Now it's time for us to start Tokyo Electron financial announcement for the Q2 of the fiscal year ending on March 31, 2023. Thank you very much for joining us today despite your busy schedule. I am Yatsuda of IR department, acting as a moderator for today's session. Now I'd like to introduce today's attendees. Mr. Toshiki Kawai, Representative Director, President and CEO. I'm Kawai. Nice to meet you, everybody. Next, Mr. Hiroshi Kawamoto, Vice President and General Manager, Global Business Platform Division, Finance Unit. I am Kawamoto. Thank you very much for joining us. Prior to the presentations, let me explain the flow of today's conference. First of all, Mr. Kawamoto and Mr. Kawai will make presentations. After that, until 6:30 Japan time, we will take a question from your side. This meeting will use two channels of Webex for the simultaneous interpretation between Japanese and English. As we explained in our email, you are kindly requested to use apps on PCs or mobile terminals if you plan to ask questions. If you are not going to ask questions, you can use your telephones. In addition, since this conference is intended for the institutional investors and analysts, we'd appreciate your understanding that we'll receive questions only from institutional investors and analysts as usual. We will post the audio contents of this conference in Japanese and English on our website within a couple of days. It will be appreciated if you could also visit our website. Now, Mr. Kawamoto, Vice President, General Manager, will present the consolidated financial summary. Mr. Kawamoto, please. Thank you very much for waiting. Good afternoon. I am Hiroshi Kawamoto of Finance Unit. I'd like to present the consolidated financial summary of the Q2 of fiscal year ending in March 2023. This slide shows the quarterly based results. In the Q2, we generated net sales of JPY 709.2 billion, 49.7% increase from the previous quarter, as shown in the red box. In the Q1, there are delay in equipment shipment and start-up due to the impacts of lockdown, and also supply shortage due to disruption in the logistics. As these difficulties were resolved in the Q2, the result exceeded our guidance for the H1 of this fiscal year. By segment, the SPE net sales recorded JPY 689.0 billion, delivering our highest ever quarterly net sales. The FPD net sales were JPY 20.1 billion. Net sales, operating profit and operating margin hit the record high. Gross profit margin remained high at 46.3%. This is the graphic representation of the financial summary of the previous slide, just for your information. Next, this slide shows the half-year based financial results. Again, could you look at the figures in the red box. In the H1 of this fiscal year, we generated net sales of JPY 1,182.8 billion, exceeding the financial estimate we announced on August 8. This is the record high. Sales by segment. This SPE net sales recorded JPY 1,153.0 billion, exceeding our financial estimates. The FPD net sales were JPY 29.7 billion, almost as expected. Gross profit margin was 44.7%, and operating margin was 29.6%. This shows the segment information. For SPE on the left-hand side, you can see FPD in the middle, and you can see composition on the right. For SPE, we generated net sales of JPY 689.0 billion, and delivered segment profit margin of 36.7%. While we keep investing in such area as R&D for future growth, thanks to significant increase of the net sales, segment profit margin rose by 7.9% from the Q1. For FPD, net sales were JPY 20.1 billion, and segment profit margin was 10.0%. For composition of the net sales in the Q2, SPE sales accounted for 97%, while FPD sales accounted for 3%. This slide shows SPE sales by region. As you can see, the SPE sales showed a considerable increase from the Q1 in many regions such as Japan, North America, Taiwan and China. As for China, the impacts of lockdown in the Q1 were resolved. This slide shows SPE new equipment sales by application. On the right, you can see the Q2 from the bottom of the chart, sales to logic manufacturers accounted for 61%, non-volatile memory accounted for 24%, and DRAM accounted for 15%. Next, this shows the Field Solutions sales. In the Q2, sales amounted to JPY 131.7 billion, increasing by 20% from the previous quarter, driven by increasing such sales as modifications. As you can see, the sales has been increasing along with the time. This shows the balance sheet. Total assets were JPY 2,138.0 billion. Cash and cash equivalents JPY 184.6 billion. Accounts receivable and contract assets were JPY 507.7 billion. Cash and cash equivalents, as well as accounts receivable and contract assets increased due to the increase of the net sales. Inventories were JPY 552.9 billion, along with the revenue recognition, many products in inventory were shipped, but due to the proactive arrangement of raw materials, inventories remain almost unchanged. Liabilities were JPY 645.8 billion. Net assets were JPY 1,492.1 billion, increasing by JPY 177.3 billion due to the increase of net income. Equity ratio was 69.2%. My last slide shows the cash flow. The cash flow from the operating activities increased to JPY 193.4 billion due to the profit achieved along with the net sales increase. The cash flow from investing activities was -JPY 23.1 billion. This includes CapEx. The cash flow from financing activities were -JPY 2.1 billion. As a result, the free cash flow was JPY 170.2 billion at a high level. This concludes my presentation about consolidated financial summary. Now, Mr. Kawai will make a presentation on business environment and financial estimates. Mr. Kawai, please. Once again, good afternoon, everybody. Thank