Thank you for your participation today. This is the results briefing for the first quarter of the fiscal year ending December 2026. Before starting the presentation, allow me to confirm today's materials, which consist of three items: the consolidated financial results for the three months ended March 31, 2026, the announcement regarding revision to dividend forecast, and the presentation deck entitled Results for Q1 Fiscal 2026, which we will use now. 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 and President Jiro Ryuta and Representative Director and Vice President CFO Shinichi Kubozoe. President Ryuta 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 President Ryuta. I am President Ryuta. I have recently taken over from Chairman Hashimoto. I am still getting used to this part of my role and apologize if it feels a little awkward. I will start with an overview of the results and comment on the market environment. In Q1, SUMCO achieved sales of JPY 101.4 billion, an operating loss of JPY 5.2 billion, an ordinary loss of JPY 7.9 billion, and a net loss of JPY 8.4 billion. For Q2, we project sales of JPY 112 billion, an operating loss of JPY 2.5 billion, an ordinary loss of JPY 6.5 billion, and a net loss of JPY 7 billion. Compared to Q1, our Q2 forex assumption is JPY 160 to the dollar, which is expected to contribute to the improved performance. We expect the main driver of both higher sales and the narrowing of losses to be an increase in volumes. Next page, please. With regard to dividends per share, our dividend policy is unchanged. Although we are projecting losses, we have taken a comprehensive view factoring in the level of expected profits for the fiscal year, the outlook for the next fiscal year and beyond, cash needs such as for CapEx and free cash flow in guiding for an interim dividend of JPY 10 per share. On dividends, we take into account factors such as free cash flow in deciding dividends per share. While we are in the red, factoring in cash flow and other considerations, and given that we have significant retained earnings, we set the interim dividend level at JPY 10 per share. This is the projected trend for wafer shipments. Reflecting seasonality and inventory adjustments by customers, the 300 mm wafer shipment level was down sequentially. On an absolute basis was still at a high level for Q1 on the back of rising AI-related demand. Growth in AI-related demand up to this point had been focused on leading-edge logic. The increase in calculation volumes for AI is now driving growth for high speed wideband DRAM, HBM. Recently, we have seen a pickup in NAND flash demand as a result of rising demand for SSDs for AI servers as well. The strong demand is underpinning continued CapEx by customers, fueling expectations for wafer growth from the second half of this year into early next year. In contrast, in 200 mm, wafer shipments dropped significantly in 2023. Shipment levels remained low in 2024 and 2025. I believe that progress is being made on inventory adjustments, but sluggish growth in end applications such as consumer electronics, industrial machinery, and automotive kept Q1 at low levels. It appears that there are some pockets of favorable demand for such items such as Power Management ICs for AI, but we think it will be difficult to get back to the high levels of either 2020 or 2021. Next page, please. This is estimated customer wafer inventory. In Q1, customer wafer input volumes increased, leading to a decline in inventory volumes and days. Next page, please. This shows the trend for inventory split into logic and memory. While logic inventory is still high compared to memory, reflecting adjustments to purchase volumes, input volumes are rising. We are now starting to see a decline in inventory. For both logic and memory, backed by a recovery in production and customer capacity expansion, we could see an increase in purchase volumes going forward. That said, each customer has their own way of thinking about inventory, so it is still not clear whether we will see further progress on reductions in overall inventory days. Next page, please. Having talked about shipment and inventory estimates, I will now cover market conditions. Actuals for Q1 were as already discussed thus far. 300 mm was down sequentially from Q4. Shipments for 200 mm and smaller diameters remained at low levels. On prices, LTA prices continue to be respected. SUMCO does not have many LTAs for 200 mm, but spot market prices for 200 mm, with the exception of some specialty items, were slightly lower on a sluggish supply-demand balance. On the outlook for Q2, 300 mm continues to show favorable trends. Backed by AI-related demand, leading-edge logic and memory trends are strong. For non-leading-edge, customers are still adjusting inventory. Also, AI demand has led to shortages in memory, which appears to be having an effect on end product production plans, such as consumer products, which is then impacting demand. That said, there are some items such as Power Management ICs, where demand is picking up on AI-related