Your participation today. This is the results briefing for the third quarter of the fiscal year ending December 2024. Before starting the presentation, allow me to confirm today's materials, which consist of three items: the brief statement on consolidated financial results for Q3 fiscal 2024, the announcement regarding revision to dividend forecast, and the presentation deck entitled "Results for Q3 fiscal 2024." This will be a 60-minute briefing, which will end at 5:15 P.M. Next, a disclaimer. The estimates, expectations, forecasts, and other future information discussed here and shown in today's materials were prepared based on the information available to the company as of today and on certain assumptions and qualifications, including our subjective judgment. Actual financial performance or results may differ substantially from the future information contained in this material due to risk factors including domestic and global economic conditions, trends in the semiconductor market, and foreign exchange rates. We will have presentations today from Representative Director, Chairman, and CEO Mayuki Hashimoto and Vice President, CFO Shinichi Kubozoe. Chairman and CEO Hashimoto will discuss our forecasts and operating environment, to be followed by an explanation of the financial results by CFO Kubozoe. We have set aside time for a Q&A session as well. I will now hand over to Chairman Hashimoto. I am Chairman Hashimoto. I will start with the overview on slide 5. This is a summary of the results for the third quarter of the fiscal year 2024. Operating profit and ordinary profit for Q3 slightly exceeded our forecasts. The JPY 2.1 billion overshoot in OP is mostly the result of lower costs and a slower start to depreciation. Sales was largely in line with our expectations. Turning to the earnings forecast for Q4 of 2024, optically our forecast for sales shows a slight sequential decline. However, Q4 sales will be impacted by periodic maintenance at our main plant in November, which will depress sales slightly. Year-end and New Year's holidays will also have an impact. We project OP of JPY 5 billion, RP of JPY 7 billion, and net profit of JPY 4 billion. We expect OP to fall significantly, but the key contributing factor is the expected sequential increase in depreciation of JPY 2.7 billion. We are also factoring in dollar-yen rate of JPY 150 and a number of smaller items as well. Next slide, please. This slide shows shareholder returns, our dividend guidance. We are guiding for an annual dividend per share of JPY 21 based on a JPY 6 fiscal year-end dividend. This is a dividend payout ratio of 38.9%. With regard to dividends, given the nature of our industry, profitability can be volatile. Our aim has been to smooth the trend in DPS where possible by mitigating the cyclicality of the market to a certain degree, raising the payout ratio when profits are higher, but also controlling the payout ratio from the perspective of financial soundness when it trends significantly higher. Unfortunately, however, we are still experiencing volatility. Next page, please. Looking at market conditions during Q3, 300 mm wafers did bottom out in Q1, and shipments have since been gradually recovering. However, the pace of recovery in 200 mm appears to have been very weak. Customers continued to respect LTA prices, although we are having to push out delivery timing, which impacted volumes. On the outlook for Q4, within 300 mm, leading edge at design rules of 7 nanometer or finer and HBM use wafers remain strong. However, with the exception of these areas, conditions in the rest of the market are weak. In particular, for wafers used for legacy applications, customer utilization levels haven't necessarily been that strong, so inventory has remained high. I will talk about inventories in more detail later, but sales of leading edge wafers are very strong, but there appear to be issues with wafer inventories for legacy applications. For 200 mm wafers, customer production adjustments are continuing, so conditions, particularly for automotive and consumer applications, remain weak, with shipments at low levels. In terms of prices, LTA prices continue to be respected by customers, but the picture for spot prices, especially 200 millimeter, has been mixed. Some geographies have seen prices soften, while prices in other regions have remained firm, but overall, the trend in spot prices is weaker. On the outlook for semiconductor demand, AI applications will continue to be the driver over the longer term. I expect it will be a solid driver for at least the next two to three years. Demand related to data centers is very strong. Data center demand is mainly concentrated in 7 nanometer and finer design rules for logic and for HBM within DRAM. These two areas are seeing strong demand. There is a clear polarization in this area as