you so much for joining us despite your very busy schedule. I am Kawai. Now I'd like to talk about the business environment and financial estimates. First of all, let me start with the business environment. In the financial announcement in August, I said that WFE market in CY 2022 was expected to grow by 5%-15% on year-on-year basis. We currently expect that growth rate will land at around 10%. Due to expectations for semiconductor technology innovation driven by progress of digital shift in society and the realization of decarbonization society, our outlook remains unchanged for mid and long-term growth of the SPE industry. For FPD fabrication equipment, TFT array process market, there is no change, and slight increase is expected in the investment on the year-on-year basis. Next, this shows business progress in the Q2 of fiscal year ending in March 2023. Our sales to logic and NAND manufacturers increased significantly. For all of our key products, shipment increased considerably. As a result, we generated net sales of JPY 709.2 billion, delivering record high quarterly net sales. Operating margin was 32.8%, again, the highest ever on the quarterly basis. Sales of the Field Solutions business also hit record high of JPY 131.7 billion, thanks to steady sales generated by upgrades and modifications for memory device scaling. This achievement of quarterly net sales exceeding JPY 700 billion, despite various challenges in such an area as procurement logistics, serves as a touchstone for our efforts to pursue net sales of JPY 3 trillion set as a target in the midterm management plan. This has given us great confidence. Such achievement is strongly supported by the cooperation of our partners. It was the quarter we enforced our belief that our company's strength heavily relies on our solid supply chain. Penetration of strategic products and winning of development POR for our future growth proceeded steadily in accordance with midterm management plan. Just one example, we deliver promising results in the items shown over here. We are winning PORs steadily. All of these constitute the seeds of our future growth. Next, I will present the financial estimates for fiscal year ending in March 2023. We are going to revise the financial estimates, primarily reflecting the changes in memory manufacturers' WFE investment and export administration regulation against China enhanced by the U.S. government. On the full year basis, we expect that net sales of JPY 2,100.0 billion, gross profit of JPY 910.0 billion, operating income of JPY 546.0 billion, and net income attributable owner as parent is JPY 400.0 billion. This slide shows SPE new equipment sales forecast. Due to the same grounds that I stated for the revision of financial estimates, we have revised the new equipment sales forecast for the H2 of this fiscal year. In the H1 of this fiscal year, we generated new equipment sales of JPY 917.7 billion, hitting record high, which exceeded the guidance by about JPY 67.7 billion. The new equipment sales are expected to be JPY 700.0 billion in the H2 and JPY 1,617.7 billion in full year. On calendar year basis, we expect growth of about 20%. On the fiscal year basis, we expect about 8% growth from the record high new equipment sales delivered in the previous fiscal year. Now let me present the initiatives we are working on toward mid- to long-term growth using several slides. As you know, semiconductors become increasingly important to promote ICT digital transformation and build decarbonized society. Electric vehicles and fuel cell vehicles are expanding while autonomous driving is introduced more widely, along with spread of AR, VR, and MR. Metaverse will pervade furthermore. While the 5G communication continues to be deployed broadly in the industry and society, deployment of the post-5G technology will proceed to realize higher speed, larger network capacity, lower latency, and multiconnectivity. Such innovation of new technologies will drive continuous growth of the WFE market. As announced by SEMI, as many as 67 new 300-millimeter fabs expected to start construction from 2022 to 2025. Therefore, SPE demand is expected to grow increasingly in the future. In addition to the increase of fabs and manufacturing lines, constant technology innovation also drives the WFE market and WFE demand. As you can see here, the structure of logic devices changes about every 2 years. At present, logic devices of 3-nanometer FinFET structure are manufactured in high volume. The structure will evolve to GAA or Gate-All-Around nanosheet structure and eventually to the SheetFET structure to achieve higher performance and lower power consumption of logic devices. EUV lithography is one of the critical technologies to realize such complex and dense structure. The EUV lithography has already been deployed in high volume manufacturing lines, while High-NA EUV is expected to be introduced as innovative lithography technology for further investigating from the technology node of 1.4 nanometer. To support the development of next-generation logic device materialized by this High-NA EUV, our company is currently working on the joint development together with imec and ASML. In order to contribute to the development of next-generation leading-edge devices, Tokyo Electron works with customers around the world and promote collaboration in consortia and with multiple companies. This slide shows business opportunities and focus areas for three years to come. For logic devices to achieve lower power consumption and higher speed CPU in the 2-nanometer node, the GAA nanosheet and backside PDN structure will be in the center of changes of the