It's time for us to start Tokyo Electron financial announcement for the first quarter of fiscal year ending in March 2022. Thank you very much for joining us today despite your busy schedule. I am Yatsuda of IR Department, acting as a moderator in today's session. Let me introduce attendees on our side. Mr. Tetsuo Tsuneishi, Corporate Director and Chairman of the Board. Mr. Toshiki Kawai, Representative Director, President and CEO. I am Kawai. Nice to meet you, everybody. Mr. Yoshikazu Nunokawa, Corporate Director, Executive Vice President and General Manager, Global Business Platform Division, finance unit. I am Nunokawa. Nice to meet you. Before starting the presentations, let me explain the flow of today's meeting. Mr. Nunokawa and Mr. Kawai will make presentations. Up until 6:00 Japan time, we will have the question and answer session, entertaining questions from the audience. This financial announcement uses two channels on Webex, providing simultaneous interpretation between Japanese and English. As we explained in our email, you are kindly requested to use apps on PCs and mobile terminals if you plan to ask questions, but if you are not going to ask any questions, you can use telephones. Since this is the meeting for institutional investors and analysts, we would appreciate your understanding that we receive questions only from institutional investors and analysts as usual. We will upload audio contents of meeting both in Japanese and English later. We'll be happy if you also refer to them. Now, Mr. Nunokawa, Corporate Director, Executive Vice President and General Manager will present the consolidated financial summary. Mr. Nunokawa, please. Good afternoon. I am Nunokawa of Finance unit. I would like to present the consolidated financial summary of the first quarter of fiscal year ending in March 2022. First of all, I'd like to note that along with the change of our accounting policy, the revenue recognition standard has been changed from the former, completion of startup and testing. The consolidated net sales of the first quarter, based on the new revenue recognition standard, was JPY 452 billion, hitting a record high as the quarterly basis. By segment, SPE net sales was JPY 437.9 billion, also hitting a record high. FPD net sales was JPY 14 billion. Gross profit margin was 46.7%, and operating margin was 31.4%. Due to the net sales growth and segment composition mix, both quarterly based profit margins broke the previous records. This is a graphic representation of the financial summary I talked about. This slide shows the segment information. For SPE, sales was JPY 437.9 billion and segment profit margin was 34.9%. Due to the sales growth and the customer mix as well as new PORs contribution to the sales, profit margin also showed a significant increase. For FPD, the sales was JPY 14 billion and segment profit margin was 11.8%. For the composition of net sales in the first quarter, the SPE sales accounted for 97%, while the FPD sales accounted for 3%. This slide shows SPE sales by region. Sales in China particularly showed a considerable growth. Proportion of sales to foundries and local China memory manufacturers increased from the previous quarter. This shows SPE new equipment sales by application. As more and more customers design manufacture logic devices for themselves, and also be subcontracted to manufacture logic devices, namely foundry business, it becomes increasingly difficult for us to set a demarcation between logic and logic foundry. Due to this background, we have decided to combine logic foundry and logic and others together in the disclosure from this fiscal year. In the first quarter, from the bottom of this chart, sales to logic manufacturers accounted for 47%, non-volatile memory accounted for 34%, and DRAM accounted for 19%. Sales to both logic and memory manufacturers increased from the previous quarter. This shows field solution sales. In the first quarter, sales amounted to JPY 95.2 billion. Mainly due to decline in the sales of modifications, sales declined from the previous quarter, but we can see steady progress in this field. Next, this shows balance sheet. The total assets were JPY 1.4508 trillion, cash and cash equivalents were JPY 341.7 billion, notes and accounts receivable, trade, and accounts assets were JPY 254 billion, and inventories were JPY 386.9 billion. In comparison with the previous quarter, accounts receivables and contract assets grew considerably while inventories decreased. This is because of application of the new revenue recognition standard. Liabilities and net assets. Liabilities were JPY 378.8 billion, and net assets were JPY 1.072 trillion, which increased from the previous quarter due to increase of retained earnings. The equity ratio was 72.9%. This shows the inventory turnover and accounts receivable turnover. Since the continuity has been broken, along with the application of the new revenue recognition standards, from this quarter, the numbers are shown separately from those of the past in this diagram. The inventory turnover was 92 days. The accounts receivable turnover was 60 days. My last slide shows the cash flow. The cash flow from operating activities was JPY 111.2 billion. Cash flow from financing activity was - JPY 65.9 billion. The free cash flow was JPY 95.5 billion. This concludes my presentation of our consolidated financial summary. Mr. Kawai will present the business environment