Gentlemen, for taking the precious time to attend Renesas Electronics Fourth Quarter of Fiscal 2021 Results Presentation. Today, simultaneous translation is available. If you look at the globe button on the screen, at the bottom of the screen, please select your language from that button. For today's presentation, we have the CEO of the company, Mr. Hidetoshi Shibata, our CFO, Mr. Shuhei Shinkai, and the head of our Automotive Solution Business Unit, Mr. Takeshi Kataoka, and other staff are also present. From now, our CEO, Mr. Shibata, will say a few words, and after that our CFO, Mr. Shinkai, will give you an explanation regarding the results for the fourth quarter. Then after that, we'll take questions from the participants. We expect to finish the whole session in about 60 minutes. The presentation materials to be used for today's meeting are posted on the IR website of Renesas Electronics. Please turn on your microphone, Mr. Shibata, and begin. Once again, hello, this is Shibata, CEO of the company. Last year, we had a fire. To summarize that, and also the progress of our mid- to long-term business and strategy will be explained in the progress update, which is held biannually, and that the next session is scheduled for next month. For today, we would like to focus on the full year results for fiscal 2021, which ended in December 2021. Now, as many of you, I believe, have already seen the presentation. On a non-GAAP basis, revenue was slightly below JPY 1 trillion, and operating profit was slightly over JPY 300 billion. That was the number for last fiscal year. The demand continues to be strong and robust, and we see that trend continuing. For fiscal 2022, in the first quarter, quite a favorable and a steady expansion is projected for the first quarter, and the numbers are already presented there. With that, on an ongoing basis, the situation remains not really bad at all for us. All those questions that we have been receiving from you regarding at which point we'll see an inflection of demand, we will continue to carefully keep an eye on that. If we see any signs of changes, we will be ready to take actions as necessary. That's going to be the plan for this year. The detailed numbers will be explained by Mr. Shinkai, our CFO. Please bear with us. Shinkai-san, please, the floor is yours. All right. I am Shinkai, the CFO. I would now like to begin the fourth quarter and the full year results presentation for the fiscal year ended December 2021 based on the material posted on our IR website. Please go on to page four of the presentation. For the fourth quarter, if you look at the middle dark column in the middle of the table, revenue was JPY 314.4 billion. Operating gross margin was 54.3%. Operating profit was JPY 98.7 billion, and net profit was JPY 31.4 billion. Profit attributable to the owners of parent was JPY 80.9 billion, and EBITDA was JPY 119.4 billion. As for the comparison with the forecast, if you look at the far right column, I think you can refer to that. I'll give you some explanation later. For the year, full year numbers are presented on the next dark column, third from the right. Celeno's acquisition, which was just completed in the end of the fourth quarter, that's not included in the P&L, only the BS, that is consolidated for fiscal 2021. That's the accounting treatment for that acquisition. The next page, please. This is the revenue trend on a quarterly basis. The fourth quarter is represented on the far right. Overall, the revenues achieved an increase of 61.4% year-on-year and 21.7% on a quarter-on-quarter basis. If we exclude Dialog, on a year-on-year basis, 34% and 8.0% on a quarter-on-quarter. As for automotive and industrial infrastructure and IoT business, the numbers are presented already here. If we exclude the Dialog contribution, the automotive year-on-year was 37% increase, and quarter-on-quarter 8.1%. Industrial IoT and infrastructure year-on-year 38.9%. On a quarter-on-quarter 9.1% increase. Now, moving to page six. The fourth quarter operating margin, gross margin, operating margin, and the revenues are summarized here. We have presented it together with the segment results. The company total on the far right, let me begin with that. The box on the upper right shows the changes from the forecast. As for revenue, there was a 5.5%, in terms of the median level, there was an increase of JPY 11 billion. The forex impact was about 40% and also the remainder came from the changes from the automotive and in the industrial infrastructure and IoT business. For automotive, if the forex impact is excluded, there was a slight underperformance compared to the forecast because there was some adjustment from the customer demand towards the end of the year. As for industrial infrastructure and IoT, there was a significant increase compared to the forecast. PC and mobile related demands and also the former Dialog products, there was a strong demand for them, so we were able to front load and ship those products that were completed before in advance. There will be some adjustments in the quarter, this current quarter. As for the gross margin, 1.3% increase compared to the forecast and the product mix as well as the production recovery were the major driver behind this improvement. 