Good morning, everyone. If you'd like to listen to this session in English, please click on the interpretation icon at the bottom of the screen and select English Channel. 本日はお忙しい。 Thank you very much for taking the time to attend Renesas Electronics' 2024 Capital Market Day despite your busy schedule. [Foreign language] We thank you very much indeed. [Foreign language] This is today's agenda. [Foreign language] The total meeting is expected to last for 4 hours, and we expect to finish at 1:00 P.M. Japan Standard Time. [Foreign language] The materials to be used for today's session are already posted on the RSIR site of our corporate homepage, and after tonight, a video of today's session will be posted on the same site. In the first half and the second half of today's meeting, we will set your time for questions and answers. During the Q&A session, please use the raise-hand function of Zoom so that we can take your questions in voice, so please make sure that you set Zoom so that we can know your name and affiliation. So, without further ado, we would like to invite our President, CEO Hidetoshi Shibata, to make a few words of greetings and have his presentation. Shibata-san, the floor is yours. Thank you very much, ma'am. Good morning to you all. This is Shibata. Today, we have secured longer time than usual years for today's session, so please bear with us to the extent possible. The main purpose for today's session is that, compared to last year, we'll be more expanded, and the leadership members will have an opportunity to have a dialogue with you, so that is the reason why we set this timetable this year. So, although time is limited, to the extent possible, we would love to have as many of you as possible have a direct conversation with the leadership team of the company, so that is the purpose of today's meeting. Now, first of all, from my staff, I would like to give an overview regarding the company's current position, just briefly to set the stage for today's meeting. All right. Please change the slide. All right. First of all, in 2019 when I took office, and after that, all the developments after that are not summarized here. As you are already well aware, last year and the year before, the revenue compared to the period before that nearly doubled compared to the period before 2021, so far, we have been able to achieve a favorable increase in our growth. [Foreign language] among the top names, TSR was number 3 for the full year. NVIDIA was in a very good position, but after that, we are the number 3 after a slight margin with AMD. And last year, we were selected as one of the names of the Nikkei 225 index, and for sustainability, the MSCI index also adopted us. As far as sustainability is concerned, our rating compared to two years ago because we were recognized as a low-risk company, and therefore we were able to successfully improve our scores in sustainability as well. Now getting into this year, after this year, in April, as planned, we have launched the operations of Kofu Factory, and towards the mass production start of next year, we are making steady progress in the preparations towards that timeframe. Also, as we announced, the Transphorm acquisition, of course, all the processes are currently making favorable progress, so if things progress as planned, we shall be able to have disclosing of this deal shortly. The details will follow during Chris' part, so we would like to come up with some more details during Chris's presentation. And also, as a major step towards digitalization, our Altium acquisition, we are also making favorable progress in its process right now. If everything goes well, based on that assumption, maybe we might be able to close the deal earlier than planned, sometime around the third quarter of this fiscal year, as a possibility. Now, two years ago, in 2022, we set this aspiration for 2030. We would like to achieve this aspiration by 2030, and we would like to become an embedded semiconductor supplier, and the most audacious one is capitalization, and also for cash flow, as you can see, and also by applying the multiples, and therefore we would like to achieve a 6x increase in terms of our market capitalization in this aspiration. So far right now, the execution of the mid-term plan is making steady progress. Review. Also, during the last fiscal year, in the 1-year period, in the multiple expansion, one factor of this, valuation gap fill. As far as this is concerned, we were able to achieve a certain level of progress in terms of this, like the down cycle management and peak and trough. This will be covered by Shinkai-san's presentation in more detail, but I think to some extent, we have been able to successfully manage the down cycle management, and also the inventory control in the down cycle. I think we were able to pass the test. INCJ achieved its full at last fiscal year. There's still a concern slightly about the overhang, but in order for us to address the concern of overhang, we were able to make a great step forward with this exit. Also, this year at last, we have started to resume dividend payment. So, with all these accumulating in the timeframe of aspiration, two times as much of progress has already been achieved as of the end of 2023 as I recap the last fiscal year. Now, after this, the remaining piece that we have to address is the real multiple expansion in the real sense, and I'll cover this after this, but we would like to utilize our assets to the maximum so that we can drive growth. And of course, this will be supported by digitalization, so we would like to accelerate digitalization in order to further support this aspiration. So, in terms of scale, so far, we have had an organization based on segments. In order to convey this in the Japanese context to make it easier for you to understand, this is more like a company system, having a smaller company inside one company. That was the previous structure by which we operated the company. However, from January of this year, we have changed significantly so that in order to pursue the same direction as a whole company, we have changed into a new organization which is product-based. Leveraging the scale, of course, the biggest objective for this is that we would like to leverage our managerial resources, including technology and human resources, to the maximum so that we can go beyond the segments and compare different segments and be able to offer more innovative solutions to customers. That is a major objective, of course, but it is very difficult to quantify them for the near term. Therefore, as a measurable target, we just have written down some measurable targets at the bottom of this page. For example, in terms of R&D, so far, we have partnered with many different parties in the R&D activities, and among them, the top 20 partners, the most advanced and the large-scale partners, will be the focus going forward. By focusing on our partnership with them, we shall be able to engage in more strategic R&D activities. So that was one thing that we have reorganized this time around. Also, for the front-end production processes and the back-end packages and testing, all these in the past, we covered many wide range of initiatives, but we have decided to streamline them by 30% so that we can improve the efficiency. So, that was another target. So, currently we are making progress in this streamlining of the operations. So, this is more like an efficiency initiative, but the primary purpose is maximizing the scale and leveraging the scale to the maximum so that we can accelerate the speed of innovation and digitalization. Well, still, acquisition of Altium is not closed yet, and therefore, things that can be decided, some things that we can disclose is very limited. However, at this point of time, this is our view right now, so I would like to share them. Of course, this will be covered in more detail when Buvna speaks in her presentation, but at this point of time, our thought is that so far, towards the Renesas customers, we have provided digital platforms, and on top of that, we will integrate the software that we provide and the development tools and also the auto coding and QuickConnect Studio will all become available in a single platform so that it will be easier to use. So that has been something that we have been doing so far. Altium has this design software called Altium Designer, a very strong PCB design software, and also the partner search Octopart, and also the Altium 365 platform was released, so they will be accelerating this. So, they are currently working on these initiatives. So at this timing, in the near future, of course, we will aim to reorganize them altogether so the platform will be integrated into a single platform, and on top of that, numerous applications, thousands, 2,000, 3,000 of these applications, all sorts of tools and application softwares and data will be incorporated on top of that so that it could be made available to the users. So that is the role that we would like to realize. And again, at the risk of repeating myself, this is not closed. So once the deal is closed, we would like to reorganize this and compress the timeframe and accelerate the initiatives towards this target. So stay tuned, please. Stay tuned to the future developments. Now, slightly, it looks like this is a leap of the logic, so I'm not really convinced whether I should talk about this, but in order for us to drive the growth, one is this theme for us to tackle the Indian market. During Bobby's session, we'll talk about this later to some extent, but we believe India offers a great potential. Therefore, if you look at the middle there, in the last several years, and of course into the next fiscal year, these planned numbers are incorporated here, so the headcount in India will try to increase this by 20x. So this is a major investment and a major growth that we anticipate in India, so that is what we are doing in India. Of course, we'll try to drive this further at an accelerated pace, but human is not as sufficient. So what is required here is to provide solutions that are ready to use. Customers are requiring this. I feel the day in, day out, so these system-level solutions will have to be offered them in greater numbers, and that offers better ease of use. And of course, IIT area, they have a lot of splendid research facilities, education facilities, so we would like to strengthen our partnership with those universities and the institutes so that we can collaborate with them and work together with the staff as well as the students so that we can drive further the growth in India. But that alone is not sufficient, and therefore, digitalization angle will have to be brought in as possible. And by doing so, I think further possible to substantially accelerate the growth in India. So digitalization, what change will it bring about? Of course, customer experience will be enhanced, and our solution will become more stickier. That is, of course, one ambition that we have, but especially when it comes to India and markets like India, in order for us to drive growth, we believe digitalization will become a very significant enabler, a very important enabler. So by putting up all these efforts by 2030, we would like to make India account for 10%-15% of our total revenue. So that is the ambition that we have as far as our revenue target is concerned. Now, our purpose, this is just a recap of what I have explained previously to make our lives easier is the purpose of the company. So in close to daily activities of people, we would like to offer highly reliable solutions that bring peace of mind to our customers. So that is our purpose. Of course, in order to realize that, of course, so we have seen a trend change recently, but in order to achieve this, we, of course, will have to make lives easier on this planet. So that is a reason why we have been strengthening our efforts in the ESG area, and the progress so far has been quite favorable. So that's another thing that I wanted to convey here on this slide. Scope one and two, these are the GHG emissions originating from our company, and of course, on the supply chain, and also the power supply-related GHG is also covered in scope two. And for scope one and two, we would like to achieve a close to 40% reduction by 2030. And as of last year, 20%, to be more precise, 18% reduction is already achieved by 2023. So, beyond here, of course, on the extension of the initiatives that have been employed so far, we would like to continue pursuing energy saving, green energy adoption, and also PPA, and also solar panel introduction will also be pursued. As for scope three, by 2026, 70% purchases. I'm sorry, the suppliers accounting for 70% of our purchases will be targeted by this scope three reduction. So far, we have already achieved 43%, making steady progress already. The focus for this fiscal year, the grey, the blue parts at the bottom are the first area, the supply chain, and green has caused the. We will continue to build on the past activities this fiscal year as well. Also, another thing that's making good progress this year is disclosure. Relatedly, although, we at last will start publishing the integrated report. We have done that already, so if you take the time, please read them. Of course, for the indexes, the remaining one target is the Dow Jones. We would like to make efforts so that we will be incorporated in Dow Jones. For the upper two ones, health and safety, this relates to initiatives at the factories, so that will account for the bulk of health and safety, and that will be the focus area for this fiscal year. Also, the other element, human resources, especially we'll focus on diversity, gender diversity. We will accelerate initiatives in that area. Of course, in the hardware technology sector and as a company based in Japan, diversity is always a problem, is always a challenge, but we would like to face this squarely so that we can also make good progress in the area of diversity. That is also selected as a focus area for this fiscal year. This is about Renesas culture, and this is something that, yes, I have introduced before about TAGIE, and it's exactly the same thing. From 2020, we've been showing this TAGIE culture, and it's supposed to be like a journey that's supposed to take like 10 years to make any major step, and that's what we have been calling out for. But then at the moment, we know that there's higher awareness within the company. But then sometimes these maybe people got too used to this. Maybe we need something new, but then it's not that we're going to be stopping what we've been doing so far. It's going to be important that we be able to make progress of each of these items that we have here because in the end, we want to make sure that this TAGIE culture really would stem within our daily life in making decisions and conducting our daily activities. We want to make sure that this culture is something that is very much rooted within whatever we do every day in the 10-year perspective. In the culture survey that we did last year, there's something that I did pick up. In other words, among the focus areas, we did find that, for example, global collaboration really stood out. After that, CTO Yoshioka-san took the lead, especially among the engineer members. We decided to pursue this global collaboration in various aspects, and as a result, it's a slight step forward, but when we did the pulse check this year, we did find that, yes, these actions proved to be effective to some extent. Now, last year, 69% of the respondents were saying that they're starting to feel global collaboration, they're able to take part in that. But within the pulse check this year, we found that 72% of the respondents are actually feeling that they're part of this global collaboration. And so it's the 3 percentage points, maybe it is within perhaps the amount of some calculation miss, but we did find improvement at your rate. And so we hopefully be able to look into the remaining focal points, and we want to make sure that we be able to create even further progress. But then, of course, it is collaboration, as we say on the bottom right. What was good was that we found good progress in Japan and APAC. I mean, it started small and slow, but it started to become larger. But then at the same time, on the right bottom again, this IT infrastructure, the collaboration there seemed to have required a little more struggles. And it's actually one of the underlying themes, but we wanted to change the organization. We've always wanted to really put resources into digital in India. But then as we've been doing that, we need to see if this IT infrastructure really would become a strong foundation for our future growth. And that's exactly what I do want to see. It is something that I have been talking about, but ever since 2019, we wanted to see if we'd be able to create the short-term achievement. That meant IT, anything around IT, we were trying to just work around with whatever we had to see if there could be any improvement. But then from here, there's going to be in order to make sure that we'd be able to drive another $20 billion, we have to make a more drastic change. It is really going to be making a true remap of IT infrastructure that we have. But of course, once we start this, we do know that it is going to require a lot of work. Shinkai-san has been giving you updates in the quarterly announcements, but I do believe we have been sort of deep-diving the scope, and we're taking time to make sure that we'd be able to capture the benefit. Of course, it's not something that is tangible. It's not exactly that you'd be able to easily find, especially in terms of contribution to our numbers, but it is something that we are working on, and so that's what I wanted to mention. Now, I am going to talk a bit around numbers. Ever since 2019, we've been always keeping track in this format. In other words, based on our continuing business base, what is going to be our adjusted P&L. Last year, as we mentioned, compared to 2022, there's been a slight decline in revenue. However, in terms of gross margin or operating margin, we know we've been able to outperform the model. The right-hand side shows the model itself. I know I've been asked several times in the past, "Aren't we going to update our model?" The answer today is we're going to basically keep it as it is. Some of you may notice that when we started, it was really about gross margin and operating margin. We showed it in the range, but we decided to just take out the bottom range. We're just going to show the upper range. That's a bit of a minor change that we did make. Of course, margin is something that we do pay attention to. We will do so from here off as well, but at the same time, we want to make sure we'd be able to find growth in the top line. We're not going to sacrifice margin in any way, but it's not really about just increasing the margin and for the margin per se, but it's really going to be we're trying to pay more attention to revenue growth. Again, we are going to keep the model. That's my response to the questions of updating this model. When we say drive the growth, where is it going to come from? What is the driver? Of course, each product group will be telling you the details. If you have any questions, yes, we'd be happy to receive your questions. But in terms of overall company growth, what's going to contribute more, at least within our plan? I'm just going to give you a sneak preview. And again, for details, please do hear from each of the leads. So this is the verticals that you find, for example, automotive, industry, infrastructure, and IoT. And horizontally, you find each product group. So high-performance computing, this obviously will the driver will be on the automotive side. And the theme really hasn't really changed, but it's really about scalability, and it's not going to be cookie-cutter type of a solution, but it's going to be tailored solution. And we've always known that we really have to work on AI and tools. And I do believe in this past 12 months, we've been able to make great progress. Vivek-san probably will be able to tell you more. Again, this is really going to be our continuous theme so that we'd be able to drive revenue. Then for Embedded Processing, again, this is going to really come from the industry area. There's certainly various growth angles, but again, here, it's really about scalability. From here, we are going to drastically revisit the UX so that our clients would be able to find an easy-to-use solution, which is going to be the driver for growth. Analog connectivity, this again, certainly, this is something that we'd be able to say to all products, all business, but if we just focus, pay attention to what is making numerical contribution, like memory interface product, which I'm sure you'd be hearing from Davin Lee, but anything, maybe it's not directly linked to AI per se, but we know that there's going to be explosive computing needs, and a memory interface would be required, and that's going to be another driver of revenue. For power, we're talking about this really broad range of portfolio. We have all the wide bandgaps. We have silicon solution. We have controllers. We have power management IC. And so, with all those portfolios, we'd be able to respond to each piece of each segment. And there's certainly going to be increased needs of compute capability, and so we want to respond to all these needs. And from here off, there's going to be more integration. We're certainly already seeing that, but as we try to pursue more integration, there will be more module, which again would be a driver of growth. Of course, IGBT module is something like a big lunchbox is also included, but it's not just that. We're also looking at smaller module that's for offering more computing capability with GPU. It's going to make sure that you'd be able to have explosive increase in your capability, and that's exactly what we want to offer when we say module. Now, maybe it may sound a bit different from my previous slide tones, but I do want to talk about some of the negative aspects or something that we need to do more. It's something that comes from some of the previous questions that we received in our earnings results. Nothing new maybe, but from this March, we know that the third-party, when we look at their share, our share in the total