Thank you for your participation today. This is the results briefing for the second quarter of the fiscal year ending December 2025. Before starting the presentation, allow me to confirm today's materials, which consist of four items: the consolidated financial results for the six months ended June 30, 2025, the announcement concerning the difference between forecast and actual figures for the six months ended June 30, 2025, the announcement regarding interim dividend, and the presentation deck entitled "Results for Q2 Fiscal 2025." 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 Representative Director and Vice President, CFO Shinichi Kubozoe. Chairman and CEO Hashimoto will discuss our forecast 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 an overview of the Q2 results. Q2 came in slightly ahead of plan. Sales were JPY 102.9 billion. The overshoot at top line should be considered within the margin of error, reflecting variance in timing related to the physical arrival of freight shipments by sea. However, OP was JPY 1.5 billion, compared to our forecast of break-even. While forex impact and cost largely offset each other, there was variance in volume amounting to around JPY 0.8 billion, and a further JPY 0.8 billion related to delays in incurring depreciation for a combined positive impact of around JPY 1.5 billion. Turning to the earnings forecast for the third quarter of 2025, we project sales to be largely unchanged QoQ, an operating loss of JPY 3.5 billion down JPY 5 billion Q o Q, ordinary losses of JPY 6 billion, and losses attributable to owners of the parent of JPY 5.5 billion. As you can see, we are forecasting losses for Q3. The vast majority of the losses are the result of the expected QoQ increase in depreciation of JPY 3.4 billion. Also, we expect a negative QoQ impact of JPY 0.7 billion from a stronger Yen. Other key factors were volume and electricity unit prices. Electric power costs are expected to step up as we head into July. Given all of the factors, we project a QoQ decline of roughly JPY 5 billion in operating profit. Next slide, please. This slide shows our dividend guidance. The interim dividend has been set at JPY 10 per share. The fiscal year-end dividend level has yet to be determined. With regard to determining dividend level, we consider a number of factors. We take into account the demand for cash for items such as capital expenditures, although this has been largely already covered, free cash flow, EBITDA, as well as the situation for funding for dividends to be paid. Next page, please. This is the trend for 200 mm wafers. One factor behind this trend is, firstly, the fact that usage of 200 mm wafers is in decline. Another factor is the pronounced shift in the Chinese market to local production. Usage of 200 mm wafers in China is relatively high, and many of the end products that consume 200 mm wafers are also being made in China. Our non-Chinese customers are losing ground in the China market. This has led to a fall in demand for 200 mm wafers. The trend reflects the combination of this China impact as well as the fading of demand for 200 mm wafers. The fading of demand is the result of weaker economic conditions as well as the transitioning of some applications to 300 mm wafers. The fall in demand as a result of weaker macro conditions should recover when economic conditions improve, but as the loss of demand on the back of applications transitioning to 300 mm represents a structural change, demand here will not come back. Geopolitical risks associated with China have grown significantly, with an increased tendency by China to focus on local production capabilities across the board. We are seeing Chinese players become stronger. Our customers' competitors are being guided to adhere to the Buy China policy. This is contributing to the weaker sales of 200 mm wafers. For that reason, I believe it will be difficult for the market to bounce back. Next slide, please. This is the trend for 300 mm wafers. Optically, the slide appears to suggest a solid QoQ rebound in 300 mm wafers in Q2. However, if we look at factors such as market share for various players, I believe that there were some behaviors on the part of some of the companies which end their fiscal years in March, in which they moved to curtail sales in the March quarter in order to position themselves for a stronger start to the fiscal year in the June quarter. This applies to customers as well as our peers. In my view, real demand for both quarters is likely to have been an even split of first-half wafer numbers. I don't think there was a significant QoQ increase in real terms. Next slide, please. With regard to the market conditions going forward, it is difficult to read. However, near term, there was a rebound in Q2 in 300 mm wafers as a result of inventory adjustments related to the fiscal year end, although I view the bounce as more of an orchestrated move as opposed to a reflection of real demand. I think real demand in Q2 was largely unchanged. I have already elaborated on the situation for 200 mm wafers. Conditions remain unchanged. In terms of prices, customers continue to respect the LTA prices, but spot prices, particularly for 200 mm, are unsurprisingly