Now, we'd like to start Q&A session. Morgan Stanley MUFG, Wadaki-san, please. This is Wadaki of Morgan Stanley MUFG Securities. Because only one question is allowed, and therefore, SoC tester market for the three consecutive years is making a negative growth. However, what we would like to expect is that perhaps there are replacement needs for the test beds, and perhaps SoC is now accommodating with the generative AI. And also, in the midst of a U.S.-China economic conflict, and perhaps for the back-end process capacity may be poised to increase in the global market, and therefore, test equipment investment may be increased. And I think about all these possibility, I wonder, at some point in the near future, there might be some additions on the sales and performance on your end. What is your take? Now, in regard to SoCs, as Mr. Wadaki, you are fully aware that our major customers is, for example, foundry and OSAT, and such service providers are our customers. And to your question, what is key for us is the improvement of their operating rate and utilization rate. And in FY 2023, what we recall, there was an idle capacity and changing the users from smartphones to AI, HPC, and there were so many business for the purpose of upgrading. But in regard to the utilization rate, though it is improving, particularly for the Taiwanese customer, some of the customers are approaching to their full capacity operation. And for the system orders, compared to six months ago, the order level is increasing, as we are aware of. Yet, we would like to carefully monitor the situation because there are some foundries who are not on the full capacity yet. Because of this reason, TAM is now being estimated at this point, like you heard in the presentation. But the market condition, change drastically. We need to carefully monitor three months to six months. We need to have a full understanding of the decision, and we need to update our outlook. In regard to the smartphones, the sales of smartphones is not as robust as you would hope to be. However, in the second half of this year, our customers will once again migrate to the advanced process nodes. It is very likely that they will advance to the higher nodes. Therefore, a T-A-M, TAM, is now published in six-month basis. Probably in the second half of this year, there might be some new trends appearing in the market, as I expect. We will be very careful in monitoring the situation, and we'd like to make judgment on our own. Thank you very much. In regard to the global decoupling, like I asked, the test house and OSAT in the United States and the capacity building, what is the impact on that? Well, migration of supply chain is actually happening, and because of the decoupling, for instance, from China to Malaysia or from Taiwan to Malaysia, that there are some supply chain migration. The tester demand for us is now becoming visible at this moment. Having said that, though, some of the factories are being built up, and we need to carefully monitor the situation at this moment. Thank you very much. You have answered your question. Thank you very much. Mr. Wadaki, thank you very much. Next, from CLSA Securities, Mr. Yoshida, please go ahead. Hi, this is Yoshida from CLSA. I'd like to ask Douglas about your market share outlook in calendar year 2024, and if possible, in 2025 as well, at both memory and SOC testers. I think the market growth potentials are more favorable for your company, but Teradyne also commented that they are gonna take some market share at HBM and also AI ASIC. So do you think the recent increased market share can be maintained or further strengthened going forward? That's my question. Thank you. Yeah. Thank you very much, Yoshida-san. Yeah, you know, for our outlook for FY, or calendar 2024, I should say, as I mentioned, is slightly up. But as you mentioned, there's gonna be a large focus on memory as part of that total tester market for this coming year and into 2025. For 2025, we do expect a higher growth rate than we've seen in the past for memory versus SOC. And into 2026, it's potential to continue. In June, we will be very more clear about the actual market sizes for 2025 and 2026, and how we're modeling those assumptions. Specifically on, on HBM, I can comment that, we're very comfortable, you know, with our position that we have. We've been working with our customers closely for so long. In fact, HBM, I think we started more than 10 years ago. And so, we have very deep relationships, but we also understand that we have to maintain competitive balance between ourselves and how we're supplying into the system and manage our marginal profits there. Our first objective right now, our first responsibility, is to make sure that we have adequate supply at the performance and quality levels expected by our customers. And by the way, those customers happen to be our SoC customers as well. We have an obligation and responsibility for the entire industry to make sure that we have adequate supply. As I mentioned in my prepared remarks, we are opening up our supply chains in order to grasp the opportunity of the HBM and the high-end DRAM side. While I can't talk specifically about customers or exact market share levels for 2025 and 2026, I guess I'll leave the remark at we're very comfortable with our position at this point. Thank you. Yoshida-san, is that okay? Well, do you think that market share condition for SoC tester side is also similar to this in HBM memory tester? I think historically, what