demand. The inventory adjustments are not across the board for 200 mm either. Products where progress has been made on inventory adjustments or data center products are showing some signs of increased demand. That said, we believe the overall strength of the recovery is lackluster at this time. LTA prices will continue to be respected. Spot prices had tended to be weak up to now, but there are some pockets of recovery. I believe as conditions improve, we should start to see some corrections to price. Looking out to the second half of the year, our view remains largely unchanged. We expect to see continued strong growth for AI-related and a more gradual recovery in non-AI. We expect strong wafer demand for AI-related leading-edge logic and memory to continue. There continues to be a sense of shortages for AI-related. In contrast, for non-AI logic, there are some products where demand is picking up, but given the variance in progress on inventory adjustments between customers and the impact of shortages of memory used in end products, the conflict in the Middle East and inflation, we need to monitor the market closely to determine whether we might see a recovery. 300 mm overall continues to see strong demand, with the recovery trend likely to continue. While 200 mm should see some recovery and the mixed picture in terms of customer progress on inventory adjustments, the magnitude of a recovery is likely to be weak. Next page, please. The operating environment for semiconductors is highly volatile and challenging, but semiconductors are a growth industry. Leveraging the solid base on the significant accumulation of technological expertise SUMCO has built up over many years and our strong relationships with customers, we aim to continue to grow over time. The four items we show here, which make up SUMCO Vision, are necessary for responsive and agile management. Of these items, what is particularly important is the first item, being the global number one in terms of technology. This will cement SUMCO's position within the industry. We are implementing many initiatives to achieve this. First, we must swiftly and appropriately invest in R&D and CapEx. It is also necessary to train the human resources that will make this a reality. We are currently putting systems in place within the company. We must also engage with both our suppliers and customers, ensuring a solid flow of information to build a robust ecosystem. My aim is to see SUMCO build its own success. The second, third, and fourth items are self-explanatory. Our policy remains unchanged. We will continue with the business structural reforms we are currently conducting with the aim of elevating our capabilities in leading edge, while taking a selective approach in evaluating the non-leading edge areas to improve profitability and the sustainability of our business. We ask for your continued support. This completes my section of the presentation. I will hand over to CFO Kubozoe to talk about details of our Q1 earnings. I, Kubozoe, will present an overview of the results and forecasts. Next page, please. As touched upon at the outset, the results for first quarter fiscal 2026 are shown in the middle of the page. Sales were JPY 101.4 billion. Operating profit was JPY -5.2 billion. Ordinary profit was JPY -7.9 billion. Profit attributable to owners of the parent was JPY -8.4 billion. Lower down on the table, we show CapEx on an acceptance basis of JPY 9.4 billion. CapEx is now declining as we are already past the peak. The level is a little lower because of some timing push outs into Q2. However, compared to previous acceptance levels, the amount is much lower. Depreciation was JPY 30.8 billion. It is down from the Q4 level of JPY 35.6 billion, reflecting the impact of the start to a new fiscal year. Further down on the table, EBITDA was JPY 23.4 billion. The forex rate for the quarter was JPY 155 to the dollar. Next page, please. This is the analysis of change to operating profit. Starting on the left, in the analysis of sequential changes to quarterly operating profit, Q1 sales fell JPY 3.8 billion QoQ, and the operating loss widened by JPY 0.7 billion. The yen weakened by JPY 2.3 QoQ from Q4 to Q1. The results were largely in line with our Q1 forecast. As you can see from the chart below showing the components of OP change, costs increase, but sales variance was a JPY -4.9 billion, reflecting a decline in volume as well as a lower number of operating days during the quarter, which depressed volume. There was also some impact from weaker spot prices. These negatives were offset by the decline in depreciation and a forex tailwind for a net JPY 0.7 billion QoQ decline in OP. We show the year-on-year change on the right. Sales were generally flat year-on-year, while OP fell JPY 11.1 billion. The change in the forex rate was JPY 1.5 year-on-year, a relatively small change. The increase in depreciation of JPY 6.1 billion accounted for the vast majority of the year-on-year profit drop. On top of this, for sales variance, in Q1 there was an impact from inventory