Ladies and gentlemen, thank you very much for taking precious time to attend Renesas Electronics progress update session. We thank you very much. Today's meeting is attended by our CEO, Mr. Hidetoshi Shibata, our Senior Vice President and CFO, Mr. Shuhei Shinkai, the Executive Vice President and General Manager of Production and Technology Unit, Masahiko Nozaki, Executive Vice President and General Manager of IoT and Infrastructure Business Unit, Sailesh Chittipeddi, Senior Vice President and Head of Sales and Corporate Digital Marketing of IIBU, Mr. Chris Allexandre, and also Senior Vice President and Head of MCU Business of IIBU Unit, Mr. Roger Wendelken, also the Senior Vice President and General Manager of Automotive Solution Business Unit, Takeshi Kataoka, and also some other staff. For today's agenda, it is presented here. We would like to finish the total meeting in about three hours and 20 minutes. Please be advised that the materials to be used for today's meeting is posted on the IR site of Renesas, and later on, a video of this session will be posted on the same site. Now, Mr. Shibata, please turn your microphone on and start your presentation. Other speakers are requested to turn your video off. Thank you very much, Mr. Muto. Good morning to you, everyone. I am Shibata. As Mr. Muto explained, this time around, we have decided to share the material with you beforehand this kind of format. We would like to continue improving these kind of technical details, so if you have any feedback to us, please use the appropriate channel to provide us with the feedback. Just like last time, in order to deepen your understanding on the IIBU business, with that intention, in addition to Sailesh, we have requested Chris and Roger, the Head of Sales and also the Head of MCU Business, to attend the meeting so that we can provide an opportunity for you to deepen your understanding on the IIBU business. We wanted to provide the material as well as the opportunity for you to deepen your understanding and allocated a lot of time for this business segment. Also, because of the interest in the semiconductor and the production business, and in our case, unfortunately, we had a fire at the beginning of the year. Regarding the production and the resilience, our approach and our philosophy will be presented by the head of the PTU unit, Mr. Nozaki. We have spared an appropriate amount of time for him to present these issues. I decided to make my presentation as concise as possible. Now, I would like to share my document with you. Can you see the screen that I have just shared with you? I think it's fine. All right, now, let me begin. First of all, in the first half of this year, and if I look back at the year to date, in March, we had the fire, but before that, in February, there was an earthquake, and also in February, we announced the acquisition of Dialog. Fortunately, we were able to close that deal in August. For the business, on a continual basis, of course, depending on the performance, may vary just slightly. Overall, I think the demand has continuously been robust, and that is also giving us difficulty. On top of that, with COVID-19 and also the CO2 issue in China, the supply side continued to be unstable throughout the year. Every day, I'm trying to roll up my sleeves and taking actions to stabilize the supply. We are making every effort every day and night. Just three months ago, the equity finance was successfully completed, and for the balance sheet, we have considerably stabilized our balance sheet right now. Looking back at the fire at the Naka Fab. We have talked about this issue on a repeated number of cases. We have been very sorry that we have caused a lot of anxiety to you, but what was good out of this unfortunate incident is that the casualty was none out of this fire. What was good out of this unfortunate case was that in just one month, we were able to resume the supply of products. Also, some of you have been shared with information regarding, and have given us a positive comment that the transparency in reporting the outcome of this fire has been quite good. Those positive comments were appreciated, and with all the support, we have been able to recover this far. The external support and also going beyond the boundaries in the internal teams, the teamwork within the internal organization has been enhanced, which was a good development out of this unfortunate incident. Based on the learnings from this fire incident in the production unit. We have taken action to increase the resilience. Belatedly, we have decided to enhance the level of resilience, and we have started taking actions towards that goal. On the left-hand side, you'll see a picture. I think this picture has been shared with you some time ago. This is a CO2-based automatic fire extinguisher, and we are gradually rolling out this equipment in many locations. In the middle, we have a more sensitive smoke detector in place. The installation of this equipment is now expanding gradually. The far right is the picture of the sprinklers, and this has also been deployed. I just wanted to communicate this to you once again. Fires should be detected as quickly as possible. In the event of an unfortunate day, we would like to minimize the impact as much as possible. Those kinds of hardware facility-related measures have been implemented. That alone is not sufficient, in my view. What is more important is listed on the right-hand side. The human and organization behavior is more important. From the upper left, just about sharing good practices and learnings across different sites. Based on that, we'll set the target and also conduct training to