well, with the gap between the winners and losers widening. For automotive, consumer, and industrial applications, however, we have seen a particularly sharp drop-off in demand for automotive. I think there has been a significant impact from the decoupling of U.S. and China trade, but there has also been a slowdown in EVs in China, with reports of large EV graveyards, so conditions are not very good in automotive. I think a recovery will take time. In terms of the outlook going forward, Trump has been re-elected president. Visibility is not very good. Of course, he is a businessman, so it may well be his behavior will be determined by whether or not he can make money. You could take the view that from this standpoint, he might be easier to read than the other candidate. That said, he holds some very strong views and is a unique individual, so trying to predict what he might do is very difficult. As I said earlier, there are still delays in completing inventory adjustments for legacy applications in 300 mm wafers, so the pace of recovery is gradual. It appears that wafer inputs are rising, but because of the significant wafer inventory, customers seem to be drawing from inventory, so wafer purchase volumes have been slow to rebound. For 200 mm and smaller diameter wafers, end products are also weak, so I think it will take some time before we see a recovery. A lot of automotive applications use 200 mm. Customer utilization levels are down significantly, so a recovery will likely take some time. Next page, please. This slide shows the wafer trend for 200 mm by quarter. As you can see, the market showed an unprecedented drop and has subsequently remained at low levels. Conditions for 200 mm are very challenging indeed. Next page, please. This is the trend for 300 mm. Thanks to AI as a driver of demand, overall, we are seeing a recovery. However, AI is the only application where demand is strong. Legacy applications are not necessarily that strong. Next slide, please. In the next few slides, we explore what is happening with leading edge logic and silicon wafers. Next slide, please. We have tried to depict the expected evolution for leading edge logic and silicon wafers. We defined true leading edge to be five-nanometer or finer design rules. At this time, the structure is still FinFET, as shown here. The power supply wiring is on the surface, so the process is to grind down the gate material on a single wafer to achieve this structure. With the nanosheet or GAA gate all-around type, which is now being developed, the gate material is wrapped around the wafer on all sides. The key characteristic is that there is power supply wiring on the backside as well. Effectively, this means the use of two wafers. In this approach, the question is, what type of wafer should be used for the second wafer? So far, no standard approach has emerged. We are providing many samples as part of customers' exploratory efforts to nail down the specs. However, as we get closer to the most advanced design rules, the existing metrics are insufficient. There are many more metrics that are required, further elevating the degree of difficulty in fabricating wafers. At the same time, this also creates room for differentiation, but it does mean that wafer fabrication is much more challenging. Next slide, please. If we just look at leading edge Epi wafers, we estimate the CAGR to be 36%. In terms of applications, AI servers account for a significant proportion of the total, followed by smartphones and PCs. So effectively, these applications account for the vast majority of leading edge applications. Automotive accounts for only a very small share. Next slide, please. So which are the nodes where growth is strong when we refer to leading edge? Certainly, 5 nanometer and 3 nanometer are key. 2 nanometer is likely to start next year and see dramatic growth. The transition to GAA is likely to come at 3 nanometer, so we would expect to see strong growth going forward. GAA is currently 400k wafers per month, but we expect it to be 800k wafers per month in four years' time, effectively growing at a rate of 100k wafers every year. Next slide, please. This slide shows customer wafer inventory trends. Inventory has come down, but more recently, we have seen a pause in the declines. This is because customers have started to slightly increase purchase volumes again, which is being mirrored in the inventory trend. Next slide, please. When we look more specifically at logic and memory trends, actually trends vary very significantly by company, making it impossible to generalize. For instance, there is a logic customer where inventory of leading edge wafers is virtually zero, but there are also customers where the inventory of wafers for legacy applications is very high. For memory, inventory levels are higher for NAND, while DRAM wafer consumption is