semiconductor realm has been increasing, but then the MCU side, we're actually decreasing, losing some of our market share. So that is what we observed. It is something that we've mentioned before, but the largest reason behind this market share decrease is the microprocessor within the automotive side. Of course, half of that would be short-term reasons, in other words, FX, etc., but then the remaining half of this reason actually really comes from this capability of our side, which did impact our market share. I did mention in the earnings result that when there's always this five or seven years' time lag before we find anything show in our market share. So that means whatever we do, for example, right now, doesn't mean we'd be able to see that visibly in increasing our market share in next year or in two years from now, but we certainly are preparing ourselves so that in the end, we'd be able to show you with a higher market share. Now, on a short-term perspective, again, I talked about margin. I mean, related to the financial model that I mentioned earlier, but again, it's not that we're going to be pursuing that margin point per se because that means price point, it's going to be difficult for us to really thrive in the competitive landscape. So pricing, we do want to be flexible, but that also would mean it's going to be important that we work on cost reduction. So this means that we're going to work so that we'd be able to reduce COGS in the overall cost as well. So that's really going to be a very important initiative, and it is something that we've already started to implement. And we do want to make sure we'd be able to show you the results as soon as possible. Same time, in making the specs of the products, I know there was, we talked about how there seems to have been a mismatch versus what we found in the market, and so we're trying to address that and working more on that. We do believe we should be able to improve ourselves, for example, in responding to EV market needs ahead. And the final part is about digitalization. So in the near term, it's not exactly about this large-based digital experience, but it's really about AI or tool. How to sound the offerings there is going to be important. And again, that is something that you'll hear more from Vivek for more details. So with that, so again, MCU, we have to certainly work more on this. That's true. But again, something that I did mention in the earnings result, but I'm not that pessimistic in that sense because this Design-in progress, if you look at this, I think I'd be able to share with you my take or my observation. That's why I included this slide in my deck. So left-hand shows automotive. Right-hand shows industrial infrastructure IoT, the Design-in track record. And so up until 2022, this is something that we've already introduced to you, but the 2023 result is something that we have here, and it's exactly what you see. So automotive, we were able to make 50% growth year-over-year, and for IoT, we were able to create 30% growth. So that's good growth. Now, automotive, of course, this is something that I have been saying from before. It really depends on whether or not we have a large order, and that does sort of impact what kind of growth you'd be able to find. So like you see on 2021, it doesn't mean we'd always be able to see this linear growth. That's not quite easy to forecast, but then if you'd be able to look at this trajectory all the way from 2019 and onwards from 2020, you can see that we have actually been able to mark growth overall, especially in this last 12 months. Compared to the year before, we have been able to show quite a good increase. So again, this contribution is supposed to show in this more longer term, like in a 5-year trend. It's not something that really shows in this more the tangible performance immediately, but you can see that what we're doing is really good, and it's going to be supportive for our future revenue and profit growth. That was a quick introduction. Today, it's more like an update than giving you a message from CEO, but again, here's my summary. I believe looking back at this five years, I think we've been able to make good progress, not just in terms of our numerical performance, but I think we've been able to make good progress in other areas as well. At the moment, again, today's underlying theme is really about thinking of the growth into the next 5-10 years, and it's really about making sure we have this concrete foundation for that. That's really the main point today. To do this all by doing what we say, that will enable us to enjoy sustained long-term growth. I know I've run over my planned time, but from here, I'd like to ask you, move us onward, thank you very much. ありがとうございました。 Thank you very much. Next, Vice President and Software and Digitalization Head, Buvna Ayyagari, to present. Buvna, over to you. Thank you. Hello everyone, good morning. My name is Buvna Ayyagari. I head the Software and Digitalization Division. In this next section, I will present some information about the division related to digitalization, as well as our vision, strategy, some near-term and long-term goals. Next slide, please. So let me first start with our vision to set the context for the rest of the presentation. We are in an era of insatiable appetite for compute. There's an explosion of number of electronic devices, be it in automotive, industrial, infrastructure, or IT. The other shift that we're seeing that's happening in the ecosystem is that in systems design, there is an increasing shift to what was previously larger focus on mechanical-based design to electronics design. On top of that, there are a lot of new entrants into the systems design world contributing to an increasing number of electronic devices. And yet, electronic system design is growing in complexity. For these new entrants that don't already have big investments in system designs, there is a large upfront effort to build a know-how for electronic system design. And at the same time, for the established larger enterprises, there is an increased pressure for reducing their time to market and for lowering risks of design iterations. Our vision is to lower the barrier to electronics design, to make it more accessible to the broader market, to bring more integration and automation into a platform so that we can enable more innovations. At Renesas, we aspire to do this by building a platform that will bring together electronic system design as well as lifecycle management, and we plan to do this together with Altium. With this integrated platform, some of the challenging aspects of electronic system design and lifecycle management will be addressed. By making a platform where the process flows, the data flows are well connected and available in one platform, this will make it easier for our users to build electronic systems. Next slide, please. Now, to accomplish this vision, we decided to partner with Altium. How do these two seemingly different solutions fit together, a hardware engineering company and a software company? Well, let me tell you. Renesas is a leader in MCUs with a large footprint. We also have one of the broadest product portfolios for auto industrial infrastructure and IoT. Our growing library of over 400 winning combinations targeting different applications enable customers to build their electronic systems more efficiently. Renesas also has a strong presence in the industry with an intimate knowledge of customer requirements and relationships with enterprises and a workforce with expertise to support them. Combined with all of this, Renesas has the financial capacity for bolt-on acquisitions to continue to build towards this vision. Now, if you look over on the Altium site, they bring the industry's leading system design platforms. Octopart is a leading electronics part search platform. Altium 365 is a growing choice for a cloud-based collaboration platform. Altium also brings a strong workforce, well-versed in PCB design, with Altium Designer, which is a leading PCB software provider in the industry. Together, these lay a strong foundation to execute the vision, and I will tell you more in upcoming slides. Next slide, please. So let me take a step back and explain where all of this fits in the overall electronic system landscape. So this slide here shows a very simplified depiction of the electronic systems design world. Starting from the left, system design typically begins with the definition of the product in the form of capturing requirements. These are then translated into an architecture definition for the system that is then spawned off to break it down into multiple subsystems. Multiple components make up these subsystems, which then need to be brought together on a board or multiple boards. These are then sent off to be manufactured and assembled and tested for a final product. Now, this was an electronic system design recap in 30 seconds, very simplified view, but to make a few points. If you look closer at this ecosystem, a lot of evolution has happened in some parts of the landscape. For example, let's take the case of EDA. EDA has completely revolutionized the way chips are designed and verified. From the early days of design, where chip designers had to hand-draw gates to now where large chips with trillions of transistors can be synthesized, placed, and routed by abstracting the design into a high-level description language. Can you imagine what the evolution might have been or not been if we were still hand-drawing gates for a design of this size? A lot of evolution there. Another area, as an example, is 3D packaging, where there's been a lot of innovation in the recent past. Now, despite these examples and the evolution and maturing of the semiconductor and electronic system design space, the pace of evolution has not touched all parts of the ecosystem in the same way. The parts that I have here shaded in blue remain largely disconnected mini ecosystems. This is the area that we're focusing on, and I'll tell you more about it. Next slide, please. Now, with that context, let us double-click into the electronics design and lifecycle management from a user or a customer perspective. I talked about the complexity of system design. Now, let me give some specific elements there. One challenge is the number of platforms, software CAD, CAE tools, data formats, data processes that are involved in building an electronic system. There are multiple flavors of cloud and security choices as well. And then, with the growing amount of software and focus on a software-first approach, the ability to co-design, co-optimize software with hardware continues to be a key requirement. But then, how to connect all of this to PCB design and system simulations? Co-design is required here as well to avoid design and fabrication iterations. Not only are these iterations expensive, but they also take more time. What about traceability? The pandemic has taught us the importance of supply chain assurance and lifecycle management and the need to have traceability from discovery and sourcing of the parts all the way to end-of-life lifecycle management. Today, these solutions exist as a set of disconnected islands, and it's largely up to the user to bridge these islands in order to build their products. Next slide, please. This is what drove our vision for a solution, for a solution that is a connected digitalization platform, one that integrates electronic system design as well as lifecycle management. This will provide the ability to have components: discovery, sourcing, PCB design, simulation, fabrication, BOM management, lifecycle management, all in one connected platform. That is the vision. Now, you may ask, some of these solutions already exist today and are pretty mature in the industry. Why do you need a platform for this? Well, the idea is not to reinvent the wheel. Yes, there are many mature solutions that already exist and are available today. Rather than develop new solutions, the goal here is to partner with these existing solution providers and integrate them into the platform. Again, the vision is to provide connectivity and integration into a single digital platform such that the user has the capability to bridge these different islands all in one platform. By combining the strengths of Altium and Renesas, our vision is to build a platform that connects and bridges these islands so that the semiconductor industry can build innovative products better, faster, and more efficiently. Next slide, please. So the digitalization platform will bring together electronic system design and lifecycle management. That is the vision. Now, let me spend a few minutes on the first part there, which is electronic system design. If we look at it from a customer lens, the biggest challenges in electronic system design, the longest poles, if you will, can be categorized into these three buckets. From left to right, these are software, PCB design. When I talk about software, I'm not talking about the CAE software, but rather the software that runs on the hardware, the PCB design and simulation. Now, in embedded software, while the industry has evolved quite a bit, there's a lot of software maturity and evolution that has happened, and the software modules at different layers of a software stack are available. It is still a lot of effort for a customer to integrate these modules for a full SDK or software development kit for a particular application. On top of it, the customer or the user has to further test this integrated SDK for their specific use cases. Now, co-design and co-optimization of software and hardware requires the ability to iterate on choices in real-time, i.e., virtually. The design pillar should include the ability to assess choices for components by simulating them for different performance metrics. Finally, another challenge is the simulation of these hardware, software, system-level choices and iterations to be able to evaluate them for system-level metrics before finalizing the design. Visualize this: that in hardware, where the user is making different choices and correspondingly is able to obtain the integrated software, or at least the majority of it, say 75% of it, all in the same platform while they're iterating and making different choices on the hardware and software simultaneously in the same platform. This is the idea here, which is to build a digital platform where we can enable and address all three of these pillars in a connected platform. So grand vision: how does the user actually benefit from it? Let's look at that. So from a user perspective, this is a single platform to assess, evaluate, build, and simulate systems, which, of course, is going to provide them ease of use. Previously, they would have to go to multiple platforms, multiple data formats, multiple CAE CAD tools to do all of this. Now, they get all of that in a single platform, ease of use. Also, the development time, because they have the ability to do this all in a single platform, the development time is significantly reduced. Now, if this vision is realized the way we're thinking about it, then the other side effect or benefit is going to be that we can do all of these iterations in a digital platform. So all the explorations, all the iterations, all the choices, the simulations, evaluating different options, all of that can be done digitally, virtually on this platform before anything physical is actually built. That reduces the risk of finding bugs and issues on a physical system, and it also reduces costly iterations. And finally, we plan to bring automation into this platform in a manner that abstracts the design level. And with this, users are no longer required to know all the details of the underlying IP, their configurations, the CAD CAE tools, and all of the other elements to bring a system design together. With these layers of abstraction and automation, the barrier to develop is significantly lower. So those are the benefits to the user. Next slide, please. So where are we today? Honestly, very early in our journey. Today, we have a cloud-based platform called QuickConnect Studio, which you might have heard about or read about at last month's Embedded World. QuickConnect Studio has the ability for a graphical drag-and-drop system design, thus abstracting the design process. Through this platform, the user can iterate between different component choices, Renesas devices as well as our partner's devices, before building a board. So, as I mentioned before, visualize a platform where you're dragging and dropping different electronic components to build your system. And in real-time, in the same platform, the software that's going to run on those components is dynamically adapting, being modified to match the hardware. On top of it, within the same platform, the user can then modify, customize the SDK, the software, and even write their own application software on top of it, all within the same platform. Today, we support not just Renesas components on this platform, but also those of our partners. The number of partners and their devices that are starting to come on board this platform is growing, and we are working on automating that process of onboarding Renesas partner devices. Finally, this system built on a digital platform can also be connected to a remote board farm. The user can iterate on component choices, customize the software, generate the complete SDK, and run it on a real system, on a real board, in a remote farm somewhere, all from within the platform, and then make any changes that are required and go back and do these iterations, all in a digital platform. Next slide, please. We are very early in our journey here of bringing this vision to fruition. There is a lot more to iron out once the acquisition of Altium closes. I would like to wrap up by sharing with you some early thoughts and plans towards executing this vision. So if you look at this chart here from left to right again, Horizon One, which is in the next 1-2 years, we will launch the electronic system design and lifecycle management platform. Now, it's not going to be the final version. It will not have all the elements that I described on previous slides. It will not have all the bells and whistles, but the initial platform will be launched, and we will continue to build the various features into this platform. The goal is to start by integrating requirements management, subsystem sourcing, and importing the components into the platform. The platform will also be enriched with third-party support for existing solutions. As I mentioned in a previous slide, the goal is not to reinvent existing solutions that are already there and mature in the industry, but rather to partner with them to see how we can onboard them onto this platform. And this is going to be prioritized based on our alpha and beta customers that we're engaging with and their prioritization. We will also bring more automation to the design processes so as to abstract electronic system design to a higher level. A little farther out, say in the next two to five years, our focus will be on continuing to grow the number of designer seats and wider adoption of this digital platform. The focus is going to be on broader penetration into the mass market with the goal of essentially improving overall user experience by addressing some of the challenges that I outlined earlier in the slide deck. Through the digital platform, users will experience a connected platform for electronics design and simulation, making it easier, lowering the barrier to designing electronic systems. Finally, our Horizon Three, which is 5-7 years out, is to have this connected platform integrating electronic system design and lifecycle management. That brings me to the end of my presentation. Thank you. [Foreign language] Thank you very much. Next, we will ask Mr. Shuhei Shinkai, Executive Director and CFO, to give the finance presentation. Shinkai, please. Hello everyone. This is Shinkai, CFO. So, in this finance part, I'd like to talk more about this aspiration of market cap sixfold and what is going to be our high priority topics, finance model, as well as capital allocation. So first of all, we have some of the financial highlights of 2023, and I have several index here. So, the left-hand side shows this peak and trough, in other words, revenue and gross margin. Compared to the past, we have been able to decrease the volatility amount. For example, for revenue, from its peak to the trough, the gap is approximately 10%. Of course, there's been some benefit from weaker yen, but then even if we exclude FX impact, we're not far off at all from our peers' performance. In addition, as for gross margin, the gap is 2.6%. Now, here we don't really find any currency impact. At any rate, compared to the past and compared to our peers, we have been able to mark a very good superior result. It's really about understanding the demand trend and being able to proactively engage with our customers at an early stage, being able to proactively work with the supply chain to make any adjustments. So, we have been able to keep up with the changes so that we'd be able to avoid any risk. Also, on the right-hand side, we have non-GAAP EPS. So even during the down cycle, financially speaking, we have been able to focus on the bottom-line growth. In 2023, we've been able to mark 20% growth vis-à-vis last year. Next slide, please. Now here, so again, we're trying to make a 6x increase in a market cap, and here we're trying to break it down. So, it's about doubling our scale, which is shown on the horizontal axis, and tripling valuation, which is also shown on the vertical axis. And at the end of 2023, the market cap, compared to the 2022 average, we've been able to double it. And what composes that is shown on the left, so 1.5x coming from scale, 1.3x approximately coming from valuation. And to do this, these actions that we did in 2023, some are something that we're still doing in 2024, are what you find on the right-hand side. So, for example, A, and for example, it's about increasing scale, for example, investing in in-house MCU production capacity or investing on power discrete production capacity or power, well, SiC capability acquisition. So that's the A part. And then also in the middle, we have this valuation gap, so B1. And I did show you some of the figures before, but it's really about down cycle management, especially