Good afternoon. This is Tai young, Head of IR and Planning Team at Samsung Electro-Mechanics. Thank you for joining our 2023 first quarter earnings conference call. On today's call, I am joined by CFO Sung Jin Kim, EVP Won-taek Kim, who is the Head of the Strategic Marketing Center, Kyutek Park, Head of Support Team, Component Division, Sangwon Lee, Head of Support Team, Optics and Communication Solution Division, and VP Junghoon Ahn, Head of Support Team, Package Solution Division. We will start with a presentation on our first quarter company level and divisional business results, followed by market trends and outlook by product before taking your questions. First, our 2023 first quarter results. In Q1, our revenue was KRW 2,021.8 billion, which is an approximately 3% increase QoQ, but roughly 23% decrease YoY. The details regarding revenue increase/decrease factors by division will be explained later on during the divisional results. Q1 operating profit was KRW 140.1 billion, which is an approximately 38% increase QoQ, but around a 66% decrease YoY. Pre-tax profit in Q1 was KRW 143 billion. Net profit was KRW 111.4 billion. In terms of financials, as of end of March 2023, total asset was KRW 11,000,100 million, a slight increase from end of Q4. Major financial indicators, liability to equity was 42%, a slight decrease QoQ, and debt to equity was 18%, similar to Q4. Equity ratio was 71%, a slight increase QoQ. Are the divisional results and also future outlook. First, the Component Division. The Component Division Q1 revenue was KRW 825.5 billion, which is roughly a 1% decrease QoQ and a 33% decrease YoY. While the overall MLCC shipments increased, particularly to China, as customers ease their inventory adjustments, our revenue remains stagnant due to the fall in the U.S. dollar to Korean won exchange rate. Automotive MLCC continued to record solid performance with increased vehicle electronic content such as ADAS and autonomous driving. We expanded our lineup in high capacitance, high temperature, high voltage MLCC, which is a foundation for future business performance. In Q2, the component market is expected to see solid demand continue from automotive applications and also see a gradual recovery of demand for IT and industrial applications. We will focus on continuously increasing supply to global EV and Tier 1s and also respond timely to high-end product demand, such as small size, ultra-high capacitance MLCC, and focus on breaking into new growth markets such as AI and automation robots. Next is the Optics and Communication Solution division. The division's Q1 revenue was KRW 798.6 billion, which is roughly 22% increase QoQ, but an 8% decrease YoY. During Q1, supply of our 200-megapixel camera module with enhanced stabilization for the strategic customer increased to full volume, and the supply of high-performance camera modules, including the 10x folded zoom, also increased, resulting in overall revenue increase QoQ. Automotive camera modules recorded solid revenue with increase in supply of high-performance products. In Q2, even though smartphone camera module demand is expected to decrease due to seasonality, we will focus on timely supply of differentiated camera modules for the new flagship smartphone scheduled for launch in the second half to offset soft market demand. For automotive camera modules, market growth is likely to continue, driven by advances in autonomous driving technology. Accordingly, we will focus on leveraging our internal capabilities to diversify our automotive customer base and expand our product lineup. Lastly, for the Package Solution Division, Q1 revenue was KRW 397.6 billion, a roughly 17% decrease QoQ and a 23% decrease YoY. The division's revenue decreased, reflecting weak spec demand for smartphones and PCs affected by the global economic slowdown. BGA supplies decreased in applications such as mobile AP, 5G antenna and memory substrates. For flip chip BGA, while demand for PC substrates decreased, business for large size, high multilayer server substrate is continuing to make significant progress to a full-fledged business. In Q2, the package substrate market is expected to see increased demand around certain BGA products, and we will focus on increasing our supply around demand growth applications such as mobile AP, memory, and Arm processors. For flip chip BGA, while PC related demand is likely to see another weak quarter, the demand for high spec package substrates is expected to continue growth. Accordingly, we will focus on increasing supply of high-end products such as flip chip BGA for server and automotive applications. That ends my presentation for our Q1 results, and now EVP Won-taek Kim of our Strategic Marketing Center will go over the market trends and outlook for each product group. Good afternoon, this is Won-taek Kim, EVP of Strategic Marketing at Semco. I would like to share our market update and outlook for MLCC, camera module, and substrates, respectively. First, MLCC. In Q1, IT and industrial MLCC demand continued to remain soft overall due to several factors, including weaker than expected upside effect of the China reopening on consumption and investment, sluggish consumption of IT devices, such as smartphone and PCs due to the global economic slowdown, and temporary investment cuts by so-called big tech companies. However, in the case of Chinese demand, we saw signs of demand recovery, including an increase in demand for certain customers as inventory adjustments started to ease. As a result, our MLCC shipments increased QoQ. For automotive MLCCs, despite the effects of seasonally weak vehicle demand, automotive MLCC demand continued to remain solid, driven by increased electronic content in ICE vehicles and wider penetration of battery EVs. With MLCC inventory adjustments already completed to a certain degree, and considering factors such as the gradual recovery of set demand, launch of new smartphones in China, and inventory demand in anticipation of Q3 peak seasonality, MLCC demand in Q2 is expected to increase quarter-on-quarter. In particular, the demand for automotive MLCC is expected to continue growth, driven by growth in xEV penetration, which creates greater demand for high-end products such as high temperature and high voltage, high capacitance MLCC, and also driven by increase in MLCC content per vehicle. Accordingly, through active market sensing, we will focus on the Chinese smartphone market, where demand is expected to recover in order to drive IT MLCC revenue growth in Q2. For automotive MLCC, we will focus on increasing our automotive supply capabilities by preparing a product lineup that meets the needs of the automotive customers, and focus on increasing our automotive market coverage by adding new customers among the