good, reflecting market talk. Wafer input has gone up slightly for memory, so we have seen a moderation in the downtrend for inventory. Next slide, please. Projecting is very problematic. Up until 2022, there was a strong correlation with our estimate for PPP GDP, but more recently, we have seen a divergence. At this stage, it is difficult to say whether we might one day get back to tracking PPP GDP or whether the relationship has broken down. I believe that the disruption is a result of decoupling. Effectively, geopolitics is having a major impact. China appears to have developed their own capability to fabricate wafers. Quality does not necessarily appear to be very good, but there is strong pressure to comply with the buy China policy. Local Chinese chipmakers, particularly those with a high degree of state involvement, have little choice but to use made-in-China wafers. This policy directly competes with the inflow of wafers from the free world up to this point, but we don't have a lot of clarity on what exactly is going on. However, as China has increased the volume of its homegrown wafers, I think this has resulted in a data black box leading to data mismatches that cannot be explained. We are giving a lot of thought to how to address this. Although the majority of wafers produced in China are test wafers, based on our investigations, we understand that wafer production is at around 1 million. The key memory player, where the state is the majority stakeholder, is thought to be consuming 400 to 500k in domestically produced wafers. Almost all is likely to be domestically produced wafers. We are seeing an increase in factors that cloud the overall picture for China. This completes my section of the presentation. I will hand over to CFO Kubozoe to talk about details of our Q3 earnings. I, Kubozoe, will present the earnings for this quarter. Please turn to slide 18. This slide shows the results for this fiscal year up to Q3. As discussed earlier, Q3 results are as shown in the column third from the right. Sales were JPY 98.4 billion, OP JPY 9.1 billion, non-operating gains and losses were a negative JPY 3.5 billion, and ordinary profit JPY 5.6 billion. The negative non-operating loss widened on a sequential basis, but this is due to valuation losses on foreign currency-denominated bonds as of the end of the quarter. The yen was slightly stronger at the end of September, resulting in valuation losses. This was the main factor for the JPY 3.5 billion non-operating loss. Profit attributable to owners of the parent was JPY 3.6 billion. CapEx on an acceptance basis was JPY 43 billion, and depreciation was JPY 20.2 billion, up roughly JPY 2 billion on a Qo Q basis. The forex rate for third quarter was 152.6 JPY to the USD, with the average remaining above 150 JPY to the USD. Nine-month sales were JPY 296.6 billion, OP JPY 29.9 billion, ordinary profit JPY 26 billion, and net profit JPY 16.2 billion. Further down the table, the OPM, EBITDA margin, and ROE for Q3 are as shown on the table. Please turn to slide 19. This is the analysis of Q on Q and year-on-year changes in operating income. I will start with the sequential analysis for Q3 on the left. Sequentially, Q3 sales fell JPY 6.3 billion, and operating income fell JPY 3.1 billion. The yen strengthened by 2.6 yen versus the Q2 average. We show the key elements of the JPY 3.1 billion sequential change to OP in the bar chart below. Solid utilization levels meant we were able to generate cost savings. However, as discussed earlier, there was an increase in depreciation of JPY 2.2 billion. Sales-related variance was impacted by a slight decline in volumes for a negative impact of JPY 1.4 billion. The drop in volumes was primarily in smaller diameter wafers. There was also a negative forex impact of JPY 1.2 billion. The combined negative impact of depreciation and forex at JPY 3.4 billion was significant in depressing Q3 OP. Looking at the year-on-year change for the nine-month results on the right, sales fell JPY 24.2 billion, and OP dropped JPY 31.9 billion. I discussed this in August in reviewing Q2, but the year-on-year negative from sales-related variance was very large. This, combined with the increase in depreciation, meant that despite the positives from costs and forex, overall OP fell JPY 31.9 billion year-on-year. Next slide, please. Slide 20 shows the balance sheet and cash flow statement. On the balance sheet to the left, cash and time deposits fell JPY 44.4 billion versus the end of the previous fiscal year. I will talk about this in more detail in discussing the cash flow statement. There was a significant increase in tangible and intangible assets of JPY 105.8 billion from the end of December 2023, rising to JPY 668.8 billion as of the end of September. As a result, total assets increased JPY 61.6 billion to JPY 1 trillion 134.6 