deepen the understanding at each individual level. Then on the bottom left, you see that among the sites, of course, we have to make sure that this will not go astray and go to a wrong direction. We would like to promote and facilitate a healthy competition awareness so that each site can compete to get to a higher level. This is the continuous cycle that we would like to realize. For that purpose, as you see in the middle, we have launched a dedicated team. Of course, what is written here is not the only solution. It may not be sufficient, but in our company, and we have been taking these kind of measures to some extent in the past. In my view, the thorough education, thorough execution was not that thorough, in my view. We have decided to change the mechanism, and I will be involved in that myself, make a decision and execute. We shall not repeat the same mistake, and having a competitive mindset so the people in the field will take more improvement actions voluntarily. We will have to implement all these kind of mechanisms and operate the business in that way. We started taking actions toward that goal, and we would like to expand that rollout of this practice across the board. Now, I'd like to talk about the resilience issue, will be discussed more in detail afterwards by Mr. Nozaki in his presentation. Now, change of gears slightly. I would like to talk about the supply stability, which we covered during the results presentation. The backlog on the left-hand side, this was presented already in the results announcement session. This is nothing new. As I recall, by the mid or end September, the advanced PO towards next year, it's about receiving orders. We have said that we will start communicating and talking about that by mid-September. I just talked to you that when we have this progress update session, we might be able to share more information with you. For infrastructure and IoT, IIBU, and automotive, the customers and the business conditions are different. The approach are therefore different between the two. As far as IIBU is concerned, POs are coming in more naturally in the process. As of the end of the second quarter, the height of the bar has risen to 1.5 times the level of the end of the second quarter. I will give you more details when we announce the next results. Automotive, the bar height has tripled already, and that does not include the no cancel, no return orders. It's an order, but in the system itself, we use the existing EDI for the order receipt. There are some customers in the automotive sector that they would like to do this kind of transaction outside a system. For the final order for the next year, the big number is already decided, actually. We cannot respond to all these purchase orders naturally. For the next one year, of course, the supply will likely improve, but I think we will have to continue allocating the products. The backlog is high, which is a concern for us. As we have said on a repeated number of occasions, we are trying to share the visibility beforehand. Even if things go softer, we are not likely to put a brake rapidly and all of a sudden. I think we'll be able to make predictions beforehand and take action. Advanced PO, I think in that regard, is a very good practice for us. At this point of time, I think many of you are interested that this may be the beginning of the end, but we don't share that view. Up until the first half of next year at least, this kind of demand and supply situation will likely continue, in my view. My vision has not changed in that regard. One point that I would like to add after the last financial results representation session is the others. The other column was added that you see at the bottom there. At last, the OEM, the manufacturers, and ourselves, especially the Tier 1 suppliers, are located in between us and the manufacturers. The way of collaboration, we are trying to change that. That kind of study has been explored gradually, and I think this is going to take time, but gradually we have started exploring those kind of studies. That is represented by the other column there at the bottom. As for the supply, we will continue securing the supply. In that regard, we are making progress in each of the elements listed here. As for strategic inventory, we are facing difficulty at this point of time. As far as multisourcing and advanced POs are concerned, we are expanding our initiatives gradually. Next, I would like to talk about just more about the software side. This is about culture. It's all about culture that I mentioned the last time, and I'm strengthening this view day by day. Culture, how to share the same culture within the company and make it translate that into our blood and bones and meat, and have people take it for granted. I think that is very important for us, and we are trying out and making errors repeatedly to promote this culture thing. The survey that you see here, we shared this with you during the last Analyst Day meeting. On top of that, if the bottom right, the intranet site, using this we are now sharing the video and with all the employees so that people can get more excited and involved. I myself host roundtable meetings and tell them where there is a gap. This is like a grassroots activity, so I'm sure that this is going to take time, but we are now trying to cultivate this culture among the organization. Also, a package video has also been created. For example, the new recruiting activities and to the newly hired people, we want them understanding, get familiar with the Renesas culture immediately. These actions have been taken. Those are some of the things that we do want to keep on doing. We want