around inventory control. And we've also started dividend payout. In other words, we have been able to make progress in terms of shareholder return. For the B2 part, this is something that we still do have a lot to do, but it's really about multiple expansion. For example, the very important journey was the digitalization. It's about Altium acquisition. So, we do believe each of these activities for us to achieve 2030 aspiration, we've been able to make some progress. From here, I'd like to talk about more mid- to long-term topics. So, if you look at the middle in bold fonts, in other words, what your figures for 2023, it's been adjusted, meaning using the currency rate, 100 yen versus US dollars and 120 yen versus euro. That's the number that we continuously use, and we only look at the business that we've continuously been doing. And so, as you can see, the adjusted revenue, that's JPY 1,164.8 billion, gross margin 57%, operating margin 32%. So that's the result for 2023. On the right-hand side, we show the mid-term model. Mr. Shibata did talk about the gross margin, operating margin. We decided to just take out the bottom limit. So that's a minor update. But even during down cycle, the intention is to make sure that we'd be able to operate within this model. As for the revenue growth, just like you see this checkmark from 2019, we have been able to mark positive result versus SAM and gross margin, operating margin. Likewise, we've been able to achieve the model. Next slide, please. So as we head towards 2030, what kind of revenue growth are we expecting? So we're trying to achieve more than $20 billion by 2030. And the drivers for the sales growth is something that we have plotted in this bar chart. So we have three that we have circled. So within the vertical segment, it's about ADAS, EV, and infrastructure. So these are the three areas where we expect for the revenue to grow, to drive growth. And we also have the forecast for the segments' growth as well as the themes for growth drivers on the right-hand chart. And again, for details, I'm sure you'd be able to hear more from each of these of the business units. But the growth rate for each segment, just like what we have been saying from before, we're trying to see automotive grow in line with SAM. But then industry, infrastructure, IoT, we're expecting for more growth than SAM. And for automotive, we want to have scalable product groups. But then especially for ADAS areas, we're trying to make sure that we'd be able to enhance convenience through software and EV, MCU, analog, and power and from silicon to wide bandgap. So, it's really about covering a wide portfolio. That's the strategy. For industrial infrastructure, IoT, it's really about enhancing UX so that we'd be able to expand the application where we'd be able to serve. And of course, this certainly is the part where we have synergy from Altium. For infrastructure, this is really about power integration. It's really about capturing this very robust demand growth. Next slide, please. Next is our margin model. The mid-term model is exactly what I showed in a previous slide. Here, I'd like to talk in a little more long-term range, our thoughts behind the long-term range. On the top, we have the gross margin. It's not that we're going to just keep on finding this growth and gross margin every day, but it's really about keeping a good balance. That's our approach. On a short-term basis, so it takes more time. As you go into right. First of all, in the short term, it's really going to be an increase coming from industry, industrial infrastructure, IoT, together with the market recovery. It's also going to be recovery of the total mix, and it's going to be better utilization. On the mid- to long-term, it's going to be about power or discrete. This includes amortization, depreciation amortization cost, which is going to be impacting the total mix. We're also going to be decreasing the management cost by trying to integrate some of the production technology. It's really about one of the advantages; we'd be able to work from scale advantage and also from mid- to long-term for high-performance computing and embedded. We should be able to enhance the production mix of the foundry side. In other words, on the long-term basis, it's pretty much going to be flattish from where we are today. We also show operating margin on below. So OpEx would be reduced, and it's not exactly perhaps a reduction, but it's really utilizing scalability, which is going to enable us to see proportionally OpEx decline. SG&A, I know it's been taking time, but it's really about what kind of synergy we'd be able to enjoy versus integration. For R&D, it's really about optimizing the cost-benefit through selection and concentration. And through sales growth, we should be able to grow operating margin. So, in other words, we have three themes on the right-hand side. So again, we're going to put emphasis on growth, revenue growth. And that's how we're going to control the margin. And we're also going to make sure we'd be able to strike more efficiency so that we'd be able to enjoy a more scale merit. And it's really about striking for more operating leverage. Next slide, please. And next is our capital allocation policy. So here, we have our capital allocation policy for the time being after Altium acquisition. So, you see all these blocks, CapEx, the leverage, dividend, as well as strategic investment. So that's going to be the order where you'd find it coming. And of course, strategic investment would include M&A or some buybacks that we'd be doing in an agile manner. So, for capital expenditure, it's really going to be investing mainly about power discrete, where our own production is going to be the main part. And here, we're trying to make sure that we'd be able to, on average, find 5% growth in revenue. The leverage is about Altium acquisition financing, but we're trying to achieve net leverage under one time within three years. For dividend, we started small from this year so that we'd be able to continuously offer dividend payout. And from here, we're trying to make sure we'd be able to show you a higher level of payout. And specifically, it's really about total payout ratio, which would include dividend and buybacks. But we're trying to step by step increase this level to more than 30% of the free cash flow. Next slide, please. And so again, about Altium acquisition, what is going to be the time frame in creating value? So, in Buvna 's part, we talked about the digitalization journey. And so here, we're trying to look at this from the finance perspective. And so, from day one, we're going to start our deleveraging activity. And again, like I mentioned earlier, our target is to achieve net leverage under one time within three years. But of course, this component is exactly the same thing that we've been saying in our previous large M&As. Next is about the synergy block. And again, it's the same components that we showed you within our previous major M&As, except that this time we're expecting it's going to take a little more, and it's going to start with cost synergy. This is because right after acquisition, there's going to be the costs that would no longer be necessary, especially the costs that's associated with keeping the company listed. There's also some of the savings that we'd be able to achieve by utilizing Renesas resources. Next is the revenue synergy. By having Altium join in a larger group, we'd be able to increase the investment that would go into this entity, which would accelerate revenue growth. We are going to keep the arm's length relationship between Altium and Renesas. On the other hand, the synergies, we do believe both would start to materialize. We expect that these synergies should really become really tangible within the six years. That's really going to be the time when the payback period would end. With that, we'd be able to structure a platform, which is exactly our digitalization vision, so that we'd be able to materialize value creation. The very, very top part is a full upside. On the right-hand side, we have three points. Compared to the past M&A, it is true that it is going to take a little more long-time frame because it has to do with the difference in the fact that we have software. We're also trying to maintain this arm's length relationship. But then when we look at the contents of synergy as well as the actions to create synergy, it's really not much different from anything that we've been doing in our past major M&As. And so, it's exactly where we'd be able to enjoy our previous track record. And so, if we'd be able to create this deleverage, cost synergy, revenue synergy, then we'd be able to see the upside. Next slide, please. And so again, this is the model housekeeping. So again, we have decided to just erase off the bottom range. Otherwise, it's the same. And so again, here, we're trying to make sure that we'd be able to scale up the surface space that creates this sixfold. And I think we've been able to show you some progress in 2023, but it is something that we want to keep on working. Some of the more recent action items is something that you see on the right-hand side. So, A would be about maximizing our scale benefit, B1 valuation gap filling. There are still rooms for improvement. And so, it means that we need to go a step further into each of these activities. B2 is again, the closing is yet to come. But after Altium acquisition, after we've been able to complete that, we should be able to really exercise the framework of synergy creating. And I'm sure I'll be able to update you about the progress in our future meetings. But thank you very much. [Foreign language] Thank you. [Foreign language] [Foreign language] [Foreign language] The MC will nominate the speaker. [Foreign language] After being nominated, you'll be able to put on the microphone. So please unmute yourself and speak up. [Foreign Langu Due to the limitation in time, please keep to two questions per person. [Foreign Language] [Foreign Language] [Foreign Language] [Foreign Language] [Foreign Language] [Foreign Language] [Foreign Language] [Foreign Language] [Foreign Language] [Foreign Language] [Foreign Language] [Foreign Language] [Foreign Language] I believe that you'll be rolling this out to the existing customers going forward. What has been the reaction from the customers? Has it been a positive feedback? And what will be the applications that these software will be introduced first? I'm sure that depending on the application, some will be easy, some will be difficult. And so it will not be just the Altium's midsize customers, but also the larger customers that Renesas has. So I believe that you'll be targeting much of your customer base. So my first question is regarding the feedback or reaction from the customers, or where you'll be starting first. That will be the first question. Thank you. [Foreign Language] Well, it's too early to tell, to be frank. これ [Foreign Language] There are so many things that we still have to decide and take action on. But at this moment in time, regarding what Buvna presented. [Foreign Language] Providing what we have been providing to customers in bits and pieces in a more unified platform, including third-party solutions. So it's more about our existing clients using our existing ingredients. So from the customer's perspective, we expect that they will say the usability has improved significantly. Now, going forward with Altium, as we provide a more integrated platform, we really don't know the reaction from the customers because we're still two different companies. We're not able to provide an integrated platform at this moment. But in terms of the ecosystem, we have a lot of positive expectations. And even though it's still early days, we are already making offers to partner or collaborate. And those kinds of negotiations are already starting. So I need to be careful with my wording, but my image is that countries who are already quite advanced in electronic system design or users who are already very fluent in these kinds of electronic system design. We are actually targeting customers who are not that. So one example was India. So we're targeting customers who are not very experienced in electronic system design or customers who have been outsourcing most of electronic system design. For those customers, we hope that they will feel that this is so easy to use that they are able to in-house that rather than outsource. So once again, this is something that we will start going forward. So this is more about the future. So there are two initiatives that we are working on. This may have been a bit confused in your mind, but it's a different time frame and different set of initiatives. Understood. Thank you. My second question, I'd like to ask about the financial impact. So I believe that it will be integral to the valuation improvement going forward. But from our perspective, how can we judge how the valuation will improve? So the current digitalization strategy, you'll be able to retain more customers, to make it more sticky to the customers. In terms of the profitability, a more user-friendly software will make your products more attractive and raise the margin or prices. Or maybe you'll have more users of Renesas products, and that will be adding to both revenue and profits. So what will be the logic behind the valuation contribution financially? What are your expectations regarding this strategy? [Foreign Language] Well, I think we need to look at a longer time frame. But one angle that was not mentioned was volatility. By increasing recurring revenue, financially, we can reduce volatility. We can reduce beta. That is one positive impact that we are expecting because the volatility is quite large. And from the top management point of view, predictability is very important in finance. And having predictability means that we are able to tackle more initiatives. Now, we do have to be a bit reactive to the market volatility, but we would like to reduce that. And if we're able to take action as planned, then that will be a positive reflection on financial performance. Understood. Thank you very much. Thank you very much. Now, moving on to the next question, which will be from BofA Securities, Hirakawa-san, the floor is yours. Please unmute yourself and begin your question. Thank you very much, BofA. My name is Hirakawa. First question is Buvna. Digitalization over part of the semiconductor supply chain sounds a great strategy. During the briefing on Altium acquisition a few months ago, it was interesting that Shibata-san addressed that Schneider is a benchmark company in terms of this digitalization. Actually, the question is, do you think this analogy like digitalization in capital goods market is valid for the semiconductor area as well? Also, how do you see competing with Renesas Semiconductor in PCB design versus Texas Instruments and others if that thesis is valid? Was she able to hear the English? Are you able to hear me? We heard you, but you spoke in the Japanese channel. Was it better for me to speak in Japanese? I'm not really sure about this logistics here. Buvna, were you able to hear the English question? Yes, I was. Okay. So can you take the question? Address the question? So the question was two parts. There was some noise, so I'm not quite sure as well. But there were two parts to the question. One was about the PCB design and the competition there. The second part of the question was your analogy, Shibata-san, in your previous presentation where you talked about Schneider. And to elaborate on the similarities there. Yes, please. I can address the first part of the question, which is about PCB design competition. Yes, Altium is one of the leading PCB software design houses. The Altium 365, which is a new collaboration platform, is actually pretty unique in the way it's architected. It is meant to provide collaboration across design teams and across electronic system design across multiple areas. The way we are planning on utilizing this and I have to say, again, what Shibata-san had mentioned before, which is that the acquisition hasn't closed yet. This is more of an idea and a vision that we have is to essentially use that platform to start bringing in some of the elements of electronics system design and the lifecycle management altogether in one digital platform. We believe that this is an area that is actually a gap in the industry. So, if you recall the slide that I had shown about the landscape of electronic system design, and I had shaded in blue the part that we play in, that's actually a gap in the sense that the solutions exist, but they're not connected. They're disjointed, and they're different platforms. There are different software. There are different data formats and process formats for connecting those. Our belief is that that is a gap, and our customers will benefit very much if we can address that gap by building this digital platform. So that's where we plan to play in. And again, keep in mind, these are ideas. This is a vision. Acquisition hasn't closed yet. But that is the idea. And I don't believe a solution similar to that exists in the ecosystem today. Thank you. That was part of the question. Did I question Buvna? The analogy between Schneider's case versus our vision here. Yes. That was the second part of the question about how you'd outline. Yes. Do you want to take that, Shibata-san? No. It's a question against you. Okay. So again, it's very early to really talk about this because the acquisition hasn't closed. Both Renesas and Altium are on our own paths of digitalization prior to the acquisition. If you look at the perspective from Renesas customers again, I've shown on the slide that the long poles, the biggest challenges from Renesas customers, from semiconductor customers, the biggest challenges are really, how do you consume these electronic components to build a system design more efficiently? So how can you do it better? How can you do it faster? How can you do it with less risk? How can you reduce the time to market? Those are some of the challenges. In the context, again, of Renesas customers, if you look at it, they're looking at how do we get optimizations and iterations in the hardware-software co-optimization without having to spin multiple physical boards? So that is one path for digitalization. Then on the Altium side, if you look at it, their primary focus has been Altium Designer, which is a PCB design software, but also this collaboration platform that I'm talking about. So the analogy there is that the idea is to start bringing more and more applications, more and more of these customer challenges to start connecting them into one platform so that a user does not have to go in and out of multiple systems, multiple data formats, multiple software, etc., in order to be able to complete a system design. Now that involves also lifecycle management because it's not a one system done and it's over. There is the process of lifecycle management there. If you bring these two concepts together, the analogy, I would say, at a very high level with the Schneider situation is essentially to have a platform, a digital platform, a software platform where you I guess the word I could use is maybe tuck in, but where you integrate all of these apps so that from a customer perspective, it's one integrated platform with all of these applications underneath that enable them to do their electronic system design faster, more efficiently. Okay. Thank you very much. [Foreign language] [Foreign language] Thank you very much. Next question. UBS Securities. Yasui-san, please. Please unmute yourself. Thank you. I'm Yasui from UBS. I have two questions. My first question is regarding Altium. Once again. At the time of announcing the acquisition, 20,000 was, I think, the customer number for Altium. Considering Renesas, how many customer accounts does Renesas have? And what is the overlap with Altium? Or I'd like to ask about the potential market size. I'm sure it's huge, but if you add up Renesas and Altium, what will be your market share? If you could give a ballpark number, a rough number, that would be very much appreciated. My second question. I think Shinkai-san, you talked about payback period of 6 years. So JPY 900 billion divided by 6, like JPY 150 billion. So the revenue size is like JPY 40 billion. So I don't really understand the logic behind the 6-year payback period. So what are you trying to achieve through these 6 years? Thank you. Thank you. So I'd like to ask Shinkai-san to respond to both of your questions. For the first question, regarding the customer size, customer base, there are some information restrictions. So I'm not able to talk about everything, but I don't think there's much overlap. That's what I can say. And regarding the payback period, regarding our definition, we're looking at the return from investment to be over our cost of capital. So the return to be above our cost of capital, that is where we see the payback period because everything from there will be above our cost of capital. Thank you. If I could ask a follow-up question. Regarding the cost of. May depend on the definition or whether cost or cost of capital. If you could give me a rough indicator, please. To give you the rough indicator, I'd say 8%. Investment is $6 billion. So $6 billion, 8%. So, $480 million run rate after tax. That is the calculation. That's very clear. Thank you very much. In terms of the investment return, that's very difficult. Every time we get this question, it's very challenging. Because we believe that there are still pieces of the puzzle that we need for growth. And that is how we decided on the Altium acquisition. So, at the bare minimum, as Shinkai-san mentioned, we need to achieve returns or margins above ROC. And here we look at but in the medium term, as I think Yasui-san, you asked before about ROIC, how we look at ROIC. And so, we need to go to that higher-level discussion in the future. But at this time, we don't have sufficient resources to simply achieve organic growth, and we still need acquisitions. Going forward, we don't plan to do many multi-billion acquisitions, but $1 billion or $2 billion kind of a bolt-on acquisition is something that we need to continue to engage in. And so we will have a similar perspective regarding the investment and returns for these bolt-on