weaker. For our expectations for 300 mm in Q3, we are likely to see a continuation of the polarization of the market. Although semiconductors should continue to grow, the only segment of the market that is currently strong is AI-related. Trends for all other applications are sluggish. We are seeing very slight improvements for the overall market, but near-term conditions are challenging. However, with customers locked into LTAs, committing themselves to significant purchases when market conditions were strong, they are therefore carrying substantial levels of inventory. Working down the elevated inventory is taking time. For 200 mm wafers, as discussed earlier, there has been a structural change in the market. The trend for prices in Q3 is in line with my earlier comment. In terms of the outlook going forward, AI should continue to drive logic at design rules of 7 nm or lower, and HBM within DRAM at very high levels of growth. Other applications are showing gradual improvements. However, there is a slight impact from China here. Data for China is not included in the market statistics, but Chinese players are starting to gain ground in memory, which is likely offsetting market growth and resulting in a weaker trend based on the available statistics. If we look at the overall global markets, I believe a moderate recovery is underway. However, with the Chinese shift to using homegrown products, while the Chinese are seeing solid growth, trends in the non-Chinese segments of the market are lackluster. As a result, inventory has remained persistently elevated for legacy applications. I think it will take a little more time before we see a recovery in demand. The market for 200 mm wafers, I reiterate, is struggling to cope with structural changes in the market. We have no choice but to take drastic action. Next page, please. As you can see, customer wafer inventory is not falling at all. This is the chart for the overall market. While wafer inputs are rising solidly, customers have inventory on hand, so the increase in inputs is not translating into an increase in wafer purchases. Next page, please. You can see the same trends here when you look at the customer wafer inventory trends split between logic and memory. It looks like there may be more progress on inventory on the memory side. For logic, while wafers for 7 nm and finer design rules are on fire, inventory trends for wafers for 28 nm or 40 nm are extremely sluggish, with no signs of recovery. Next slide, please. On this slide, we look at the expected benefits of the impact of AI for SUMCO. If we look at servers for data centers, for example, there has been strong positive growth momentum. If we look at the applications for logic use wafers for 7 nm and lower, servers account for the vast majority, growing at an annual rate of around 16%. Currently, the cap on market growth is more a function of a lack of capacity on the part of our customers. The customer's capacity expansion has not been able to catch up to demand. That said, there are only a very limited number of customers that can produce these chips, so growth hinges on the ability of this customer to increase capacity. We do recognize that they are making significant efforts to rapidly raise capacity. Next slide, please. The case for logic is clear, but the natural follow-on is, what is the situation for memory? HBM has obviously been a driving force for DRAM, so growth should continue. The red-dotted line shown here is the theoretical rate of growth for chip density based on scaling. The question is whether bit demand is outpacing this theoretical level or not. In the case of DRAM, bit demand is outpacing the theoretical rate of growth in chip density. This suggests that silicon wafer inputs will grow. If we then look at NAND memory and bit demand as a result of increased layers, for 2024 and 2025, bit demand is not projected to outstrip the theoretical rate of growth for chip density. Currently, the market is not yet at that stage. Obviously, we don't have a lot of visibility into the situation in China, although it looks like China is seeing solid growth here. However, since Chinese memory players are only using China-made wafers in most cases, although we don't have full visibility, I believe that China is seeing wafer growth. That said, I expect there will be a recovery next year for non-China markets, with bit demand backed by increases in the number of layers outstripping the theoretical growth, which should drive an increase in wafer volumes. This completes my section of the presentation. I will hand over to CFO Kubozoe to talk about details of our Q2 earnings. I, Kubozoe, will present the earnings and outlook in more detail. The results for Q2 fiscal 2025 in the third column from the right are, as highlighted earlier by Chairman Hashimoto. Sales were JPY 102.9 billion, operating profit was JPY 1.5 billion, ordinary profit was - JPY 0.1 billion, and profit attributable to owners of the parent was zero. In the middle of the table, we show CapEx on an acceptance basis for Q2, which was JPY 19.2 billion, while depreciation was JPY 26.7 billion. The forex rate was JPY 145 to the dollar. OPM and the EBITDA margin are, as shown in the table. In the