adjustments in non-leading edge logic, while there was an increase in PW, which led to a change in product mix, hence the negative sales variance. Combined with the negative impact from costs, OP fell JPY 11.1 billion year-on-year. Next page, please. On this slide, I will cover the balance sheet and cash flow. Looking at the middle of the balance sheet on the left, total assets as of the end of March were JPY 1,142.8 trillion, up JPY 14.9 billion compared to the end of December 2025. Cash and deposits increased by JPY 34.7 billion to JPY 109.9 billion as of the end of March. I will discuss the change in cash and deposits in covering cash flow on the right in a moment. There was a significant change in tangible and intangible assets, falling JPY 21.4 billion as of the end of March, with depreciation outweighing CapEx acceptance. Liabilities increased JPY 20.1 billion. Given that interest rates are expected to rise going forward, we chose to front-load the refinancing of some of our cash needs for this year, pushing up outstanding borrowings for the end of Q1. There will be repayments in Q2 and Q3, which should lower the level of interest-bearing debt. Overall, interest-bearing debt should decline toward the level as of the end of last year over the course of the year. Under net assets, I highlight retained earnings. As a result of the net loss at the end of the fiscal year and dividend payments, there was a decline of JPY 11.9 billion in retained earnings. There was an increase of JPY 2.3 billion to the capital surplus, which reflects the impact of the sale of shares in subsidiary FST. Given FST was a wholly owned subsidiary, the gains of JPY 2.3 billion are directly reflected on the balance sheet. As we front-loaded some of our borrowings, the equity-to-asset ratio was 49.8%, and the D/E ratio on a gross basis was 0.66 x as of the end of March. This represents a slight deterioration from levels as of the end of December 2025. On the right, we show cash flow. Operating cash flow was a positive JPY 24.1 billion. Cash flow for investment activities was an outflow of JPY 13.1 billion, reflecting a slight push out of CapEx acceptance into Q2. As a result, free cash flow was a positive JPY 11 billion as of the end of March. Reflecting the increase in borrowings, interest-bearing debt rose JPY 20.4 billion. Under other, we show the proceeds from the sale of FST shares, including the impact of dividends paid. There was a net increase in cash and deposits of JPY 34.7 billion, which matches the balance sheet entry touched upon earlier. We show our Q2 earnings forecast on the next page. I will now discuss our earnings forecast. The projections for Q2 are as shown on the third column from the right. We project sales of JPY 112 billion and an operating loss of JPY 2.5 billion. We project an ordinary loss of JPY 6.5 billion and net loss attributable to owners of the parent of JPY 7 billion. Q2 depreciation is projected to rise to JPY 33.7 billion. Below, our assumption for forex in Q2 is JPY 160 to the dollar. This assumption underpins our forecast for the quarter. Near term, the yen has appreciated somewhat, but the JPY 160 level was based on actual rates in April and May. Next slide, please. On this next slide, we show the analysis of change in operating income. On the left, we show the sequential changes. Q2 sales are projected to rise to JPY 112 billion, up JPY 10.6 billion, driven primarily by 300 mm. Operating losses are projected to narrow by JPY 2.7 billion. Our forex assumption of JPY 160 to the dollar implies yen depreciation of roughly JPY 5 QoQ. If you look at the waterfall chart below, you can see that we expect positive contributions from increased sales and forex, reflecting our view of improvements in sales variance and forex impact. We expect depreciation to increase by JPY 2.9 billion above the line. The expected increase of JPY 1.1 billion in cost takes into account a slight increase in unit prices for electrical power and the impact of annual increases in wages. On a net basis, we are expecting a JPY 2.7 billion QoQ narrowing of operating losses in Q2. On the right, the year-on-year changes for first half are as shown here. In addition to the factors discussed for the sequential changes, depreciation will rise, but in terms of sales and production, volumes are expected to increase. If we compare the year-on-year for Q1 last time, the negative for sales variance is slightly lower at JPY -4.6 billion. On top of this, we project a positive from forex impact. On a net basis, first half OP is expected to decline JPY 15.1 billion year-on-year. Next slide, please. We have provided reference material at the end of the presentation with historical trends for earnings and EBITDA on the next page. We project sales of JPY 112 billion, up from the previous JPY 100 billion level. In addition, EBITDA margin is expected to improve from the 23.1% of Q1 to 26% in Q2. This completes my section of the presentation. Thank you. Thank you. We will now open the floor to questions. We will start with Mr. Enomoto. I am Enomoto of