to make sure we be able to do this very carefully so that it becomes really grounded amongst everyone as part of the culture. It's all this update that I wanted to give you in this regard. Now from here, I have two slides, and it's about ESG initiatives. On the top left, what you find here is something that we shared in the previous Analyst Day. It's the same slide. What are some of the updates here? One is about the social aspect, and it's really about human capital and what kind of activities we've been able to put here. For example, having more disclosure or trying to pursue more diversity and inclusion, and we're trying to go more into this type of initiatives. Of course, it does take time, technically speaking. This is something that we alone would not be doing. It's something that we need to get supply chain people get involved. In other words, to be able to share the same code of conduct. What the ESG initiatives that we try to practice, we want to make sure supply chain members would also be able to share. Sometimes it's something that we would verbally request. Sometimes it's also included in the contract. Also from the governance perspective, there are some new initiatives in place. For example, the second bullet point, it says here, the board diversity and number of concurrent positions. We set our policy, which is also disclosed in our website. Also appointing lead independent director, this is something that we've also been doing. These are some of the things that we've been doing. We've also disclosed our tax policy. In Japan, amongst the Japanese companies, probably I would even dare say that we probably were some of the earlier Japanese companies to decide to disclose our tax policy. Again, transparency is really much part of our culture, and it is our motto. That is why we wanted to make sure that we'd be able to disclose this information as we try to operate this company. Previously, for example, what you find on the bottom right, there was this talk about MSCI Japan Empowering Women Index, and also the FTSE Index, MSCI Index. I said that we are going to aim to be included within these indices. The MSCI, we still need to wait timing-wise. We still need to wait till next year before we know the results. However. The top MSCI index, we know that for the top MSCI index, we have successfully been able to join here. Let's see, Blossom Japan, this is something that we will have to retry, and unfortunately, we'd like to do that from next year. We do have to revisit why we were not selected in this round of decision. That's something that I do want to discuss further on. Also more about ESG, what environmental initiatives that we have been practicing. For example, any initiatives around greenhouse gas emission. Previously, I talked about what we are doing until the extent of Scope 2. In other words, to the extent we'd be able to keep control. However, we want to do more. In other words, we'd like to look at the entire supply chain and promote more disclosure. For SBTi, we are going to submit commitment letter so that we'd further be able to make progress in this initiative. Going back to whether or not we'd be selected within the indexes. I think it has to do with our view to water resources, and it's something that we are learning. Up until this Q3, for example, like you find on the top right, we have disclosed more initiatives and policies we've set. Other targets and plan for water usage, we are going to be setting this the latter half of this year. After that, we would like to go for third-party verification. By second half of 2022, we'd like to make sure that we'd be able to join in the global initiative for water resource management. That's how we'd like to make sure we'd be able to further enhance our SBTi, so that we'd be able to, again, reapply ourselves in the index that we have missed this time. Of course, there are some areas where I still am not really confident in. For example, within the semiconductor industry, people who have factories like us do have to use water, but then there are also fabless people. Why are these people, why are we treated the same as fabless people? This is not exactly equal footing. I do have that type of concerns, but of course, I can't use that as an excuse for ourselves. We just have to promptly keep on doing what we can. In other words, it is going to be important that we make a step ahead that will enable us for external parties to appreciate what we are doing in the ESG front. From here, allow me to introduce a little bit of numbers, some numerical updates. First is the design-in progress. You may remember that at the beginning of this year, we set a target, which is shown in the blue bar in the middle. With this industrial, infrastructure, and IoT, we have envisioned a growth. For automotive, there was this very one large high-end computing design-in last year. That means we did tell that operation-wise, you may not want to expect a growth for 2021. What happened in first half? First, for industrial, infrastructure, and IoT, now versus target, we have just gone a bit over half. We are making good progress. Also even for the automotive, we've been able to achieve 54% of target. In other words, so far so good, I believe. Also, in terms of design-in, we also have to look at the quality. Some of the highlights will be introduced from Kataoka. Mr. Kataoka fits about automotive, and also, Sailesh, Chris, and Roger will be able to introduce in the front of IIBU, industrial, infrastructure, IoT side. Now, MCU design-in is very much growing. I think that's one of the highlights that I'd be able to point out too at this point. Of course, we still have three