and financial estimates. Now, I would like to talk about our business environment and financial estimates. I am Kawai. I'd like to make a short presentation on this title. Let me start with the business environment. For the WFE market in calendar year 2021, in our previous financial announcement held in April, we expected the WFE market growth of about 30% on year-on-year basis. Currently, however, the WFE market is expected to expand more significantly due to rapidly growing demand for advanced logic devices and memory devices driven by digital shift in society, such as acceleration of investment to data centers. At present, we expect the WFE market will grow by around 40% on year-on-year basis. For FPD fabrication equipment, TFT area process market, there is no change in our view that large size panel investment is now in transition period, shifting from LCD to OLED. We have scrutinized the market environment once again and modified the decline of FPD market from about 30% to about 20%. I will talk about WFE market outlook by application. The change in our outlook of the whole WFE market growth is attributed to logic foundry and DRAM. For logic foundry, we previously expected 30% growth in WFE CapEx, but we have changed it to around 45% increase. For DRAM, the previous outlook of 45% increase in WFE spending has been changed to about 60% growth. For non-volatile memory, there have been no changes in our outlook, and WFE spending is expected to increase by about 15% on year-on-year basis. This shows business progress in the first quarter of fiscal year ending in March 2022. As Mr. Nunokawa reported earlier, in the first quarter, both net sales and profit renewed our records. We are making steady progress toward achievement of our midterm management plan. For all applications including DRAM, NAND, and logic, I think the effort we have made over the past few years to win PORs are now delivering fruitful results. For the production, each of our plants is enhancing capacity to address strong demand. The field solution business is also making good progress as planned. In addition, we have initiated a corporate initiative named E-COMPASS, aiming at fostering partnership and enhancing leadership in the industry in an attempt to focus on environmental conservation, not only through our products, but also through our entire business activities. I will not talk about this detail today, but I'd like to have an opportunity to present this initiative someday in the future. Next, I will present the financial estimates for fiscal year ending in March 2022. We have revised the financial estimate upward by reflecting further growth of demand. In fiscal 2022 on full year basis, net sales is revised to JPY 1.850 trillion, increased by JPY 150 billion. Gross profit will be JPY 824 billion, increased by JPY 85 billion. Operating income will be JPY 508 billion, increased by JPY 66 billion. Net income will be JPY 370 billion, increased by JPY 40 billion. All of them are expected to set new records. The full year profit margins are also expected to hit record high. Specifically, we expect gross profit margin of 44.5%, operating margin of 27.5%. This slide shows the SPE new equipment sales forecast in fiscal 2022. As you can see here, sales in the first half will be JPY 685 billion, JPY 60 billion increased from the previous forecast. Sales in the second half will be JPY 725 billion, increased by JPY 90 billion. Both of them are expected to be by far more than sales of the first half of fiscal 2019, JPY 504.3 billion, which set a record at that time as half year sales. Therefore, we project full year SPE new equipment sales of JPY 1.410 trillion, 46% growth on year-on-year basis. Meanwhile, new equipment sales on calendar year basis will increase by more than 50% year-over-year, outperforming the WFE market growth rate. The figure on the right-hand side shows quarterly breakdowns of the sales forecast in the first half of this fiscal year. This shows R&D expenses and CapEx. Both of them are expected to hit record high in fiscal 2022. We have revised R&D expenses upward by JPY 5 billion to JPY 165 billion. Capital investment remains unchanged at JPY 64 billion. We project depreciation expenses of JPY 43 billion, where we accelerate proactive R&D and capital investment to cope with growing market and diversify needs for leading-edge technologies. Finally, this shows the dividend forecast. Based on the financial estimate of this fiscal year and payout ratio of 50%, we have revised the forecast upward. We plan to pay full year dividend per share of JPY 1,189, which will be way above the JPY 1,000 mark and set a new record. Thank you very much for your kind attention. This concludes my presentation. Now we will have question and answer session till 6:00 Japan time, where we'll receive questions both in Japanese and English, but our attendees are on the Japanese channel. Please allow us to restrict verbally asked questions to only in Japanese. When you ask questions in Japanese, please hit raise hand button on Webex. For details, you are kindly requested to refer to the instructions attached to the email. I will call name of the person who ask question one by one. Please check the chat box on Webex, as our secretary will inform you in advance that you will be the next person to ask a question. If you have question in English, please use the chat box to send the question in text together with your