billion. Total liabilities were JPY 496.5 billion, with interest-bearing debt increasing JPY 115.4 billion to JPY 339.8 billion from the end of the previous fiscal year. We have largely completed our borrowing for Japanese investments, but there was a slight increase in borrowings at the Taiwanese subsidiary, pushing up the balance of interest-bearing debt slightly. In addition, we also paid down some debt in Q2 and Q3 for the net increase of JPY 115.4 billion. Net assets were JPY 638.1 billion on the back of an increase in retained earnings, but a decline in non-controlling interest. At the bottom of the table, we show a number of metrics. The equity ratio was 51%, and the D/E ratio on a gross basis was 0.59 times. The equity ratio declined 2.3 percentage points, while the D/E ratio increased by 0.2 times. On the cash flow statement to the right, relative to nine-month operating cash flow of 53 billion JPY, investment cash flow composed of capital expenditures on an acceptance basis and others on a net basis was an outflow of 200.8 billion JPY, resulting in a negative free cash flow of 147.6 billion JPY. There was also an outflow of 14.6 billion JPY in dividend payments versus an increase in interest-bearing debt of 117.9 billion JPY for a net decline in cash and time deposits of 44.4 billion JPY. As touched upon in discussing the balance sheet, cash and time deposits were down by 44.4 billion JPY. Effectively, we are covering our investment outlays through the combination of cash and time deposits and borrowings. On page 22, we show our forecast for Q4. With regard to Q4, in the lower part of the table, we show the forex assumption, which is 150 JPY to the dollar. We project Q4 sales of JPY 97 billion, operating income of JPY 5 billion, and ordinary income of JPY 7 billion. For non-operating income and expenses, we are projecting a positive JPY 2 billion. We have factored in a foreign exchange assumption of 150 JPY to the dollar, which impacts the valuation of foreign currency-denominated bonds. Net profit attributable to owners of the parent is expected to be JPY 4 billion. Depreciation is expected to increase sequentially. We project JPY 23 billion for Q4, which is a JPY 2.8 billion Q on Q increase. On a full-year basis, we are guiding for depreciation of JPY 79 billion. OPM and EBITDA margin guidance is shown at the bottom of the table. On a full-year basis, we project sales of JPY 393.6 billion, OP of JPY 34.9 billion, ordinary profit of JPY 33 billion, and net profit of JPY 20.2 billion. Next slide, please. Slide 23 shows the analysis of change in operating profit. First, the Q4 sequential change on the left. Sales is projected to fall JPY 1.4 billion Q on Q. OP is forecast to fall JPY 4.1 billion. Looking at the breakdown of the JPY 4.1 billion decline in OP, as you can see down below, the significant factors are the negative impact of an increase in depreciation and the forex impact. We are projecting a 2.6 yen appreciation of the yen versus the dollar on a Q on Q basis. The combined negative is JPY 3.5 billion. With regard to sales-related variance, as mentioned earlier by Chairman Hashimoto, there will be periodic maintenance at the main plant in Imari, leading to a slight negative, but the key factors depressing OP by JPY 4.1 billion on a Q on Q basis are depreciation and forex. Looking at the analysis of year-on-year change for the full-year forecast, sales is forecast to fall JPY 32 billion and OP JPY 38 billion. Although we expect positive contributions from costs and forex, this is not enough to offset the large decline in sales-related variance and the increase in depreciation, hence the projection of a JPY 38 billion year-on-year drop in OP. The reference materials show trends for sales, EBITDA margin, and other metrics. Please refer to this at your leisure. This completes my section of the presentation. Mr. Komori, thank you. We will now open the floor to questions. We will start with Mr. Enomoto of BofA Securities. Mr. Enomoto, I would like to ask about slide 16 on the 300 mm wafer global capacity and demand forecast. In your explanation, you mentioned that China test wafers were probably around 1 million wafers. If that is indeed the case, then frankly, I don't think we will see a recovery to the red line shown here in terms of the outlook for next year and beyond. Please talk about your view of the outlook for next year onward, taking into account the situation in China. Are you suggesting that since legacy applications are weak, the recovery is likely to slow given the impact of what is happening in China? Chairman Hashimoto, although test wafers account for a large proportion of the China market, there is also a sizable portion which is polished wafers. This is because there is a company which was established as part of an overarching governmental strategy which has strong