second column from the right, we show the results for the first half. Sales were JPY 205.3 billion, up JPY 7.1 billion year-on-year. OP was JPY 7.4 billion, down JPY 13.4 billion year-on-year, while profit attributable to owners of the parent was JPY 3 billion, down JPY 9.6 billion year-on-year. CapEx on an acceptance basis was JPY 51.9 billion, down from JPY 124.7 billion as of the same time last year. The significant decline reflects the fact that we are getting close to the completion of our program of greenfield investments. That said, on the back of the completion of new facilities, first half depreciation was JPY 49.4 billion, split between JPY 22.7 billion in Q1 and JPY 26.7 billion in Q2, up JPY 13.5 billion year-on-year as of first half. Next slide, please. In the analysis of sequential changes to quarterly operating profit, Q2 sales increased by JPY 0.5 billion from Q1, while operating profit fell JPY 4.4 billion. The forex rate was JPY 145.2 to the dollar versus the JPY 153.9 level of Q1, reflecting a substantial appreciation of the Yen during Q2. The waterfall chart below shows the breakdown of the JPY 4.4 billion QoQ change in OP. The major factors depressing OP were a - JPY 3.7 billion impact from forex and a - JPY 3.5 billion impact from increased depreciation. Sales, excluding the impact of forex, were up slightly, resulting in a positive impact from sales-related variance, but costs were largely unchanged sequentially, resulting in the JPY 4.4 billion decline in OP. On the right, we show the first half results. On a year-on-year basis, sales rose JPY 7.1 billion, but operating income fell JPY 13.4 billion. For the first half, the Yen appreciated slightly on a year-on-year basis. As shown in the waterfall chart below, the forex impact was a - JPY 0.6 billion. The major factor depressing OP was, as noted earlier, the significant year-on-year increase in depreciation of JPY 13.7 billion. With regard to costs, we continue to see increases with a negative impact of JPY 1 billion year-on-year. This reflects increases in materials costs, as well as the impact of the surcharge for renewable energy on electricity costs, pushing up the unit price in the absence of exemptions. A slight recovery in sales resulted in a positive contribution from sales-related variance. Despite this positive, the magnitude of the increase in depreciation meant that it accounted for the vast majority of the year-on-year profit decline in first half. Next slide, please. On this slide, I will cover the balance sheet and cash flow. Looking at the middle of the balance sheet, total assets as of the end of June were JPY 1,161.7 billion, down JPY 10.9 billion compared to the end of December 2024. I will discuss the change in cash and deposits in covering cash flow in a moment, but cash and deposits were JPY 80.9 billion, down JPY 14.7 billion. Notes and accounts receivable fell around JPY 6 billion. In terms of major items, tangible and intangible assets were JPY 708.2 billion, up JPY 8.6 billion. At this stage, CapEx acceptance is still slightly higher than depreciation, hence the increase to the JPY 700 billion + level as of the end of June. Combining the various figures, total assets fell by roughly JPY 10 billion. On the liability side, there was an increase in interest-bearing debt of JPY 10.6 billion to JPY 364.5 billion. We chose to cover all of our long-term refinancing needs in 2025 early in the year, hence the increase in debt in first half. However, as maturing debt rolls off in second half, we expect the outstanding balance of interest-bearing debt to revert to last year's level by the end of fiscal year end. Others under liabilities are down JPY 20.2 billion. The major factor is timing differences between CapEx acceptance and actual payments. We made payments for CapEx that were accepted in the second half of last year, leading to the reduction in liabilities. Net assets were largely unchanged. Based on this, the equity-to-asset ratio was unchanged QoQ at 50.7%, and the D/E ratio on a gross basis was 0.62 times as of the end of June. On the right, we show cash flow. First half operating cash flow was a positive JPY 53.6 billion. However, as touched upon earlier, the outflow of cash flow for investment activities was JPY 70.5 billion, reflecting both the acceptance of CapEx and the timing of actual payments. The resulting free cash flow was a - JPY 16.9 billion. After factoring in dividends paid and net proceeds from borrowings, as mentioned previously, cash and deposits declined JPY 14.7 billion to JPY 80.9 billion as of the end of June. Jumping forward to page 19, I will now discuss our earnings forecast. The projections for Q3 are as discussed earlier. We forecast sales of JPY 101 billion and an operating loss of JPY 3.5 billion. We project an ordinary loss of JPY 6 billion and net loss attributable to owners of the parent of JPY 5.5 billion. Q3 depreciation is projected to increase further to JPY 31.2 billion. Our forex assumption for Q3 is JPY 145 to the dollar. As a result, the nine-month projections shown on the right are for sales of JPY 306.3 billion, operating profit of JPY 3.9 billion, ordinary loss of JPY 1.3 billion, and net loss attributable to owners of parent