we've seen, you know, over the decades is that when there's large waves that happen, if it's PC and mainframe, you know, moving to mobility, and now with this era of AI, we've seen a large expansion in the memory business as the computational architectures have changed. We're seeing that now, and that's why there's such expansion of HBM and high-end DRAM. Normally, after that, it follows with a large ramp-up in SoC. What we're expecting to see now is continued growth in the data centers and the cloud, and then there's going to be some migration into the edge compute. You're gonna start seeing more applications of AI at the edge, which then will support the volume growth of SoC in consumer and mobility. Our SoC business is still quite strong in our view, given the cycle, because of the HPC. As that migrates from cloud to edge, we should see that layered on to our business model. Okay. Thank you very much. Thank you very much, Yoshida-san. And next, Nakamura-san from Goldman Sachs, please go ahead. Thank you. Thank you very much. I'd like to ask about the profitability and the outlook, as well as trends. So earlier in the presentation, 48% is the gross margin you spoke of, and compared with the previous year, it'll be down slightly. So in the new fiscal year, the sales is going up, and there will be a goodwill impairment. And also, if, if you exclude that, operating profit is a flat year-over-year. Is it just because of the product and mix situation? And if that's the case, memory tester profitability may be lower than we anticipate. And earlier, Doug-san talked about the improvement of profitability. That is one of the key responsibilities. What sort of schedule or timeline do you have, and what sort of level do you think you can raise it to? Thank you. Well, thank you very much, Nakamura-san, for your question. First, I, Mihashi, would like to respond to this question. Well, as you rightly pointed out, FY 2024 profit may look slow. The reason why this is the case is because of the product and mix. I, I cannot just say it is all because of product and mix. But as for this year, in FY 2024, memory tester sales ratio will be very high. That is our projection. Normally, 20%-30% is the memory, historically speaking. But as for FY 2024, this will be much higher than the 20% or 30%. So the product and mix will be the largest factor that can impact our performance as well as profitability. And as for profit and as to how we can improve the profitability, first and foremost, in relation to memory, especially HBM, the generation change speed compared with the DDR, commodity DDR. Unlike the generation creation of business, we have to work with our customers with a very hands-on approach to deliver new devices without depending on JEDEC. So the cycle time will be faster. JEDEC. So from the second half of the year, HBM3 will come in, so the generation change will happen. So at that timing, along with the evolution of devices on our side, we would like to deliver higher value-added system configuration, and our technologies will be used. And as a result, our profitability should improve. I believe we can expect that to happen. Earlier, Mr. Lefever, Group CEO, mentioned that to improve our profitability, we will strengthen our supply chains to a great deal, and then our procurement and cost will be managed very thoroughly, and also our production will be made more efficient. By doing so, we're going to push up our profitability. Such activities will be conducted this year. Thank you. Thank you very much. In that sense, HBM sales will go up going forward, and as for FY 2025, do you believe that the profitability will go up in FY 2025? Yes, that is our assumption. Thank you. Thank you very much. Thank you. Nakamura-san, thank you very much for your question. From Jefferies, Nakanomyo-san, please. Nakanomyo-san, one question. Impairment is my question. Is that coming from the large accounts, where their sales forecast was changed, as I understand from your presentation? But, was that significant enough to pose a large amount of impairment, and what is your forecast? Do you need to continue to incur such a loss of sales going forward? And also, if that particular customer is not the one to sell to, I believe that you still have some potential to expand the business, but yet, you are posting the impairment. Would that be just a conservative approach, or why did you post such a large impairment? Thank you for the question. This is Doug. I'll do my best to answer the question. I think I understand. The impairment that we took, yes, was related because of some overexposure to a certain large customer. We do not have plans to take any further write-downs. We do remain confident in this particular business, which has to do with high-end sockets. And as we transition to a broader customer base from their historical business that we acquired, we should see future business and cash flows related to that division. So, while it's painful, as we do that transition, and the sales cycles have been somewhat longer than we had originally anticipated, we're encouraged by the opportunities that we have been working on with qualifications and customer expansion. So I think, hopefully, I caught the question right, and that gives a appropriate answer. Yes, understood well. Thank you very much. Nakanomyo-san, thank you very much. The next question is from Macquarie Capital, Damian. Can you hear me? Yes, I can hear you. Yes. All right. Thank you very much. Yeah, this is Damian