ties to the state. Companies like this are very proactive in fabricating semiconductor chips. This particular company is fabricating stacked memory. As a result, their wafer consumption is relatively high. Our business with this company has declined substantially. I think the impact of this is very significant. In other words, trends in legacy applications for test wafers have significantly diverged from the typical trend to date, or in other words, this dotted red line. We used a dotted line because we are not that confident in the forecast. I think there is a possibility that we don't see the kind of recovery as suggested by this graph. That said, there isn't much point in speculating about things we don't understand. We will need to monitor the situation for a while longer. However, one thing is clear. Regardless of what happens in China, leading edge will definitely continue to grow strongly on AI-related demand. So although legacy applications cover a broad range of industries, including EVs, some of which appear to be doing well, in fact, conditions for some are actually very poor. Without a recovery in this part of the market, I think achieving solid growth over and above consuming the wafers produced in China will be very difficult. Our new plants are built to focus only on leading edge, so I would expect these plants to achieve high utilization. However, I am a little concerned that our mature plants could struggle if legacy applications remain persistently weak. Mr. Enomoto, understood. Thank you. Mr. Komori, next is Mr. Watabe of Morgan Stanley MUFG Securities. Mr. Watabe, based on the demand indicated in the charts for 200 mm and 300 mm on pages 8 and 9, overall wafers appear to have grown by 5-6% sequentially in the September quarter. Despite this, SUMCO's sales fell 6% in Q3. Although the yen was slightly stronger, the drop in your sales feels a little large. Although this may have been in line with your expectations, how should we interpret these figures? Chairman Hashimoto, where we saw divergence from our forecast was in 200 mm. 300 mm was virtually in line with expectations. 200 mm is difficult to read because we ship to many different customers. My sense is that in 200 mm, the customers where we have strong relationships were struggling slightly. These were auto-related customers. The number one, two, and three customers in auto-related are very good customers for SUMCO. Conditions at these customers have been widely covered in the press. On the back of this, we struggled slightly with 200 mm. Mr. Watabe, I see. So on this chart, the sequential trend for 200 mm appears to be basically flat, but you are saying that SUMCO actually saw significant declines. Is that right? Chairman Hashimoto, so setting aside whether it was significant or not, what I will say is that frankly, volumes fell below our expectations. Mr. Watabe, did 300 mm at SUMCO increase in line with the sequential trend indicated in the chart? Chairman Hashimoto, so fortunately for us in 300 mm, we are strong in leading edge, so we expect to see further growth going forward. The reason why leading edge is not growing now is because the customer is running at full capacity and production is capped. Given this situation, as the customer increases capacity and they are working very hard to achieve this now, I believe the Japanese wafer players will benefit from the incremental increases in volume. Mr. Watabe, I see. So SUMCO did not see its share of 300 mm decline. Is that right? Chairman Hashimoto, our share in 300 mm has not fallen. Mr. Watabe, thank you. Mr. Komori, next is Mr. Ikeda of Goldman Sachs. Mr. Ikeda, I want to ask about the outlook for leading edge logic demand as shown on page 13 and how SUMCO is positioned. I believe your share of leading edge logic has been around 60%. However, for three-nanometer and finer design rules, your Japanese competitor has been very proactive in pursuing business. With regard to this situation, particularly as the technology transitions to 2-nm GAA, can you comment on issues such as initiatives on crystal alignment, the response of your customers, or backside power supply? Earlier, you indicated that there are still areas that are unclear, but please talk about the outlook for business opportunities. Also, on HBM-use wafers, I believe that given your customer base, you haven't had much success in winning business here, but please talk about the impact that AI servers will have on your earnings, including your initiatives in leading-edge DRAM. Chairman Hashimoto, first of all, on HBM, we are supplying wafers for HBM. We have been able to develop relatively good wafers, and customer response has been good, so I have expectations for this area. For leading-edge logic, regardless of where we go, we are in competition with our Japanese peer. It continues to be the case that the