80% was the contribution for this. Also for the operating expenses, there was a decrease compared to the forecast. R&D, SG&A, on the same proportion, made a reduction compared to the forecast. We achieved a reduction compared to the forecast. On a quarter-on-quarter basis, at bottom right, in terms of gross margin, there was a reduction of 0.9 percentage point, and this is mainly due to the consolidation of Dialog. That impact accounts for the bulk of this. Also, if you look at the segment results on the right-hand side, as for the revenues, the breakdown was already provided to you earlier. The gross margin and also operating margin for industrial infrastructure and IoT, Qo Q, if you look at the numbers for Qo Q, you see that there are some changes there, and that's mostly due to the consolidation impact from Dialog. Page seven, please. This is the in-house inventory trends. On the far right, if you look at the company total, the DOI overall, on a core Qo Q basis, we have achieved a reduction. If you look at the left-hand side, there was a slight increase in automotive and a reduction in industrial and infrastructure IoT business. Overall, in terms of actual amount, there was an increase, and this is due mainly to the PPA impact from Dialog and the addition of Celeno. If you exclude those impact, there are three major impacts because of the frontloading of some inventory, including both a work in progress as well as finished goods and also for the backend production increasing above forecast, and also for finished goods. For automotive, as I mentioned earlier, the timing difference because of the timing, there are some back orders. That was the impact. Therefore, both for work in progress and also for finished goods as we mentioned last, compared to the last presentation, there was a slight increase in the inventory level that we hold in-house. This is the sales channel inventory. The far right shows again the company total. Just for your information, for the channel inventory, the Dialog portion is not included here, and we'll try to include the numbers after completing the integration in the first half of this year. The company total WOI on a Qo Q basis achieved a reduction. If you look at the segment results on the left-hand side, automotive, compared to the initial assumption, there was a slight increase. This is due to the OEM production adjustments. As for industrial infrastructure and IoT, there was a reduction compared to our initial expectation due to the decrease in inventory and also the changes in demand. Those were the two factors behind this decrease in WOI. If you look at the actual amount, the inventory, it may look as though this is flat or slight increase, but in some transactions, in some trade flows, because of ship and debit in the actual amount, there seems to be a slight increase. Ship and debit introduction will be continued on a in certain phases going forward. If you look at the actual amount, there might be some times where we see a slight increase in the inventory actual amount. Now moving on to the next page, which is about the utilization rate for the front end on an input basis. Fourth quarter utilization rate almost came in in line with our expectation at 84%. On a Qo Q, there was a slight decrease, which is due to the number of actual days of operation. Please turn to page 10. This is the order trend. If you're looking at the order backlog based on the client, we have been showing you the quarterly trend. As we have been communicating to date, for the long-term orders, we are trying to take on those long-term orders and accept those for Dialog, those are completed in the third quarter. For the Dialog portion, we are completing those transactions in Q4. Going forward, the order backlog will be coming down. Also, on the right-hand side, you can see the total order and the order backlog. On the far right, you can see two bars. The bars, the bar on the left. The gray portion is a fixed order, which is coupled to the bar graph on the left. We have not received the order, but based on the contract, we have some orders that's been committed by the clients. That's represented by the commitment bar. We have orders that happens in the fiscal year. On top of that, we have the orders in FY 2022. On the right-hand side, you can see the total. It shows the total demand. Most of that will be the revenue for this fiscal year. On the other hand, if you look at the bottom, you can see that there will be some order backlog at the end of FY 2022. As a part of this, will still be on our books as order backlog at the end of this fiscal year. What this means is that when we work on the long-term orders that we started to do from last year, if we do not take those actions, the order backlog of our graph will be coming down in the future. That is our projection. Please turn to page 11. This is EBITDA and the free cash flow. In Q4, EBITDA was JPY 119.4 billion. For the full year, it was JPY 375.4 billion. On the right-hand side, you can see the free cash flow. The operating cash flow was JPY 111.2 billion. Free cash flow was JPY 95.3 billion. Free cash flow for the full year was JPY 259.1 billion. Next page, please. So this is the forecast for the first quarter of FY 2022. Please look at the dark blue column in the middle. As for revenue, the forecast midpoint is JPY 336 billion. QoQ is the column that's two columns on the far right. We're expecting 6.9% growth QoQ. As for gross margin, we're looking at 65.5% QoQ. The improvement will be 1.2 percentage points. For OP, we're expecting a 34.5% OP margin QoQ. That's an improvement of 3.1 percentage points. Next page, please. This is the revenue and demand forecast for Q1 in FY 2022. As for the forecast for Celeno, we have the QoQ and year-on-year numbers that