months remaining. I don't want to just jump into what we see right now. I think we are on a good track of seeing a 30% growth vis-à-vis last year for the industrial, infrastructure, IoT side. Also for the automotive side, maybe the scale may not be large, but we are still seeing a very good growth. It seems like we are able to seek further growth, and we are seeing a design-in/design-ins. Also likewise, perhaps the scale may not be that large, we are also seeing more analog design-in traces. I believe those would be some of the highlights for this year. Moving on to synergy with IDT. Maybe this is not exactly within your top interest now, so I guess the topic is really going to shift to synergy with Dialog as we try to pursue further future updates. I don't want to make excuse, but we did make a bit of a change in how we track the numbers. For example, in automotive, the winning combo solution was taking a bit of a time, and therefore we decided to just focus on the analog side. In reality, we also have to look at digital. Internally speaking, we also have decided to look into the digital side. That is why you're seeing a bit of a change in how numbers look. I think previously we were selling, for example, 2020 as JPY 1,070 million. At this moment, this is the number that we are looking at at the moment, this JPY 1,208 million. At the moment, the design-in lifetime value for the first half is surpassing the 2020 actuals of that JPY 1.208 billion We've been able to surpass that. With that in mind, what you see here is the target model that we set at the beginning of the year. On the right-hand side, you see, for example, we want to create the sound plus growth and gross margins over 50%, operating margin over 20%. That was our long-term target that we set for at the beginning of this year. In Q2 results announcement, the numbers that we presented back then, I'm sure some of you may have thought, "Is this the right target at the moment?" Because at the moment we've already achieved these numbers that you see. We have decided to update the targets, including Dialog figures. Industrial, infrastructure, IoT, now we have Dialog, therefore, we are able to see a one-notch higher aggressive growth. That is why I've indicated here plus plus. Even for gross margin for industry, infrastructure, IoT, we always say roughly 60%, but it's really going to be 60%+. That's really the target that we've set at the moment. Also for the operating margin. We have been focusing on R&D works, and of course, that attitude itself has not changed. As we try to enhance our scale, we can also build on what we've already been doing. Therefore, I think now we'd be able to set this operating margin somewhere between the 30%-35% range. For the automotive, we have decided to set this renewed target. Of course, for the gross margin, we are expecting that we should be able to do better. In other words, in total, that's 50%-55%. Also for the operating margin, we now put the number 30%, which for us is like another stretch that we've set for ourselves, especially for the revenue growth. I'm sure you will be able to hear more about what they feel within their business unit. From here, I know I don't have much time left, so I would like to just quickly go over where are the growth drivers for each business unit. Of course, each business unit members would be able to tell you the details. I'm just going to give you some of the highlights. First, industry, i nfrastructure and IoT. We've always been talking about data center 5G and IoT. Now that we have Dialog, we are now able to expand the portfolio within IoT space. In addition to that, for example, there's more electrification shift, but then sustainability is really becoming a core essence of the business, and we are feeling that. We already did have good capability in the low power or ultra-low power space. Now we're able to add Dialog technology here. Now we're able to fully leverage our competence here. Of course, we still do have data center 5G and IoT, but there's also the sustainability piece that is really going to create a very common base to pursue what we can do. Now, what we show you on the left-hand side is something that we've already presented before. This is the entire story in launching new product. Some of the new products are introduced on the right-hand side. The first two would be the more entry-level MPU for AI solution. What's on the bottom right is the more classic Renesas, so some motor or TSN. We've also been able to launch a new product we haven't announced yet. I'm sure we'd be ready to announce this. It's like a sneak preview that I've included in the slide. I'm sure you will be hearing from Sailesh later on. We also have to capture that mega trend, data analysis intelligence. Of course, there's more on the other side of the cloud. At the same time, we also have to think more of what we have to do on the edge endpoint. Implementing AI in this edge part is really going to be important. Device or solution, the tool is something that we have to expand more. Also, for infrastructure IoT, the left-hand side is not really changed. Industrial power, the data center, we do believe a very good future awaits. On the right-hand IoT space, again, at this point, I haven't spoken much about Dialog yet, but before we acquired Dialog, again, MCU design-in, we have been able to see a very good progress. I just wanted to highlight that again. Also RISC-V, we are making very good progress. In Q4, we should be able to ship the first sample in industry-first products. The final connectivity part. We've always been collaborating with partners. Now that we have Dialog in our group, especially