BofA Securities. I would like to take this opportunity to ask you about your management policy. What are your aims for SUMCO as the new president? When I look at SUMCO, what comes to mind is the sheer challenge of timing CapEx, particularly in the past. How are you thinking about addressing this challenge going forward? Will the approach be to specialize in leading edge? Or maybe given that you need to go where the opportunities are, there will be times where you will need to invest. Please elaborate on your management vision for SUMCO. It is true that CapEx has been very challenging in the past. This is a market where timing and accurately forecasting the market is very difficult. Currently, the pace of market developments has accelerated, raising the probability of failed investments if you invest in one fell swoop. There is a need to constantly monitor the market and, as much as possible, invest at the optimal timing, but in phases. With regard to CapEx for SUMCO, the focus for now is mainly on facilities for fabricating and testing high performance and leading-edge wafers. SUMCO amended its plan to expand capacity at Yoshinogari. Can I confirm that SUMCO will basically not need to make major investments in the next few years? When we started our greenfield investment program in 2021, our assumption was that the magnitude of market growth would be larger. Subsequently, the trend changed, and it now appears that the market will not grow to the levels we had previously anticipated. With regard to the large-scale investment made in the Imari area of Saga Prefecture, we have built a large physical shell. We believe that the facilities in place at this location represent sufficient room for capacity expansion for the time being. Additionally, we still have room to add more equipment at this site. My view is that only once this site is fully populated would we then potentially revisit Yoshinogari after rigorously studying the then current market conditions. Understood. Thank you. Thank you. Next is Mr. Watabe. I am Watabe of Morgan Stanley. Thank you for the presentation. Earlier, you commented on the outlook for 300 mm demand, but are you seeing any impact as a result of the Middle East conflict? Are customers adding to inventory? Are you not seeing rush orders? Also, you indicated that there was some movement in terms of price hikes, but can you elaborate on this further? Also, are you fully excluding the impact of FST from Q2 forecast onward? If that is the case, the figures imply significant top-line growth. At this time, we are not seeing a significant direct impact as a result of the conflict in the Middle East in terms of the demand outlook for 300 mm. SUMCO is seeing virtually no rush orders or front-loading either. On price hikes? On price hikes, as we have been saying to this point, the vast majority of our 300 mm business is covered by LTAs. Reflecting the push outs of deliveries, the expiry of LTAs is still some way away, so there isn't much talk of price hikes or customers seeking to negotiate price at this time. I, Kubozoe, would like to follow up here. I believe your question, Mr. Watabe, is not about LTA prices since they won't change, but more about previous comments that spot prices were slightly weak. Near term, we are starting to see a slight re-rating for spot. FST earnings are factored into the current forecast. Will you be excluding FST earnings from Q3? You said you had sold shares. Actually, our stake is still above the level that would make FST an equity method affiliate. We haven't fully sold our shares to that level. It will take maybe one or two more rounds of disposals before FST becomes an equity method affiliate. Once that happens, it will impact the scope of consolidation, but the Q2 figures include the contribution from FST. Understood. Thank you. Thank you. Next is Mr. Yoshida. I am Yoshida of CLSA Securities. With regard to the earlier comments on LTAs, you indicated that SUMCO wasn't yet at a negotiation stage for prices. When do you think negotiations are likely to start? Also, given signs that spot prices are starting to rebound, last time, Chairman Hashimoto suggested that prices were unlikely to decline significantly. If we think about the current situation, given rising costs, it seems likely that you could raise prices. Please comment on the timing of negotiations and price levels at that time for LTAs. I prefer not to comment on when the LTAs are likely to roll over. The situation is different for each customer, so it is also tough to generalize. On prices, supply and demand are the determining factors, so it isn't the case that the only direction for prices is down. I would be happy to see a scenario where there is a tightening in supply demand in which a customer asks for more volume and says they are willing to pay a higher price. In any case, it has always been the case that silicon wafer prices have gone up and down on supply demand. Based on what we are seeing now, I believe we can look forward to gradual price increases. I think there is a good possibility that