acquisitions. And maybe we can go to a higher level in the future. Thank you. Thank you. Now, moving on to the next question. Citigroup Securities, Fujiwara-san, please begin your question. Please unmute yourself and begin your statement. Well, thank you. This is Fujiwara from Citigroup Securities. I have a major question relating to your views regarding the India market. Over the mid to long term, you have a target of range of 10%-15% as a revenue target contribution from India. So currently, you have a revenue size you want to launch, a revenue size of over JPY 200 billion immediately with India. So how to interpret this? What is your aiming for? Is it the application? What is your target market in India? And of course, you have existing partners in India for as they invest in India, are you going to capture those demand? And of course, you said that you're going to increase your headcounts in India. So what are the necessary type of personnel that you're looking for in India? What kind of personnel do you think is needed in India in order to achieve your aspirations? Of course, this is something that I don't have in my mind. But in the human resource market, what is necessary for you to win those talents? If you can comment on that, that would be appreciated. All right. Yes. We are not focusing on what is called a transfer business. Local businesses are focused, and therefore, basically, Indian customers, Indian affiliate enterprises, we would like to drive the growth there and thereby achieve revenue expansion at Renesas. That's the main theme that we are going to address. So what kind of applications are we looking at? Actually, the focus area of ours will still be the same, I think, in. Things. So, it's not going to be significantly different from our overall focus. But within the segment, if things are remarkably complex, for example, if there's a market like Japan or the United States, perhaps we would like to introduce something more simplified in India. At least that will be needed, at least for the time being. I think the easy-to-understand case would be EVs. The automobile markets will increase significantly in India. So, it's going to still be a very important market. This. But in India, the two wheels are now becoming electronic increasingly. So, electrification is happening there. So, in the automotive segment, it's not remarkably different in India versus other markets. But those are motorcycles, the price point difference, and also the spend is different. So, the competitive landscape is quite different. So those will be the target initially. White goods and industrial, I think the same applies. So in Japan, the white goods that are widely used in Japan, compared to them, I think what we would like to offer in India would be more simplified. But we don't see a significant change in the basic requirements between Japan versus India, for example. Right now, many electronics Taiwan or China, those suppliers, Taiwanese suppliers are taking care of those needs. But we would rather like to facilitate the Indian customers to internalize those productions. So we would like to drive that transition and thereby expand the part that we can address. That's the major theme that we are going to go after. So, then what kind of talents will be needed in order to achieve this target? The education and the talents market in India, if you look at that, securing R&D in talents will be very competitive because we will have to compete against many other competitors. But there's plenty of resources available in India, be it hardware or software. The R&D personnel talents in India, there are a plenty of number of people. So how to secure the most excellent ones is the question there. Then the bigger challenge would be from the perspective of developing the right business, the leadership or the management class would be more important. So within India, we would like to secure the necessary human resources or maybe promote the existing human resources that we already have in India, especially those Indian people who are active in outside markets other than India. I think the change that we're witnessing in India right now is different from what has happened in the past. So they might want to go back to India. And I think you are also feeling the same, that this is the trend that we are witnessing right now. So including all these potential talents, we would like to develop a thicker management class. We're not really worried about the R&D human resources because we have a lot of recruiting programs in my mind, including the university approaches. So if we do things properly, we shall be able to secure the necessary R&D people. So the more important challenge will be to establish management class. So we are already starting making efforts there. So we'll try to make progress there overcoming challenges. Thank you. That's it for me. Thank you. Thank you. Thank you. This is Yamazaki from Nomura. I'd like to ask about power. I'm sure that there will be a more detailed business presentation later. But from the corporate side, I'd like to ask a few questions regarding power. In Shinkai-san's presentation, you talked about SiC growth potential. It was a +1 against the market. It used to be +2 rather than +1 in the previous slide. So maybe you are slowing down on the EV-related growth expectations. You talked about the dilutive impact on the margin. So as long as it's not below the 55% level, you will still be stepping up on the automotive, EV. Also regarding this industry, there are many companies that have subsidies. Unless you win the subsidies, it may be quite difficult to win in the competition. How do you think that you'll be able to get these subsidies? I'd like to ask about your overall strategy regarding the power business. Let me first turn to Shinkai-san regarding your question. Then I would like to elaborate. Regarding power and growth of EV, is it going to be single-digit or double-digit growth? There may be some difference, but we have not basically changed our outlook. We plan to and expect to achieve powerful growth going forward. We are making various investments in preparation for that. But it is also true that in terms of the margin or the mix, we need to be quite careful in looking at the impact. On the other hand, by managing cost and investment and the payback timing, we can make various efforts on the front to promote growth while managing the margin at the high level. This is the financial perspective on power. So power and SiC strategy, this is I don't think for SiC, subsidies are making such a big difference, putting China aside. So China is a different market. But aside from China, I don't think the market players are developing new fabs that are funded by subsidies. In some cases, for constructing plants or the fabs, major announcements were made. But actually, since then, many have been withdrawn or canceled. So I don't think subsidies will make such a decisive difference in this market. On the other hand, from our perspective, we would like to provide the full portfolio and sell the solution to customers. So we would like to obtain a certain scale. But it's not that we are going to be growing that. So we want to grow the business, but we don't plan to make this a dominant value. So corporate target 55%, we do not think that the growth in power would threaten this kind of 55% margin target. So on the other hand, we're not saying that for the power discrete, we may be under 55% margin. We're not saying that we wouldn't sell the product without achieving the 55% margin. Based on the market competition, we will go lower than 55% margin. But if power grows to be too big, then it could be discretive to the margin. But we do not think that it will have such a significant impact on the margin or that it will grow such a dominant size. Now, looking at our footprint, we're currently in SiC 6-inch. But going forward, of course, we will be expanding to 8-inch. At some time in the future, we'll be migrating. And for GaN, 8-inch discussion rolls out to expand. Two vendors are saying that they will be launching 12-inch tools in the near future. So if you look at our footprint for 8-inch, we already have one or two locations, which will be converted to wide bandgap. And for the 12-inch Kofu silicon floor, and then there is a separate floor that will be available. So it's not like we're going to be investing heavily in greenfield. Rather, we're able to control the depreciation cost. And using our existing facilities, we are able to ramp up our production. So again, I don't think that subsidies will be that critical. Sorry for my long-winded answer. But in providing our solution, SiC and GaN are both very important. This is something that we can cover with our production footprint. We do not believe that this will be a dominant portion of our company-wide revenue. So even if the gross margin is lower than the company average, as a whole, the company can control all the margin. That is the concept behind our management. Thank you very much. Thank you. We are still receiving some other questions, but we have already reached the scheduled time. So we would like to finish the Q&A session for the first part of this meeting at this juncture. Thank you. Hi everyone. I'm Bobby Mattenpour, Head of Global Sales and Marketing at Renesas. In my presentation, I'm going to talk about our go-to-market strategy, execution, and results we've generated so far. Next slide, please. I'm going to start by revisiting our two-pronged go-to-market strategy to grow and diversify our revenue by going deeper, utilizing our growing portfolio of MCU, MPU, SOC, power, analog, and connectivity to win more sockets per system, increasing our content per board. This will help us diversify and grow our revenue from the product-technology perspective. And by going broader, selling our full portfolio as a solution to a larger number of customers with our sales team directly and in partnership with our distributors, especially reaching out to small and midsized mass-market customers. This will allow us to diversify and grow our revenue from the customer and market segment perspective. And mass market is very key to that. Next slide, please. So now I'm going to talk a bit more about mass market acceleration in this slide and the following, which is critical at diversifying our customer base. But before doing that, I'd like to highlight our four-plus-one go-to-market deployment model, consisting of four global vertical teams covering major accounts in verticals such as industrial, infrastructure, IoT, and automotive. And then the plus one, which is the regional team covering the remaining mid- to small-sized customers, some directly, and some with our distribution partners. This approach continues to pay dividends in not only increasing our design and revenue in the verticals but also helping to accelerate design and in the mass market as the system expertise gained by our vertical teams flows through our larger global sales team, through our system and solution, and regional teams in form of system block diagrams, knowledge that's helping our teams identify, engage, and win every socket and duplicate across customer base. Additionally, these system block diagrams created by our end equipment experts are picked by our system solutions team, refined, and published as Winning Combos or System POCs that are basically software-hardware implementation of our Winning Combos to help drive further acceleration of demand through our sales, distribution, and also published on the web for mass consumption. Next slide, please. This process has enabled us to consistently increase not only the number but the quality of our Winning Combos but also gain necessary insight to convert more and more of these Winning Combos into System POCs, helping reduce time to market for our customers and accelerate adoption of our larger portfolio and growing content per board. Customer success and feedback remain very positive on our approach. We are now sharpening our focus on System POCs as a means to further simplify, accelerate our customer development cycle as they can quickly validate the solution, make appropriate adjustments, and get to production faster, shortening time to market for them. Last year, we surpassed our target of 500 Winning Combos and POCs and strive to reach well beyond 600 this year with a larger shift towards System POCs more specifically targeted for mass-market customers who traditionally lack the resources at the disposal of the larger customers and benefit mostly from our approach. Next slide, please. As I mentioned earlier, we're seeing great success with our approach to Solution Selling. We're seeing a growing number of customers designing and buying multiple product categories from Renesas. The plot on the left of the screen shows the data we have on customers buying more than one product from Renesas, where we see a consistent growth, about 50% CAGR, in customers buying more than one product category with faster growth in customers buying three or more categories. This is a measure of success in going deeper. As shown on the top right, we also see acceleration in e-commerce as we drive mass-market engagement and empower and drive our disti partners to sell an entire portfolio and gain new customers. This is a good indication of our momentum in going broader. Here, we do see a peak in 2022 as during COVID supply crisis, more customers came to e-commerce to find supply. However, we still see solid 25% CAGR from 2020 through 2023. Lastly, on the bottom right, we also see strong revenue growth in mass market driven by our Renesas regional sales team and mainline distributors benefiting from the four-plus-one sales structure, strategy, and focus on Solution Selling and go-to-market with Winning Combos and System POCs. We believe we have very good momentum here. Next slide, please. Now, on the design-win front, which is a good leading indicator of future revenue, here, we also see great momentum. We closed 2023 very strong with 40% year-over-year growth, well above our 20% target, growth led by automotive, mass market, and infrastructure. We also saw strong design-win growth across all product groups with High-Performance Computing, Embedded Processing, and power leading the charge, benefiting from recent investment in new product portfolio by embedded group for mass market, for power, for infrastructure and automotive, and High-Performance Computing for automotive. For 2024, we continue to maintain focus on designing while also pivoting our focus on designing to revenue conversion to ensure we defend and capitalize on our designs in the last couple of years and see them through to production and revenue generation. We are very encouraged with the results thus far, both on revenue diversification, mass market growth, and designing growth. We believe we have set a solid foundation for long-term diversified revenue growth and reaching the $20 billion target that Shibata-san has set forth. Next slide. Let's talk a bit more about the long-term vision from the market segment perspective. At the top for Renesas, we expect to gain share overall, benefiting from our product portfolio investment and go-to-market strategy and execution. We expect to gain more share in industrial, infrastructure, and IoT, leveraging Solution Selling and attached in IoT and growing product portfolio and improving customer user experience in industrial space, both for major accounts and for mass market customers. In infrastructure, we're gaining share and continue to see huge opportunity for us in data center and AI, leveraging our differentiated power, timing, and memory interface portfolio and our strong relationship and existing footprint with cloud service providers, enterprise customers, and the suppliers. In automotive, we see strong design and momentum, in particular with R-Car SoCs and ADAS, MCUs in automotive control segment, and now with healthy power attached as a system sell. Also, with our increased investment in power discretes, we anticipate big gains in EV over the next couple of years, fueling further long-term growth. Overall, for automotive, we see us performing in line with the market in the short term but growing faster in the outer years as our recent design materialized into revenue with customer program ramps. Next slide. Web and Renesas.com would be very important to success for all of what we described so far. Online experience remains a critical pillar of our go-to-market strategy for all customers. We are focusing on ease of use by improving content, content navigation, quick access to documentation, and serving up companion products to complement our Solution Selling approach. We are seeing improving results on Renesas.com with a 25% increase in down funnel activity, showing users spending more time on our site, finding the content more relevant, and taking next steps in their path to selection of devices and design with Renesas. To improve further, we're now investing in AI-powered search to enhance findability and customization of results to end-user behavior for better experience. Next slide, please. I want to now take a few minutes to talk about more specifically about a couple of important regions, region and all markets, first being India. India will be a key focus for Renesas, as mentioned by Shibata-san, both for strategic local investments in R&D, in manufacturing, some of which already have started, and also for demand creation and revenue growth, in particular for locally sourced automotive and industrial market. We see them as big areas of growth with great synergy with Renesas portfolio and investment focus. We also see the India market and customer base very suitable for our Solution Selling approach with Winning Combos and System POCs, given the growing number of small to midsized customers with limited design infrastructure and capability. We want to help those customers win. We want to help them reduce cost of R&D, accelerate time to market, thus reducing their barriers to enter the market and be successful. As Shibata-san mentioned earlier, we're planning special focus on Winning Combos and System POCs tailor-made for the India market, targeting specific segments in automotive and industrial relevant to India, using our growing local India team with support of global infrastructure of Renesas. Next slide, please. Lastly, I want to discuss our China strategy. While we have relatively small revenue in China with China customers, it remains as an important region for Renesas, but needless to say, a very competitive one for all, including Renesas and our peers, given the growing list of local semiconductor suppliers. For success in China, we intend to be very strategic and target by segments. We see automotive as a fast-growing and competitive market where we can grow by engaging with select Tier 1s and OEMs, developing deep partnerships allowing us to get first look, adapt, and support their unique requirements as they aspire to grow in China and globally. We have a growing footprint and existing business with our differentiated SOC and MCU products, giving us an advantage that we will leverage and build on. Industrial and mass market is another area of high interest for Renesas. It is not as big as the other segments, but I expect it to grow rapidly in the next few years. This is, again, a very suitable target for our portfolio and Solution Selling approach with Winning Combo s and System POCs, where we can differentiate by bringing the full solution to the end customer, better user experience, and helping them win and win along with them. For smart appliances space, where we have sizable market share, we do see heavy competition from local semiconductor vendors, particularly in the lower-end models targeting local consumption. Here, our strategy is to defend our position with added focus on the high-end models, those targeted for export, where performance, supply, quality are still valued by OEMs and the end customers. This will allow us to push back on the advances by the local vendors by limiting their playground. For mobile and consumer in China, this is not an area of focus for Renesas. We will play opportunistically with our catalog portfolio and semi-custom products where it makes sense. So, in summary, we believe we can have good incremental and healthy revenue growth in China with our segment-based strategic approach and chart a good path for success despite growing challenges that we see, and our peers see as well. Next slide. In summary, I would like to reiterate that we stay committed to our going broader and deeper to grow and diversify our revenue Solution Selling approach, selling more of our portfolio to a larger list of customers. We're seeing great signs of success, including mass market revenue growth in both e-commerce, mainline distributors, and a growing list of customers buying a diverse set of products from Renesas across multiple product categories. Combined with our great design and momentum, clear market and regional strategy and execution, we believe we are setting a very good foundation for long-term sustainable revenue growth. Thank you very much. 続きまして。 