coincides with the previous slides. QoQ is 6.9% through Auto. It's a double-digit plus, and so it will be in mid-teens. On the other hand, as for industrial infrastructure IoT, it's a single plus, as it's a low single-digit. As I communicated earlier, some of the orders have been postponed to the previous quarter, so there will be a rebound. For the sell-through forecast, we see similar trend for industrial infrastructure IoT QoQ basis. It will be an increase of single-digit due to the rebound. For the other segment, we are expecting an increase in double-digit. Next page, please. This is the breakdown of revenue for Dialog. The gray portion is the legacy business that in effect have been sold licensed in the PMIC business. As scheduled, in Q4 it was completed. Next, I would like to highlight a few pages in the appendix. Please turn to page 19. This is a balance sheet. As I said at the outset, with the acquisition of Celeno, it is reflected in the balance sheet. It's about JPY 35 billion impact, which is included in this goodwill. For Dialog's PPA, in Q1 of this year, we will complete that. At that point, the PPA will be reflected for Dialog. For Celeno, it will be completed in Q2, and thereafter it will be reflected. Page 21, please. This is the reconciliation between GAAP and non-GAAP. From this time, we have changed the categories so it's easy to see. We have the recurring items and the non-recurring items. For the non-recurring items, we have the net of factory fire impact and others. Next page, please. This is visualizing the graph. In the middle, you can see Dialog and Celeno related. This will be reflected in Q1, Q2 respectively after we complete the integration process. Next, on page 24. This is the status of our CapEx. For Q1, on a decision-making basis, we're looking at roughly JPY 40 billion as CapEx plan. Out of that, the lighter blue bar which is exactly half of that. That is for ramp-up investment. We will be utilizing the subsidy from METI. That will conclude my presentation. Thank you very much. Thank you very much. Now we'd like to move on to the Q&A session. The moderator. We'll first like to explain how to raise questions. If you have a question during the Q&A session, please select the Raise Hand button on your screen. Please select the Raise Hand icon on your screen. From those who raise their hand, we would like to call your name and company name in the order. When your name is called by the moderator, you'll be able to ask the question, so please unmute yourself and begin your question. Now, in the interest of time, we would like to limit the number of questions to two questions per one questioner. Hi. All right. The first question from Citigroup Securities, Ms. Fujiwara-san, please unmute yourself and begin your question. Hello, this is Fujiwara from Citigroup Securities. Can you hear me? Yes, we hear you. All right, two questions. Please allow me to ask them. One point of confirmation at the outset. On page 10 of the presentation, on the right-hand side, you have the total demand on this slide. For the fixed portion is about JPY 1.2 trillion, according to what I see here. On top of that, you have the commitment and also the orders coming in in 2022, which appears to look like JPY 2 trillion in total. There's a backlog of about JPY 500 billion, according to what I see here. According to your view, I think, as total revenue, JPY 1 trillion, is that your projection, basically? Is that what is shown in here? The actual direction is okay, but JPY 1.25 trillion appears to be too bullish. The basic direction is correct. Okay. Let me dive down into that JPY 1.5 trillion. Let's say that hypothetically that JPY 1.5 trillion is correct. This JPY 1.5 trillion, if you wanted to sell that, do you have the capacity available to sustain that sales? Also, if JPY 1.5 trillion, if you wanted to do that, if you exclude the consolidation impact of Dialog, I think mid-30s% increase was already achieved in 2021. Then in 2022, excluding Dialog, I think 10% or YoY increase is projected or planned for fiscal 2022. I think that is a high level by international comparison. Practically, do you think that is possible? Can you give us a direction about that? All right. In order to avoid misunderstanding, JPY 1.5 trillion I think is too bullish. I think that is too much. I don't think we can expect that. JPY 1.5 trillion, if you talk about the supply based on that, then I don't think that is feasible for us, and that is not our plan either. As a basic direction since last year and for this year as well, on a continual basis, we are expecting a significantly large growth, and that is true. The supply to our company for that portion, according to what we can already see today, I think we have by and large secured those supply for us. What I mean by by and large is that, roughly speaking, there are two points here. Although the size is not that significant yet, Foundry and OSAT and some raw materials, those suppliers mainly, when we think about them, I think, on an ongoing basis, the supply increase or allocation increase are still being requested and some portion of that is included in here in these numbers. This continues to be the trend for the last two-three years, Omicron and the COVID-19 impact still remains, and we still have that impact here and there. What is happening, we don't have any certainty as to when and where the supply could be suspended. Those are the two factors. JPY 1.5 trillion I think is too much. On a comparison with last year, I think, we can