name and affiliation to secretariat. We will refrain from answering a question if no name or affiliation is given. On the Japanese channel, I will read out the question, translate it into Japanese, and our attendees will answer to your question in Japanese. While on the English channel, it will be simultaneously translated into English on the real-time basis. For questions verbally asked in Japanese, please allow us to limit to one question with one follow-up question. For English questions sent in text, I'm sorry, but we will receive only one question without the follow-up question. If we have extra time toward the end of the meeting, we'll receive additional questions. Okay, the first question. Let's move on to the first question. The first question is by Mr. Yoshida of CLSA Securities Japan. Mr. Yoshida, please. Thank you very much. I am Yoshida from CLSA Securities. Can you hear me? Yes. Congratulations for your WFE market. I have a question. There's very strong outlook for WFE market. If that is the case, I wonder what happens in next year. It's a bit too early to ask this question, but as of today, for 2022 WFE market outlook, do you have any comment on that 2022 WFE market outlook by application, if possible? Yes. For that, let me answer to your question. I'm Kawai. I'd like to answer to your question. To answer to your question, the specific figures, though it's too early for us to say anything about precise, but next year as well, we are expecting positive growth. That's our outlook for next year, 2022. For this fiscal year, 30% growth was expected in the past, but now we revised it upward to 40% growth. This is what I said in my presentation already. As I said earlier, digitalization is accelerated and leading edge logic devices are driving market. The server, and PC, and smartphone are main drivers. For server, the high speed CPU, DDR5, for ECC function is to be mounted, so chip die size will increase by 10%. The RAM investment will continue. This trend will continue next year as well. That's how we view. Therefore, the high speed CPU, DDR5 investment, also the leading edge logic area is also highly expected. As application expands, the commodity logic are also 28 nm node or the legacy nodes. Investment for those legacy nodes are expected to increase furthermore next year. Based on that, positive growth is also expected next year. Thank you very much. Thank you very much for your answer. My follow-up question is about PORs. This fiscal year, for the first quarter, you can see new PORs. You mentioned new PORs. Could you give us some specifics? What sort of application or what sort of a system have you got the new PORs? For the future, what sort of area you can see some further growth? What you said is exactly correct. For this fiscal year, two years ago and last year, for high volume production, we've got the POR for mass production, that have the big impact or contribution to our performance. The major portion is especially etching selective process. We've got the POR for selective process, we can increase processor breadth of POR little by little in that area. For the pattern collapse prevention is another technology, Supercritical drying technology, in other words. We're also increasing the POR for high volume production line. Those two in particular are the major contributors. Film deposition area as well. Number of processes rather big. There are large number of processes for film deposition. Demand for that, for example, big contact film deposition, the silicon film deposition, for example, we get the large amount of PORs. They are the major factors for us to grow. Also, for etching, there are three processes for 3D NAND, and also there are other processes, and we are making every effort to promote ourselves, and I hope that will lead into the further growth. Patterning related lineup, etching system, lithography process, film deposition, and cleaning systems. There are so many new applications for the future, and this is where we try to drive further growth. Thank you very much for your answer. Thank you very much. Thank you very much, Mr. Yoshida. Next question is from Mr. Hirakawa of Bank of America, BofA Securities. Thank you very much. I'm Hirakawa of BofA. I have one question. Demand is really strong at present. What is the lead time of your product at this moment while the demand is very strong? Nunokawa will answer to that question. As for the lead time, maybe your intention should be our lead time is getting a bit longer because of the strong demand. That's my guess. I'm sorry. Yes, that's correct. As far as our company is concerned, there have been no changes in our lead time. Lead time remains unchanged just like before. Of course, we have been working very hard to reduce lead time continuously. We are on track to further reduce the lead time for each product. We are making every effort for that. On the other hand, procurement of parts. We have been taking care of supply chain, including affiliate companies. We provide our forecast and plan to suppliers and supply chain so that we can smoothly procure the components and materials, and that contribute a lot for us to maintain the good lead time. Thank you very much. Thank you very much for your answer. I have one follow-up question. I'm sorry. May I say, Mr. Hirakawa, thank you for your question. As Mr. Nunokawa said earlier, the procurement of components and material must be your concern. Did