from Macquarie. Just have a question on the profitability improvement that you're looking for in memory testers. Are you able to say, like, what kind of actions you could take? Because it looks like, given your expectation of strong HBM and memory tester growth next year as well, maybe stronger than SoC tester, it would seem that actually, there is obviously risk that your margins could still be under pressure next year. But so any hints you could have on what kind of actions you're going to take would be welcome. Thank you. Yeah, yeah. Thank you, Damian. And without getting into really deep dive details, I would probably put it into the three buckets that Mihashi-san mentioned in his answer, which is that we're looking to achieve better value for our customers by improving their yield and throughputs, and that, and as well as the technology transitions. So, as everybody in the industry knows, the yields of HBM are under lots of pressure, and this is a reason why test capacity is required. But there's also opportunities to work with our customers to add value to their operations. And if we do that correctly, we should be able to improve our product value, and therefore our margins. The second thing I would say is that we are working with our supply chain. So you can imagine the number of suppliers that go into the memory tester bill of materials, and the extensive supply chain for productions that we have. So we're working with them closely. And then the last thing is just driving overall efficiency. So I think, when we look at the detailed plans that we have, we're fairly confident that we're gonna have some margin expansion in the memory area. And so it's going to take, you know, a lot of work, but we've already seen some of the fruits of the labor from this past year already, looking forward into our model. Okay. Thank you very much. Next, Okasan Securities, the Shimamoto-san, please go ahead. Hello, hello, can you hear me? Ah, yes, we can. Please go ahead. From my side about SoC tester projection, it's changed so much from three months back. You have provided an explanation, but once again, which part are changed dramatically compared with three months ago? And if you provide a breakdown between first half and second half, are they much different from each other? For example, are you going to be strong in the second half or in the second half of 2024, things shouldn't be too strong yet? What is your projection? Well, thank you very much. This is Nakahara of Sales speaking. Well, first of all, as I mentioned earlier, in the market, utilization improvement has been slow compared with our projection and expectation, and that is because of a smartphone market. Another point is that now automotive industry, equipment, machinery, tester demand has slowed down somewhat, and there is more clarity about it. So including such developments, term projection has been revised downward. As for first half and the second half breakdown, at some point in the future, our SoC tester utilization will be full in the market. So in the second half of the year, we expect more improvement. Improvement will be clearer in the second half of the year. Did I answer your question? Yes. Thank you. Thank you very much. By the way, AI, out of SoC, is AI in line with your projection? Some companies are saying that AI demand is strong. What about your outlook? Generative AI in FY 2024 and 2025, our tester business, this will be our core. So both memory and logic, both of them, will be the key for us. So once we reach a peak utilization, then a system order will come in, in relation to generative AI. Thank you. Thank you very much. Thank you. This is Yamamoto of Mizuho Securities. Can you hear me? Good afternoon. Please go ahead. Now, in the same point, Mihashi-san, I would like to ask a question regarding the profitability, and product mix worsening is fully understood. However, would that be the single only reasons of deteriorating operating margin? Share is gaining in steadfast manner and SOC tester and the memory tester, when you look at the breakdown further, then, as an outcome of a competitive landscape compared to five years ago, are there any products having a lower margin? Is that simply that a product with a lower margin increased, but that simply the product mix issue, or when you look at the each line of the product's margin, isn't that deteriorating? Could you comment on that, Mihashi-san? Thank you very much for your question, Yamamoto-san. To be succinct, for FY 2024, 2023, the profitability was lesser, and business with a lesser profitability have expanded, and that is a main reason. In regard to the each and a single level of our products, we are quantitatively monitoring the margins, and profitability worsening is not an observed impression, yet basically. Well, for example, wafer tester is mostly in the memory area, and therefore, profitability is deteriorating. But for the other line of products, foreign exchange rate and cost of goods and inflation, as well as the wage increase, of course, we've been receiving a certain pressure of a margin deterioration, and yet we are able to secure a certain profitability. I'm sure that you are looking at the Teradyne's number, though business is slightly different. However, when it got to tester, their profit deterioration for the tester business is actually smaller than your company's. What is your take? Well, operation and the way of operation is quite different, Teradyne versus us, as what we are doing versus