expect a steady growth on a continual basis. The materials and the supply for that and the capacity to achieve that in-house as well as outsourcing, the capacity for that, I think by and large have been secured. That's what I wanted to say here. That's all for me, thank you. Okay, thank you very much. One follow-up question on that. You said that you are continuously requesting some allocation increase to some partners, but the guidance for first quarter, if you look at the full year of fiscal 2022, I think this is the lowest level. Should we expect a sequential increase over the coming quarters? The annual guidance is not provided this time around, so I don't want to repeat this interaction. I think it's difficult for me to repeat this interaction. As of this point, how should I put it? We are not expecting significant volatility, so a favorable sequential curve is projected. That's what I'm saying. Thank you. Thank you very much for that. I understood. Thank you for the question. Next question is from Hirakawa-san from BofA Securities. Please unmute yourself and ask your question. This is Hirakawa from BofA Securities. Thank you for this opportunity to ask my question. My first question is, now the other one says that auto semiconductor sales increased by 35%, and it was over 30%. I think the increase in the content per vehicle and also refilling the inventory, how would you break down that growth? There is a concern that that there's too much semiconductors out in the market, so that's the background of my question. On top of that, going forward, we're looking at the auto production and also the automotive semiconductor growth. Also what kind of gap should we expect between the two given the content per vehicle increasing? That's my first question. Well, we have Mr. Kataoka, so I will ask him to take that question later. Before that, let me offer you a few words. Looking at the content per vehicle increasing, if I make a very conservative or solid comment, I guess, we will not see a major change in the number. Intuitively, looking at the recent business trend, the content's impact is getting bigger than before. That's my firsthand impression. I think this is coming from two factors. One is that I think you are also getting this impression, and this may be a consensus, but recently, if you look at entry class vehicles, the ADAS equipment is very robust compared to before. What's installed is actually as good as for the premium luxury cars. That's one impact. The second factor is the shift to EV, as you all know. We're seeing that impact. That's the one major impact. The second factor that I'd like to highlight is looking at the U.S. OEMs. They have been quite vocal and open about this, but there's been a lot of constraint on supply. Manufacturing in cells, in a way they had to prioritize what they want to do. They have been quite selective. Yeah, our clients are client-based. I think it's prioritizing the vehicles that's higher in price. The electronic contents and the semiconductor contents that's higher in these premium cars. I think the OEMs are increasing the production of those high-end cars. In that sense, compared to the previous trend, looking at the most recent trend, the semiconductor content per vehicle growth is becoming greater. That's my another impression. I will hand over to Mr. Kataoka for the details. Yes. I'm Kataoka from the Automotive Solution Business Unit. Last year, we have seen various data points. Looking at the auto production increase, that was about 3% last year. The content growth, we have various data points, but it's considered to have grown by 8%-15%. Some are saying it's 20%, so it's a wide range. As Mr. Shibata mentioned earlier, there is a constraint on the auto production. The OEMs are shifting their focus on the high value-added cars, which means that they are using more semiconductors. I think the content's growth may exceed that 8%-15% that I just said. In sum, the production growth and the content's growth put together, we may see a growth of around 20% or more. As you pointed out, our growth is at 35%. Where this is coming from is that on top of what we're seeing in the market, the inventory at the OEM and Tier 1 is at historical low last year. Even today, that's been the case. I think they are building up on the inventory level. That is the delta we're seeing. Clearly, our inventory level is building up for sure. We are paying close attention to that. Both OEMs and Tier 1s, we are closely coordinating with them to monitor the situation. If you just look at the OEMs, the inventory of finished goods is at historical low, and that's what we can see from the general data. For this year, the production unit, there again, there are various data points. What we have on hand, some data points suggest more than 10% growth. The content growth, as last year, that will be strong. In sum, for auto altogether, we can expect high growth. Having said that, the auto production volume will be impacted by semiconductors or other components. If the auto production does not grow by over 10%, as I said, then in total, there could be some adversity. That's something that we need to closely monitor going forward. I have another follow-up question. You said that you are closely monitoring the inventory level. How about the backlog? How about the clients' inventory level? Are they at a healthy level? Like, can you share to the extent possible, how closely are you watching those inventory levels? Can you help assure me with the inventory