of JPY 2.5 billion. Nine-month depreciation is forecast to be JPY 80.6 billion. On this next slide, we show the analysis of changes in operating income. On the left, we show the sequential changes. Q3 sales are projected to decline by JPY 1.9 billion and operating income by JPY 5 billion. The forex assumption is for JPY 145 to the dollar, largely unchanged from JPY 145.2 to the dollar in Q2. As mentioned earlier by Chairman Hashimoto, we expect the impact of the increase in depreciation to rise substantially by JPY 3.4 billion QoQ. We expect costs to rise on the back of higher electric power costs as a result of higher summer season rates. On sales-related variance, we project a slight negative on the back of sequential declines in sales. The projected forex impact is a - JPY 0.7 billion, including the impact of the recent rapid strengthening of the New Taiwan dollar versus U.S. dollar, as opposed to just dollar Yen. Overall, it is the negative impact of the increase in depreciation and forex that is contributing to the sequential decline in OP. On the right, we show the year-on-year change for the nine-month forecast. We project a year-on-year decline in OP of JPY 26 billion. The impact of the increase in depreciation is projected to be a - JPY 23.4 billion. The impact of forex moves is projected to have a negative impact of JPY 4.2 billion. Although a gradual improvement is expected in sales-related variance, the magnitude of the increase in depreciation and the negative impact from forex is expected to contribute significantly to the JPY 26 billion year-on-year drop in OP. Finally, on page 23 in the reference section, we show historical trends for earnings, EBITDA, and EBITDA margin. Please review these items at your leisure. This completes my section of the presentation. T hank you. We will now open the floor to questions. I am Enomoto of BofA Securities. I would like to ask about your view of real demand for wafers in Q3. Also, you mentioned toward the end of your presentation that you expect NAND flash wafer input volume to pick up from next year. This suggests that you are starting to see some positive signs for next year and beyond. Please talk about real demand in Q3 and your view of the outlook into next year. On our expectation for real demand for wafers in Q3, unfortunately, I expect it to remain largely unchanged throughout the remainder of the year. This is because, although customer wafer input levels appear to be improving slightly, customer inventory levels are still high, so higher input levels will not lead to higher purchase volumes. We don't necessarily have perfect insight, but for NAND, it appears that the situation is gradually improving based on rising customer input levels. There will be a time lag before wafer purchase volumes pick up, in my view. Y ou have said that customer input volumes are rising, but that inventory levels are high. What is the likelihood that customer inventory levels will decline? Customers are trying very hard to reduce inventory, so I think inventory will decline at some point. Once inventory finally gets to an appropriate level, purchase volumes should align with input volumes. If the question is, how long will it take to get to more normal levels of inventory, I think it will take more time. There are differences between individual customers, with some carrying a lot of inventory, but others at relatively healthy levels, so it's difficult to generalize. However, overall, I think a recovery will likely take time. From that perspective, LTAs looked like a good thing in the beginning, but under the current circumstances, since customers continue to buy wafers in compliance with the contracts, at least initially, their inventory levels have surged as a result. Given the slow progress in the recovery, it's likely that the customers now feel that this wasn't how things were supposed to work out. For us, that's even more so the case. That is the situation we find ourselves in. Understood. Thank you. T hank you. Next is Mr. Watabe of Morgan Stanley MUFG Securities. Today we saw the U.S. float its intention to impose 100% tariffs on semiconductors. What is your view? Will this impact wafers and your stance on investments in the U.S.? You talked about the tariff impact at the last analyst briefing. Can you provide an update? T he talk of tariffs on semiconductors emerged just this morning. As yet, we don't know any of the details, although I suppose we have some sense of what is being proposed. There seems to be a lot of discussion about whether the tariffs are targeted at those who are currently investing in the U.S., or whether those who already have existing operations in the U.S. might be exempt. Many seem to feel that companies that already have an existing operation in the U.S. should be okay. For those that are currently investing in the U.S., there may be a question of how much they might be required to invest, which could complicate the situation. However, although we have a general sense of how this might play out, the U.S.'s true intentions are still unclear. We are in the process of trying to get more information. That said, SUMCO has three plants in the U.S., so if the majority view is correct, then tariffs for us would be 0%. However, if the requirement turns out to be that all items sold in the U.S. would need to be made in the U.S., then none of the wafer makers are producing wafers for TSMC in the U.S. It is not clear how this will play out at this stage. We find ourselves in an environment where anything could happen, so frankly, it's confusing. It isn't an environment where you can extrapolate using common sense. That's the situation. To reiterate how we are positioned in terms of sales to the U.S., the U.S. accounts for 7.5% of total sales. U.S. production accounts for 2.5% of the total, which is unlikely to be impacted. This leaves us with a gap of 5% where we don't know what will happen. 