for low power Bluetooth or Wi-Fi, I think we have sufficient items to offer organically. Some of the initiatives we'd be able to practice on our own is something that we certainly want to pursue. Anything for auto side, so this is something that has not really changed. I'm just going to skip this slide. Also, with that, the first half, we are going more for xEV, for example, on the left-hand side. This is the Tier 1 customer in China. This is about BMIC, battery management IC solution. We've been able to have a design-in here, which is a very good step for us. On the right-hand side, it's really something that we've been doing from before. PMIC and something about our computer device. In this case, the design-in was done for an OEM in Germany and for a Korean manufacturer. Now, the customers we talked about, with whom we have a larger deal with, this came in full force starting this year. This is an example that I wanted to share with you, which is rapidly expanding for BYD. As you can see here, telematics, cockpit, advanced parking assistance. In a broad range of areas, we are supplying our solutions and products for many different applications. They have selected us for those purposes, but unfortunately, these design-ins are mainly centered on MCUs. Still, for analog, we have been adopted by them to some extent, so we would like to further accelerate the momentum and enrich and expand our business. Other than the traditional SoCs and MCUs, we would like to have them utilize our analog devices. We would like to continue these efforts to expand our sales, accelerating our efforts. The integration with Dialog. A quick update to you. Like the previous acquisition, One Renesas at the entity level, the vast majority of that will complete, I think, in the end of next year, as you see at the top line on the upper part of this chart. January 1, effective that day, we wanted to have an integrated organization, but this time around, the integration process has been quite favorable. October 1st, we'll do the majority of the work by then on October 1st. At the closing announcement, the ABU side especially, the automotive side, Vivek will lead the analog power. We made that announcement during that closing announcement. We will try to integrate the organization from early on so that we can develop synergies. We'll try to achieve that synergy as early as possible, and that is a representation for that. Another big point is that previously we talked about integration. That was mainly excluding IT in the past because of practical reasons. There were different solutions used for the IT of the company. This time around, this is going to be a good opportunity, so leveraging this opportunity, we have decided to integrate the IT solutions completely. That is the vision that we have. Because of technical issues, this is going to take time. In the first half of next year, we will complete integration as a first step among the acquired companies. In the first quarter of 2024, as you see here, as much as possible, we will try to bring this forward to 2023. We will achieve the complete integration of the ERP at the latest by 2024. When we do this, everything else can be done in a plug-and-play environment. The integration work will be not significant any longer. In the process of developing the foundation, the legacy system that we have been operating from in the past, all these in legacy will be renovated using this opportunity. One more thing that I wanted to share with you was how we plan to use money. We talked about this from time to time. For our future growth, we don't have any ambition for a major acquisition because we would like to attach priority for the Dialog project. We will not rule out the possibility of the tuck-in acquisitions, which is written on the first line here. For leverage, the second point here. Fortunately, right now, the environment in this industry sector is quite favorable. I think at an early timing, the net leverage 1x, we shall be able to achieve this ambition at earlier than expected date. In resonating with that, shareholder return that you see in the third bullet point here, this is not far out, maybe in one year's time or two years' time from now. If possible, we would like to start providing returns next year. I think in the shorter period of time, we shall be able to provide, realize, and operate a solid shareholder return program is a one step, a little bit aggressive ambition that we have. In terms of, at least at the ambition level, we have a more ambitious plan than before. The OpEx remains unchanged from the previous explanations. Lastly, the summary. The left three, the angles that you see on the left-hand side, we have a well-positioned portfolio. Also, we are well-positioned to address the higher growth market, and will do so. What is most important is emphasis on delivering results, because result is all that matters. We would like to attach a lot of focus for results. The update this time around for the portfolio. With the addition of Dialog, we have further enriched our portfolio, and this is especially remarkable in IIBU, but we will emphasize the faster-growing market and customers, both in IIBU as well as for the automotive sector. We have been continuing this effort, and we will further accelerate this direction going forward. So far, also, if you look at the inside details, it's not everything is all beauty, but I think we have been able to somehow make a good, solid progress so far. We are doing this all for the purpose of making our lives easier, not only us, but the end users and consumers. That is the ambition, the vision that we have, and we are uniting efforts