Next, moving on to the next presentation, we would like to invite SVP and GM of High-Performance Computing, Vivek Bhan. Vivek, that's all short. Please begin. Sorry. Thank you. Good morning and good afternoon. I'm Vivek Bhan, SVP and GM of the High-Performance Compute group at Renesas. During this presentation, I plan to provide key areas of our HPC group strategy and the progress that we have made in those areas. Next slide, please. Let me take the opportunity to introduce the focus products that are developed within the high-performance computing team. Develop MCUs and SoCs for automotive compute, as well as compute solutions customized for non-automotive applications like industrial and factory automation. We, as Renesas, are somewhat uniquely placed in automotive with a portfolio that addresses both the microcontroller and the SoC space. Next slide, please. We are investing in areas of growth in the market like ADAS, EV, industrial automation, and our aspiration is to grow significantly in these segments. In ADAS, with Gen 4 and Gen 5 product portfolio, we offer a scalable family of products with different levels of AI integration. In control, we have an expanding portfolio for E/E architecture, including domain and zonal controllers, using both our RH850 and Arm-based architecture families. In EV, we can offer more integrated solutions around our MCUs with integrated analog and power for applications like inverters, onboard chargers, and so forth. We are also building industrial networking automation compute solutions with application-specific customizations. These are all vectors for our growth strategy going forward for High-Performance Compute. I also want to take the opportunity to what Shibata-san shared earlier. I want to address the recent market data showing Renesas losing our leading market position in auto MCUs to a competitor. We acknowledge that. We have faced some headwinds within our leadership position, and we have already taken countermeasures to address some of the gaps that we found in our portfolio. We have taken further steps in our R&D, as well as accelerated our efforts to offer better product-market fit going forward. Next slide, please. From a market perspective, our automotive market view is that global light vehicle production will be relatively stable. However, we see growth in automotive semiconductor TAM based on increased semiconductor content growth per vehicle. We see a lot of opportunities for us to expand our market reach for the market trends that we see in the industry. Next slide, please. A quick view of our financial performance. Our financial performance in our automotive segment that includes high-performance computing, analog, and power has achieved highs in both our revenues as well as in our profit margins. Next slide, please. Let me now talk about ADAS. ADAS is a key segment for focus in Renesas. Revenue growth is expected to outperform the market with our scalable compute family as well as our integrated system solutions. Renesas offers SoCs with various levels of integration. We offer MCUs, sensors, analog power management along with our software capabilities and our ability to provide integrated system solutions. Next slide, please. As we know, Renesas has a long history with compute and safety-oriented products. Renesas offers a full portfolio to cover all segments in the automotive application space with scalable and flexible solutions for all classes of vehicles. Our solutions are also more of open platforms that allow OEMs to build around our compute solutions with their customizable additions for specific differentiation. We are well-positioned with a leading-edge comprehensive portfolio that covers a full range from basic control to real-time applications to High-Performance Computing based on the broad portfolio of MCUs and SOC families that we are bringing to the market. Renesas is also uniquely placed to offer both SOCs and microcontrollers with a similar software framework, a similar toolchain enabling faster and efficient integration, reducing development cost and time to market for our customers. Next slide, please. As part of automotive solutions, Shibata-san mentioned about AI. We are specifically expanding our AI toolchain and capabilities to simplify customer adoption of existing and emerging AI networks to deliver ADAS and AD solutions to the market. Customers desire higher flexibility and faster optimization agility for evolving AI networks and AI applications. We announced the AI Workbench, which allows use of our AI-centric virtual software integrated design environment on the cloud, enabling our customers to build workloads faster and also add their own additional optimization. We also announced hybrid compilers, which now allow for software reuse across multiple archive generations while also enabling the best utilization and performance across heterogeneous hardware architectures. We continue to provide out-of-the-box optimized experience for AI for our customers for enabling fast time to market. Next slide, please. Continuing on our thoughts and vision around AI, software-defined vehicles demand continuous closed-loop hardware and software solution development to build better systems. Our vision is providing a ready-to-use scalable solution in an integrated environment for our customers, which is accessible from anywhere. Using our Renesas tools, we enable access to our boards and reference designs over the cloud for our customers to develop a large set of AI models in a factory-like environment. Our integrated environment will allow a large set of software developers to work on our products and develop applications faster, including safety-critical ones. It allows integrated, comprehensive, and easy-to-use technology framework for customers to build software-defined vehicle solutions using both our hardware and software capabilities. Next slide, please. As we may know, in the past, customers and auto OEMs have suffered longer development cycles and costs due to late hardware and software integration. This has resulted in, in many cases, system problems discovered late causing further delay or undesired trade-offs. To address this, Renesas is continuously investing both in software as well as on the hardware side, so we enable faster and easier integration of software with hardware for real application use cases. With a very strong focus on shift left, we are providing modern, integrated, and unified environments that enable parallel hardware and software development. With our tools and SDK, we accelerate software-defined vehicle development and the time to market for our OEMs that are using our compute products. Also, our open SDK architecture allows OEMs to differentiate by developing solutions and applications on top of our safety-enabled pre-integrated platforms. Next slide, please. Bobby and Shibata-san mentioned about our broad and comprehensive portfolio. Again, to highlight that from auto ADAS perspective, Renesas offers a broad portfolio that covers digital compute, analog, and power. It allows Renesas to start early at the system level, offer more integrated and validated solutions that are better optimized for performance both at the component as well as at the system level. Next slide, please. We discussed ADAS. Let me now take the opportunity to share our progress and strategy on the E/E architecture space. Based on our products' customer interest, we expect revenue growth to outperform the market. Our growth is driven by our portfolio coverage, including central compute, zonal and domain compute, analog, and integrated system solutions. Next slide, please. OEMs are adopting zonal and hybrid architectures for EE with varying compute between centralized and distributed. Renesas offers flexible and scalable integrated solutions that support the needs of focused OEMs, which are adopting this with varying levels of integration. We have a full range of products that are well-positioned to address domain, hybrid, and full zonal solutions with central compute offered with various levels of real-time support and also maintaining our existing software installed base. Next slide, please. For compute, both at the central and zonal levels, Renesas offers a comprehensive product range with 16-bit and 32-bit MCUs using proprietary cores. We also recently expanded our portfolio for MCUs with the Arm-based 32-bit family. In addition to that, Renesas provides fully integrated SoCs for centralized compute. Our compute solutions also allow various levels of AI integration. In addition to all that, we provide a reusable and extendable common software platform and framework to cover all our compute products from MCUs to cross-domain compute to fully integrated SoCs. Next slide, please. My last slide and the key points to highlight: automotive is a key area of focus for Renesas, and we continue to invest and expand our product offerings. Renesas is well-positioned with a flexible, scalable, and open portfolio and platform for ADAS and EE. Renesas offers full system solutions optimized for performance using our digital analog power products integrated with our software capabilities. We are continuously enhancing and augmenting our software offerings, our AI and cloud infrastructure, and the corresponding toolchain for our customers. Renesas has a full portfolio from high-performance SoC to cross-domain compute to MCUs, which also benefits from the same software framework and infrastructure. We continue to have good, strong customer engagements, good market traction, as Bobby shared some of the deals in progress recently, and we continue to expand our partnerships to grow and accelerate the business going forward. That's my last slide, and thank you very much for listening. 続きまして、執行役員兼エンベレッド・プロセッシング担当の、ジェネラルマネージャー、セキ・トシヒコよりご説明いたします。 I am Seki, in charge of Embedded Processing. Please move on to the next slide. Let me start with an overview of Embedded Processing. In terms of our product coverage, we have MCU and MPU. And we have our core product. We have the 32-bit RX and the 16-bit RL78. These are our own core products. And five years ago, we released the RA Series, and these are adopting ARM core. We have the 32-bit RA, and also, we have the MPU RZ Series, which was actually under another team in the past, but now it is under our team, the 64-bit MPU RZ Series. So, we have our Renesas core products and the ARM core products. Now, looking at the 2023 revenue breakdown, we have driven our core products, our RX and RL78, which comprise two-thirds of our current revenue. So these products were released 10 years ago, but these have a very long time frame, so these two still have not reached their peak. So at this time, RX and RL78 still comprise the majority of our revenue, but the newly released RA and RZ are also growing steadily, especially over the past few years. We have a strong traction from our clients. I'd like to explain in more detail in the following slide, but these are contributing to winning new customers and expanding our market share. And toward 2030, we would like to further expand this product. In terms of segments, the so-called mass market and industrial, including appliance, is taking the majority market. Next slide. In terms of our revenue, we are aiming for growth toward 2030, as mentioned by Bobby, of basically doubling our revenue. This has been supported by RX and RL78 and also the industrial segment. But toward 2030, we expect the market to grow at around 7% toward 2030. We would like to achieve an annual growth rate of 10% so that we can double our revenue toward 2030. The basis of this growth is our very comprehensive service to the mass market, the industrial market. So our responsibility is to provide products that are needed by our clients. It's very important that clients are able to find products that are optimal for them. We will continuously update and strengthen our portfolio so that the customers find the optimal products and also scalability. Some of our products are used for even 30 years down the road. We need to continue to provide support for the long term as well as being able to upgrade the product. Scalability is going to be our focal point going forward. One more point I'd like to stress, as Buvna mentioned and as Bobby mentioned, UX, user experience, is going to be key. We would like to have our customers use our product with a peace of mind securely, and the user-friendliness is going to be very important so that the customers can use our product and reduce the time to market. These are the two key points: scalability and user experience. This is going to be the driver for our revenue growth. One more point here, the automotive business, this is RA78, 16-bit. Vivek's product portfolio is going to be the mainstream for automotive. That's unchanged. But the 16-bit low-end, which has been used for control purposes of the body, we believe that in 2030, we will still see the 16-bit being employed. So, we expect a solid revenue from this product going forward. Now, let me talk about the market share. This was already mentioned by Shibata-san and Vivek. But if you just focus on my responsibility, there is some depreciation of yen that has impacted this. But basically, we were flat at 22%-23%, a slight reduction, unfortunately. But as Shibata-san mentioned, if you look at design in, we have very strong, powerful growth. So 2023, 2024, the market situation is quite tough. But if you look at the design in numbers, we are confident that we will be able to deliver strong results. And we have the down sell in 2022, 2023. And we believe that we will maintain our momentum so that we can achieve the 2030 target and continue to enhance our product capabilities. And for RA8 and RX, RL78 and RX, we expect a 30% growth, very powerful growth going forward for these existing products. One aspect of this is the support function. Two years ago, there was a supply shortage, and the market was in a turmoil. But the customers very much appreciated the fact that we were able to continue to provide our products. And the trust that we gained during this time has led to strong numbers. On the other hand, for RA and RZ, we are expecting very steep growth going forward. So RX and RL78, these are the mainstream at the moment. But now we have a track record aligned with these products. So it's going to take some time for these to be fully converted to revenue. 2, 3 years, 4 years will be the time it takes for these design in to be converted into revenue. But there is no doubt that this will be a driver for our future growth. And RL78 and RX, this family is mainly for existing customers with whom we have had a relationship for a long time. But for RA and RZ with the Arm core, these are mostly new customers, especially customers who are using other vendors, switching over to our products. Or when they launch a new product, they have compared our product against others and found that Renesas' solution to be superior. And we have won these design in projects. So in that sense, these are going to be the seeds for our future growth. We would like to continuously support our customer so that we can achieve positive sales expansion going forward. Bobby and Buvna showed a similar slide regarding mass market and the platform that will be necessary to support the mass market. The embedded processing business is one of the core sources of Renesas' earning power. Expanding the customer base through embedded processing actually holds the key to the success of Renesas. In terms of the earning power, we need to be one of the leading sources of Renesas. In that sense, over the past few years, the business profile and revenue profile is something that we have been working very hard on. As a result of that, we have improved our dependence on large customers. The mass market accounts for about half of our revenue. Going forward, we'd like to further expand, especially we would like to increase the number of customers. The method for this, as mentioned by Buvna, is digitalization, providing the toolsets for digitalization. As Bobby mentioned, for the customers who require our support, providing POC and providing the core technology, which will form the pieces for their success. We would like to work in collaboration with the other divisions of Renesas so that we can achieve this growth. This is a map of the strategy that I have outlined. On the left-hand side, these are the product portfolio, these four, for RX and RL78. We already have existing customers, existing community. We need to make sure to respond to the customers' requests and feedback. On the other hand, for RA and RZ, this is significant scope for growth. This will be the driver for our future. For RA, end of last year, RA8, this is the industry's first Cortex-M85 of Arm was employed. This is high-end kind of a crossover to MPU was launched. Additionally, last month, at the beginning of April, RA's low-end was released. This is like 8-bit, 10-bit. But RA8 had been supporting, providing the 32-bit Arm core product. So, in that sense, the RA coverage is expanding from low-end to high-end. And then on top of that 64-bit RZ, we will continue to enhance this product as well. This is the key to our portfolio lineup. And as core technology, microcontroller, we have four technologies that will be key to make us distinctive. So, the sales side is working on POC, winning combination. And these are the core technologies that will be backing this up to make our products more competitive. To be more exact, we have the motor control and HMI, human-machine interface, which has been the key from the past, like touch or video or audio or human-machine interface. These two will continue to be an important differentiator. But in terms of usability, we will be working with different partners to enhance our support functions. And also, AI, machine learning, is being a hot topic everywhere. And we will make proposals toward this market and to provide a broad range of services regarding AI and ML that I would like to talk about later. And so IoT and AI plus IoT, AI, IoT, this will become more prevalent in the market. And security and functional safety will become ever more important for the clients going forward. So this is an area that we would like to provide technological proposals. Then on top of that, we have the user experience. If you break this down, there is find, buy, use, and share that experience in an open community. There are four key elements within user experience. So from here, I'd like to talk in more detail about user experience as well as AI. Now, starting with user experience, we have been working hard on user experience for the past few years, especially focusing on the middle two, buy and use. We have made much effort in terms of buy and use. In terms of buy, we had some negative feedback from customers regarding our sample system. So we have upgraded our sample system to provide free sample systems and the catalog web distributor. We have been working with the distributors, maintaining the necessary amount of inventory and samples so that when the customers want to try something new, to make a trial, they are able to obtain the necessary goods in a short period of time, like 48 hours. Of course, there were customers that we were not able to serve when there was a supply shortage. But now we have a robust lineup. Also for the mass production support, we have been preparing the die bank and having multiple production lines, which has been appreciated by the customer. We are able to achieve a flexible supply structure providing short lead time and having multiple production lines. Although recently, we did not have any major production problems, anything could happen. Of course, the geopolitical changes, tariff issues came up just the other day. So, customers make requests on having backup or sourcing the products from a certain country. In order to respond to these customer requests, having multiple production sites is extremely important. So, we have been able to show a strong track record over the past few years and to continuously enhance our supply so that the customers place more trust with us. Now, when it comes to use, this is the main part of user experience. We have the software platform FSP and also design guide Application Note that can be used to support the development of the customers, as well as the different tools for development. We have been also providing video content for online training. So, for buy and use, although this is a never-ending journey, we have delivered a certain level of results for buy and use. Now, moving on to the next slide. For find and share, we believe that there is still much room for improvement regarding find. We have a lot of documents. But customers say that it's difficult to find the right document. So in terms of the hardware manual, we are going to focus on that. Each manual has over 3,000 pages. And we would like to streamline that, make it easier to understand and access. Also, Bobby talked about AI-based search. AI is becoming widely used technology. And so over the next few years, we would like to enhance AI search or smart search so that the customers will be able to obtain the information that they need in a short period of time with little effort. And for share, because we have been using our own core product, we tended to be quite close. But one of the biggest reasons that we employed Arm's core was to make our community more open. So RA and RZ series will be the growth drivers going forward. And as we further strengthen these products, we would like to emphasize the importance of share, especially since the launch of RA, we have tried to expand our partnership base. We now have more than 350 partners that we are collaborating with. And we would like to further enhance this partnership so that we can provide more robust solutions. And for each partner, they have their strengths in terms of their footprint or other technologies. So we would like to leverage those strengths. And also, we have been working with Arduino for a few years and also ZephyrOS, which is a very popular OS recently. These will be adopted on the RA/RZ series. Also, we would like to strengthen the partnership with GitHub, which is a software repository. But we don't have a lot of history, and the number is quite limited. But we would like to enhance this going forward so that the necessary information will be made available to the customers. Let me turn to AI. So AI has been discussed many times already, so I'd like to keep it brief. But Gen AI is developing at an accelerated pace, and the pressure on the data center is becoming more serious. Some people say that the power consumption in the data center will be about the same as Japan's over the past few years. So, this is not just us, but many other companies are working on moving the process from data centers to edge and endpoints and to have a good allocation of processing in data center and edge and endpoints. And this is going to be key for efficiency. One key will be our AI solution, DRP- AI. I'm highlighting this technology here. But one technology we have is pruning. It's like pruning a tree. To select or screen the necessary information or data. And DRP is a very collective technology. So, as Gen AI evolves, multitasking and parallel processing will further expand. And using our core flexibly to respond to this is going to be an effective measure. So, in terms of power efficiency, using our technology, we can achieve power. So, we will be able to do the same process using the GPU with 1/10 of the power. So of course, there are strengths and weaknesses for each technology. But if you look at the edge