prices will rise in the near future. I see. With regard to the impact, last time around, I believe that the LTAs were for three years and baked in price increases of around 50%. What is the image we should have for the next round? I understand that we are not currently at that phase, but depending on demand, is there a possibility that prices could be negotiated up? At this stage, as we have said previously, because the customers have not fully taken the volume stipulated in the LTAs, the endpoint of the LTAs is being extended. We can't say specifically when, but generally speaking, the LTA periods are still getting longer. It is still too early to be thinking about the next round of LTAs at this time. Although negotiations will happen sometime in the future, it is still some way off. We aren't there yet. Understood. Thank you. Next is Mr. Ikeda. I am Ikeda of Goldman Sachs. I would like to ask new President Ryuta about your aspirations and medium-term objectives in terms of growth and margin improvement. In particular, the EBITDA margin has dropped to around 23% compared to peak levels of close to 40%. Are you aiming to return to these levels by transitioning to more sophisticated technology? If we look at near-term 300 mm demand, on top of GPUs and ASICs, there is growth in CPU demand driven by AI inference and related to this LPDDR5 and NAND flash demand driven by higher server capacity, which suggests significant growth potential. Beyond this, the use of two wafers in chip fabrication is also a positive factor for volume. In particular, I think we can look forward to double-digit growth for 300 mm in 2027 and 2028. If we assume this kind of growth, do you think a return to an EBITDA margin of close to 40% might be possible? Also, related to the discussion of prices earlier, I would expect there would be a significant improvement in prices in 2027 and 2028. Can you comment on what you are expecting for the medium term, touching upon the above factors? I would like to defer to CFO Kubozoe. As you highlighted in your question, Mr. Ikeda, the EBITDA margin has come down from the close to 40% levels at the peak. We are aiming to get back to this level with initiatives in sales as well as internal cost measures. The objective is unchanged and has been carried over from Chairman Hashimoto. However, we don't have visibility at this time as to whether it will happen in the 2027, 2028 timeframe and what sort of volumes we are talking about. Hypothetically, if we can get the volume, we would be very focused on ensuring that we don't miss the opportunity. What is important is that we are prepared to produce, sell, and have customers buy wafers. We have been focused on this to date and will continue with our efforts going forward. On prices, LTA prices are predetermined, so there isn't room for a change until the LTA expires. For spot, it doesn't represent a large portion for SUMCO, and it isn't a situation where prices are surging either. The current situation is one where the mindset is starting to change. There is also the question of how prices will move in response to supply-demand. Hypothetically, if we find ourselves in a situation where we can raise prices, we certainly would want to ensure that we don't miss this opportunity. That has been our approach to date, although it is perhaps presumptuous for me to say with President Ryuta here, I think our approach will remain unchanged. Understood. If possible, can you disclose the proportion of your business that is leading-edge AI? I believe that an increase in the ratio and the change in product mix, including GPUs and CPUs and leading-edge DRAM, will have a meaningful impact. What is your view on the direction of the ratio? The market that is growing the most is leading-edge logic for AI. We are pursuing this market with a focus on further technological development for wafers. If demand picks up, we will do our best to increase our capacity appropriately by adding equipment to address bottlenecks or improving equipment throughput. It is tough to say specifically what we will do, leading edge will definitely increase going forward. Understood. Thank you. Thank you. Next is Mr. Nishiyama. I am Nishiyama of Citigroup Securities. With regard to 300 mm wafer supply demand, in the past, up to Q3 of 2024, you provided a graph showing this data. Within this, you included data on wafer manufacturers' production capacity. I believe that there is probably not much variance from the estimates shown at that time. If we then compare that to demand growth in 2025, this implies that wafer utilization rates were around 85%. If we limit ourselves to leading edge, utilization rates could be close to 90%. Do these levels feel right to you? If that is the case, we could posit a scenario where there are some items where there will be supply shortfalls when we think about the period from second half 2026 into early next year. Can you comment on current supply demand and your view of the outlook? Currently, we are not operating at full capacity utilization, and utilization rates vary