two Japanese wafer players account for almost 100% of the market, maintaining a high share. However, there are differences in our areas of strength. Our peer has relative strength in polished wafers, particularly in fabricating large volumes of the same wafer backed by their very strong capability in production technology. SUMCO's strength, reflecting its background as the combination of three companies, is in its diversity. This diversity allows us to think outside of the box, which contributes to our strength in leading edge logic. We are particularly focused on this area. So effectively, the two companies have been able to coexist. Mr. Ikeda, assuming that the market will grow by around 600K wafers from 2023 to 2027, is it your expectation that SUMCO will take more than 300K wafers based on a market share of slightly less than 60%? Chairman Hashimoto, yes, that is my view. Mr. Ikeda, with regard to GAA, do you believe that SUMCO is in a very good position? Chairman Hashimoto, so what is challenging for GAA is 110, not 100. All of the customers are struggling with 110. SUMCO has been supplying sample wafers for 110, but although it is very different, customers have said they can use SUMCO wafers. What is a little unclear is whether customers will actually do GAA 110 or not. The timing continues to get pushed out. Mr. Ikeda, understood. I have been able to confirm the strength of your competitive capabilities. Thank you. Mr. Komori, next is Mr. Yoshida of CLSA Securities. Mr. Yoshida, please refresh my memory on how you are thinking about CapEx for this year. If possible, can you also comment on how you are thinking about next year as well? Also, you have provided a figure for annual depreciation, but can you comment on how to think about this going into the next year? Chairman Hashimoto, for CapEx, we have already completed the capacity expansion in terms of making payments. We are now at a stage where what is left is the inspection and acceptance process. At this time, I have no intention to undertake new CapEx. That said, I do think it will be necessary to invest to modernize our plants that currently produce for legacy applications. CFO Kubozoe, do you have any other comments? CFO Kubozoe, we project depreciation for this year to be JPY 79 billion. I commented on next year's outlook at our last results briefing, but given the rapidly changing market conditions, we are still in the process of thoroughly reviewing the ramp-up plan and the pace and schedule for the ramp-up. Consequently, I think the numbers could change again. The number discussed last time was large, but I think that the number could well end up being lower. Mr. Yoshida, thank you. Does that mean that you will be restricting CapEx next year? Previously, you had indicated that even if new facilities are not operational, you would still need to start depreciation as a non-operating expense, but would a lower amount mean that there may be some negotiating room with your auditors? CFO Kubozoe, the current situation is that we are in the process of reviewing schedules for facilities and considering a number of different factors in trying to determine ramp-up timing. This is not related to next year's CapEx, as referred to earlier. Chairman Hashimoto, on the point about depreciation, it is true that once facilities have been completed, under Japanese accounting practice, we are required to take depreciation even if the facilities are not operational. This is a conservative approach which errs on the side of soundness. The situation may be slightly different overseas. Our competitors may be able to suddenly stop the process and carry non-operational facilities, but we are erring on the side of financial soundness in choosing to initiate depreciation. That said, in a situation where the facilities have not been ramped up and where we couldn't sell product even if the facilities were operational, we are doing a number of things, such as focusing on pushing out delivery timing of facilities as much as possible, delaying the inspection process, or negotiating with our vendors to give us a little more time. So we are working on reducing depreciation from the level that was previously mentioned by CFO Kubozoe. However, from the standpoint of financial soundness, even for facilities that have not been ramped up, once we have completed the acceptance process, depreciation will kick in even if the facilities are not operational. That is unchanged from the last time we talked about this. Mr. Yoshida, understood. Thank you. Mr. Komori, next is Mr. Miyamoto of SMBC Nikko Securities. Mr. Miyamoto, I have a question about the 300-millimeter wafer demand outlook based on pages 7 and 14. On page 7, you commented on the market environment for Q4, saying that you expect the recovery in overall shipment volumes to be delayed. Can you comment on whether