and endpoint, these kind of power-efficient solutions or proposals will be very important. The implementation space is limited, and the heat processing capability will be limited. So how can we enhance our power efficiency so that this technology can be realized in the endpoint? I believe that our DRP is going to hold the key. And what is even more important is how we can deploy our AI technology to many customers. On the left-hand side, there are three types of customers. So AI beginner, AI experienced, and AI expert. I'd like to explain using the middle example. We will provide a trained model using different use cases in the application zoo. And the customer will utilize this pre-trained model. Then the customer will also apply their data to retrain the model. Then the model that was developed using their retrained data will use our translator, and the AI navigator will be used for this purpose. So customers who don't have data or customers who've never used AI before can start with the top example using the application zoo's pre-trained model and execute. This will be the easiest step. Then after using this, maybe the customer will gain more experience, and they will want to add their own data set. And that will be the middle example. And for AI experts who just want to implement the AI, then the bottom one can be applied. And maybe the customer is a beginner at first, but they may be an expert in two years' time. So we would like to provide a seamless transition between these three models. The lineup of application zoo. We have about 66. By the end of the year, we'd like to move to 130, and we'd like to expand to even more use cases going forward so that we can provide AI to the mass market. So this is my summary slide. I'd like to emphasize three points. First is the scalable MCU and MPU portfolio. We will be further expanding this with the RA and RZ family. We will be enhancing its performance and low power. The second point is user experience. We will utilize Altium's assets and move one step forward to make it easy for the customers to develop their products and reduce the time to market, which will be integral to the customer's competitiveness. So we would like to enhance user experience and realize this together. The last point is AI. AI is drawing much attention from customers. When we talk to customers, many say that they don't know how AI can be utilized yet, but they would like to try. We'd like to provide a set of tools, solutions, and environments for the customers to easily try out AI and bring to the mass market. This concludes my presentation. Thank you very much. Next, moving on to the next presentation, we would like to invite SVP and GM of Analog and Connectivity, David Lee. David, the floor is yours to speak in. Hello, everyone. My name is David Lee, and I will give an overview of Analog and Connectivity. Next slide, please. Analog and Connectivity is comprised of several product lines. We offer a full system solution of memory interface products for DDR DIMMs, including DDR5 and Multiplexer Combined Ranks or otherwise known as MCR. For timing, we have a very broad and deep portfolio of silicon timing solutions. In connectivity, we support numerous wireless technologies and protocols, including BLE, Wi-Fi, NFC, DECT, and sub-gigahertz, to name a few. With these varied technologies, we can support a diverse set of applications and end markets. We also have a wide range of sensing solutions such as environmental, optical, position, and automotive sensors. And rounding out the Analog and Connectivity portfolio are our custom-mixed signal solutions, otherwise known as GreenPAK, high-rel or radiation-hardened products, and our extensive collection of standard products such as op-amps, memory, voltage references, digital potentiometers, and interface products. You can see the 2023 revenue and end segment composition on the two charts on the right side. Next slide, please. There are several growth drivers that contribute to the revenue increase through the year 2030. In automotive, our connectivity solutions will enable more intelligent wireless communications with NFC, UWB, and BLE. Our sensors will gather the required data for intelligent processing, and our GreenPAK products will integrate various analog functions into our programmable platform, thereby reducing the form factor, power consumption, and cost, in addition to simplifying the design process. For industrial, we offer several reference designs that include products from a wide portfolio of technologies. Combined with our MCU leadership position, we provide solutions that include processing in addition to products from our GreenPAK family, standard products, connectivity, and sensors. In infrastructure, our market share leadership position and content expansion in both DDR5 and MCR DIMMs will drive future growth. And for IoT, we offer very low power, intelligent connectivity solutions that are ideally suited for edge IoT, a market that we see significant growth in over the next few years. Next slide, please. Let's now discuss our memory interface products in a little bit more detail. We see a path to 10% compounded annual growth rate through 2030 driven by several factors. Renesas has a strong market share in AI-optimized servers, and we are positioned well to see growth with the launch of AI PCs. In addition to our leadership position in DDR5, we are also a major supplier of MCR DIMMs, a segment, as mentioned previously, that is expected to grow significantly over the next few years. This allows us to maintain our leading share in both data center and client memory segments. Our global teams work very closely with our partners and our customers to ensure proper support is provided. Next slide, please. One of the key growth drivers is the content increase in both DDR5 and MCR DIMMs. We expect DDR5 to exceed DDR4 consumption in the second half of 2024. Combined with a 3x content increase in DDR5 versus DDR4, we expect an acceleration of revenue growth as this transition takes place. For DDR5, we can now offer a solution that comprises the PMIC, the Temp sensor, SPD hub, RCD, and data buffer. As MCR DIMM volumes increase, we will see even further growth with a 10x increase in content. Next slide, please. MCR DIMMs are a new class of high-bandwidth memory solutions that offer the best value. They are optimized for high performance, capacity, and power consumption per dollar compared to the other competing solutions, as you can see from the table on the right. MCR DIMMs can handle high-bandwidth workloads and provide a significant improvement in memory performance. It is currently being ratified by JEDEC and will be known as multi-rank buffer DIMMs or MR DIMMs. Once it becomes an industry standard, the robust ecosystem of suppliers will enable high growth and adoption given its performance, capacity, cost, and power consumption benefits. Renesas is ideally suited and positioned to benefit from this transition. Next slide, please. Moving on to connectivity. We see an increasing trend of connectivity at the edge, driven by the need to have low power connectivity along with localization and identity. There are several factors driving this trend. First, we are seeing a large increase in adoption of smart devices at the edge, and many of them are battery-operated as they will be untethered. The goal is to have cohesive and intelligent end-to-end connected systems with increased real-time compute and data movement. Because of the increased demand for compute and communication across all these edge devices, data integrity and robustness are required to ensure security to address privacy concerns. To implement this architecture successfully, this requires advanced technologies that we have both developed in-house and acquired over the years. Our advanced technologies, along with our knowledge base, position Renesas well to maximize the growth of connectivity at the edge. Next slide, please. Continuing from the previous slide, let me highlight some key challenges that need to be addressed. Many of the edge devices are battery-operated, so low power budgets are required to ensure maximum battery life. Data communication will increase exponentially when more edge devices are connected. As such, data integrity cannot be compromised. Also, to maximize performance, real-time responses from the edge devices are required. This means latency needs to be minimized. Renesas has a scalable strategy to address many of these challenges. Our ultra-low power architecture found in connectivity solutions extends battery life significantly. Our solutions also efficiently enable localization and identity, thereby helping to protect data integrity and increase robustness. We also have a powerful software platform that enables customers to easily implement our connectivity devices and optimize performance to meet customer demands. This three-pronged approach and strategy allows us to address these challenges and deliver on the growth projections. Next slide, please. The Renesas connectivity product portfolio provides many competitive advantages. As I spoke to before, our ultra-low power architecture uses up to 50% less power than our competitors. For example, our Wi-Fi solutions can run for more than 2 years on 2 AA batteries, and our BLE can run roughly 10 years on a single CR2032 cell. This extends product lifespan, reduces maintenance costs, and improves progress towards sustainability goals, offering a compelling value proposition for customers. We also provide many performance advantages. In NFC, our solutions enable secure communication with the widest margins, allowing customers to increase the range of communications between the point-of-sale devices. In UWB, we double the interference robustness to overcome noisy environments, allowing our customers to be used in extreme conditions with a lot more accuracy. Furthermore, our connectivity products offer highly integrated solutions to reduce the overall size and bill of materials. In UWB, we can typically reduce the board size by more than 30%. For BLE, we integrate power management functions to improve efficiency and an MCU to allow compute and control. In NFC, we eliminate the need for complex matching circuitry. All these integrated features provide our customers with the ability to reduce both solution size and cost. Finally, our easy-to-use software platform allows fast and scalable integration of connectivity devices with our MCUs. This significantly reduces the overall development time and simplifies the implementation process. Next slide, please. With our vast portfolio of products in analog and connectivity, along with our strong MCU position, we can offer customers a solution instead of a product. We call these solutions winning combos, as you heard earlier, and we currently have more than 500 of them, and they continue to grow very quickly. For every MCU we sell, we can bundle products such as interface, timing, memory, connectivity, GreenPAK, sensors, and so on, depending on the application and use. The benefits are huge as it simplifies the development process for our customers and at the same time maximizes Renesas content per application. We see a potential to expand the SAM by JPY 300 billion per year with this approach. Next slide, please. In summary, Analog and Connectivity is positioned for strong revenue growth through 2030 driven by several key factors. In memory interface, we see solid revenue growth due to the DDR5 and MCR ramp as both DIMM products have significant content increase. For connectivity, our differentiated products and competitive advantages position us well to maximize revenue as connectivity at the edge increases. Our solutions can address the challenges brought forth by this architecture, and our teams are ready to help solve our customer needs. Our solution cell or Winning Combos offer our customers solutions to reduce development time and cost. By leveraging our strong MCU position and our broad portfolio in analog and connectivity, we provide solutions instead of just products. Finally, we have an easy-to-use and flexible software platform that enables our customers to quickly develop and optimize their products. Similar to Winning Combos, this allows our customers to reduce development costs and get to market much faster. As you can see throughout this presentation, analog and connectivity is positioned well for long-term growth. Thank you. [Foreign Language] Thank you very much. Next. Over to you, Chris. Hello everybody. My name is Chris Allexandre, and I'm the General Manager of Power Group in Renesas. I'm very excited to share with you today not only our strategy but the growth journey we have ahead of us. Next slide, please. See, this is the first time we are presenting to you the power business and the summary of our portfolio and market exposure. I'm going to start with a comprehensive summary of our business. As you can see on the top left, we have a comprehensive portfolio coming from various acquisitions of companies with very strong power heritage. This comes from engineering talents, technologies, and IP that we've now combined under one roof under power. We have not only combined them, we have actually integrated them to a much deeper level, creating scales and enabling our growth through innovation, portfolio expansion, and solution. I will detail that in the next few slides. The portfolio ranges from integrated power management IC or PMIC, computing power, which is digital controllers, power stage, and other products that we use to power MPUs, SoCs, as well as GPUs. The battery management with fuel gauge, BMIC, charging, and USB, discrete and wide bandgap with MOSFET and IGBT that we are expanding now to silicon carbide, as well as last but not least, a growing catalog portfolio made of controllers, drivers, DCDC eFuses, and many other products that we sell in the many markets. As you can see on the bottom left of that slide, the product portfolio is used across many of the equipment that are driving semiconductor growth today and, in the future, enabled by the megatrend on data, electrification, and energy efficiency. Our current revenue is reasonably diversified, and what you will see is we're going to take that diversification to the next level, both in terms of product and segment exposure. For instance, you can see that the segments like infrastructure AI or EV or even industrial are today a modest part of our revenue, and that will drive a lot of growth in the future. Next slide, please. We talked about a comprehensive portfolio, and the strategy that we have is to continue to expand that portfolio to give customers more options to serve in all the markets. We believe that technology will coexist in power and in multiple applications depending on the power requirement. Specifically, we are very committed to wide bandgap as we believe it's going to be very critical for power delivery in the next decade, and we are committed to expand that portfolio. We actually announced, as Shibata-san talked about, the acquisition of Transphorm, a GaN company, a couple of months ago, and we are expecting to close that transaction in the coming months. This is a fundamental step in that strategy to continue to expand our wide bandgap portfolio. This is not only opening up a new SAM for us of $13 billion by 2030, which is untapped. It's enabling us to give customers options and expand our portfolio in all the different markets that we serve, as you can see on that slide. This is also a great example of the solution strategy which I will detail and which my colleagues have talked about, where we combine more Renesas products together to deliver more value to our customers. On day one, we're going to have more than 15 Winning Combos, including 8 proofs of concept, real board implementation, combining the Transphorm GaN specs as well as our controllers and drivers, which shows the power of providing a full solution to our customers. Next slide, please. In terms of strategy, we have three focus areas. Number 1 is infrastructure AI and computing. Number 2 is automotive, EV, as well as any other application in the automotive space where we can increase our content, as well as industrial, which is made of several subsegments from home, industrial automation, renewable energy, and many broader applications. The strategy is around two axes. The first axis is what I call the vertical axis. This is laser focus on those very fast-growing. particular, infrastructure, AI, and computing, as well as automotive, where we have dedicated engineering teams, both design and application, working with Bobby's sales and FAE, which are deployed by segment, to provide customers through a center of expertise, dedicated, tailored bespoke solutions that will satisfy their needs and innovate. We are working through the winning combo concept to take that to a lot more customers. The second axis, which is rather new but also very well fitting with the overall strategy of Renesas, is what we call the solution and attach axis. This is basically, essentially, leveraging Renesas assets and footprint to scale and offer customers a full solution. We do that by two means. One is to make sure that we power any of the digital products that we've talked about from the MCU, the MPU, and the SoCs, and I will detail that in the future, as well as any power analog product we have to make sure that we combine and provide more solutions to the customers. As I said, we do it two ways. On the MCU, MPU, and SoC, we are developing a variety of PMICs as well as other catalog products that we combine with very tailored solutions, going up to validation and full design for the customers so they have an easy way to implement those solutions, as well as making sure across the board we provide reference design. For our own product, the analog and power, we always look at expanding our catalog portfolio to make sure that we can provide Winning Combos to our customers. Again, just not expand our SAM but help our customers to have an easier life. Next slide, please. This strategy is aiming at more than tripling the power revenue between now and 2030. This will be driven by multiple segments, but as you can see, the fast growth will come from infrastructure AI, EV, and industrial, which will really drive this accelerated growth on top of other segments that will continue to grow but yet at a more modest pace. The overall theme of our strategy to grow is diversification and consistency. I talked about the importance of this comprehensive portfolio, and you can see on the right side that this diversification comes from selling more product into the same segment and providing more vectors of growth into each of those segments. I talked about the opportunity that we have combining more product around the GaN, but you can see as well that we're expanding discrete way beyond automotive into industrial and infrastructure, as well as expanding the catalog portfolio to serve all those markets. This will drive a significant change in terms of product mix. I talked about the product mix at the beginning. This will basically change completely and result in a much more resilient and consistent growth business. Infrastructure AI and EV will have the highest figure, nearly 2x our overall growth for the power group, followed by industrial, as well as IoT and other automotive that will be in the high single digit. Overall, power balance between automotive and non-automotive will remain the same, but the exposure to new markets like EV and infrastructure will be a lot bigger, followed by industrial and IoT. Same on the product mix, where we expect that 2030 our discrete and complete compute portfolio to be a lot more significant to our revenue. Next slide, please. Next slide, please. Talking about infrastructure and AI and data centers, we have a large and growing opportunity for Renesas across multiple applications, not only with existing products but also with new products we're developing but also given the change and the evolution of that market which I will detail. For traditional High-Performance Computing applications, racks of equipment, servers, switches, storage range typically between 10-25 kilowatts. With our current product, which we're addressing, that business between the multiphase DCDCs, controllers, power stage, 48-volt power distribution, vertical power, and DDR PMIC that Devin talked about, we can address up to $700 per rack with those traditional systems. AI is changing this. AI systems demand significantly higher power and create a much larger SAM. NVIDIA announced this year at the GTC 2024 that their new Blackwell-based rack will be up to 1,200 kW, which is 5-10x bigger than any other system today. We see that trend to continue across any other GPUs and SoC, creating much more needs and a much bigger opportunity for us. With the increase of the content in AI, the new product, as well as the expansion of our portfolio, we think we can address up to $2,200 per rack, which is a significant opportunity for us, and you can see more and more product going in that market. Next slide, please. Now, we're not new to that business. Renesas is well established in the server enterprise and infrastructure space with data centers, and we continue to win for multiple reasons. Number one is we are known for digital controllers' leadership. We were one of the pioneers more than 10 years ago to introduce those digital controllers that really kind of make a big difference for our customers. Customers value our innovation, our high performance, and the fact that we provide flexibility and programmability, which helps them get the best and increase their SoC performance. We're also valued because we provide a full solution, again, optimizing our power stage with our controllers to deliver the best value. Less known and less visible, but as more critical, our solutions are designed and optimized for hyperscale CSPs. What this means is we provide extensive diagnostics, telemetry, and other remote management capabilities software tools that we provide to our customers. This helps those CSPs that are managing very complex, large-scale deployments to basically manage the complexity, and this creates a lot of stickiness between our engagements. We're also one of the few companies that bring innovation, quality, and scale. Renesas has shipped nearly 3 billion units of power management IC in high-performance