100% tariffs on that 5% would be significant, but at the same time, it is still only 5% of the total. We are not in the same boat as the automakers in terms of magnitude. That said, a 100% tariff seems excessive. If the tariff is 100%, then frankly, we can't really sell into the U.S. It isn't clear what will happen. T hank you. N ext is Mr. Ikeda of Goldman Sachs Securities. My question includes some discussion of the medium term. You have guided for losses in Q3. Headed into next year, depreciation is expected to remain elevated, and earlier you indicated the recovery in volume is somewhat slow. Given this situation, how do you propose to improve your earnings? Also, recently we have seen a widening gap in profitability between individual semiconductor materials suppliers, including wafer makers. A South Korean conglomerate chose to divest its wafer manufacturer. There seems to be a trend toward industry consolidation within semiconductor materials suppliers. There are other materials suppliers that have been acquired by public entities or accepted support from public sector entities, a trend that is drawing the attention of the capital markets. Do you think we will see industry consolidation or more alliances with third parties? Please comment to the extent that you can. I n a volatile geopolitical environment, if you act in haste, you could find yourself repenting at leisure. It may sound trite, but I think that the only choice is to ensure that you have a full and deep understanding of the situation. In terms of getting back on track for profit growth, if we look back at 2019, off the top of my head, I think depreciation was JPY 35 billion or JPY 39 billion. In comparison, depreciation in 2025 is likely to be roughly JPY 100 billion, an increase of close to JPY 70 billion. If we then look at profitability, we generated profits of around JPY 50 billion in 2019. Theoretically, if circumstances were the same, we should be able to generate profits of around JPY 50 billion or JPY 60 billion, but depreciation is a significant drag on profitability. The first priority, given that we have largely completed payments on our investments, is to address the depreciation. This is the unavoidable reality. I am aware that some companies and some countries allow you to push out depreciation if the new facilities are not yet operational. However, we firmly believe in financial discipline. As such, even if our facilities are not yet operational, we will begin taking depreciation. If we look at 200 mm and smaller diameter wafers, even after serious consideration, the likelihood of a recovery, given structural change, is small. This is because Chinese players have begun producing not only wafers, but end products that consume 200 mm wafers and are increasing volumes. Even if they can't sell into the U.S., they are able to sell into countries other than the U.S. With their entry into markets including Europe and Japan, our customers who consume 200 mm wafers have come under significant pressure as a result of the competition with Chinese players. Unless we are successful in selling into China, a recovery is likely to be difficult. The Chinese government has been clear in instructing manufacturers to buy products made in China. As a result, the market that is available to free-world players is shrinking and is unlikely to recover. There are applications that are transitioning to 300 mm wafers, which is fine, but I believe that we do need to move swiftly in addressing the situation for 200 mm wafers. We have already decided to close down the Miyazaki plant, but for other plants, we will need to look at a major shift of human resources from 200 mm facilities to 300 mm facilities where demand is strong. For instance, rather than hiring new employees for our new plant, we are already actively transferring employees from our 200 mm plants. W ith regard to industry consolidation, will the divestment of a South Korean wafer maker have an impact? Could there be a benefit for SUMCO if you were to partner with manufacturers of other leading-edge materials? F or now, I don't see much benefit to us from acquiring or entering into an alliance with a South Korean company. There isn't much overlap in terms of customer base, but our strength is in leading edge, while the South Korean player has strength in polished wafers. One thing that I found surprising in the recent development was the fact that they don't have any operations in the U.S. I think an acquisition or alliance would be unlikely for us. I don't