technology. For DRAM to deliver DDR5 high-speed working memory, EUV lithography and high-k metal gate will be introduced. For NAND to realize larger storage, initiative to deliver high-stacking structure of 300 layers will start. In addition, NAND manufacturing process is expected to adopt multi-tier stacking and bonding technology to bond memory cells and peripheral circuits fabricated on different wafers. Our company offers broad product portfolio, coping with such future technology innovation. We believe the area indicated in bold face, in particular, will provide us with great business opportunities. We aim to expand the share in high value added areas. In the Field Solutions business, in addition to the current business area, including re-engineered models, modifications, and part sales, we think it's very important to make attractive proposal about new solutions, leveraging the existing process tool effectively when we pursue our future growth. Firstly, establishing the infrastructure essential for data utilization, such as servers associated with process tool and group of process tools. Secondly, establishing sensing technology to monitor process tools and wafer processing condition. Thirdly, analyzing domain knowledge of equipment and process through effective use of digital support tools. Last but not least, utilizing AI for efficient process improvement and equipment function development. By accumulating these efforts and enhancing each one of them, we will provide optimum solution and strive to maximize equipment performance and enhance productivity. IoT, communication, metaverse, and reapplication, all those things are key words. The business opportunities of the Field Solutions will be increasing and expanding. We are working on the strategy for further growth of this Field Solutions business. By promoting these various activities, we will go forward to achieve midterm management plan that we announced in June 2022. Aiming at net sales of JPY 3 trillion, operating margin of 35% or more, and ROE of 30% or more, we will make every effort to outperform the market, facilitate further growth, so that we can become one and only company in the prime market of Tokyo Stock Exchange within 5 years. This shows our plan for R&D expenses and CapEx. The plan remains unchanged. As we already announced, we will invest more than JPY 1 trillion for R&D and more than JPY 400 billion for CapEx, especially for evaluation tool for 5 years to come. To achieve the new midterm management plan, we will continue proactive R&D investment and capital investment. My last slide shows dividend forecast. For interim dividend, we plan to pay JPY 857, which is record high interim dividend. Along with the vision of our financial estimates, year-end dividend is expected to be JPY 425. TEL will end our 60th year on November 11, tomorrow. In this fiscal year, we expect to deliver the record high net sales, and we have been promoting various initiatives for the further growth in the future. We are steadily winning PORs by leveraging our strategic equipment. With our sincere gratitude to the shareholders who kindly supported our growth, we are planning a commemorative dividend of JPY 200 per dividend at the end of this fiscal year. Thank you very much. This concludes my presentation. Thank you very much for your kind attention. Now we will have question-and-answer session until 6:30 P.M. Japan time. You can ask questions either in English or Japanese, but as our speaker is unavailable on the Japanese channel, please allow us to take all your questions only in Japanese. If you ask a question in Japanese, please press the raise hand button on the Webex. For details, please refer to the instructions attached to the invitation email. I will call a name of the person who ask a question one by one. Our secretariat will contact you in advance, so please check the Webex chat box. For questions in English, please use Webex chat box to enter your company name, your name, and your question in text and send it to our secretariat. We will refrain from answering questions if your name and affiliations are not given. On the Japanese channel, we will translate your English question into Japanese and read it out in Japanese, and speakers will answer in Japanese. On the English channel, the question and answer will be simultaneously interpreted into English on a real-time basis. As we said in our invitation email, we will take one question per person so that we can take as many questions as possible. If time allows, we will take questions additionally. Now, we are very happy to take questions from the floor. The first question is from Mr. Shibano of Citigroup Global Markets Japan. Thank you very much for your presentation. I am Shibano from Citigroup Global Markets Japan. I have a question regarding future outlook. I want to get more detailed information so that I can get more high resolution information, picture. Now from the H1 to H2, there have been the major reduction in the sales. As a result, the Q2, actually July, September, is a kind of peak for this cycle. From Q2 to September to December to January to March quarterly, what sort of sales are expected according to your understanding? In your business, when are you going to expect the bottom? Do you have any comment on that issue, please? Mr. Kawai, please. Let me answer to your question. I am Kawai. Can you hear my voice? Can you hear me? Yes, I can hear you. Thank you very much. This time, we revised our estimate downward. This is because of the recent memory, in particular memory users do have the inventories. Because of the logistics disruption and component and material procurement