computing applications, and we continue to be recognized for resilient quality as well as reliability, which brings resilience to our business. The broad adoption of our portfolio today and in the future is a clear evidence of that. As you can see on the right side, we pretty much work and are engaged with any customers in the AI and computing space, as well as across multiple applications from CPUs, TPUs, GPUs, and ARM servers, and even going to all the SoCs and cloud providers. Next slide, please. Let's talk about AI. I mentioned the fact that AI is really a disruption and changing the game. We see exponential growth for AI attached power, and the SAM is going to be significantly impacted. Why? Number one is AI SoCs require a much higher level of power, and that will continue to increase at a much faster clip than any CPU in the future. You can see on the left side, the current high-end CPUs range about 500 W per SoC, while the current AI GPU is already at 1.2 kW, and that will grow 2-3x to next generation. More power consumption leads to more power content and more power to SoCs. You can see on the right side that CPU power ranges around $20-$40 per SoC this year, while AI will be in the range of $75-$200, significantly higher. Number two is AI is requiring a lot more integration and density, which basically increases the ASP. We see 3-6x per amp increase in many of those AI systems versus traditional infrastructure. Last but not least, as you can see at the bottom left at the bottom right of the slide, we see the growth of AI SoCs to continue throughout the next few years at a 20% figure and significance. If you put higher power content, higher ASP, and continuous growth, we see clearly exponential growth in the AI attached power computing, which is going to change the dynamic of the business. You can see that the overall SAM for compute power is going to grow about 20% figure for the next few years, while the AI contribution will grow nearly 50%, being almost two-thirds of the business in the next five years. Next slide, please. On top of AI infrastructure, we see a growth in AI in mobile computing and clients. The introduction of AI PCs with local inferencing and accelerated inferencing will be a change in the personal a big change in the personal computing. Shipment of AI PCs are expected to grow to nearly 70% of the market by 2030. This creates disruption in the power architecture that has been used so far, which benefits Renesas. I talked about at the beginning how we combine all those different technologies to create scale. This is one of the great examples. To increase inferencing performance, the SoCs are adding new computing engines, one of them being the neural processing unit and HBM memory. A new CPU will be introduced this year that will deliver with a new NPU 4x inferencing performance versus previous generation. Although the power architecture, the power requirements remain the same, the architecture of adding NPUs and HBM is changing a lot, and that, again, benefits Renesas. This favors a new approach, which is adding not only a PMIC on top of traditional VR. Renesas is strong in PMIC, and that plays to our strength. We actually have developed a unique PMIC that will be embedded in many of the AI PCs that will run throughout this year. We see a very strong design engagement. We have a very strong partnership with one of the CPU vendors, and we see today 30 customers' platform being designed that will run at the second half of this year. We believe this is here to continue and here to deliver nearly 2x the potential content into traditional computing versus historical implementation. Next slide, please. Now, between the market, the application, the portfolio, and the customer engagement dynamic that I mentioned, we are very excited and very enthusiastic about the growth potential that we have in the computing power, as you can see on the right side. This is really about layering three vectors of growth. Number one is what I call the foundation. As I mentioned, we are today in a significant engagement with many of the CSPs and enterprise servers. That will continue to grow at a high single digit to low double digit through continued expansion of our market share, which is about 25% today. We expect it to be 35% in the next few years, coming from increasing content generation after generation and deeper customer engagement. I talked about the layer coming from AI clients. As I mentioned, this is starting this year with 30 AI PC platforms in design that will run in the second half of this year and drive growth in the next two years. As I mentioned in the earlier slide, we believe we can power 60% of the AI PC in the next 18-24 months. Last but not least, the acceleration coming from the AI infrastructure. As I mentioned, higher content, higher ASP, fast unit growth will drive accelerated growth for us. We are already shipping to multiple CSPs. We engage with one of the major SoC providers, and a lot of active design is ongoing as we speak that will drive significant growth for the next few years. That will basically help us to grow this sustained growth for the future. You can see on the right side that we'll be able to drive up to 30% figure growth in the computing power business with this acceleration coming from the AI that will be nearly 50% figure. Next slide, please. Switching gears to the automotive, here, it's a complete portfolio play, and our solution offering is really giving us a great position. There are two paths for us to grow in auto. Number one is expanding our solution and portfolio regardless of EV or not. As I mentioned earlier, we serve EV as well as other applications in the automotive as long as we can continue to grow the content. We are leveraging here the great presence and the market share of Renesas into MCU and SoC by pulling through standard catalog product as well as up to functional safety PMIC, providing full solution to our customers and making it easier to use and ease of use and a scalable platform. We're also expanding discretes, wide-bandgap, battery management, and IGBT to make sure that we provide more content into specification. There's no doubt that EV will be a fast-growing market. Despite the slowing down of the expected growth, it's still a big opportunity that we have ahead of us for the next 5-10 years, and we want to capitalize on this. Our product can serve OBC, DCDC, as well as inverters and battery management, and we are ready to support the customer's innovation through the next few years. Next slide, please. In discrete and wide-band gap, the overall scheme, the overall theme is expanding portfolio, diversify portfolio, and build scale in a calibrated and consistent way to support our growth. Number one is diversification. Our portfolio has been historically more engaged in the automotive space, but that product we are taking now to industrial, and I've started that in the last few years and now accelerating. You can see on the slide that we are deepening the engagement on the industrial side with many more applications, as well as driving geodiversification, engaging with new customers in different territories like North America, Europe, India, and South Korea. Growth in EV is important. Two things, silicon carbide, I will detail that in the next slide. We are building an offering to be a significant player. We are currently in the designing phase for both automotive and industrial, coming from our 6-inch fab in Takasaki, delivering soon our Gen One devices, which are planar topology that will be in production 2025, while we're working on the next generation trench base, which will target more advanced applications by 2027 and beyond. Now, EV has a lot of cost pressure, and IGBT remains key to serving that market, which requires performance and best cost. We've made the decision to transition our IGBT to a 12-inch facility, Kofu, which we have made the inauguration last month and plan to ramp in 2025. We also just ramped, as we speak, IGBT in Naka, 12-inch facility, to basically sustain the demand of our customers and are getting POs and shipment as we speak this quarter to serve those customers, to continue to expand that business for the next 10 years. Next slide, please. Now, I talked about IGBT. Over the last few years, we've seen an acceleration of our IGBT designing, and even more so in the last 12-18 months. We get very good feedback from customers, both in terms of performance as well as cost. You can see on the right side the acceleration of this designing as well as the diversification to industrial, which I talked about. In the middle, you see the diversification through customers and diversification. We are expanding in automotive to new customers and new applications and new geography. In industrial, we are expanding into a new segment like renewable energy, HVAC, and home appliances. On the right side, you can see this new designing, how they will contribute to our revenue and shipment over the next few years. The momentum is real, especially starting next year with the coming online of Kofu. We are very confident we're going to continue to expand our IGBT business for the next 5-10 years, complementing our silicon carbide and wide-bandgap exposure. Next slide, please. Last year, we talked at Capital Market Day, and we announced our plan to introduce silicon carbide. I'm very pleased to announce today that we've made a lot of progress. First of all, our 6-inch Takasaki fab retrofitting for SiC is well on the way, and we expect it to be completed next quarter. As I mentioned, the samples from Takasaki, as well as the demo tools and the solution we are developing, are basically performing per spec, and will be delivered in the hands of our customers in the coming months. Like IGBT, our ambition with SiC is to serve multiple market segments to make sure that we build a very diversified portfolio and diversified business that will grow for the next few years. To support that growth, we also signed a $2 billion wafer supply agreement that will help us to grow that plan for the next few years. The first-generation planar SiC MOSFET that we are delivering to customers gets good feedback, is seen as in the pack. The positive feedback we are getting is in our differentiation from lowest RDS(on) over temperature, coming from the expertise in high-quality manufacturing from Renesas and the engineering talent that we've pulled in that business. We'll continue to develop, and we expect to reduce that RDS(on) by 40% next year in the next few years, as you can see in the next generation, as you can see on the right side. We are very confident that we will build the right step in a very calibrated, balanced, and structured way for long-term success and to support and to enable the EV inflection that we're going to see starting 2027, 2028. Next slide, please. I talked about the importance of solution and how we are basically having this driving this solution attached access, and I wanted to spend some time on this before I conclude. As I mentioned, the first number one approach is to leverage the amazing footprint of Renesas in MCU, MPU, and SoC in auto and beyond automotive, as Seki-san talked about. Renesas ships nearly 4 billion of those digital SoCs, MPUs, and MCUs per year. It's an amazing opportunity for us to attach our power devices. We do it two ways. For the very complex devices, we're actually developing dedicated, tailored, validated PMICs, including functional safety that we provide in a chipset solution way to the customers, reducing any of the burden for customers to implement both SoCs and MPUs. For the less complex MCUs and MPUs, we provide a more catalog portfolio through reference design and Winning Combos that, again, helps our customers to pick and choose to be able to power those devices. In other markets, it's the same. I talked about the diversification coming from using more of our product and developing more product to serve all the key markets where we have pull. I refer to the opportunity in AI infrastructure, where we have a significant position, a great opportunity to expand through our access to the customers. We've seen that already by being able to design a catalog 48-volt IBC into one of the largest SoC vendors, and I'm very excited about the opportunity to take our discrete business into infrastructure in the future. We also have a deliberate focus on making sure that anything we provide as Renesas should be analog, should be power, that we develop products that can attach to them. I mentioned Transport and our drivers and controllers, but there are many examples where, again, we are making sure that every time we sell one product, we enable solution for our customers. This is not just about expanding our SAM, expanding our SiC. It's really making our life of customers easier, tagline from the company, a real implemented strategy. Next slide, please. This is my conclusion. As I talked about, we have a comprehensive product portfolio coming from IP and a very successful engineering team coming from various acquisitions. We are really scaling it and putting it to the next level. I gave the example of AI PC where we're combining those two technologies. What you're going to see is more product, diversified engagement across multiple segments. I talked about the steep growth coming from the diversification, but also the drive from two vertical segments, both AI and infrastructure, that will really accelerate our growth for the future on top of the solution and attach pay with high detail. I talked about the acceleration in AI, which is real, which is today, starting this year, very strong momentum both into the clients as well as the infrastructure. In high voltage, we continue to build a more balanced and growing portfolio to win in auto as well as to build our accelerating line in EV. It's a balanced, calibrated, step-by-step business plan with more product, more application that we believe will deliver long-term success. Last but not least, as my colleague said, solutions in Renesas are not an afterthought. Renesas is developing solutions, and everything we do is about how we deliver more to our customers and combine more product together to make the life of our customers easier. Thank you very much. [Foreign Language] Thank you very much. Meanwhile, I'd like to move on to the Q&A session. In this Q&A session, Bobby, Vivek, Seki-san, Davin, Chris, and Shibata-san will handle your questions. If you have any questions, please indicate by the press of the raise hand button that you see on your screen. From those who raised their hand, the MC will nominate the questionnaire in order. If you're nominated, you'll be allowed to speak, so please unmute yourself and begin your question. In the interest of time, we would like to limit the number of questions to two questions per one questionnaire. All right, so we'll begin with UBS Securities, Yasui-san. Please begin your question. Please unmute and start your question. [Foreign Language] Yasui-san, we cannot hear you, so we are sorry. So, if you can repeat your question, that would be appreciated. Can you hear me now? Yes, we hear you now. So, let's begin. My first question is for Mr. Seki. My impression is that the Altium's benefit will most benefit your business. So, the Altium's characteristics is that they have a very broad customer base, and the SaaS channel is based on cloud, according to my impression. So, what is your expectation from Seki-san, your viewpoint? What is the potential of customer base expanding? If you could just share that point, that would be appreciated. My second question is for David and also to Chris regarding a data center market. You have a plan to increase the market share, but will it be driven by capacity, price, or what is the element that will drive the growth? Because the customers are very difficult customers, hyperscalers in many cases, so perhaps capacity commitment will be difficult for you to achieve this growth. Therefore, how do you think you'll be able to expand the market share on a continuous basis, especially in the area of memory and PMIC? If you can elaborate on that point, that would be appreciated. Okay, we'll begin from Seki-san, and then in the order of question, David, and then Chris. That will be the order of answering. Would that be okay? There are so many people involved here, so we will make sure that one person will not consume so much time, so please try to answer concisely. Okay, I'll try to answer in a very simple my simple answer is that we have a high expectation for customer base expansion. To my embarrassment, actually, in order for us to leverage Altium, originally, the variety of our products on their product was limited in the first place. Since last year, we started making efforts, and all the products that we have were incorporated on their platforms. That was a very fundamental thing, but we started from there. This will happen only after the completion of the acquisition, but the customers that they have a reach with, we'll try to even accelerate our approach to those customers so that we can expand our customer base. And those customers that were beyond our reach, we'll try to access them again. And if we are able to do so, we shall be able to expand the customer base exponentially. That is actually the mass market strategy that I talked about during my presentation. I think this will further drive and accelerate the reach for us. Okay, so the cloud and data center about our growth. First, from the memory perspective, Davin, if you can, Davin, can you answer the question first from you? Yes. So the growth in infrastructure for memory is more than just capacity. As everyone knows, AI growth is continuous, and our growth there is with content increase along with the market growth. Not only are we benefiting from the growth of AI, but we're benefiting by selling more products into those segments, whether it's the server side or the client side. In addition to that, as AI demands continue to increase, new memory technologies will come to fruition. And as you can see from what happens from DDR4 to DDR5 and now with MCR, our content continues to increase over time. From a capacity perspective, we have long-term partners that we work with to secure capacity, knowing what kind of growth projections we have internally. The way I would add to this is, number one, as I mentioned earlier, we are not new to that space. Renesas is a significant power and PMIC in the memory supplier into the infrastructure, CSP, cloud service providers, as well as enterprise servers. On the power side, we have about 25% market share with very strong product and quality. And we expect to continue to increase that market share through continuous support of those customers that are very satisfied with our quality innovation. But as Davin said, the AI is really changing where it's not anymore about just serving the customer. It's about innovation, and it's about speed. This disruption is giving us an opportunity with more power content for each of the systems and speedy execution to really capitalize what I call the AI Gold Rush, which is happening as we speak and for the next few years. [Foreign Language] Thank you very much. Would there be anyone with a question? If you have any question, please use the raise hand button. [Foreign Language] Of course. We would like to entertain questions for any topics that were raised in the first half today. [Foreign Language] We will now take a question from Takayama-san from Goldman Sachs. So Takayama-san, please unmute yourself. [Foreign Language] Thank you very much. So I'd like to ask my question too. So for SiC, there's one thing I wanted to confirm. So in this past 12 months, I do believe the business environment has changed, be it price, demand, supply. I do believe there's been a lot of change. And so when we look at this, your approach. How do you think you would be able to enjoy your advantage? Yes, you talked about contents. Is that going to be your important point? And also, how you'd be able to collect back the investment. How are you going to measure the payback period? Are you going to wait till when you'd be able to create a positive business? How do you measure that? Yes, thank you very much. Maybe, Chris, you'd be able to answer that question. First of all, you mentioned the environment for EV has changed over the last 12 months. And if that had actually an impact, it's actually to help us. And as I mentioned, we are very deliberate in building step by step, in a very calibrated way, our technology and the capacity that will support that technology. So the slower outlook for EV growth is actually an opportunity for us. It will impact more the competitors that have put huge capacity upfront. How we measure success? Well, we measure success from customer engagement, feedback on our technology, as well as designing. And as I mentioned, we are today delivering our first generation, getting good feedback. In the next 12 months, we expect to see the start of designing more in some application and building from there. So we expect to build that business over the next few years. That's my answer. [Foreign Language] Yes, thank you very much. Be it silicon IGBT, I think we're always talking about the same theme. Just like we've heard from Chris. It's not like we're trying to take 30% of the world or half of the world market share. It's a step-by-step approach looking at what capacity that we'd have. Again, it's a step-by-step increase in the production capacity, for example. Even if the market would slow down a bit, that's not really going to change the payback period or the utilization that we'd be able to enjoy. Of course, when it comes to price point, we still do have to be careful. At the same time, for example, at least for SiC, most part of the cost is really about substrates. If that part of the market improves the overall finance, it's probably going to make sense for us. It's not going to deteriorate. We're trying to be careful in taking this approach, which I do believe enables us to enjoy the pace of the market or actually the business environment. So it's just like we said. Thank you very much. So there's a lot of 8-inch shift, and that's been a bit slow. And that's what caused you to lag behind. But for example, if it's for procurement, you've been able to have this advantage of Wolfspeed now in terms of procurement now. And of course, you're