. On second half, DRAM, NAND, foundry, you can see the proportion for those for the second half. Toward this first half of next year, how do you see the trend for each? I want to see near future outlook. I want to see your view on the trends. Are you talking about the proportion among those? Rather than the proportion, I want to see the actual amount. How does actual amount change? Several times I already explained, the same or more than same actually. For each proportion, 25, 40%, 10% and 25%. There's no big gap or difference among them.
Every element is expected to grow steadily. That's our expectation. First half of next year, JPY 440 billion will be increasing furthermore, and every area will be increasing, yes, the same or more than this year. I have some follow-up question. Some customers are placing quite a few orders because of the extension of the lead time. Do you see some trend as such? Actually, way before, this kind of trend doesn't happen now, but from early this year, for silicon-based materials and electrostatic chucks are getting running short. Customer places order at earlier stage. That trend started early this year, and this is not new trend now. Especially for quartz, silicon and electrostatic chucks, we are delivering our products in accordance with the customer request for the delivery, and we are focusing on that area.
For delivery schedule, we are understanding delivery schedule, and there is no duplication of orders at all according to our understanding. Thank you very much. Thank you very much. Next question, please. Yes, the gentleman on the second row, please. Thank you very much. I am Aritomi from CLSA Securities Japan. I have a question for POR. I want to understand the condition for POR. For etcher, you have won two PORs for slit process. I think you have already won these two PORs for slits. Second quarter, not only etcher, but also other process tools. Have you won any other PORs? If any, I would like you to share your idea with us, please. For cleaning system 3D NAND, batch, the phosphoric acid cleaning process, you can see very steady increase. And for cleaning, once again, we have backside and bevel edge cleaning.
We are focusing this area as well. For that application, you can see some increasing trend of duplication in this area, backside and bevel edge cleaning. And the focus area, one of the focus area is the film deposition. For that film deposition, ALD. We are following our plan very steadily. Thank you very much. We confirmed that we are following our plan. I have one more question to follow up. For those processes, what is the contribution to sales? Maybe sales contribution will happen next year, or already sales contribution has started this year. The sales has been contributed this year already. Thank you very much. Thank you very much. I'd like to entertain next question. Yes, the gentleman on the opposite side of the second row, please. Thank you very much for your presentation. I am Yoshida from Deutsche Securities.
First of all, my first question is about 3D NAND. I saw the wafer output information on page 17. This year, 700,000, and next year, 1.1 million wafers, and that will be increasing furthermore next year. For 3D composition will account for 90% or higher. I think 3D composition will getting closer to 90%. Anyway, 3D NAND composition will be increasing. Now you can see investment increase because of greenfield. When that will hit the ceiling, what will happen to the size of the WFE market? When there is no further increase of the wafer output, what happens beyond year 2020? I hope I understand your question properly, and I try to answer to your question. For client SSDs, as of today. Next year, sorry, about 50% adoption of SSD is expected for next year.
In that sense, we do have some room for margin for growth for the future. Among SSDs, 3D NAND accounts for 80% or plus. In client SSD, you can see some potential of further growth. Based on that understanding, I think continuously the increasing trend will continue for the DRAM or memories as a whole, not only for 3D NAND and DRAM, actually. As I said earlier in my presentation, we are going to see data-centric society. When data-centric society is established, now you can see it's huge amount, not only capacity, you need to think about the high speed and high bandwidth, and low power consumption. All those characteristics need to be achieved through the technology innovation. Therefore, memory demand will continuously strong. I hope I understood your question properly, and I try to answer to your question from the comprehensive viewpoint.
Did I answer to your question properly? Yes. Thank you very much for your answer. You talked about the memory issue. I have one follow-up question for the memory. Now we have capital intensity increasing, and number of customer has been decreasing, as you said earlier. If memory price goes down, what sort of reaction will take place on the customer side? In other words, some company will continue investment furthermore, but in order to maintain the price, they're trying to maintain the price, or the company just stop the investment all of sudden. How do you see the trends, especially for the DRAM customers? When I talk with DRAM customers, especially the planning division people, I talked with those people. For DRAM area, actually many of them or all of them are very much aware or sensitive to the price issue, DRAM price.
Capacity in the market is increasing, and they are aware of that sort of trend when they are running business. In other words, we feel very reassured by talking with those customers. They have some experience from the previous years, and they learned a lot. They are very much aware of the issue. That's the reason why I said steady growth will be continuing in the future in my presentation. On the supply side, there is no likelihood that prices decreased. Maybe when price may drop, that may because of the demand side. That could be the only risk factor you need to think about. You can see some startup or new generation product, you have some yield problem. There are some adjustment period. However, that sort of adjustment takes place at any time, so I don't have any major concern on that.