level that you're monitoring at the client base? Kataoka-san, would you like to answer? Well, okay, I'll take the question. This is Shibata. As we don't see a surprising level at a micro level, different companies, when we talk to them and based on the discussion and also where we can get the actual figures, we are monitoring the trend. Also, we are also watching the micro data points. In particular, the trend of the inventory level is something that we are closely monitoring. As I tried to say, if the absolute value of the amount of inventory is high or low, but compared to the previous level, we're trying to see where we are today in the cycle, also reflecting the financial data. As when we take a comprehensive micro view, we can see if the current level is okay or if it is alarming. That's how we are trying to view the trend. I will be repeating myself, but last year about two-thirds of the revenue or increase in revenue I think was okay. One-third of the revenue growth, regardless if it was additional or not, I think it was a build-up in the inventory. That is my view. On the other hand, for this year, looking at the order production compared to last year, the projection by many is that it's going to grow quite significantly compared to last year. If everything goes smoothly, then we should not see the situation as a major concern. Looking at the OE production plants and also the third-party's production plants versus those plants, if what we see underperformance in the actual numbers, then we may have to rethink our strategy. Thank you. Thank you very much for that. Now the next question is from Daiwa Securities, Sugiura-san. Please begin your question after unmuting yourself. Hello, this is Sugiura from Daiwa Securities. Thank you for appointing me. I have a question regarding the demand first. 2022, ABU and IIBU, for market growth, which is expected to achieve a higher rate of growth in Q1, I believe, IIBU's because of the reaction of the shipment that was made in advance. I think the growth rate for the QoQ in Q1 is lower with IIBU. For the full, on a full year basis, for automotive versus IIBU, which can expect a higher rate of growth? And if possible, can you also comment on the demand trend by application? And also, due to the strong product portfolio, is there any element where you can achieve a higher growth than the market average? Can you comment on that as well? Regarding the revenue growth, I think ABU is expected to achieve a higher rate of growth compared to IIBU for this year. For IIBU, mainly, as a strategy intentionally, all those efforts for diversification, I think, those will skillfully and successfully kick in, and I think that is already manifesting itself. On the other hand, because we have diversified to some extent already, those cloud data center applications which can achieve a high rate of growth, compared against those portfolio we have a high bet on, I think, relatively speaking, the growth rate will be smaller because that's a necessity and that's inevitable. When it comes to automotive, we are expecting a huge rate of growth this year after those years of performance. Of course, the details will be added by Kataoka-san later if there's anything else that he can comment on. For application, ADAS, EV related applications are expected to achieve a high rate of growth according to our projection. In our case, especially the third generation SoC as well as 40nm MCU, because of the designs that we have acquired in the past at last are now being deployed. I think that is manifesting itself in terms of huge sales growth. Of course, it's very difficult to define properly what SoC is. I think compared to market average and compared to our competitors, I think this is an area where we are seeing a larger rate of growth, higher rate of growth. That's all for myself. Kataoka-san, do you have anything to add? Yes. For automotive, electrification as well also xEV electrification as well as ADAS and gateway, those applications are going to increase in number and, this is going to be a standard feature for all cars, which used to be an optional choice in the past. MCUs and the SoC in our case is therefore expected to increase significantly, in some cases triple or double compared to last year because the in total, I think we can expect a significant growth for those applications going forward. That's all for me. Thank you. My second question. On page 10 of the presentation, I have a question as well for this page. Regarding the backlog, the backlog growth Q1, Q2, and Q3, that remained very high, but in the Q4, the growth rate has slowed down quite significantly. For your order efforts, your long-term efforts, I think this has had a positive effect on the fourth quarter. Your long-term efforts for order taking, how did this translate into the backlog level? I just wanted to know if this change is a trend change or not. Well, thank you very much for asking that question. This is a matter that I think it is very important that you understand. That's the reason why we drafted this graph here. One step before that, I would like to mention that each company are taking different measures in this area, like a U.S. company, a particular U.S. company, they have already included some fixed orders for next year already in this year's number. European companies do not do any effort like that at all. What we have done is that, for the full year of this year, all those orders for this year, we've tried to finalize and then fix them first and foremost. We