concern, they are prepared for such kind of concerns. Now this kind of problem has been moderate, getting milder, and we have revised the estimates. This is the current situation for the memory of investment, and the investment by the memory manufacturers has been pushed forward. Another reason is in October 7, there was announcement of the American government for the trade restriction on China, and we also incorporate this fact when we revise our financial estimates. This condition or situation is expected to be monitored furthermore. For each quarter, the quarterly-based outlook or forecast, it's a bit difficult for us to come up with quarterly outlook because of those like uncertainty. However, when you look at the future, we do have the high potential for the future. The next CY, we need to look at the entire picture rather than the smaller picture. Now we have the trend, mega trend of digitalization. As I said in my presentation, the memory investment is rather small drastically, that might be expanding the Q2 next year, or Q3 next fiscal year or Q3 next year. We can see some gradual increase so that we can see big years ahead of us. This is our future outlook, and we should be prepared for the future so that we won't repeat the same things in the past. From next year and onward, there might be the business opportunity for high-speed CPU, for data center investment, and for the leading-edge node, WFE market will be driven. In other words, DRAM 1B nanometer and 300 layers for NAND and logic 2 nanometer approach. In these areas and also the recovery of memory investment, we will see the timing of recovery with memory investment in the future. For DRAM, some people said Q2 should be the recovery timing. We need to be careful to look at the situation in the market. As announced by SEMI, 67 wafer fabs are to be constructed from 2022 to 2025, and we need to be prepared for these kind of new fab constructions for the future. Therefore, we will see the high business opportunity, and we should not look at the quarterly-based outlook. We should look at this year, next year, and two years from now. We want to have the good system so that we can be prepared for the recovery of the market. When you ask us the timing, it's a bit difficult for us to say the timing, and we shouldn't talk about the timing. Everybody is now exploring the timing to trigger the next growth right now, so we must closely look at the situation in the market to prepare for the future recovery. Having said that, when it comes to power device, power devices are running short. Anyway, thank you very much for your answer. Mr. Shibano, thank you very much for your question. Next question is from Mr. Nakamura of Goldman Sachs Japan. I am Nakamura of Goldman Sachs Japan. Thank you very much. As for the revised financial estimate, I want to learn something more about your guidance for sales, annual sales changed by JPY 250 billion, and operating margin is changed rather drastically. It's the change of JPY 170 billion. The gross margin reduction is rather big. Could you explain the background of those changes in detail, please? Is that because of customer mix or because of the soaring price of raw materials, for example? Thank you very much. I am Kawamoto. Let me answer to your question. About your question, in particular, in the H2 of this fiscal year, there are some impact of the soaring price of components and materials, raw materials. As Kawai said earlier, R&D, for R&D, we continue our investment. We will not decrease R&D investment. We are continuing R&D development investment, so that's one of the reason. In addition, product mix is another factor. The H2, we will see the drastic drop in the sales because of the product mix. These are the major reasons for our revised financial estimates. Next year, when you look at the baseline, the H2, we should think about the gross profit margin for the H2 of this year when you think of the outlook for the next fiscal year. In this industry, there is the potential for growth in our industry. As I said earlier, next year and onward, the huge business opportunities will be coming for 300 layers, and high-speed CPU is to be released. Investment for data center will start, and for DRAM, 1B node investment will start, so 1.5-2 years. For 2-year cycle, new equipment is required. We must provide high-value-added product with appropriate price. To meet the trend in the market, there are various factors like inflation or exchange rate. We are doing business on yen basis, so we have very limited impact of the exchange rate fluctuation, but we try to come up with appropriate pricing. In principle, our high-value-added products should be introduced in the market. As for the timing, as for your question, the timing might be changed, so now we do have the high potential. Rather than using the H2 of this fiscal year as a basis, but I think we can increase our performance little by little for the future. The timing of device scaling investment is critical. Mr. Nakamura, thank you very much for your question. Next question is from Mr. Yasui of UBS. I am Yasui from UBS Securities. My question is about this year's financial estimate, SPE net sales, which has been reduced. When you look at one year, 5%, +5% WFE market expected to increase by 10%. I think this is on the dollar basis. When changed to the yen basis, I think WFE market is expected to grow by 10% or more, while your net sales is increasing by 5%. So your sales might not catch up with WFE market growth. Could you just explain that, please? For WFE market, this is for the wafer fabrication equipment. This is the market for the front end of the manufacturing