believe that this is the right time for industry consolidation. U nderstood. Thank you. N ext is Mr. Miyamoto of SMBC Nikko Securities. I n the discussion of improving profitability, you touched upon the significant impact of depreciation. Depreciation is a major factor in terms of the QoQ profit decline. I think it is important to understand when depreciation will peak out. From that perspective, the question is how much full-year depreciation will likely decline from the previously discussed JPY 150 billion, as explained last year in August. In an earlier comment, the JPY 100 billion level was also mentioned, although I suspect it is likely to be slightly higher. Please comment on your expectations for full-year depreciation for this fiscal year. Also, for next fiscal year, I think the first quarter will see a decline in depreciation due to the reset at the start of a fiscal year. Will Q4 2025 depreciation be the peak? Earlier, you mentioned that acceptance of greenfield investment has been largely completed and that you have no intention of pushing out depreciation on facilities that have not yet begun operations. For these reasons, I think that Q4 will be the peak, but please comment on the outlook for depreciation. I have already said that we expect Q3 depreciation to be around JPY 31 billion. However, in terms of forecasting for Q4, many facilities are expected to start operations, but we will take into consideration customer demand in ultimately determining the timing of ramp-ups. We are still reviewing the numbers and have yet to make a decision. For this fiscal year, as you alluded to in your question, we do expect that annual depreciation will come in several tens of billions of Yen lower than the previous projection of JPY 150 billion. However, we expect the peak for depreciation to be the next year. While there will be a step down in quarterly depreciation from Q4 into Q1, we generally expect that the peak in quarterly depreciation will come sometime in the next fiscal year, although we haven't as yet firmed up our quarterly plans for the next year. On an annual basis, however, we expect next year's depreciation will be higher than this year. O n a full-year basis, given that depreciation in the first half of this year was lower, I can understand that depreciation for next year may be higher, but if we look at it on a quarterly basis, I thought that this year's Q4 was likely to be the peak. Do you really expect CapEx acceptance to be that high in Q1 or Q2? W e will be gradually ramping up capacity over time. My understanding of your question is that you wish to understand the net impact of the actual timing of facility ramp-ups on the one hand and the impact of the start of a new fiscal year on depreciation on the other, and that your view is that this year's Q4 is likely to be the peak. However, at this time, I don't have numbers that would allow me to specifically say yes to your question. I can't answer your question at this time, although I will say that Q4 is likely to be a high level. T hank you. Understood. N ext is Mr. Nishiyama of Citigroup Securities. I would like to ask about price trends. My understanding was that as a result of LTAs, 300 mm prices generally rise 2% - 3% every year. Are prices still tracking in line with this? With regard to the spot market, have you seen signs of a bottoming? Also, your peer indicated that they were asking for higher prices in Taiwan as a result of the move in the New Taiwan dollar versus the U.S. dollar. Is SUMCO's subsidiary also doing the same? F irst of all, with regard to LTAs, as we have said in the past, there is a range of price patterns for the LTAs, and in fact, the majority of LTAs were done at a fixed price. It is true that there are some LTAs for leading-edge wafers where prices step up. Customers have respected the LTA prices. The overall blended price for LTAs is up slightly, so it is not bad. In terms of spot prices for 300 mm wafers, SUMCO has virtually no spot transactions, so the majority of spot transactions is done by FST. FST had a policy of not engaging in LTAs, but conditions in the spot market are not currently conducive to raising prices. I was a little surprised to hear you say that someone is raising spot prices. The overall market is not that strong given the very high level of customer inventory. It doesn't seem realistic to expect customers to agree to higher prices when they have so much inventory, although we would be happy to do so if the customers agree. I don't think the market is there yet. I have one follow-up. Please talk about the positioning of LTAs. Earlier, you talked about how LTAs looked good initially, but how they have actually contributed to delaying a recovery. I believe you will begin negotiating the next round of LTAs next year. Will you be forced to negotiate at lower price levels given that spot prices are below LTA prices? Will you need to rethink the structure or positioning of the LTAs? I n terms of how customers are viewing LTAs, SUMCO has largely completed its investments to expand capacity. Relative to this, if your question is, have we fully sold out our capacity, then the answer, unfortunately, is that that is not the case, which is an issue. At