going to go through a step-by-step approach in scaling up your capacity. But looking at what you'd be doing, do you think that's exactly the edge that you're able to enjoy versus the peers, especially when you compare yourselves with the peers? So thank you. Chris, do you think you'd be able to answer that question too? Yes. So first of all, as I mentioned, we're actually enjoying the benefit of retrofitting an existing fab, 6-inch from Renesas in Takasaki, which helps us to enter in that business without a significant upfront cost. We are looking, obviously, for the next generation at 8-inch. We have not finalized our decision yet, which would be more around the 2027-2028 timeframe in terms of volume production. So we actually believe that this is a wise strategy, as Shibata-san talked about, which is to build consistently that business ahead. [Foreign Language] At the same time, I'm sure things will change in the end. But 8-inch substrates, at this moment, it's not really going to give you cost-benefit today because there's a lot that needs to be done. 8-inch substrate and 8-inch device, you need to have enhanced maturity. Otherwise, you will not really be able to see a cost advantage. So not yet. And within the time horizon that we have, I do not believe there is going to be any disadvantage we'd have to see albeit the pace. Thank you very much. [Foreign Language] Thank you. Next question is Mikio Hirakawa-san, please. [Foreign Language Please unmute. [Foreign Language] Thank you. I'm Hirakawa of BofA. I have two questions. First question may overlap with the previous question. Regarding power, design in is a very good. [Foreign Language] Design in is having a lot of momentum. So for 23, IGBT, design in is progressing. That's page 13. So what are the applications for this? And geographically, where do we see big growth, if you could elaborate? That's my first question. And my second question is regarding sales and marketing. You talk about the market share. And there was some reduction in market share. Maybe that there was a weakness in marketing. But now that you're trying to expand market share, what changes have you made to your marketing approach? That is my question. Your second question was regarding microcontroller, MCU. Yes, especially for automotive. If there are any marketing approach changes for automotive, MCU. Let me just clarify first. It's not that we had a weakness in marketing. It's more about the product definition. It's not the spec. I think we moved too fast. But. I'd like to ask Bobby to respond later regarding any changes to sales and marketing. Then regarding Chris, I'd like to ask for IGBT, which segment, which geography, if there's any characteristic you can highlight. Then regarding automotive microcontroller share recovery, I'd like to turn to Bobby. So Chris first. Yes. So in IGBT, as you could see in my presentation, the growth of design wins is coming from two aspects. Number one is diversification to industrial, which now represents a significant part of our design wins. And I mentioned a few applications like HVAC and home appliances and a few others, and renewable energy. As well as in the automotive side, it's not new application because we've been serving a lot of the classic applications in the automotive. It's really taking it to new geographies, and you mentioned that. And we have real success in Europe, in North America, as well as India and the rest of the world. So we see a very strong momentum in Europe as well. As a matter of fact, we just closed a significant design win with one of the Tier 1s in Europe in an exciter application. So, we see really about diversification in application as well as going to industrial. That's my answer. North Korea isn't as good. South Korea did. Not North Korea. He said South Korea, but not South Korea. Minor difference. I'll take the question on the market share and MCUs. So as Shibata-san mentioned, this is not related to marketing, but about having the right product at the right time, which was the case that we did not have a few years ago. That's where, over 2-3 years, we did lose share. And the results of that, as it takes a while for automotive platforms to go to production, we see that now. So that's the delay effect. On the positive side, you've seen in the data we have shared, we have had great momentum with the MCU designing over the last 2-3 years. And we believe those will help us recover that market share in the next 3-5 years as our end customers ramp to production. No, no, no. What did you do to increase the design in terms of sales and marketing? Well, first of all, it's the release of new products that better fit what customers need. We have also been engaging very closely with customers as we saw the share losses. So deeper engagements with Tier 1s and also dedicated support for OEMs globally that allowed us to also influence some of the decisions by the Tier 1s from the OEMs as they get more involved in making the decision at the architecture level. So, a two-pronged approach, engaging with Tier 1s and influencing decisions and engaging with OEMs globally. [Foreign Language] Yes. So, as Bobby mentioned, this is something we have been doing from the past, but especially 2021, 2022, we have deepened direct dialogue with OEM more broadly and more deeply. We are engaging with OEMs. And so, this, I think, is a big turning point for us in coming back from the share loss. Previously, we had really bet on the mega tier one. That was our product definition, focusing on the mega tier one. We still have that perspective. But how will the OEMs adopt this product? Now we have that kind of a broader perspective. So compared to the past, perhaps we can say we have less risk, less volatility product development. Thank you very much. [Foreign Language] Now, moving on to the next question. FMR, Michael Reznikas, please begin your question. Please unmute and begin your question. Hi. Thank you for the presentation. In terms of the point on the AI gold rush, can you just talk about where you feel you have market leadership in terms of GPU, CPU, and IoT markets? [Foreign Language] All right. Chris, please begin. Chris. I think it's a bit too early as the market just really started to declare market leadership. What I can see is on the client side, we are clearly the innovator, okay? And we're the first one to capitalize on the disruption with the AI PC, combining PMIC and VR. On the SoC side, we are engaged today with leading CSPs as well as SoCs. So we are clearly among the top in terms of engagement from an AI perspective. Yes. Great. Thank you very much. [Foreign Language] All right. Thank you. [Foreign Language] Next, we'd like to take a question from Yamazaki-san from Nomura Securities. Please unmute yourself. Please. Yes, thank you very much. This is my second round to ask a question. So automotive MCU, maybe it's related to this, but EE architecture. And going beyond that, I feel like it's slower than I thought, but instead, it's going to be light MCU. There's going to be more portfolio. And I think this is something that's been happening for the past 3 years. And back then, there weren't much MCUs, but then it started to increase. I think it was like 3, 4 years ago, there's been some shortage. And of course, the number of MCUs, like 3 or 4 years ago, we've been hearing about how it's supposed to expand. But on the other hand, EE Architecture, in terms of function, if it doesn't go well, I understand if that happens, then MCU numbers will increase. But then from here off, if EE Architecture is supposed to be developed, does that mean the number of MCUs would decline? Is that the scenario? But of course, we don't know. The functions enhancement versus the architect or MCU numbers, is there any correlation here? Well, thank you very much for that question. Maybe I think you should answer that. So, E/E Architecture, as it develops, what's going to happen to the number of MCU? In other words, MCU demand, is there going to be any implementation? Because E/E Architecture, I mean, what's that going to impact our automotive side of the business? So, Vivek-san, please. Thank you. Thank you for asking that question. As far as E/E architecture is concerned, we are seeing all flavors of E/E architecture, as I presented before. The original domain architecture, in some cases, OEMs are carrying some of that domain and adding some zone components to it, and then a progression towards complete zone. The amount of content that gets integrated in the MCU based on what type of architecture you adopt is different. From a Renesas perspective, we have a product portfolio that caters to all these hybrid combinations, full zone, some zone plus domain, or pure domain. We are well positioned to service the different needs from an E/E architecture perspective. As zones become more prominent and hybrids become more prominent, there is more integration of content happening within the MCU. So we are seeing that as an exciting change, as more functions get added to automotive and the zonal architecture controls it, there is opportunity to have more content size from a pure MCU perspective. As for the question on total number of MCUs, from the data we have seen, we don't expect that to significantly change or grow. It will grow at a reasonable pace, but not significant pace. But what will change is the type of MCUs that are used and the type of IP and innovation that gets integrated into those products. [Foreign Language] Yes. And if I may also add a little more to what Vivek just answered. So especially what's happening around our MCUs, so E/E architecture, domain, zone, rather than the evolution around there, for example, if it's 28-nano MCUs, there's like a cross-domain concept, and there's going to be a little more kick-off there. In other words, a richer MCU, if there's going to be provided, that richer MCUs, if you will, can be provided into various areas. So, this one MCU, if it's richer, could be used. So that's exactly what we explained earlier. So that's something that we introduced with this mega OEM. But then when we tried that, of course, there's a lot of issues around cost. And we then found that instead, instead of that rich MCUs, per-function MCUs started to become required. So in other words, our expectation to MCUs, it wasn't that we hit it wrong. It was just this integration of MCUs sort of go around in some of the more different way that there was this different shift in these functions around MCUs than we initially had been thinking. So the number with centralized computing, it's not that we'd be expecting a decline in this demand of MCU numbers because we still find that part of demand be robust. There will still be a growth. And that's really the thought that we've maintained for the past few years. Thank you very much for your response. And my second question, it's about server power supply. So we heard about power contents. And yes, there's going to be an increase in contents, I understand. But then a lot of people are trying to be strong in this space with power. Looking at your own portfolio, like SiC, wide bandgap, GaN, I understand that's going to increase your portfolio, what you need to do. I understand that. But is there anything around power? Is there going to be any new parts? Or do you think what you have is like a complete set of solutions now? For example, behind the rack, is there more that's happening? Do you find any issues? Or I mean, how complete do you think you are in terms of the portfolio here? Yes. Thank you. So Chris, can you answer? So if there's any areas that we'd need to fill in more within the portfolio and where could be the emerging needs from now? So Chris, can you address that question, please? I mean, you're never complete enough. That would be my first answer. Now, with the product we have today, we have a lot on our hands to deliver the solution that our customer needs. I talked about the expansion of the portfolio with new products. I also talk about redirecting some of the product we have. For instance, we never addressed with our FETs and discretes, historically, the infrastructure business. We are doing that now and using the engagement we have with those big CSPs and vendors and suppliers to be able to drive more content. GaN, as you mentioned, will also make his way into the infrastructure space. I would say we're never complete enough, but I think we have this vision of using all the technologies, all the IPs we have, and close the gap when we have a gap, like with GaN, to be able to serve that business for the next 5-10 years. [Foreign Language] Thank you very much. [Foreign Language] Are there any other questions? [Foreign Language] If there are, please use the raise hand button. [Foreign Language] We are accepting questions from analysts, media, investors. If you have a repeat question, that is fine, even if you have already asked questions. [Foreign Language] We are accepting questions. Please use the raise hand button if you have a question. [Foreign Language] Next question is from M&A Online. Itonaga-san, please. Please unmute and ask a question. My name is Itonaga from M&A Online. Thank you very much for your time today. I'd like to ask President Shibata. 今日は you talked to some extent about M&A, but over the past five years, you have already done some major M&As. And I'd like to ask how you view the track record of your past M&A. What have been the results of the M&A in terms of revenue or other results? Well, I have provided a constant update on the past M&A, focusing on cost synergy and revenue-driven synergy. I have tried to provide a regular update. And basically, such an M&A has been on track. And so we don't provide a detailed update since it would be rather a repeat of what we have said in the past. So the conclusion here is so far, so good. Basically, the investments have been in line with our expectations. Of course, there are some positive aspects or negative aspects. Infrastructure power, this originally comes from the Intersil acquisition, which has really expanded successfully. And there are some other businesses that have not grown as much. But overall, I believe that the M&As have met or exceeded our expectations. Of course, if you just look at the numbers or the objective facts, for us, what is most important for us through the acquisition is the people. For each organizational layer, the acquisition is obtaining talent. And there are six members that are shown on the screen. But three out of the six joined Renesas through acquisitions. So half of these top leaders came through acquisitions. Leveraging our technology, our strengths in Renesas and in the companies that joined Renesas, we are able to provide new solutions and deliver results. That, I think, is the most important thing. So far so good. We'd like to continue to evolve our culture, evolve our solution, focusing on the human resources. That is my thought regarding our past M&A. Thank you very much. If I could add a follow-up question, you talked about $1-$2 billion level M&A going forward, not a big acquisition, but more of a $1-$2 billion level acquisition. Do you consider startup acquisition as well in Japan, or would you consider more established companies with manufacturing capabilities rather than startups? If you have any thoughts regarding this. In terms of the token or bolt-on type acquisitions, we will continue to proactively look for opportunities. No change in that sense. Most recently, Transphorm could be one example. But Panthronics last year, this is an NFC Austria company that we acquired. So we'll continue to work on these acquisitions. And $1 billion-$2 billion, this is just an idea. We're not saying that we won't do acquisitions like $2.5 billion. So I can't really commit in terms of the number. But what I want to say is that we're not going to accumulate $6 billion, $10 billion types of acquisitions going forward. We'd be looking for a smaller level acquisition. And we would like to continue to look for such opportunities to accelerate our growth. That's the message that I wanted to deliver. Understood. Thank you very much. [Foreign Language] Thank you. [Foreign Language] Now moving on to the next question, which is from UBS, Mr. Yasui. Please begin your question. Unmute and begin your statement. Thank you. I have two questions then. The first question regarding MCR memory. According to my understanding, the AI accelerator will be mostly HCR. And so MCR's target market, what kind of applications? It's not going to be the general servers. Is that correct? So, if you could define on that, that would be appreciated. And the CXL link function will also be added. So, what will be the role of MCR? What kind of functions are you going to highlight? And what will be driving the adoption? That's my first question. And my second question is for Vivek ADAS. Market prediction is very difficult in this space, I believe, according to my understanding at least. So my question is that the number of customers, is it really growing? Is it declining? Like Apple stopped their autonomous driving project, which is rumored about. And of course, Tesla has their own development program. So is the number of customers actually increasing? That's my second question. And of course, competitors cultivating customers on their and also custom ASICs. Design-only companies are now emerging. So what about the number of competitors? Is it decreasing or increasing? So can you also comment on the competitive landscape? So that's another question that I have. All right then. The first question, MCR, MR memory, that will be focused on the comparison between the two. So what are the needs and the applications? That will be answered by Davin. And the ADAS market will be commented, including the competitors' movement. Vivek, Davin, please begin. With any new innovative technology, the early adopters will be the higher-end segment. In this particular case, it will be the AI-optimized server market. MCR actually coexists with HBM in order to maximize the performance. We see early adopters being the AI-optimized servers. Once it becomes an industry standard after it gets ratified by JEDEC, we also see that technology proliferating potentially into general servers too. Just like any innovative technology, you start with the high-end applications, and over time, it moves down to more of the generic applications. That's how we see the trend for MCR. Vivek, we can ask you. Vivek. Thank you. Yeah, let me take the question on ADAS. So in the ADAS market, OEMs are continuously evolving their solutions so that they can upgrade from level two to level two-plus to level three. So the amount of technology that is being integrated in ADAS compute, specifically central compute, as well as MCUs, continues to grow. And that provides opportunity for suppliers like Renesas, who not only provide the technology but also have a very significant and strong history with safety and reliability, which is important for ADAS. So that's point number one. Number two is from our perspective, there are competitors in the market. But if you look from a Renesas perspective, we have the full, complete solution for ADAS. When I say full solution, we are addressing central compute for the highest premium segment to the lower segments, to the beginning segments. We have a full, scalable, flexible portfolio of customers to take different ADAS solutions into different markets. On top of that, as I mentioned, we are very unique as a company where we not only offer SoCs but also do MCUs. We are able to bring forward how to integrate software frameworks that are not only applicable to SoCs but also to MCUs so that OEMs that are looking to upgrade have options for scalability, reusability, and flexibility for ADAS solutions. On top of that, with chiplet concepts, we have our central compute from Renesas, some combination of accelerators, but also flexibility that OEMs are looking to add some of their unique IP or technology also to our solutions. That open platform, compared to our competition, is also building a lot of interest in what we offer. The flexibility, scalability part is there, the open platform, and then the capability to offer a very similar infrastructure for SOCs, crossover MCUs that Shibata-san mentioned to the MCUs at the lower end are all reasons why OEMs and the market have interest in Renesas products. [Foreign Language] Thank you very much. [Foreign Language] It is now the scheduled time, and so we'd like to end the Q&A session. [Foreign Language] Before we end, can we ask Mr. Shibata to give a comment to close the session today? Yes. I know we spent a long time, but thank you very much for joining this session today. It's long, but we did have a lot of participants. I'm sure there were some parts of the presentation that you probably would have liked to hear more, but this is really the way we'd like to start. Hopefully, we'd be able to have this session on a regular basis. I hope you take it that way. As for business, again, in my session, I intentionally did not use the word diversification. But then, like we had been using before, the term diversification really illustrates what we have been doing. And so that's how, at the moment, we've been able to pretty much control the peak and trough because we've been able to diversify. In the second half session, we did talk about our growth vector. In other words, it's not just AI. There are several that we have in mind, and I think you've been able to see that today. To this growth vector, our exposure, maybe there are some that we don't, at the moment, would not have that much exposure yet. It's not that we'd be expecting an exponential growth from here. We do have several strong vectors, which is going to really support our future growth. That's my thought. Again, within our previous, I do believe our past strategies are really working well. Now with this new digitalization aspect, we do believe we should be able to further seek a very stable growth. That's exactly what we expect to see. I hope you'd be able to look forward to what we'd be able to show you. Once again, thank you very much for joining this session. Thank you. With that, we'd like to close Renesas 2024 Capital Market Day. Today's material and recording will be posted on our IR website. The posting of the videos will show up on our IR website from evening Tokyo time. Once again, thank you very much for joining.