we answer to your question correctly? Yes. I have actually one follow-up question, relevant question. Actually, now we are in August 2021, I wonder, lead time might be six months. That's my guess. If that's the case, for next year. You already started talking with your customers so the second half of your next year, calendar year. That's my guess. How do you see the future of the lead time next year, especially second half of next year? Specific talks with the customer, of course, we need to refer to the customer's fab capital investment map. We have two to three year range plan to be shared together. This is how we promote the negotiation, and because of the semiconductor supply shortage, of course, we need to carefully look at the situation of the supply of semiconductor devices. Based on that, we have revised our forecast upward. We incorporated those factors in our revision of forecast. Now we have added some more in our forecast, so we have some additional demands while the semiconductor supply is in shortfall. We need to carefully look at the situation. As Mr. Nunokawa said earlier, so it is not true, actually. We are discussing also for this year's situation as well as next year's situation. Thank you very much for your answer. Mr. Hirakawa, thank you very much for your question. Next question is from Mr. Nakamura of Goldman Sachs Japan. Thank you very much. I am Nakamura. Can you hear me? Yes. Thank you very much. For WFE, market has been revised upward by 10%. Out of which, 2022, how much are pulling forward from 2022? That's my question. In addition, at present, DRAM price has been declining in the spot market. For DRAM capital investment for the future, there should be no concern. Could you share your idea with us on that remark, please? please? Thank you very much. As for your first question, how much are being pulling forward from next year? I should say semiconductor device demand is getting increasing, so additional investment. Rather than the investment is pulling forward from next year, but actually we have additional demand. That's why we have revised the forecast upward. That's how I would like you to understand the meaning or reason for the upward revision. As for DRAM, the price is being adjusted. That's what you said in your question. The impact of that on our business, as of today, as far as we are concerned, as I said in my presentation, the DDR5 die size is increased by 10%. We have strong demand, increased for demand for high-speed CPU. Therefore, DRAM price adjustment does not directly impact customer capital investment plan. That's how I view the situation. Thank you very much. That was very clear. In that sense, there is not so much demand pulled forward from the 2022. Still 2021 and 2022, you can see continuous increase in the demand. That's how you view the market trend? Yes, that's correct. Thank you very much for your answer. Mr. Nakamura, thank you very much for your question. Next question is from Mr. Wadaki of Nomura Securities. Thank you very much. Thank you very much. The first question, actually, my question is quite similar to the other questions so far. Adjustment, there are some deceleration in some applications. There is no such story at all. Is that correct understanding? Correct. Yes. There have been no symptoms at all about the deceleration trends. I have one follow-up question. It's not concerned, but China, actually, the first quarter, the huge sales in China. As for China, for example, in the future, there might be some restriction on export, Chinese customers try to purchase a lot in advance. How do you view the trend in the Chinese market? In particular, I don't think Chinese customers are purchasing things ahead, but that is just along with the market growth and Chinese customers are investing along with the market growth. At present, China customers, the market share should be about 25% in WFE market. That should be the market share of Chinese customers, 25%. That trend will not change. Along with WFE market increase, I think China continuously have the share of about 25% in the future as well. This is how I view the trend of the China market. Political issue and some export restriction, rather than those things, because of the semiconductor device demand, they are keeping their investment. Thank you very much. That's all from me. Mr. Wadaki, thank you very much for your question. Next question is from Mr. Hasegawa of Mitsubishi UFJ Morgan Stanley Securities. I am Hasegawa of Mitsubishi UFJ Morgan Stanley Securities. I have a question. The first question is about the change in your revenue recognition standard. I want to understand its impact. According to your financial review, the difference between the new standard and old standard is about JPY 139.6 billion for sales and JPY 82.9 billion for operating income. When it comes to fiscal 2022 full year forecast, to what extent have you incorporate impacts of the change of the revenue recognition standard? This is my first question. Thank you very much. Nunokawa will answer to this question. For the first quarter, if we applied the old revenue recognition standard, as you said earlier in your question, there is a difference of JPY 139.6 billion for sales and JPY 82.9 billion difference for the profit that we reported in our financial review. If we apply the old previous revenue recognition standard, as you know, our previous standard is based on completion