you expect shipment volumes to be up or down sequentially? Also, can you comment on the outlook beyond Q4 by quarter? Related to this, on page 14, I believe the graph shows that customer inventory volumes at the end of September were largely unchanged from the end of June. Your competitor has said they expect a slight intensifying of the inventory adjustment in the December quarter. Do you expect the December quarter to be depressed by inventory adjustments? If you are assuming that there will be an inventory adjustment in the quarter, when do you think it will finish? I realize it is very difficult to predict, but I would like to hear your view to the extent possible. Chairman Hashimoto, frankly, I don't have a crystal ball. However, it is certainly true that it is increasingly difficult to read the future as a result of decoupling and other factors. I think that the Q4 correction our peer is referring to is related to automotive applications. We also have a lot of exposure to automotive, but it has already been factored in to a certain extent. We are not assuming that there will be a sudden correction in particular to 300-millimeter in Q4. However, next year, although it is difficult to say with a high degree of certainty, we do have a sense for logic. For polished wafer, we do have some commitments, but who knows? In particular, it is hard to forecast for NAND within memory, although I think HBM will be strong. It is slightly more challenging to get a read of the domestic situation. For now, we do have forecasts for 2025 and feel that 2025 is likely to be slightly better than 2024. That said, the pace of recovery is very slow. I have been in this industry for a very long time but have been trying to figure out why it is so slow. I believe that China is the reason why our forecasts have diverged so much. When I have looked into it, it seems to be true. China is fabricating wafers, particularly wafers that are easier to make, which is having an impact on legacy applications in my view. There is no impact at all on leading edge wafers, but I suspect there is a significant impact on legacy applications, particularly test wafers. In terms of when we see a recovery, I think it will be different by industry. For leading edge, AI demand will likely remain strong. Logic and memory for smartphone and PC applications have bottomed and should start to show a gradual recovery. On the other hand, automotive has become very depressed. However, even so, there are some companies that are doing well. I plan to visit and ask a lot of questions. Analog related is strong, but IGBT is very weak. Customers that have been very strong in the automotive area, which includes Japanese players, appear to be struggling significantly. That's the overall picture. I do think that automotive will definitely recover sometime in the next two to three years, but this area is a factor for uncertainty now. 300 mm leading edge and AI applications are showing solid growth, so it is a question of when the customer can increase production capacity. We understand that they are doing a lot, but it will hinge on their progress. Mr. Miyamoto, thank you. Do you think overall industry demand for the December quarter will increase or decline sequentially from the 750K wafers per month of the September quarter? Chairman Hashimoto, I think it will be flat Q on Q. Mr. Miyamoto, understood. Thank you. Mr. Komori, next is Mr. Nishiyama of Citigroup Securities. Mr. Nishiyama, I want to ask about product mix. I believe there is a polarization in demand between leading edge and others. How much of SUMCO's production and shipments is leading edge where supply demand is tight? Also, I believe that an increase in the proportion of leading edge wafers should generate benefits from the mix improvement, but are you seeing this have an impact on earnings? Please comment. Chairman Hashimoto, the change in the product share is not large enough to have an impact on the bottom line yet. However, leading edge accounts for close to 20% for SUMCO. The price point for leading edge is high, and I expect the proportion of leading edge will increase going forward. We are currently implementing many measures to increase the volume of leading edge wafers. An improved product mix is favorable for us, and we are doing many things to make this happen. Mr. Nishiyama, I see. Thank you. Can I confirm that leading edge is 20% at SUMCO and that supply demand for leading edge is already tight? Chairman Hashimoto, yes. Mr. Nishiyama, understood. Thank you. Mr. Komori, next is Mr. Okazaki of Nomura Securities. Mr. Okazaki, earlier, CFO Kubozoe indicated that depreciation for this fiscal year is projected to be slightly less than JPY 80 billion. Three months ago, you indicated that 2025 would be around JPY 150 billion. So does this mean that even if you are able to limit