of semiconductors. As I said in my presentation, for this year, calendar year, WFE market is expected to grow by 10%. I mean, those circumstances, our new equipment sales is expected to increase by 20%. WFE is based on dollar. Even on yen basis, WFE is expected to increase by 20%, so I think we can follow. When you look at the fiscal year from April to March, it's a bit different. We are conducting benchmarking compared with previous year's facts, and we also achieved the midterm management plan last year, also 8% increase from the previous year's results. Therefore, compared with the market growth, our performance does not decline. That's not our expectation. Of course, exchange rate impact should be closely watched. The current yen depreciation trend may have some negative impact on our performance, but even under such circumstances, I think we can pursue the growth. Let me get some clarification. For calendar year, the equipment itself, you said 20% increase is expected. Yes. So on fiscal year basis, that's about +8%. Is that correct understanding? Yes, that's correct. So when you look at the figures, this year, SPE sales is 5% increase, but solution business declined a little bit. Is that correct understanding? Yes. Yes, that's correct. Thank you very much. That's clear. I have one follow-up question. China, now we have the China-U.S. conflict, trade conflict, and the U.S. government asked the Japanese government to cooperate with the American government. Could you share your idea about your actions or measures against this kind of trade friction? When it comes to geopolitical issue, as a company, we are not in the position to make any comment. That's our basic stance. However, one thing we can say here is American companies, including engineers, do not deliver the products, and their engineers are coming back to United States, and we do not fill up the gap produced by American companies. We don't take those orders. American companies are not able to deliver their products to Chinese market, and it's so difficult to conduct investment. Therefore, for the target customers, capital investment plan is expected to be changed in the future. This is how we view the situation. For other details, because this is relevant to the geopolitical issues, my comment may suggest some capital investment plan of relevant customers I want to refrain from making comments. Thank you very much, Mr. Yasui, for your question. Next question is from Mr. Ishino of Tokai Tokyo Research Center. I am Ishino from Tokai Tokyo Research Center. Can you hear me? Yes. Thank you. I have a question. For the H2 of this year, there's some deceleration in the H2 of this year. That's your expectation. This change, first of all, as a president, were you aware of this kind of changes in the trend and start taking actions? Because of the CHIPS Act, the investment by the chip manufacturers is expected to increase from 2024. You said earlier that Q2, Q3 of next fiscal year, and big years to come, but for the next timing of recovery, how do you view or expect the next timing of recovery? And do you think DUV should be the focus area when next recovery comes? Could you share your idea with us, please? Thank you very much. Q2, Q3, I didn't say these are the big year. I said gradually the Q2, Q3, and Q3, gradually the recovery is going on. That's what I wanted to say. I didn't say anything about the big years in my previous comments. Gradual improvement or recovery is expected for the future. In the memory at present, as you can see in the presentation materials. One moment, please. On page nineteen of my presentation materials, FY 2023, Q2, H2 of FY 2023, you can see the drastic drop in memories, 17% and 13%, as you can see here. The background includes various factors, including macroeconomic issues. The timing cannot be referred to at this moment, or on the other hand, when I say something on timing, that may mislead you, but the memory or data traffic increases by 26% on annual basis, so inventory will start decreasing at certain timing. Next year, in the middle or H2 of next year, the gradual recovery is expected. Year 2024, the very big figures can be expected. That is unprecedented values or figures. I'm not so concerned about the timing of that kind of recovery. 300 millimeter wafer, three hundred layers at one B, and the investment to 2 nanometer device node. To those trends, we are going to make every effort. As far as the business top management is concerned, we should not be too much concentrating on the near future, but we need to understand the mega trend to be prepared for the future situation. As for the logistics and distributions, there are still some disruptions still going on to some extent. Also there are some geopolitical issues that raise concern, so we must be prepared for those potential concerns. March next year, we will finish up this fiscal year at earliest point. We hope we can see the early recovery, and we want to become busy to prepare for the rapid recovery. I'm sorry, my question was not clearly conveyed. I'm sorry. Now you have the deceleration trend of memory in the memory investment. When were you aware of this deceleration of memory investment in the H2 of this year, did you notice this trend? That was the question I wanted to ask to you in the beginning. Right. This summer. Around summer. The early timing, we were aware of a certain level of supply-demand balance announced by the analysts. It's relevant to macroeconomy. When it comes to memory customers and 3D customers, they are taking care of marketing very well, and number of sales has been reduced. I think we are getting rather accurate information than before. In the previous financial announcement, you did have some, how you say, idea about the deceleration? No, not at all. No. Our customers, amid the current de-investment, the near-term recovery. We need to be prepared for the near-term recovery for some customers, and some other customers have some plan to reduce the CapEx, capital investment. There are two types of customers. Because of geopolitical issues, some customers need to be prepared. Demand for equipment, we needed to analyze the situation very carefully and precisely. It's not merely based on the supply-demand balance. Now I want to ask about the next. Now the delivery. 