of startup and testing. There is certain time between the shipment of equipment toward the completion of testing and setup. Based on that, our previous performance, we try to calculate how many days or how many months required for us to recognize revenue after the shipment of the product. Based on that, we calculated that. What happens to the first half of this year, maybe second year? Actually, the first year is a kind of sum of first quarter and second quarter. If we compare the sales based on the new revenue recognition standard and the revenue based on the previous standard, when we calculate the difference, the time from the shipment to the completion of the setup and setting, for that period, the timing of the sales recognition is shifted. In the first quarter, actually, the difference was quite big, JPY 139.6 billion, but second quarter, I don't think the same level of the difference will occur because there are many other reasons why we have such big difference in the first quarter. When you look at the first half of this year or a full year basis, actually, this particular difference we had in the first quarter remain almost unchanged. I am Kawai, I would like to add some more comments. As Mr. Nunokawa said, and he's more expert in this area, so he gave you very specific answer, but I'd like to give you some answer from different angle. By using the new revenue recognition standard, in particular, from this April, May, and June, so we ship some products. That timing of shipment accounts for the large portion on the hundred. This, if we come up with the first quarter revenue based on the previous revenue recognition standard. The February, March, and early April, we use those product shift in February, March, and early April because we used to use this completion of setup and testing. The product covered the difference between the new and old revenue recognition standard. What happens when you use the old standard? About one-quarter shift between the new revenue recognition standard and old revenue recognition standard. That's how I'd like you to understand the difference between the two standards. I hope you understand my additional comments. I wanted to understand the rough image. Now you are in the transition period between the two revenue recognition standards. I want to understand how much impact does that have on your fiscal 2022 full year forecast. For example, magnitude of impact should be JPY 100 billion for the operating income and JPY 150 billion for the sales. Is that the level of impact on your full year forecast? I am Nunokawa. Let me answer to your question. The way we need to understand is from this April, new revenue recognition standard has been adopted from our budget and report. Based on that, we do have the business activity plan based on that, or profit plan, in other words. From the old standard to new standard, but because of that change, the profit is changed by so and so. With that sort of figures are not incorporated. The size of sales over here. Now we have revised our sales upward JPY 1.850 trillion, and the same thing can be said to the profit as well. Mr. Hasegawa, thank you very much for your. I have one follow-up question, if I may. I'm sorry. Now upward revision. Oh, thank you very much. May I? Now you have revised your forecast upward. When did you decide this upward revision? Actually, your financial announcement schedule has been shifted a little bit. Based on the current situation, I think you politically set today's financial announcement. Compared with April, three months ago, at which point did you decide to make upward revision, having more accurate information? In April, May, June, and July, when did you make such decision? Now, today is the financial announcement day. We try to incorporate updated latest information when we made a decision. Actually, the semiconductor demands is really strong and inquiries have been increasing, which is really obvious. When you look at the shipment alone last year, first quarter compared with first last year, about 40% increase in this first quarter this year. Fourth quarter, in the previous quarter, first quarter, this fiscal year increased by 10% in shipment. Semiconductor demand increases, and our performance or sales really reflects that. Now we have revised our forecast upward. We try to come up with the decision based on the latest information. We discussed a lot within our board members and made a decision to give you this announcement. Thank you very much. Sorry I spoke too long. Thank you very much, Mr. Hasegawa, for your question. Next question is from Mr. Nakanomyo from Jefferies. I'm Nakanomyo from Jefferies Japan Limited. I have one question. For the gross profit margin, I have some question. This first quarter, 46.7%, very high gross profit margin. In your presentation, the sales increased slightly compared with the fourth quarter, and POR, new POR have been obtained. You said POR contribution, how much does that have impact? I'm sorry it's so difficult for you to answer to question. My major question actually is now you have annual figure, the revised upward, so 44% for annual. That will be decline from the first quarter, why is it? How did you calculate and ended up with 44%, which is lower than the first quarter? Thank you very much for your question. Nunokawa will answer to your question. The two first quarter, the gross profit margin, 46.7%. That is record