from site to site. You asked whether there were particular lines operating at full capacity. There are some items where we are seeing shortages under current conditions. We are implementing a number of reforms with the aim of responding to customer demand in the near future. There is some equipment that is not fully utilized, but other equipment that is running at full utilization. You said that there are some items that are in short supply already. How should we interpret the fact that negotiations for new LTAs are not being initiated at this time? Your peers are suggesting that negotiations for the next round are gradually starting. You say that our peers are already starting to negotiate the next round. That is not the case for SUMCO. I can't really answer your question. It may well be that the current proportion of 300 mm under LTAs is higher for SUMCO. Understood. Thank you. Next is Mr. Omura. I am Omura of UBS Securities. I have a technology question. On page 11, President Ryuta stated that SUMCO seeks to be the global number one for technology and also aims to be able to generate stable profits even in tough operating environments. I think being number one for technology is also a function of how you shape up in comparison to your peers. If we step back, SUMCO is the result of the integration of three companies in 2000. 25 or 26 years have elapsed since the merger, but how much progress do you think you have made on technology? Also, what sort of changes have you seen in technology with the new greenfield you have done? Where do you have superiority over your peers? Also, how does this tie into stable profitability? In terms of becoming the global number one with technology, SUMCO has been aiming to achieve this since its inception. This is the backdrop to the creation of SUMCO Vision under Chairman Hashimoto. Becoming number one in technology is the first objective under this vision. How do we go about becoming number one in technology? The area where we have a high degree of confidence in achieving number one for technology is in leading edge. We have a high market share in leading-edge wafers. We are also seeing many inquiries for the next generation of leading-edge wafers. What is very important from SUMCO's perspective is communication with the customers. The ability to have a clear understanding of what the customer wants is important, as is the ability to present, respond, or explain appropriately to the customer's inquiries. Communication with our suppliers is also very important. The open lines of communication allows them to present us with proposals or offer products or for us to ask if they can help provide a solution to an issue. Effectively, I am talking about creating an ecosystem and ensuring that we can grow successfully within this ecosystem. I believe this is one of our current strength. Thank you. I believe SUMCO is top class globally in terms of wafer quality. In terms of manufacturing technology, there is a significant margin gap between SUMCO and its peer Shin-Etsu Chemical. Can you comment on this issue from the perspective of manufacturing technology? From the perspective of manufacturing technology, Shin-Etsu has historically been strong. I'm not sure if this is the best way to express this, but they waste very little in their manufacturing process. SUMCO is working very hard to learn from Shin-Etsu's example. If we are successful, then I think our margin will improve. Understood. Thank you. I hope you are successful. Thank you. Next is Mr. Miyamoto. I am Miyamoto of SMBC Nikko Securities. Similar to Mr. Enomoto, I would like to ask about your management policy. In my view, how you approach LTAs is an important element of management policy. The current LTAs, which were signed five years ago, were successful in controlling price volatility on the one hand but have proven to be less effective on volumes. Changes in customer wafer input have meant that the contracts have not played out in line with initial assumptions. At a minimum, customer input volumes, effectively shipment volumes, have been lower on a single-year basis than expected. The weaker shipment volume growth has led SUMCO to fall in the red. Based on the lessons learned from this experience, what will you be looking for in signing new LTAs going forward? For example, would you adopt a structure that would lock in a minimum margin even if shipment volumes decline? Or would you seek significantly higher prices which allow you to bake in a buffer? Or although it would likely be difficult in practice, would you aim to lock in volumes? Could you incorporate a take-or-pay clause? What sort of measures are possible? As you mentioned earlier, in an environment where market forecasting is very difficult, please talk about how you are thinking about future LTAs. With regard to future LTAs, how we approach this will be determined in discussions with our customers going forward. We will have thoughts on what we would like to see, and that will likely be the basis for negotiations. With regard to increase in volume under current