Thank you very much. Thank you very much. Any other questions from the floor? Yes, the gentleman just behind the previous person. Thank you very much. I'm Mika Maekawa from Credit Suisse Securities Japan. I have one question about Lam Research. Etcher For the leading NAND manufacturer, actually, I think the Lam Research signed the exclusive contract up until the end of 2018. Up until that time, the slit or most difficult high aspect ratio area, for Lam, they can sell their product only to Samsung. That's the condition right now. The end of 2018, exclusive contract will expire, then other manufacturer, I think for the Japanese manufacturer, they are waiting for the end of 2018. When you think about etcher share beyond 2019, just because of the expire of the exclusive contract, what sort of impact do you see?
You have won the POR, so there should be no problem. I would like you to give me your idea. We have positive understanding, or I should say, we don't have so much concern on that issue. When I look at our mid-term business plan, etching share has been revised to some extent. We have higher aspect ratio in the future, and our company has innovative technologies with high etch rate to come up with good patterning profile. The end of March 2019, I think we'd like to expect furthermore at the next stage. That's the reason why we have revised our market share for etcher. About that issue you mentioned, new technology can be introduced, so we don't have any concern. Needless to say, we are always seeking for number one in the area. Of course, our competitors are growing and innovating a lot.
According to our plan, we will introduce our new technologies, and we can see some business opportunities there, and we haven't changed that area. For 9X or beyond that area. At present, cost of 9X generation might be lower than the cost of 6X or 7, 8. Have you accelerate that area or do you think you just start up 9X generation and gradually try to reduce cost for 9X? I think depend on two scenario, business opportunity of your company might be different. Could you share your idea, please? For 9X, next year, investment will be starting and our customer do have some plan. That is the double stage or one etching. They have two different options for approach.
Our application, when the process is completed, for current generation as well, etch rate, our technology do have some advantage in terms of the etch rate. We do have some advantage. In other words, 6X or 4X generation, maybe two stages, even for that, are going to win the POR so that we can further increase the share because of your good product. Is that what you mean? 3D business, high aspect ratio, we need to come up with high speed, good pattern profile are the requirements from the customer. We need to focus on the high-end so that we can provide the technology. Once our technologies are adapted, then customers are qualifying the product for previous generations. Thank you very much. Next question, please. Yes, the gentleman on the second row, please. Far end. Damian Thong from Macquarie Capital Securities. I have one question.
For this year, for Field Solution, forecast is revised upward, and what sort of impact can you see for the operating margin, and what is your expectation for next year growth ratio? As we said before, for Field Solution, profit margin is higher than the average. Therefore, when Field Solution is increasing, that means the corporate profit is increasing positively and the targets of the Field Solution sales Next year as well, demands will be increasing in different areas, so we can see the increase for next year as well. For example, this year, JPY 250 billion is the sales for the Field Solution. Yes, JPY 250 billion. That is basis for this year. The next year, you can see maybe the sales should be flat or increases, but Field Solution grows more than the process tool business. Is that correct?
We haven't compiled next year budget yet. I cannot say anything specific today, but I think we are sure you can see some increasing. The number of chambers for etcher is rather high, and number of chambers increasing for next year, that could contribute to your sales for Field Solutions. Is that correct? Yes, that's correct. The etcher area for Field Solutions business is after the warranty expiry, so that means beyond one year after the shipment. Okay. Thank you very much. Thank you very much. Next question, please. Yes, the gentleman just in the middle, please. I am Yoshikawa from Morgan Stanley MUFG Securities, Japan. This year, WFE is JPY 45 billion or more, and next year, the same level or more. That's what you said earlier. You have the upper case of the mid-term business plan. That environment is now being established.
When that happens next year, are you going to get in closer to the achievement of the targets and objective of the mid-term business plan next year and on? Also, I have another related question. This year, you have revised your plan drastically upward, but I think the full year gross margin is slightly declining. Are there any reasons for that? The first question. This fiscal year, 24% is the operating margin, and we are going after 26%, and I think we are making steady progress to achieve 26%. Continuously, we'd like to enhance our product competitiveness, and we need to enhance our efficiency in various area so that we can achieve 26% properly and surely. The market condition has been established as we planned.
As for your second question for the gross margin, that is just because of the product mix and also the very high market growing condition, and we are carrying out some evaluation, and that evaluation requires some investment. That is the reason why there is some slight decrease in the gross margin. I have one more question. Now your industry is rather busy right now. You are running shortage of many things, and that may restrict your further growth, I'm afraid to say. For example, do you have any concern or problem, any things which are running short of right now? Well, silicon, quartz, and electrostatic chucks. For each area of those three, we are trying to deliver our product to meet customer requirement of delivery. We are working together with partners. We are managing the situation properly, and we are focusing on this area.