are not talking about next year basically at all. In the middle of last year, since the middle of last year, we thought that we have to fix these orders, otherwise we won't be able to catch up with the supply and many different plans. For the demand for fiscal 2022, we requested customers to fix those orders. Those requests were given to customers. Accordingly, all those gray portions here, except for some little portion, which is a mixture of so many things. Basically, those are the orders to be delivered in fiscal 2022, and nothing beyond that are basically included. We started this effort in the middle of last year, and it started to increase significantly in the early part. In the fourth quarter, the fiscal 2022 orders were already secured and already issued. Therefore, as Mr. Shinkai mentioned our activity to secure our orders is already finished. As we have informed you the last time, the Dialog efforts was somewhat belated, so therefore those are not included here. Flattening out here was a natural outcome as a result of our planned efforts. This gray portion is expected to come down going forward. This is what we wanted to convey to you, and that's the reason why we prepared this diagram. At the risk of repeating myself, beyond this, outside of this framework, in writing, the non-cancellable orders have been agreed to, and that accounts for a sizable portion, which is represented by the commitments in the middle section there. Well, the reason why we have done this is because based on the request of customers, they wanted to use a conventional EDI system for order placement. For the orders beyond that for the future, they didn't like that kind of operation. Some customers resisted that idea. For those customers, we said it's okay. We admitted that. Outside of that system, we decided to agree on the order taking and order placement. When the deadline becomes closer, on the EDI system, the orders are going to come in, and those are already committed. In terms of our system, it is not recognized as orders yet. The top row, top section here, the orders in fiscal 2022, those are from new customers and long-tail customers and other and due to other reasons, those are not really finalized yet, as an intentional decision. That was decided by our side, rather. For those customers, though, just like before, a certain lead time will be set for taking those orders, just like before. Those middle portion commitments, in total, those numbers are already fixed. As we move forward, this will translate into and be blended into the gray portion. Then at the top of that, the total amount of that is already not fixed, and that's the reason why this is expressed in gradation colors. That's the rationale behind this graph. As time goes on, the gray bar will come down in terms of the size. To offset that slightly, the commitment portion and the orders in fiscal 2022 will blend in to the gray portion. For that portion, the amount will come down. On the right-hand side, the dark blue part, that will be translated into the revenues that is represented by the dark blue part. Now, as for the orders from fiscal 2023 onwards, although we have received some questions already, because the overall market is still difficult to make a proper forecast, so we would like to spend some more time. Towards the middle of this year, we will have to consider whether to repeat the same practice or give more flexibility, shorten the timeframe, or extend the lead time. I think we will have to decide on the most appropriate selection and respond to customers. I hope this answered your question. Thank you. I have a follow-up question on that. On the other hand, the production lead time is getting longer, and also the demand for semiconductors and supply for semiconductors remains to be very tight. Therefore, the shortening the lead time, I think in practicality is very difficult according to my view. If that is the case, then certainly the fixed orders will translate into revenues and then that will be delivered. Once the new orders for fiscal 2023 kicks in, I think the backlog coming down was difficult to understand. I think the backlog will not come down that much. Can you comment on that part as well? Right. Towards the middle of the year, it depends on the efforts that we conduct and undertake towards the middle of the year. Are we going to repeat the same process and the efforts as last year, then the gray bar may go up. Okay, understood. Thank you. The lead time itself, I don't think we have seen a significant extension of the lead time, in my perception. The semiconductor device manufacturing lead time, or after taking the orders towards the shipment, onto the shipment, that lead time, because the demand is so strong, it's getting longer of course. When it comes to the semiconductor production equipment, after order placement, until that is delivered to us, that lead time is also getting longer and longer. That is true. When it comes to capacity, production capacity such as raw material foundry and all such, the production capacity, how to allocate those capacity, actually each company for the allocation beyond next year is not really finalized. I think most of the companies have not finalized the allocation plan at all. In our case rather, towards the middle of this year, we are going to finalize the allocation plan. We received that kind of proposal. Of course, some major companies I think are talking about this in the second half of this year. That means there are flexibility for us and