high, really good figure we reported. This gross profit margin, actually, in the past, of course, we won the PORs, and that PORs started to contribute to our sales. That's one of the reasons. In addition, the sales, we have some wider scope for sales. In other words, we should say device mix have the impact on the increase of the gross profit margin. Customer mix is another reason. In first quarter, those things, device mix, customer mix, and other things, are overlap to each other to come up with very high gross profit margin of 46.7%. Now we have these numbers, and we confirmed internally. On the other hand, there are some positive factors, and several positive factors come all together in the first quarter. That's another thing we recognize. That's the reason why when I come up with fiscal, full year fiscal year, unfortunately, the gross profit margin for full year basis is lower than 46%. That should reflect our current ability. Thank you very much. I have one follow-up question. Last year, up until last year, now you have the new development, upfront investment in the R&D. I think that will happen again in the second half of this year to come up with new process. Is that possible? That may decrease gross profit margin a little bit on the full year basis, and that will contribute the sales of the next fiscal year. Is that correct understanding? Nunokawa answer to your question once again. Now we have new product development, a new function, new system are being developed in that area, R&D. From the customers, we need to provide the high profit margin product, highly valued by customer. That's our intention in our R&D activities. Therefore, the proportion of that new products, how much that will increase. Along with increasing sales, that will contribute to increase of the profit margins, but we cannot expect linear growth, so we need to have some certain time span. As you said in your question, in the future or second half of this fiscal year, can we expect something? This is what we expect exactly, so future profit margin enhancement. We are now working on the new product development, new process development. I hope that development activities are going to have positive impact on our sales. Now you can see a slight decrease in the short-term basis. That's what I interested in, I was interested in. Actually, R&D expenses do not have negative impact on the decline of the gross profit margin. Device mix and other factors are more likely to impact on the decline in the full year gross profit margin. Customer, product, and device mix. All those things are changing quarterly basis, but now we have the Midterm Management Plan, and we have Financial Model, and we are making steady progress toward the model we set for the Midterm Management Plan. As we presented in our Financial Model or Midterm Management Plan, our progress is rather steady. This is how I can answer to your question. Thank you very much for your answer. Thank you very much, Mr. Nakanomyo, for your question. Next question is from Mr. Ishino of Tokai Tokyo Research Center. Thank you very much. I am Ishino. I have a question on WFE. Can you hear me? Yes, we can hear you. WFE outlook now 20%, 30% or 45%. 20%, 30%, 45%, so you have revised the forecast upward a little continuously. What is the major tailwind to enhance WFE market growth? Are there any possibility that 45% will be further revised upward in the future? The possibility of further upward revision toward next year, positive growth is expected based on the forecast. Some customers want the product a bit earlier than the original schedule, so the WFE market might grow furthermore. We said 40% increase. About 10% increase from the previous forecast of 30%. Almost half of that increase, more than half of that increase, is attribute to the leading-edge logic devices. The inquiries for leading-edge logic devices accounts for more than half of that incremental portion. About 15%-20% are from DRAM, and the rest is others. This is the proportion or composition of that 10% increase from the previous expectation or forecast. Thank you very much. I have one follow-up question. EUV lithography, there is a huge orders for the EUV, and you can see optimistic future. In European so-called power semiconductor manufacturers, BB ratio is about 2 x, which is really incredible in the past. As for your actual feeling, demand increases and orders are not, of course, disclosed. Do you have the stronger impression for the demands or orders? Yes, increasing. That's the feeling I have right now. We do carry out the analysis. As I said earlier, and also BB ratio, 2% or higher increase. The Image Sensor IC, CMOS Image Sensor IC, SSD logic, and chips for the radio communications for 2020, the first quarter, 100,000 per month. 