what we are doing isn't quite the same. Does that mean that memory testers, to begin with, is struggling with a lower margin, to begin with from the past as well? Is that the case? For the wafer DRAM tester for wafer testers, that product itself, it doesn't have a high margin to begin with. However, on the other hand, the technology evolvement further proceeds it, and the technology-based wafer test is going to increase more. Yamamoto-san, HBM quality issue, as a result of that, a solid tester testing process has to be implemented on the fab side and on on the, on top of that, HBM3E. So there are more advancement, and by offering a higher function tested, therefore, we can enjoy premium in price and the higher margin that we can enjoy. We need to generate such trend going forward. That is all my question. Thank you very much. Thank you very much. Thank you very much, Mr. Yamamoto. It is now 5:00 P.M. As mentioned, previously, from here, I would like to accept a question from the media. First of all, from Reuters News. Sam? Mr. Sam, please go ahead. I would like to ask about the business in China. So, yeah, sales have risen to around half of total sales coming from China. Could you give us some insight into what's driving that increase recently? You know, a bit more granular detail on that. And, you know, obviously there's a big expansion of legacy chipmaking capacity in China. There's a lot of questions about to what extent that is going to continue. So is that something you're seeing as a secular trend, or is there a risk there that the company might be becoming rather over-reliant on sales to China? Thank you. Yeah. Thank you, Sam. Yeah, for sure, over the long term, our sales in China has expanded like, you know, most of the semiconductor equipment companies. We have a lot less exposure than maybe some of our peers. And this is a ship-to data as well, so it includes, you know, certain companies that have factories there, as well as the domestic headquartered Chinese companies. So that's important to point out that within that data, there's, you know, some lower data. And we've been very successful, particularly in the high-end SoC area, as well as, you know, obviously some memory customers there as well. As far as the legacy nodes go, no doubt that there is a lot of expansion in China at the expense probably of other countries. Most of the legacy nodes drive a lot of mid-range to lower range test equipment, which we have participated in, but not as much as we depend upon the higher end SoC and higher end memory. So hopefully, that gives you a little color at this point. Thanks very much. Thank you, Sam-san. My apologies. Omichi of Nikkei, can you hear me okay? Yes, sir, we can. Please go ahead. Well, thank you. So in this annual projection, compared with the market projection, it is much lower. Your projection is much lower. What is the background? So in the first half, you talked about smartphone and automotive as slowing down, and because of the margin deterioration, because of the product mix. Are there any geopolitical risks that are reflected in your conservative assessment? And if so, to what extent? For example, there could be some regulations against China and so on. So what is your view? Omichi-san, nice to talk to you. Well, thank you as always. Thank you very much for your question. Regarding geopolitical tension or risks, we haven't incorporated that too much in our projection. Of course, there are some geopolitical regulations, restrictions, or control, semiconductor manufacturing equipment, or we are part of a semiconductor manufacturing value chain, but in the end, we are providing systems to test the final products. So even if our business is regulated, the production of actual semiconductors won't stop. So control or regulations against us. So regulations against us in regards to customers in the Entity List, if the U.S. IP is included and so on, such regulations will be applied to us. But if we follow the guideline, then we can continue our business. That is the environment we find ourselves in, so this is not a big factor for us. Thank you very much. At the end of the day, it is, it ultimately boils down to the market situation, such as a weak demand and so on. Is that the case? Yes, in that sense, the market situation is not fully visible. We don't have all the input where we can make a definitive assessment, to be honest with you. But as I have said earlier, AI-related or HBM-related, especially our AI-related business in FY 2024, throughout FY 2024, should pick up. And at some point in the future, we will reach our threshold. There will be a growth above our threshold. That is our prediction. Thank you. Thank you very much. Thank you. Omichi-san, Doug wants to make some comments. Hi. Maybe our view, you know, we're a global company, and we serve all markets. You know, China is very important for Advantest, just like all of the different markets are important. And while there's a lot of geopolitical risk, there's also other risk out there with access to energy, access to human resources, and supply chains are moving. And I'm very happy to say that when you look at Advantest and our footprint, our ability and agility to move as the supply chains move around, as the technologies move around, we're very well positioned as a company, and we've worked hard for decades to position ourselves this way. Thank you. Next is, Nikkan Kogyo Shimbun. Kobayashi-san, please. Can you hear me? Go ahead. Kobayashi, of Nikkan