LTAs, we have allowed customers to push out the timing of when they take delivery. As previously explained by former Chairman Hashimoto, we could have chosen to force our customers to take the volume as stipulated in the contracts, but when we thought about our longstanding relationships with our customers, we felt it was better to take a more flexible approach, but at the same time ensure that customers respected the LTA prices. From that perspective, with regard to prices, we were very determined not to lower prices. In terms of how we thought about volume, the decision to grant flexibility did have an impact, as you mentioned in your question. We recognize that we need to find a better way of dealing with such circumstances. I do feel that holding firm on price points is important in principle, but at the same time, the contracts will likely need to reflect relationships with customers, the then current market conditions and economic conditions. Understood. Thank you. Next is Mr. Nakada. I am Nakada of JPMorgan Securities. I want to ask about the analysis of OP change on pages 14 and 18 and wafer volume as shown on page seven. I want to confirm the impact of volume while referring to these pages. If we look at page seven, 200 mm wafers appear to be up slightly year-on-year, just under four million wafers per month, while 300 mm wafers are at just below eight million wafers per month for year-on-year growth of around 15% in Q1. Despite this, you referred to a deterioration in mix with an increase in PW for a negative contribution from sales variance. SUMCO is strong in leading edge, and inquiry levels for leading edge are high, so this should be doing well. If non-leading edge customers are adjusting inventory, wafer volumes for legacy should be weaker. Doesn't this mean that the mix should have improved? Why was sales variance in Q1 negative? Can you explain this again, breaking it down into 200 and 300 mm please? Are you looking at the year-on-year change for Q1 on page 14, the JPY -3.5 billion? If we look at year-on-year Q1 market growth on page seven for 300 mm, it is around 15%. However, in Q1, which is typically a weak quarter for volumes, SUMCO was not down as much as the market in 2025, so our volumes did not grow as much as 15% on a year-on-year basis. This is why sales is not up that much. With regard to the JPY -3.5 billion in sales variance, if you split wafers into logic and memory was growing. For logic, while leading edge was growing, non-leading edge was impacted by customer inventory adjustments. Overall, the proportion of PW was higher. Given the selling price for EPI at SUMCO is higher than PW, the change in mix resulted in a drag on profits. If I remember correctly, March quarter of 2025 was seeing significant industry inventory adjustments, but the impact on SUMCO was not as severe because the sequential decline from the previous December quarter was modest. Q1 2025 was not down that much Q o Q. For Q1 overall, volume was still up year-on-year. Is that correct? Yes, volumes were up, but not as much as implied by market growth. SUMCO did not see as big of a decline in Q1 2025 relative to the market. Q1 year-on-year volume growth for SUMCO was somewhere between the Q1 and Q2 levels shown on page seven, so perhaps around half the level of market growth? For leading edge, margins are clearly higher, but there is still relatively significant volume in non-leading edge for logic. When that goes down, the relative proportion of PW for memory increased, resulting in a negative impact from mix. Is that correct? Yes. Apart from this, there weren't changes in 200 mm in volume that were also a drag on sales variance? For 200 mm, as we show on page seven, there wasn't much change in the overall market picture. SUMCO didn't see significant change in 200 mm either. There was nothing in 200 mm that was a factor for disruption. Understood. Thank you. Next is Mr. Ban. I am Ban of Nomura Securities. I would like to ask about the operating environment for leading edge, which is an area of strength for SUMCO. In the past, only the Taiwanese foundry with strength in leading edge was doing well with GPUs leading the market. More recently, AI agents are driving demand for CPUs as well. Does the Q2 forecast take this trend into account? Also, in terms of logic device structure, as backside power supply devices start being produced in Taiwan and the U.S., I believe this will require the most advanced wafer. Is this improvement in mix also factored into your Q2 forecast? For leading edge, it is true that until recently that company T had been well ahead, but we are now seeing company S in South Korea and company I from the U.S. catching up. These companies are gradually starting to do leading edge, and we expect that they will gradually expand capacity here. Currently, SUMCO is setting its sights on doing leading edge for the big three and building the required processes. Beyond this, although it is tough to say given that we don't have much visibility for more than three months out, we have been working on