room for us to make changes, so we can wait until then. We will attract and then decide on the actions for next fiscal year and beyond. Thank you. All right, thank you very much. Thank you for the question. The next question is from Nikkei. Eguchi-san, please. Please unmute yourself and ask your question. Hello, this is Eguchi from Nikkei. Can you hear me? Yes, we can hear you. Thank you for this opportunity. My first question is looking at the bottom profit. I think there was a change in accounting period. I think you have renewed the previous record high. I think there was some changes in the market, but in achieving a record high profit, how would you assess the reform that you have conducted to achieve this? Based on that, for this year, what is going to be the focus of your strategy? Are there any initiatives that you are prioritizing and focusing on for this year? Well, it's hard to say one thing has contributed to this, but I may be blowing my own horn, but we have come up with products that's more needed by the clients. To a certain extent, we were able to offer it at an appropriate value and price. That sales strategy is starting to bear fruit. I think that's one contribution that we were able to enjoy. It's difficult to express this, but I think the biggest thing and something that really reflected into our result was, how should I put this? Even if I say something really nice and rosy, it's difficult to foresee what's going to happen in the future. With those uncertainties, we have to have multiple scenarios in hand. In accordance with the changes in the projection in the market, we have to decide if we are going to go to the right path or the left path, or if we are going to step on the brake or accelerate. I think compared to before, we have been able to make the decisions very quickly and have been able to execute those decisions. I think that's one big factor that helped us. Also in the market where demand is very strong like we are seeing right now, the products in high demand, and we have taken initiatives to increase other production where the demand is strong. Also, when the demand comes off, we take the opposite initiative. Also from ramping up the production and also procuring raw material allocation negotiation with the OSAT and foundry for securing the allocation. All of those corporate activities have been conducted based on the changes in the projection in the market. I think we have been able to move with agility much better than before. What we are going to focus on this year, to answer that question, looking at just this single year, like, I have received a lot of questions, and I have referred to slide 10 to answer that. For the demand, I believe we have done what we need to do to a certain extent. For executing the delivery to the customers, we know what we need to do. It's just executing those plans. In that sense, for this year, we are going to switch our gears so that from a midterm perspective, or in September last year, we updated the target. We want to try to upgrade that to the next level or the level thereafter so that we can achieve a leap. We want to prepare ourselves to be able to achieve such big leap in the future. That will be tuck-in acquisition or investment, and then we'll continue to explore those opportunities. Regarding production capacity, we will reconsider if what we are doing right now is the right strategy. We will continue to review and revisit the strategies in place. Looking at a business model, where we will look at where the source of the value proposition is coming from. Is it okay for us to continue as an extension of the existing business, or should we dig deeper to take necessary actions to enhance our value proposition? That is also something that we will continue to contemplate on. As I always communicate with the analyst, soon we're falling behind the competitors, but we will also like to take action in regards to shareholder return. Those are going to be the focus for this year. To the extent possible, from a near-sighted strategy, I want to have a longer-term perspective, to refine our long-term strategy. Thank you very much. I have another question. Looking at the Q4 that just ended, for IIBU, I think that there was a growth, where it was consolidated by Dialog. Looking at Q1, for IIBU, looking at the different applications, will there be any change in the trend? What is going to be the driver? Can you elaborate on that? Well, looking at the sequential trend, I wonder how relevant that communication is, and I always question myself on that point. As I commented earlier, some of the positive factors like catching up with the production, and if we catch up with the future demand, then the negative impact appears in the following quarter. It's like a mixed picture. I wonder if it makes sense for me to talk about the sequential trend. Looking at the long-term trend, this year the strong area is for industrials, particularly for factory automation. Although something that's easy for you to imagine in those kind of factors, I think this has started to become strong from last year. I think that this will continue to show strength. Also, for PC, mobile computing, slightly lagging behind that, the supply is starting to catch up. This year, the printer demand, I think, will be quite high, for this year. Versus that, for PC and mobile computing, compared to last year, I think, we will see a significant slowdown. As we discussed in the last result presentation, the rate of slowdown is becoming more