the time we entered into the contracts, customers said that even if we did all of our investments, the industry would still come up short by around 800,000 wafers per month. At that time, the customers were also painting very rosy pictures of the future, saying that a shortage of wafers, which only accounts for a mere 3% of total costs, would result in all the chipmakers' plants grinding to a halt. This is why we rushed into LTAs. In hindsight, the terms of the LTAs were actually rather conservative. When I think about it now, customers ended up being bound by the LTAs. Our customers are all major players, so they have respected the conditions of the contracts. We have had no instances where they blatantly ignored their commitments. The normal way of addressing the situation is to extend the contract term. As a result, I feel wafer purchases have not picked up despite the market recovering. The LTAs may be contributing to delays in a recovery in the wafer market. That said, the customers also contributed to the situation by clamoring for ever more wafers, although you could argue that this is simply a reflection of the nature of this industry. One other factor is the dramatic geopolitical changes we have seen. Neither we nor our customers could have predicted the current situation. U.S.-China trade friction is having a big impact on the markets. For instance, China is now focused on developing local production capabilities. Capacity was being built in anticipation of demand from China, which has not come through as expected. That is not the case for us, but to a certain extent, that may have been the case for our group companies as well as some of our peers, particularly those that had a strong presence in the China market. The market has not moved in accordance with their plans. At the time, I thought that we could feel secure with LTAs in place. Our customers have respected the terms of the contracts, but at the same time, we cannot force them to take volume that they don't need. There are pros and cons. From our perspective, if we compare trends from customers with LTAs versus those without LTAs, it is true that price levels are stable. The push-outs in delivery timing have become excessive. In terms of how we think about LTAs going forward, fortunately, because of the extensions to existing contracts, the rolloff of contracts won't happen until around 2027. In terms of how we think about LTAs, we recognize that the LTAs contributed to the high levels of customer inventory, so negotiations may be more difficult in the next round. In the next round, I would hope to be able to avoid getting locked into LTAs for overly long timeframes or overly large volumes. However, in those situations, customers can be very persistent, so there's no easy answer. Geopolitics has also been massively disruptive, although it is not the kind of thing that can be easily predicted. As much as possible, we aim to capitalize on our learnings from this time in engaging in LTAs. It is preferable to have LTAs rather than not, but they are not necessarily favorable in all circumstances. The presence of an LTA means that product trends are not real-time. I understand. Thank you for the detailed answer. N ext is Mr. Omura of UBS Securities. I have a question about page 16 and the QoQ change. On the waterfall chart, you show a sales-related variance impact of positive JPY 2.7 billion, but the absolute increase in sales was only JPY 0.5 billion. Why? The improvement in profit contribution from sales does not appear to be aligned with sales. Why is it larger than the absolute increase in sales? T he absolute sales figure in the table includes the forex impact, but in the waterfall chart, we separate out the forex impact, which was - JPY 3.7 billion. Absolute sales is depressed by the forex impact, but if we exclude forex impact, then sales were actually up. Sales-related variance does not include forex impact. I see. In other words, the QoQ waterfall chart gives a relatively clear picture of marginal profitability. Understood. Thank you. N ext is Mr. Nakada of JPMorgan Securities. I would like to follow up on Mr. Omura's question. I want to understand what is happening with volume. For the industry as a whole, you show on page 8 an increase of around 18% QoQ in 300 mm. If we back out volumes from the waterfall chart on page 16, based on what you've said, I think it implies an increase of around 4%. However, the 4% QoQ increase reflects the blended impact of a decrease in 200 mm and an increase in 300 mm. Is that right? Can you give me an image of how much 300 mm increased on a standalone basis? Also, I believe SUMCO has achieved steady increases in both the March and June quarters, but I think the page 8 numbers reflect lumpy share trends on the part of your peers. Is it fair to assume your share has not changed? O ur share has not changed. T hank you. With regard to the trends in volume by size, I assume that 300 mm has a bigger impact than 200 mm. Y es, that's correct. I f we look at 300 mm on a standalone basis, was the QoQ growth in the double digits? Any color you can provide would be helpful. I have some data. First half surface area growth for 300 mm was around 6% year-on-year for the