In our factories, we are holding partners days. At the same time, also in Tokyo, we are going to hold the partners day just before the SEMICON Japan. On that partners day, we are closely discuss with our partners and share our production forecast for the future. Thank you very much. Next question, please. Yes, the gentleman in the front row, please. I am Shimada from SMBC Nikko Securities Inc. No one has asked that question. I have been waiting for that. Actually, orders or inquiries, but you won't release any information on orders. The second half compared with first half, your sales is expected to grow furthermore. April to June, I thought the July to September, you can see some deceleration, but when you look at the sales, even in the July to September, you are still in the expansion period.
This year, 20% plus increase, and next year you said equal or more than equal. It is rather vague expression. You do not say specifically 20% next year as well. Inquiries or orders in the first half of next year, maybe you can see some deceleration or some momentum slow down a little bit. Do you expect that sort of trend for first half of next year? In other words, you just maintain the high level first half of this next year. You can see some increase for the orders or inquiries now, but maybe first half of 2018, you can see some, can I say, plateau time. When you discuss with your customer, you have different feeling. Of course, it depends on application.
By application, especially for memory, I think some deceleration may take place, but how do you view the future condition of the market? I am looking forward to next year. That is what I said earlier in my presentation. The high level is to be maintained. I should say, there is some more potential than the high level. That is how you should understood the market. When I discuss or converse with the customers, I feel or sense a huge potential, we are now trying to determine the level of the demands. That is the reason why I just said equal or more than this year. We do not have any negative outlook at all for the future, next year. Memory should be okay, but when you look at logic, increases a lot in the second quarter, maybe because of MPU applications.
This area, logic, do you think the very same trend for logic next year as well? Intel has postponed their plan for investment, but although that is the situation, you have the very strong outlook for the logic. For memory, I understand, but when you think of it very naturally, foundry does not increase so much. On page eight and page nine, logic sales proportion increases a lot. Do you have any idea for the trend of the logic for next year? This is my follow-up question. For logic foundry, as for logic foundry, the same as this year, or we will be fluctuating just between 2016 and 2017. In that sense, we do not see any negative forecast. I am afraid I cannot talk more about this issue, please allow me to stop answering to your question right now. Okay, thank you very much.
Thank you very much. Next question, please. We have five minutes to go, if you have any questions. Yes, the gentleman on the front row, please. Thank you very much for your presentation. I am Sugiura from Daiwa Securities. For next year outlook, once again, sorry for that, you said the same as this year or more than this year. The existing IC vendors or new emerging Chinese local vendors, when you have two categories, even for the existing IC vendors, can you see some increasing trend? Do you think the existing IC vendors are just remaining flat, but you can see an increase in the emerging Chinese local vendors? I think both elements are included. Chinese customers are also incorporated, and existing IC vendors or customers investment is also incorporated. Based on those two, we came up with our focus for next year.
I have one more question to follow up. In your presentation earlier, you said when you include every element, the next year figure become really extravagant. What sort of application do you think about? Maybe memory? Is it DRAM? Could you just show me the breakdown of your focus for future? In principle, memories are rather good. If we just follow the plan, memory will contribute our sales a lot. Both DRAM and NAND will make a contribution. Thank you very much. Thank you very much. This should be the last question. Any other question from the floor? Yes, Mr. Moriyama, JPMorgan Securities Japan. I'm sorry, once again, I have one question. For EUV lithography and all the development, I have a question on that regard. Next year, what sort of change would you expect for EUV lithography coater/developer?
I want to see the contribution to the net sales and profit, and for OLED as well. I don't know to what extent TV market will be being format, but in the past, by using printing technology, deposition system is presented from your company. Do you think any market is expected for future? That is a new product. I want you to give me some idea. Let me start with EUV lithography coater/developer. Is that your question? Yes. You do have 100% share. I think there are some fluctuation, but by and large, do you think some increasing trend? To begin with, EUV market, I think for this year, let's say 12 systems, and next year, maybe 20 systems are to be delivered. From your viewpoint, how do you see the market? Do you think the market really exists, therefore, the EUV lithography?
I think EUV lithography market do exist. When it comes to the business opportunity, I think there is quite significant business opportunity. For one issue, improvement of uniformity and reduction of defects is another, and high sensitivity resist is to be used for accelerating exposure. By doing that, EUV throughput is to be improved. These are the area for business opportunities. Also, for the metal resist, we need to come up with reduction of the metal contamination, CIP, and performance improvement. There are so many factors for opportunities for us. In principle, the diffusion procedure should be used as a basis, and we can provide an additional function to provide the value added to expand business. That should be our business opportunity. As for your second question, OLED, in particular, inkjet printing technology that you have asked about.
In principle, what we are doing right now, for 8K large-sized TV, we do have some expectations. When it comes to business, Tokyo 2020 should be the trigger point for us to see some business opportunity. Thank you very much for your answer. Thank you very much. It's time for us to close today's financial announcement. Thank you very much for joining us today. Thank you very much