Kogyo. Related to memory, for DRAM. Mentioned earlier, HBM and related to AI. Demand exist, but for NAND, continuing from last year, it is, very weak. How would that recover? There's no projection to improve at this moment. Is this the right understanding? Your audio was breaking up. It seems that you have asked about the NAND market. Is that right? Correct. And Nakahara of sales will answer, your question. Now, as we show on the slide, for FY 2024, our memory business, 95% is earned in the DRAM. That is our projection now. Having said that, though, for NAND, inventory situation of the customer is gradually improving as far as we can acknowledge. And also, for ASP, that improvement is observed. Therefore, toward the second half of this year, situation shall be improved gradually. But on the whole, once again, DRAM business is much stronger in our company. I'll add also, mention. For the NAND industry is clearly going through, you know, this period of consolidation. So, certain companies are moving all of their wafer starts to DRAM. Some are, you know, exiting or merging, and so this is a natural market process that has to happen in order for those companies to raise up their ASPs and earn the margins. And, we're part of that supply chain, as a tester company. What I can see is there's some, you know, light coming in the form that I see especially is in things like edge AI. So, for example, smartphones with AI are now going to start going into some level of training models locally on your handsets. That will drive a huge amount of local storage, which, you know, will be in the NAND area. Same with notebooks and tablets. And so the consumer part of the AI at the edge will reveal itself somewhat in these other areas like NAND, which, you know, clearly have struggled for, you know, some period of time now. So maybe a little bit of extra commentary on NAND. Thank you very much, Kobayashi-san. Thank you very much. Next, from Bloomberg, Ms. Furukawa, please go ahead. Can you hear me? Yes, please go ahead. Oh, good. I have a question related to foreign exchange rate. Recently, the yen is becoming weaker and weaker, and when this progresses more, I would like to know what kind of measures you have in terms of hedging it. Are you going to promote the dollar-denominated transaction, or are you going to hedge more? I would like to know about that. Furukawa-san, hello. Can you hear me? Yes, I can hear you now. Well, for us- If the changes or the differences become larger, of course, we conduct activities of hedging and other necessary measures. But, most recently, we were assuming JPY 140, and now it's JPY 150, JPY 55, JPY 155. But, instead of conducting a proactive activity of a hedging, but the foreign exchange is more towards the weaker yen. And as a result of that, we need to thoroughly control the impact to our company's business operation, internal operation, meaning procurement and others. In order to respond to this weakening yen, we are conducting activities. As the financial measures, we are not taking any major additional measures. So even with the recent level of the foreign exchange rate, you are not? Is there a certain threshold that you will take a certain measures? This is Kobayashi from the IR. Basically, for the foreign currency denominated receivables we have, and so we look at the situation, and regarding the differences that will occur, whether we'll be hedging or not, it depends on the volume. I believe that we're not at that timing. Excuse me, taking any actions. We're not at that timing of taking any particular additional actions. Thank you very much. Thank you very much. It is almost time to end the session, but Tamehiro-san of Nikkei, a final question, please. Tamehiro speaking. Can you hear me okay? Yes, please. So from my side about the dividend projection for this year, at this point in time, this is not disclosed. According to guidance, you are going to make an profit increase in the end. So as a shareholder return level, are you going to maintain the same level as last year, or are you going to expand the shareholder return level? Thank you very much, Tamehiro-san, for your question. Earlier in my presentation, per share dividend, dividend per share slide was shown on page 7. It said JPY 18, JPY 18. That is our plan. Of course, this number. And did you talk about next year, Tamehiro-san? Are you talking about FY 2024? Yes, yes, I was talking about FY 2024. Okay. In that sense, this year and towards the next year, in regards to dividend, we would like to base that on our actual performance. As you can see in the past years, as for dividend, every year, it has been on the rise, and we have been strengthening the dividend for the past few years. So next year, the margin on profitability may suffer to some extent, but as for dividend, FY 2023 and FY 2024 will have certain level of dividend, and this will be approved by the board, and announcement has to be made officially after board's approval. The second midterm management plan and our total shareholder return was 69% ratio. Our policy for that plan was 50%, and so we achieved that even with the lower number this year. We're right now formulating the next three-year plan, and so in June, we will release, you know, what our policy will be for the shareholder return for the next three-year tranche. So please wait until June for the forward-looking aspect of our business, shareholder returns. Thanks. Did I answer your question? Yes, yes, you did. Thank you. Thank you very much.