2024, your product is to be delivered. That's maybe the plan that you have right now as far as your understanding concerned. The Q3, next fiscal year could be the recovery timing where you can see some symptom of recovery. Yes. Around that time, we can see some symptoms of recovery. Thank you very much. Mr. Ishino, thank you very much for your question. Next question is from Mr. Hirakawa of BofA Securities. BofA. Thank you very much. I am Hirakawa from BofA. Thank you very much. Earlier, my question is relevant to earlier questions about the downward revision of financial estimates. You revised net sales by JPY 250 billion, so this is because of the new regulations by the American government and also the changes in the market. If there are two major reasons, how do you view those two factors when you look at the full year basis, the new regulation impact? I think 6% or 10% impact are imposing on the American companies because of the new regulations or restrictions introduced by the American government. Could you share your idea with us, please? Your first question is about out of JPY 250 billion, the memory relevant issues and amount related to the American government restrictions or regulations. I think 50% and 50-50 between memory and American government trade restrictions. Thank you very much. One follow-up question. The impact of the enhanced American trade regulations in six months, that should be JPY 125 billion. So on the annual basis, it should be two hundred and fifty billion yen. Is that correct understanding? I think it depends on customer. We are not able to make any comment on that, and we must closely watch the future trend. However, at the same time, the semiconductor demand for semiconductor device is really huge. Digitalization is expanding furthermore. Therefore, a certain point of time, the production start to recover to cope with the increasing demands. Direct impacts are here. The announcement on October 7th. This H2 of this fiscal year is suffering from some impacts, but I'm sure that there are some investment in the future, so this kind of impacts will be mitigated in the future. Thank you so much. Thank you very much. Mr. Hirakawa, thank you very much for your question. Next question is from Mr. Yoshida of CLSA Securities Japan. I am Yoshida of CLSA Securities Japan. I have a question regarding WFE market outlook. Now by application, there was no announcement of the forecast by application, so I would like you to give us some comments. In fiscal 2023 and 2024, how do you see the future growth in next year and two years from now? For this year about For both for DRAM and NAND, 20%, almost 20%. For this fiscal year, logic-related devices accounts for about 30%, and others including power devices and legacy node logic devices. This is a rough picture. Are you talking about composition among different applications? Yes, that's correct. Thank you very much. Toward next year or 2024 as well, how do you see the market in next year and 2 years to come? For several years, the proportion between memories and the logic should be 60/40. That is the previous trend, 60 for logic and 40 for memory in the past. Next year, maybe the adjustment of inventory will start. Next year is very difficult for us to make some forecast. Yeah, 2024, again, 60/40, that, how can you say, proportion will be recovered. I'm sorry, my question was not so good. As for the growth, other competitors talking about 20% reduction for next year. It's a bit difficult, you said, to talk about the right timing of recovery. When you think about year-by-year basis, year 2023 or 2024, how do you view the range of the future outlook? Toward year 2024 compared with this year, do you think the market condition will recover higher than this year? How do you view the market trend? The next year, competitors are forecasting next year issue. We don't deny those forecasts issued by our competitors. There are various factors, including technology innovation, CapEx increase trend, so we should closely watch those trends. Worst case, as presented by our competitors, we are not able to deny those worst case scenario presented by the competitors. Toward the H2, we can see some increasing trend, and we want to see the actual situation in next fiscal year. Year 2024, the market will be growing more than this year. Thank you very much. 20% reduction announced by competitors should be the worst-case scenario according to your understanding. We cannot say it is scenario. We are not sure about that. We should wait and watch. Thank you very much for your answer. Thank you very much for your question, Mr. Yoshida. Next question is from Mr. Shimamoto of Okasan Securities. I am Shimamoto of Okasan Securities. Can you hear my voice? Thank you. I have a question for page 24. Up until 2025, you have the focus area business opportunities. I look at the base case of all phases. That's what you said in your presentation. What is your focal area? In which area do you expect the drastic increase of your sales? Maybe