moderate. It's going to be a moderate growth is what I see. Also on the same note, for home electronics like the AC, I thought that, there will be some weakness, but at this point, it has not weakened as we had anticipated. Also PC, home electronics, for those there will be some slowdown, but it will be slightly stronger, so the slowdown will be more moderate. Now where we can see some bullishness is cloud data center. For some, the MPS vendors, for the platform upgrade, it will be subject to the upgrade, but already for DDR5 compatible product has been seeing brisk growth. This year, and also next year as well, I think, there will be another growth to another level. This trend is coming from FA and also cloud and data center. Those are the factors, which are quite strong in demand. For PC and consumers, there will be some slowdown, but compared to before, relatively speaking, it will be quite strong. That's the view I see in front of us. Thank you. Thank you. Now, since we are running out of time, we would like to make the next question the last question for today. The questioner will be Yasui-san from UBS Securities. Please begin your question after unmuting your microphone. Hello. I have two questions. The first, your market share seems to have increased according to my simulation, but of course there is an impact of the Naka factory fire, so it may have come down and then rose again. Do you have any sense of actual growth in your market share in some of your products? Can you comment on that point first? My second question is about after the new year, the industry seems to have accepted the about the shortage of the semiconductors, and therefore the semiconductor market is not likely to collapse. As a way of your negotiation, when it comes to price negotiation, do you see some favorability in your position, or what about cancellations? Product mix, I think, are you luring customers towards the products that you are producing? In terms of your contract negotiation, are there any favorable conditions that are expected for this year in terms of your negotiation with the contract with customers? Well, the background of your question, I believe I have a good understanding on why you came up with that question, but I think it's very difficult for me to comment on them. How should I put it? Well, in that context, I would say the tailwind is likely to continue this year. That's how I see it. I'm so sorry. Can I stop here? All right, thank you. If I comment on too much, it will come back to me like a boomerang. The tailwind continues. I wasn't really able to hear your first question. Your market share. Oh, all right. Market share. The market share at this point of time, I think we should not be overreacting to that. I think we should comment on them after the third-party numbers become available. As at this point, those products and areas that we wanted to grow are beginning to show an increase. That's what we sense. Especially, as I mentioned earlier, in the case of automotive, strategic products, if you will, those are very made clear and those are, again, at the risk of repeating myself, these are enjoying a strong growth, and I think that those will be reflected in numbers. In the case of industrial, infrastructure and IoT, because we have a wide set of products, so it's very difficult to generalize things. From ourselves who are conducting this business, the original Renesas products, the former Renesas such as MCU and SoC and PMIC, after 2013, we have suffered a reduction in market share constantly. Of course, that was helpless, but we because we did this intentionally, but from an outside person's point of view, I think it looks as though we have suffered a gradual decline. In these areas, we have been able to successfully change the trajectory of those market share of those products. I don't want to say so make any bullish comments and made a mistake afterwards. After the third-party numbers become available, which is expected in two to three months, if my comment is supported by those numbers, I think I can make further comments. At this point, I would like to reserve my comments at this juncture. Thank you. All right. Thank you very much. With this, we would like to finish the Q&A session. Finally, I would like to ask Mr. Shibata to make a final comment. Thank you very much for your time today, and thank you for all of your questions. Like you asked, the numbers are growing quite steadily and some of you may feel that is this going to continue and is it going to be the right forecast. On that point, we are continuing to monitor the trend. Should there be any changes in our perspective and our interpretation, we will share that as quickly as possible. At this point in time, we are not concerned over this trend. Another point that I'd like to highlight is that, making this year the turning point, we want to strive for further growth. We want to transform ourselves to pursue further growth. In March, when we update you the progress on this strategy, at that point, we will not be at that point to say so. During the course of the year and when we reflect on this year, I'm hoping that we can comment that in the near future, we will be able to try to strive for further growth. Next month, we will offer you more details on how we are making progress in our interim plan. Once again, thank you very much for your time today despite your busy schedule. With that, we would like to close the results briefing of Q4 of FY 2021. Thank you all for your participation today.