depreciation slightly, SUMCO will still see a significant increase in cost? The full year guidance for this year's ordinary profit is JPY 30 billion. So although it will depend on next year's demand, it seems earnings will be very challenging next year. Please provide some color about measures that you are already considering to mitigate the impact of a deterioration in earnings next year. Chairman Hashimoto, earlier I said that it appears that the recovery has been slow in picking up. We are considering many different initiatives. We are considering many things, including the reallocation of human resources. Mr. Okazaki, when you say slow to pick up, I couldn't quite catch what you said. Chairman Hashimoto, the recovery in legacy applications has been surprisingly slow. At this stage, we don't know whether it is a slow recovery or, in fact, that there won't be a recovery. In the past, market recoveries had tended to be across the board with all of the market moving in sync, either up or down. Recently, as you know, we are seeing a clear polarization between individual customers, which makes it difficult to make projections. But customers doing legacy applications appear to be really struggling. Leading edge customers continue to hit new record highs. So it may be that the reason why the recovery in legacy is weak is because leading edge is replacing legacy. In terms of measures, as an example, there is no need to allocate a lot of human resources to areas where volumes are falling. There are many things we can do, like reallocating those human resources to leading edge. Also, for areas of the market that are clearly in decline, we must consider many things. Mr. Okazaki, you are talking in broad terms about initiatives like rationalization or cost reduction, but to a greater degree than normal. Is that the right way to understand your comments? Chairman Hashimoto, we are considering measures that exceed typical measures. Mr. Okazaki, thank you. Mr. Komori, next is Mr. Yamada of Mizuho Securities. Mr. Yamada, first of all, I would like to confirm that the 20% that is leading edge refers to volume rather than sales. Is that correct? Chairman Hashimoto, yes, that's on a volume basis. Mr. Yamada, got it. Given that it is based on volume, if we look at the sequential change in quarterly OP for Q3, while sales dropped JPY 6.3 billion, sales-related variance was a negative of only JPY 1.4 billion. Can we interpret this to be an improvement in mix, or is this a reflection of the positive contribution to unit prices as a result of the LTAs? Also, for Q4, do you expect a similar situation as well? In addition, I believe you will have new facilities coming online that are dedicated to the fabrication of leading edge wafers. Given that demand for leading edge is tight, can we assume that the probability of ramping up these facilities is high? Chairman Hashimoto, that's a very good question, and yes, you are correct on the first point. The proportion of leading edge is rising. Also, the price point for leading edge is high to begin with, and we have also seen a slight increase in prices, so there has been an improvement. You are also correct on the second point as well. Fabricating leading edge wafers really needs to be at the new plant. So I think we could have a situation in future where the new plant runs at full capacity, but we have idle capacity at the older plants. In anticipation of this, I want to modernize our facilities. Although we have significantly tightened our CapEx budget, I still want to ensure that we invest to modernize existing facilities within the more limited budget. In replacing the facilities, we will need to first make investments to accommodate the larger form factor for the new facilities, including renovating the physical shell and interiors, as well as re-engineering utilities. This type of investment does not require several hundreds of billions of JPY. We can do a lot of this type of work with investments of 10 billion JPY or less. It would be challenging to do this for 3 or 2 nanometers, but we are looking at different ways of allocating capacity. Potentially, we could use the modernized facilities to do 7 or 5 nanometers while using the new facilities for the more challenging leading edge wafers. Mr. Yamada, understood. Thank you. Previously, you had said that even in tough times, your aim was to generate an EBITDA margin in the low 30s. With the measures you have just described, as well as initiatives for 200 mm I would hope you can make progress given it is only a few more percentage points. Chairman Hashimoto, we will do our best. Please continue to support us. Mr. Yamada, understood. Thank you. Mr. Komori, Mr. Yamada, thank you. We will end the meeting here. Thank you to everyone for joining the Q3 Fiscal 2024 results briefing. We are grateful for your participation today.