could you name 3 business opportunities for expected high level of revenue? When market is big in size, actually every one of them, we don't say the. Each one of the business opportunity are very attractive for me. The logic, DRAM, NAND, so 4 or 5 things are now listed over here. We can expect a lot from each one of them. When you look at the market size and also product mix, it also depends on product mix. The big one should be NAND high-k process. Started this investment, and when the 300 layers are to be introduced, we can see the higher, bigger market for NAND. In the case of DRAM, etching is also promising, and you can see some promising results. We have a high expectation for etching for DRAM as well. I'm sorry. Each one of them do have the high value added product, and market size is rather big, so I cannot pick up three. I think the market size, when it comes to market size, etching is biggest. Etching is very promising. Thank you very much. For high-k process, 2020, ever since 2020, Tokyo Electron have been progressing high-k. Year 2025 as well, you expect a lot of growth in high-k process. Is that correct understanding? Yes, I think the drastic growth can be expected for high-k. Thank you very much. Thank you very much for your question. Next question is from Mr. Hasegawa, Mitsubishi UFJ Morgan Stanley Securities. I'm Hasegawa from Mitsubishi UFJ Morgan Stanley Securities. I have a question regarding big picture. You talked about the high value added of the product. When you look at external environment, inflation has a kind of dominant impact and ecosystem, I'm afraid the ecosystem can be maintained. Year 2024, you said you can exceed peak, then how will you see the macro economy? On the other hand, when it comes to the disruptions in the supply chain, over the past one year, there was serious disruption in supply chain. Sometime in the future, with one year, one and a half year, or two years to come, you can see some increasing trend in the market. How do you prepare for that? I'm sure you are doing a lot of things including E-COMPASS. Could you explain your idea for the major trend? Could you explain your question once again, please? When you look external environment, inflation is a major factor. When it comes to the price of the SBU, then chip price going up and system price is also going up. The consumption from the viewpoint of product, it's a bit difficult to raise consumption. Of course, when you look at the data center, there might be some potential growth, but I think it's a bit difficult for market to grow furthermore. When you look at longer-term, semiconductors expected growth, I have no objection at all, but the recovery will have the timing of the recovery or timing of exceeding peak. Inflation and technology innovation, we need to look at those two factors to think about the timing of recovery. Also now you have the big trend of recovery in the future. Over the past 2 years, there's a drastic disruption supply chain and disruption still going on. How do you prepare for the potential disruption again for the supply chain? First, ecosystem, high value added should be enhanced furthermore. Size of the our product and productivity, and 2, uptime, also yield control. In those area, not only the equipment price, productivity, yield enhancement, uptime increase. These are the area where that we can enhance the value added. Together with our customers, we want to come up with optimum solutions so that we can have the win-win situation to grow together and work on the technology innovation all together by having very close communication with the customer, our customers. Fortunately, customers CapEx exceeds several trillion JPY each year at large customers. There are some challenges in the line. That sort of challenges, current challenge in the manufacturing now will provide us with some value added in the future. We are now working very hard. We evaluate tools for three or four generations in parallel to come up with optimum balance to maintain the good level of the ecosystem, and we try to provide the best or optimum products for our customers' needs. The second question you asked, the raw material and components. Essentially, our company, the mass production and R&D, we even from the stage of R&D, we try to build in quality. Our R&D and manufacturing working together to build in the quality from the very starting point of the development. In the area of our facilities, factories, our suppliers are having their facilities so that we can have day-to-day communication with suppliers closely. We also have the production. There are four major factories in Japan. Each factory, every six months, we share our investment plan and production plan together with our suppliers. At the end of fiscal year, we also have the meeting about our strategy, and we are deepening the communication with our suppliers in agile manner. This is how we establish ecosystem composed of good suppliers. That should be, that sort of good ecosystem is the strength of our company. Eco Compass and the regulations of each country and proactive procurement strategy. A bit long-term viewpoint is necessary after winning POR for certain equipment and parts for those equipment, it's difficult to get the cancellation. Therefore, we should be proactive in procurement. Thank you very much. One more question. Could you share your personal idea, your direct customers, the IC manufacturers, you are now coming up optimum solutions through this close communication. What about the end customers, for example, data center investment? I asked same question one year ago. Many of the data center companies do not suspend their