towards that goal. Sorry for being somewhat longer than expected, but this finishes my presentation. Thank you. We would like to have the Q&A session for the CEO part. Before that, I would like to explain the way to raise questions. Those of you who'd like to ask questions, please use the raise your hand icon. When I call your name, you will be able to start speaking. Please make sure that you unmute yourself before you speak up. Now, due to time constraint, we'd like to just ask two questions per person, limit the questions to two per person. Now, I will start the Q&A. For those of you who do have a question, please use the raise hand button. First, from Daiwa Securities, we'd like to ask Sugiura to ask your question. Sugiura-san, please. Yes, this is Sugiura from Daiwa Securities. Thank you for the presentation. I have two questions. First is about IIBU. Like you said, you have more design-in for MCUs. What does that mean? Can you give us a little more flavor about what that is going to mean? For example, does it tie into edge AI that you were talking about, or does it mean that you've been able to leverage RISC-V? What is the meaning behind having more MCU design-in? That's my first question. Thank you. I'm not exactly sure that if I'd be able to respond to your question, why are we able to increase MCU design-in? I'm sure you will be hearing more from Roger. I think there are three or four reasons behind that, I believe. First, it's about responding to the market needs. We are now able to offer the right product. This is because, in the past, I think we were trying to offer something that we wanted to offer rather than what meets the needs. I think we're able to shift more to looking at what the market needs. I think that is how we're able to define what we'll be able to offer. That's first reason, and it's really about keeping the balance of function and cost and form factor, et cetera. Also, the second background could be something that people have been saying from long before, but Renesas, the ease of use is not exactly good, even though the function, the feature itself is good. That has always been our theme. Maybe this is something that we did talk about earlier, but for example, trying to implement apps that could be used in smartphones so that people would find it easier to find the right MCU, to be able to know more about application. It's really about having more user experience offerings. It seems like finally we are able to make a very good progress, and I think that is something that people appreciate now. Now, everyone knew that MCU from Renesas was good, but now it's easier for them to have access, and I feel like there's more people who would want to access the MCU from Renesas because of that. At the same time, I also do believe it might be from our organizational capability. It's really about having a tighter engagement with the customers as we try to have more dialogues. As a result, even for the supply side, we are able to inform some of the information that the customers would be able to make some predictions on what they'd be able to expect. Now, as for the supply, and of course, it's not that we have ample supply, but that we'd be able to offer. A lot of people do appreciate that Renesas is actually doing a good job in what we can do. It's a bit outside, like infrastructure IoT, but two days ago, Mary Barra from GM said that they wanted to do a meeting just for the purpose of appreciating Renesas. I guess that really reflects how everyone is appreciating Renesas. People are thinking that, yes, the ease of use has become enhanced, and so let's use more Renesas MCU. I guess this is something that we're finding. Of course, there's this large trend of AI, low power. Of course, to that need, I think we'd be able to leverage the capability that Renesas already had. I think we're seeing a better fit to what the industry or the market is requesting. Thank you very much. My second question, so this is about shareholder return. Thank you very much for giving your flavor, but there's also additional questions that I do have. For example, dividend, buybacks. I guess when you say shareholder return, you'd be able to have two options like that. Now, buybacks, of course, this is something that gives you more flexibility in shareholder return. When it comes to dividend, it does show stability for the shareholder's perspective. To the extent that you can comment, what are you thinking? What kind of thoughts do you have on these two options that you have when you say shareholder return? Well, thank you very much. It's exactly what you just said. First of all, I guess it's really about buyback. That's what I think. When it comes to dividend, it is going to be important that we show some information where you'd be able to predict what we'd be able to show you, what we'd be able to offer you. It is something that, first of all, we have to make sure we have our numbers straight and disclosed. If there is going to be a dividend, it's probably going to be a small start. Probably, you might think, "Is this small?" We'd like to just start increasing the dividend. For example, from ETS, for example, shareholder return, sorry, we'd be able to enhance the shareholder return by doing some buyback. When it comes to stable return, we hope that we'd be able to give some meaningful dividend, but then that's probably going to take a little bit of time. Thank you. That concludes my question. Thank you very much. Thank you very much. Next will be from BofA Securities, Mr. Hirakawa. Hirakawa-san, please start your question after unmuting yourself. Hirakawa-san, are you there? We have difficulty hearing you because