developing even more advanced wafers for the last four to five years. With regard to Backside Power Delivery, we are already in the process of developing wafers enabled for this and other technologies such as 3D or 2.5D. We are actively communicating with our customers as we develop these products. Our forecast for second half onward reflect our expectations for the market. Understood. Thank you. Thank you. Next is Mr. Nishihira. I am Nishihira of Okasan Securities. I have a question about the QoQ bar chart for changes to OP on the left hand of page 14. Can you provide more color on the sales variation impact of JPY -4.9 billion? One component of the JPY -4.9 billion is the lower sales and production levels in first quarter related to the fact that there are only 28 days in February, which reduces the number of operating days. There is a negative associated particularly with production. Also, I touched upon this in commenting on the QoQ change from Q4 into Q1 previously, but there was a change in mix as well for non-leading edge with EPI volume falling on the back of in-inventory adjustments. This mix change also had an impact. In addition, there was a slight impact from price reviews to spot prices. Sales were also down, but these are the major elements of change within the sales variation on top of changes in sales. When you say price reviews for spot prices, do you mean price declines on spot transactions being done by FST? Yes. Thank you. Can I ask one more thing? Do you think you will return to the black for operating income in Q3 or will it be Q4? Please comment to the extent that you can. Apologies, we can't comment on this. Sorry. Thank you. That's all from me. Thank you. Next is Mr. Yamada. I am Yamada of Mizuho Securities. You mentioned that you had front-loaded some financing. The figures show that both interest-bearing debt and cash, and deposits are up. Free cash flow is JPY 11 billion for the quarter, and you have been in the black with free cash flow since Q3 of the previous year, and free cash flow has been growing at a pace where it is more than doubling each quarter. Earlier, the company indicated that it was not at a phase where CapEx will increase and CapEx related liabilities are declining, so at some point the fall in liabilities will stop. Why do you need to increase interest-bearing debt? Can we expect free cash flow to continue to increase? Please comment. With regard to free cash flow, we are expecting positive free cash flow for the full year, but the cadence may vary by quarter because, as noted earlier, we are seeing some push outs in terms of CapEx acceptance. In Q1, the push out resulted in the positive free cash flow being higher than it would normally be since some CapEx acceptance was pushed into Q2. If the question is, will free cash flow grow significantly from the Q1 level as a base? We don't think so. With regard to borrowings, I may not have been clear in explaining, but there are debts that are up for refinancing this year. As you alluded to in your question, we are reviewing which borrowings we will roll over and which we will pay down while monitoring the level of cash. We did not refinance the full amount of debt coming due this fiscal year in Q1, but instead refinanced a certain proportion of this year's maturing debt. There is still some debt that will come due this fiscal year. For this portion, we will be monitoring cash levels as we consider which borrowings we will refinance. There is still some room left in terms of whether or not we will refinance some debt. That said, the total amount of borrowings relative to the amount of debt which came due in Q1 was larger, which is why interest bearing debt went up on a snapshot basis at the end of the quarter. You are making decisions on which borrowings you will roll over and which you will pay down? There are evergreen contracts where you have the ability to choose to roll over? Actually, these are individual borrowings, but we are making decisions on whether we refinance or not. I can understand the CapEx acceptance timing could get pushed out, but for Q1 you were at JPY 9.4 billion. Relative to levels you had previously indicated, the figure does not appear to be significantly lower. On top of this, CapEx related liabilities are coming down. It doesn't seem likely that there would be a significant cash outflow from CapEx, but is there a possibility that it could increase? No, I'm not suggesting that there might be an increase from the levels previously discussed. It just so happens that there was a timing difference this time. I'm not saying that the total amount will increase, but there may be puts and takes on a quarterly basis. The total amount will not increase, and the decline in CapEx related liabilities is tied to previously accepted CapEx, so it will continue to fall. Is that correct? Yes. Thank you. The overall direction will be positive. That is clear. Thank you. We will end the meeting here. Thank you to everyone for joining the Q1 fiscal 2026 results briefing. We are grateful for your participation today.