investment. On the other hand, there are quite a few data center companies whose financial performance has been deteriorating. How do you view the investment trend of those end users in terms of direction, speed, and volume? Through the dialogue with our customers, we don't hear any major concerns about those areas. Their customers. Thank you very much. Thanks. Thank you very much. There are quite a few questions from the audience. I'd like to continue a little bit more. Next question is given by text. Let me read it out. Next question is from Mr. Neil Simpson of CLSA. The question is as follows: Cash flow growth has lagged operating profit in the past 12 months. What are the reason for this? When will this improve? May I answer to the question? First of all, the growth of cash flow. That we receive question about cash flow growth, as I said before, so we are investing for a further future growth. Looking ahead, we are investing for our future growth. That's what we are doing right now. Under those circumstances, also, I mentioned earlier the inventory is to grow. As of today, we are not able to catch up with in the creation of cash. That is true. However, when you look at the future, the further growth is expected. Therefore, in the future we can show you very good results as you expected. Thank you very much. Thank you very much for the question. Next question is from Mr. Yamamoto of Mizuho Securities. I am Yamamoto of Mizuho Securities. Now you have downward revision of the net sales. May I understand about memory and the trade friction. When it comes to non-memory, there are some decline as well. For logic investment is there no kind of incorporation. You haven't incorporate the weakening trend of logic investment. Or how do you view the trend of logic investment right now? Main issue is coming from China and memory investment. Logic investment is going through some adjustment to some extent, but there is no drastic drop. That's the reason why I didn't mention to logic investment so much in my presentation, but slightly, even for logic, there's some decline in investment. I also heard from logic device manufacturers they are going to increase the CapEx investment. Power device investment is rather big. Of course when it comes to the market size, logic is largest, high-end logic market is largest in size. Power semiconductor manufacturers are investing very strongly. There are some adjustment in the investment by the logic device manufacturers, but it's not the significant trend. Next fiscal year. Now the Q2 should be bottom, an increasing trend for the third and Q3. Even for next fiscal year, logic device manufacturers do continue strong investment. Is that correct understanding? Yes. Thank you very much for your answer. Mr. Yamamoto, thank you very much for your question. Last question we will take, although we are behind the schedule. Next question is Mr. Hanaya from SMBC Nikko Securities. Mr. Hanaya, please. I am Hanaya of SMBC Nikko Securities. Can you hear me? Thank you. I have a question regarding expenses. In the beginning in your presentation, R&D costs or you continue investing R&D. That's what you said. For the revision of the financial estimate, I don't think there is any revision in R&D investment. I think that's intentional, that you maintain investment in R&D. Next fiscal year and onward, there should be no changes. Do you maintain the high R&D investment next year and onward? Personally, we also conscious about the not only longer term profitability, but also shorter term profitability. That's the reason why I want to just ask question. The investment for the further growth. We want to become one and only and to provide the world best product with the highest performance at the best timing. Investment for the future growth should be continued, otherwise it might have negative impact of our future growth. Therefore, we have no intention to stop or suspend R&D develop investment. At the same time, we are developing new products. When you think about the value added for the product to be developed, this is how we can maintain short-term, mid-term, long-term profitability. For small amount of expenses other than the investment for growth, we do have the policy to make adjustment depending on the market situation, but we have no intention to reduce the R&D investment. Additional question. Now in 2019, you spent a lot of certain amount of money R&D, for R&D, that's why you have grown a lot. But now you can see the market reduction. I think magnitude of market adjustment is rather big compared with the 2020, 2019, but you maintain your basic stance for keeping investment R&D. Next calendar year, the timing in next year, calendar year, Q2 or Q3 or Q3, we think the gradual increase or recovery quarter by quarter in 2024 should be bigger than this year. When it comes to operation, next year now spring comes, then we should be prepared for next step, otherwise we may lag behind. Along with time, we are carefully watching the business opportunity, promising business opportunities. For that purpose, we must be very, very careful in continuing the R&D investment for the future growth. Thank you very much. We have received many more questions, but it's time for us to conclude the financial announcement. We will follow up the questions we couldn't answer today on our website in a few days. Lastly, we would like to continuously improve our IR activities based on your precious feedback, so we would appreciate your kind cooperation in filling out the questionnaire before you exit the Webex. Thank you very much for taking time to join this conference despite your busy schedule today. Thank you so much.