100,000 per month increase based on the 300 mm wafer diameter. That demand is really strong. Of course, automotive semiconductors do have a strong demand. That's another area we can expect a lot. Demand has been increasing steadily. This is my understanding of the situation. Thank you very much for your answer. Mr. Ishino, thank you very much for your question. Next question is from Mr. Damian Thong from Macquarie Capital Securities. I am Damian Thong from Macquarie Capital Securities. Can you hear me? Yes. Your company's net, logic, foundry, and others are combined in your disclosure. Next year, the data for next year growth, I want to know more. Next year, positive growth is expected for memory and logic, or IDM and foundry, in other words. The growth speed, what is the difference in terms of the growth rate between memory and device, or IDM and foundry? That's my first question. For next year, yes. I'm sorry. In that sense, the legacy nodes, logic, DRAM, and leading-edge logic devices, they are well-balanced in growing steadily. When it comes to growing trend, I'm sorry, I cannot give you correct, clear answer. Maybe positive growth is expected next year. We are sure, because of the legacy nodes logic, DRAM, and leading-edge logic, actually everything contribute a lot. We do have the investment map, but 28 nm legacy node logic will have the big contribution to the WFE market growth, more than expected before. I have one additional question. Next year, and two years from now, Intel says in Arizona 2024, they are now investing a lot to set up the factory in Arizona. Year 2022 and 2023, that will contribute to your sales in two years to come. You talked about lead time for two to three year, have the manufacturing system or procurement of the materials and components, you are prepared for the further demand increase in the future. Mr. Kawai, you said you have the high confidence, Intel and TSMC, those two midterm, long-term manufacturing capacity enhancement plan, that is high accuracy. Is that because you are very confident? As I said earlier, I just talked about next year WFE market only. Each customer is now working on the construction of new fabs. They are making some announcements, and if we can make some announcement today, not because of those plan of the IC vendors to construct new fab. Our focus is based on the market trend, analysis of market trend, and investment plan announced by different customers. These are not the basis of our vision of the plan. Toward the future, for example, new fab construction, that will have a positive impact on our sentiment. Next year WFE market does not reflect that sort of plan. We are working based on the inquiries to come up with the focus for the demand. Thank you very much for your answer. Mr. Damian Thong, thank you very much for your question. Next question is in text, so let me just read it out. Mr. Shimamoto of Okasan Securities. DRAM market outlook, smartphone, and server inventory adjustment. Do you feel some concern for the adjustment in inventory? Do you have also any idea for the next year DRAM investment? WFE CapEx from DRAM manufacturer. Let me answer to your question on behalf of IR. As Mr. Kawai said earlier, DRAM growth is expected next year. As for the first question, the spot price declined a little bit. We can see that decline in DRAM spot price, but it doesn't have a negative impact on the customer investment plan. Customer investment is based on the next year capacity. We don't have any negative information on the trend for DRAM, smartphone, and servers, and also DDR5. There will be many applications with high DRAM content in the future. Thank you very much, Mr. Shimamoto, for your question. Next question is from Mr. Maekawa of Credit Suisse Securities Japan. I am Maekawa. Thank you very much for your presentations. My question is about gross profit margin once again. For the first quarter, by region, your SPE sales by region China increases. In China, your sales increases. Taiwan and Korea, your sales in the first quarter declined. So your major customers, two customers actually, because of seasonality or timing, some decline happened. On the other hand, your sales in China increases. Because of region mix, how much contribution the region mix have on the increase of the gross profit margin? According to your plan, 1 point improvement only for gross profit margin on the full year basis. 1 point improvement, is that just because of the sales increase? That's my second question. In addition, for the full year sales revision upward, how much China customer sales is incorporated? I wonder, gross profit margin is conservative or not. That's the intention of my question, to understand whether your gross profit margin focus is conservative or not. Thank you very much for your question. The first quarter actual performance, and we have the gross profit margin by region. We have the sales by region. Based on that information, you ask us a question. Thank you very much for your question. Region, the sales expansion in each region and contribution of sales from different region. I'm sorry, but I cannot directly answer to that question. What I can say right now is, new PORs contributed our profit. I repeated this several times today, and one of them. New POR customer, actually Chinese customers, we do have some PORs got from the Chinese customer that contributed to our profit. In particular, in the first quarter, gross profit margin was rather high. On the other hand, as you pointed out, when you look at each region, Taiwan and Korea, the increase in ratio is a bit different. The first quarter sales in Taiwan and Korea is very good compared with their historical level. On the full year basis, you asked us, we are not so conservative in our full year forecast. We did have a good result in first quarter. Our actual ability has been increasing. Because of that, we got this good figure in first quarter, but we should be calm and analyze things objectively. There is room for further improvement. That's the reason why full year gross profit margin is not so aggressive, the