industry on a global basis. SUMCO's growth slightly exceeded market growth. For 200 mm wafers, there was a significant decline year-on-year, and SUMCO tracked in line with the market. W hen you compare the sequential growth into Q2 to the sequential growth expected into Q3, are you assuming that growth will moderate slightly? Y es, that's our assumption. For Q1 into Q2 overall, there was not much growth, but if you look at the year-on-year comps, Q1 year-on-year surface area growth for 300 mm was around 2%, and Q2 growth was 9% year-on-year for a blended first half year-on-year figure of 6%. The step up in Q2 is a reflection of actions to limit growth in the March quarter in favor of pushing up the June quarter. First half year-on-year was 6% growth, which I think is a good reflection of the true state of the market. Growth last year on a full-year basis was down very slightly year-on-year, while the declines two years ago were in the teens. I would hope to see full-year growth of around the 6% level. I don't expect SUMCO to see 10% + growth, which is the growth rate driven by AI. I think that your peers may or may not be cooperating with customers' efforts to reduce inventory, resulting in a mixed trend for customer inventories, but this is not having an impact on SUMCO's shipments. Is that correct? W e are not artificially adjusting shipments. There are customers that moved to reduce inventory at the end of the March fiscal year, but then bought wafers at the beginning of the new fiscal year to jumpstart the year. There are suppliers that have aligned their shipments with their customers' moves. That is a reflection of their company policy, but SUMCO does not engage in this type of behavior. U nderstood. Thank you. N ext is Mr. Yamada of Mizuho Securities. I have a question about page 17 and the cash flow statement. First half free cash flow was - JPY 16.9 billion. Q1 free cash flow was - JPY 12.7 billion. By implication, Q2 free cash flow on a standalone basis was - JPY 4.2 billion, so you are getting closer to break even. I understand that the negative free cash flow in Q2 is the result of the gap between CapEx on an acceptance basis versus the actual payment basis, or in other words, the significant negative amount in the net others line under investment cash flow. If we take into account the fact that Q2 CapEx fell significantly QoQ, this suggests that the net others line under investment cash flow could turn positive in Q3 or Q4. Please comment. Please also discuss how this might impact shareholder returns. To the extent that you can, please also comment on how we should think about CapEx in the next fiscal year. CFO Kubozoe, can you respond? I t is true that the trend in cash flow is generally improving. There are some elements that are still uncertain, but we would hope to see free cash flow in positive territory by the end of this year. You are correct in your expectations that CapEx will decline gradually going forward. With regard to next year's CapEx, this year's CapEx is roughly half of last year's CapEx. For next year, we should see a large decline, although we don't have fixed figures yet, as it will depend on what sort of investments we decide to make. As a trend, however, I would expect CapEx to decline, which should lighten the burden in terms of investment cash flow. I will hand back to Chairman Hashimoto to comment on investments. A s was discussed earlier, payments for our capacity expansion should be largely completed by the end of this fiscal year. Depreciation will kick in as a result. In terms of investments going forward, first there will be maintenance CapEx, as well as upgrade investments to modernize existing facilities. With regard to extraordinary losses, facilities for 200 mm and smaller diameter wafers are already close to zero in terms of book value, so I wouldn't expect to incur significant losses from 200 mm. Therefore, there would be no impact on cash flow. What would impact cash flow would be maintenance CapEx and investments in facilities upgrades. Compared to the scale of investments to date, it will be much lower. Typically, our operating cash flow is between JPY 70 billion - JPY 80 billion, but obviously our CapEx will be less than operating cash flow. It may be that there will be some lingering payments related to this year's investments, but setting this aside, basically CapEx should be significantly lower than operating cash flow. T hank you. As you mentioned earlier, if we compare conditions for 2025 to 2019, OP is lower, but operating income before depreciation is higher, and I think OPCF is shaping up to be higher as well. A t the moment, it boils down to depreciation being a significant drag. We are on the verge of completing all of the payments related to CapEx, so I am not that concerned. U nderstood. Given that depreciation is a non-cash item, I hope that you will be able to keep the EBITDA margin at 25% or higher, and that you will be able to achieve what you have outlined today. Thank you. W e are very committed to achieving this. Thank you for your support. T hank you. We will end the meeting here. Thank you to everyone for joining the Q2 fiscal 2025 results briefing. We are grateful for your participation today.