of the connectivity, so I would like to move on to the next questioner. Sorry, Hirakawa-san. The next question is from Goldman Sachs, Takayama-san. Please begin your question after unmuting yourself. Thank you. I have two questions as well. First is about your margin management, how you plan to stabilize your margin and even seek a further enhancement. One is about the price increase, especially for the wafers. How will you be able to do that? How will you be able to translate the cost increase into price increase? If that is difficult, then will you be able to utilize mix? How to further raise your margin, which is already heightened. Can you share with us your strategy and give us the overview of your approach? Shinkai-san, later, extends his view, the graphical images, the biggest driver, will be the mix. As far as the price is concerned, this is very difficult to properly express our thoughts when it comes to prices. How should I split it? Compared to before, paradigm has changed significantly, in my view. The customers' prices going only downwards, or they don't come to the negotiation table, that has disappeared from the market practice altogether. Going into next year, I'm not really sure how things will settle at this point of time, but a reasonable approach and solution can be more expected compared to before, I think. All right. Thank you. My second question, regarding the output, what is the capability capacity that you have going into next year in terms of the process, Malaysia, you talk a lot about the back-end manufacturing capacity in Malaysia. How further, in terms of quantity, can you increase the car production? It depends on the product, I believe, but what is the level you're looking at in terms of the output capacity? Can you give us some suggestions or indication? The big picture will be supplemented by Shinkai later. I would like to talk about our strategic product. Nozaki will talk about the strategic product using a graphical presentation in his part. Overall picture is that I don't think we can stay optimistic significantly because in our own fab, capacity increase is something that we addressed. Certain, I think, level of improvement can be achieved. Next year, the supply capacity from Renesas will of course increase. If you ask me if it's going to be an increase of tens of percents, that's impossible. Because it's just one year from now, we just have to strive. I'm not sure if this answer your question, the sales growth rate that we have been envisaging in the past, the supply to support that is something that I think we can manage. Beyond that, double-digit expansion in the supply, I don't think that is impossible. There are some uncertainties to give you a precise answer. That's all I can say to you. Thank you very much. The short term back-end production in Malaysia, what is going to happen? Talking about the constraints due to COVID. Yes, in the ASEAN markets, after August or so, this has been a critical issue that people are talking about. Of course, there are elements outside of your realm, but I think I just wanted to ask you if you have been able to produce as planned. Of course, there shall be a little bit of hiccup as we have to anticipate that. Just shortly before, the COVID was in Asia. Now I think the people's interest has shifted to electricity in China. The environment changes, the condition changes. We shall not stay relaxed and optimistic because counteractions against the various developments are now be able to be taken more swiftly compared to before. With the authority with each regions and each country across the industries and transcending industry barriers, we have been able to have this kind of dialogue. Of course, there shall be a little bit of surprises on many fronts. It's not going to have a steep bathtub type of plunge. I think we shall be able to manage at an adequate level. Thank you. Thank you very much. Next from Toyo Keizai, I would like to ask Sasaki-s an to ask your question. Please unmute yourself. This is Sasaki from Toyo Keizai. Can you hear me? We do. Thank you very much. Thank you for this opportunity. I'd like to ask about Dialog. I think there's going to be a lot of goodwill amortization. When it comes to financial stability, you'll be able to really gain through your cash flow. You're not really worried about potential stability, and it seems like you're also going to try for a buyback. I guess it's going to be ROE or leverage that you're going to be prioritizing rather than financial health. Well, the health of finance, I mean, you have to ask, what is that? I think that really is at the heart of the question. We have to think of, for example, calculating goodwills and what does that mean? Of course, on the other side of the sea, there are major companies that's offering a dividend with net cash. Why is that not happening in Japan, and why is Japanese companies focusing on what kind of tangible assets they would have of cash in hand? You may wonder that, what we want to focus, for example, this goodwill, we have to keep an eye on, so that this will not be diluted. To prevent that, what kind of a cash flow do we need? At this point, it's not that we see any change of the situation that may worry us. If there is, in that case, we may want to think of how we'd be able to keep the health of the balance sheet. Then again, at this point, we do believe we have solid outlook. Like we discussed in a previous session, I don't believe there's this situation where the market would really change due to some change in the trend, and it's not that type of acquisition we did. I do believe we can feel comfortable in what we have at this moment.