figure I just presented. Thank you very much for your very thorough answer. In the previous financial announcement, gross profit margin, everyone was rather questioning whether gross profit margin is really high. I wonder, your full year gross profit margin might be some conservative. I have one follow-up question. In the second half of this year, you have strong demand, but orders are increasing day by day. That is the situation of the April to June. If that is the case, I wonder if you can see more increase in sales in the second half of this year. When I look back two to three years, every quarter, first, second, third quarter, I think the sales has been changing a lot, especially second and fourtth quarter, maybe because of the end of year. There are some changes in the sales, but now you have some leveling among the different quarters. Are there any restrictions that you don't see so much fluctuation in sales? Just because of the change to accounting policy or changing revenue recognition standard, there's no factors to fluctuate the sales from quarter to quarter? As for your last bit, are there any restrictions? No, there is no restrictions at all. The change in revenue recognition standard and the forecast for the second half of this year, there is no relationship between the new revenue recognition standard and our forecast for the second half of the year. It just bottom up figures, right? You have just communicate from the inquiries or demand from the customers. Yes, that's correct. Thank you very much. May I say something? The gross profit margin, you mentioned to your question. Thank you very much for your pointing out the issue of gross profit margin. Little by little, now the share has been increasing. Because of the value we are providing to the customer, we have the product for the leading-edge fields, and our strategy has been implementing steadily. The marginal profit ratio has been increasing, which reflect the value of our products. The marginal profit ratio improvement and share increases along with the value increase, and that contribute a lot. Also, the reduction of the fixed cost against sales, along with the increase in the market growth. As I said in the beginning, we do have strategic products, and our strategic products are permeating into the market steadily. That is each product. We have four major business units, and product mix difference or shipment timing difference might have some impacts, but by and large, we are on track of steady growth. That's my additional comments. Thank you very much. Thank you very much, Mr. Maekawa, for your question. We have one more question, although it's time for us to close the session according to plan. Next question, Mr. Yamamoto from Mizuho Securities. Mr. Yamamoto, please. Can you hear me? Yes, now I can hear. I'm sorry. Thank you very much. For April to June, you have the sales. Now you have the shipment-based new revenue recognition standard. That is the product shipped from April the 1st to June the 30th. The product you shipped in March, I don't think that is not recognized as revenue. Is my understanding correct? Yes, what you said is correct. Thank you. Yes, please. Let me just add some explanation. In the previous CST, completion, setup, and testing, 1 point. At the point of the completion of testing and setup, that's when we recognize revenue. In the new recognition standard, shipment should be the basis to recognize revenue. Also, after completion of setup and testing and accepted by customer, to be delivered to the customer. The remainder sales is also recognized. In that sense, from April through June, we recognized the revenue and products were shipping by the end of March, and we also got acceptance. They are accounted, recognized as the sales. As for shipment, what you said is correct, the products which were shipped from April 1st to the end of June. The products which were shipped in March and not yet recognized, also incorporated in the sales you see up. For the products shipped by the end of March, sales only from setup services done in the first quarter were recognized. As for the sales for products themselves, adjustments were done in balance sheet without going through the PL. Okay, understand. Thank you very much for your answer. Thank you very much, Mr. Yamamoto, for your question. We do have some more questions, but because of the time, we'd like to close today's financial announcement. As for the questions we are not able to answer today, we will upload the answers to the question and answer page of our website. There are two information, as we already informed you on our website, from this fiscal year, we are going to publish integrated report. In the middle of September, we are going to publish it both in Japanese and English. Second piece of information is about non-financial information announcement. This year, on October 12th, Tuesday afternoon, we are going to hold IR Day where we are talking about midterm, long-term growth initiatives. We are going to explain ESG activities, the new technologies. Really happy if you join us in that day. We are going to inform the details of IR day later, and we are going to make the improvement of our IR activities based on your feedback. Really appreciate your cooperation in filling up the questionnaire survey for this Webex meeting through the Webex. Thank you very much for your participation, despite your very tight schedule.