rapidly growing new EV companies and Tier 1 vendors. Next is the camera modules. In Q1, demand for our camera modules increased QoQ, thanks to the effects of a strategic customer's new flagship smartphone and solid demand for automotive cameras. In Q2, even though the effects of the strategic customer's flagship launch is likely to gradually wear off, demand from Chinese and global customers for high spec camera modules is expected to increase. Overall in Q2, we expect demand for the camera modules to be more solid than usual years. In the second half, key smartphone customers, including strategic customer, are expected to continue to emphasize the high pixel, high picture quality, and high power zoom cameras in their new flagships. Furthermore, with the increase in foldable smartphones, it's expected to drive slim camera module growth. For automotive camera modules, the increase in global OEMs electronics adoption, strengthened safety regulations, and advances in ADAS technology are expected to continuously increase the number of camera modules per vehicle, which will be an additional driver behind strong automotive camera demand. We will focus on new designing activities for new flagship smartphone projects of the strategic customer, Chinese customers, and global OEMs, and actively respond to foldable phone demand to further increase our dominance in the high-end camera module market. At the same time, we will also focus on growing our automotive camera module business by continuously proposing differentiated camera modules to key automotive customers to capture the increase in demand for high pixel camera modules for sensing applications created by advances in ADAS. Lastly, the substrates. In Q1, BGA demand overall decreased as major customers increased inventory adjustments in the face of sluggish smartphone and other IT device demand and decrease in memory demand. For flip chip BGA, while demand for server and automotive applications remained solid due to the effects of the larger size and high multilayer, demand for PC flip chip BGA, which accounts for the larger share of total demand, decreased significantly, resulting in an overall soft demand. In Q2, even though overall BGA demand is expected to remain sluggish versus last year, considering that some BGA products for smartphones have completed inventory adjustments and that memory market situation is expected to recover in Q3, demand for related substrates is expected to recover compared to Q1. Meanwhile, for flip chip BGA, market demand is expected to fall in Q2 as PC related demand is likely to remain sluggish. Despite such market outlook, we will focus on developing new customers by leveraging our differentiated technology and quality, including our high multilayer and passive component embedding technology. We will also focus on actively increasing the share of high-end products targeting growth applications such as high-performance server network equipment, automotive, and ARM processors in order to diversify our revenue structure. Thank you. Now we will start the Q&A session. Now Q&A session will begin. Please press star 1. That is star and one if you have any questions. Questions will be taken according to the order you have pressed the number star one. For cancellation, please press star two. That is star and two on your phone. The first question will be provided by Chari Jo from Korea Investment & Securities. Please go ahead with your question. I have two questions. The first question is about MLCC. Can you share with us the first quarter shipment, inventory days and ASP for your MLCC, and also share some outlook for your MLCC key performance metrics in the second quarter? Second question is about the substrate business. With the global economic slowdown, many of the cloud companies are expected to cut their investment sizes. What kind of implication do you think that would have on your flip chip BGA for server? Can you share with us your outlook for the server flip chip BGA supply for Semco? To answer your first question about our first quarter MLCC shipment inventory ASP and second quarter MLCC outlook. Compared to the fourth quarter, first quarter of this year, we did see an increase of MLCC shipment quarter-on-quarter, especially around the Chinese mobile customers. Overall MLCC shipments did increase QoQ and our inventory days have decreased QoQ. Our blended ASP however, did slightly decrease QoQ. This is mainly due to the fact that our MLCC shipment increased mainly around our mobile MLCCs. In terms of revenue, if our revenue in dollar, U.S. dollar terms did increase quarter-on-quarter, because during the first quarter, the U.S. dollar to Korean won exchange rate decreased, in terms of Korean won denominated revenue, we saw a slight decrease quarter-on-quarter. You've also asked about the second quarter outlook. Given the fact that the inventory adjustment in the market has taken place to a certain extent, and considering that going forward, we expect Chinese smartphone new products to be launched and automotive MLCC demand to remain solid. We expect that in the second quarter we will see another quarter-on-quarter increase in MLCC shipments. Your second question was about the supply outlook for our server flip chip BGAs. When we look at the server market itself, in the near term, we do expect there to be some impact due to the economic slowdown, as big tech companies are likely to change their investment plans. That said, still in the mid to long term, if you look at the server market, continuous growth is expected as there is a digital acceleration with the adoption of new technologies such as the large AI models exemplified by ChatGPT. In the case of server substrates, as you know, we started mass production of server substrates at the end of last year. Since then, customers have recognized us for our stable supply capabilities. They have been asking for additional volumes this year, so currently we're supplying volumes higher than we had originally expected. We're also currently underway with investments in expanding our server dedicated substrate lines. That investment is going ahead smoothly as planned. Going forward, our decisions to either expand, make investments in expanding capacity will be reached flexibly in line with customer needs and market situation. 네, 다음 질문 받아주시기 바랍니다. 다음으로 질문해 주실 분은 하나증권의 김로코 님입니다. The following question will be presented by Roko Kim from Hana Securities. Please go ahead with your question. 질문 기회 감사드립니다. 두 가지 질문이 있고요. 첫 번째는 중국 리오프닝에 따른 MLCC 수요 회복 기대감이 있는데요. 관련해서 저희 뭐 가동률 현황이나 그리고 향후 전망에 대해서 말씀 부탁드립니다. 두 번째는 2억 화소 카메라 모듈 탑재한 스마트폰 반응이 양호한 것 같은데요. 이와 관련해서 향후 뭐 2억 화소 혹은 이제 folded zoom 등의 고사양 카메라 공급 확대 계획이 있으시다면 말씀 부탁드리겠습니다. 감사합니다. My first question is about your MLCC utilization, current update and forecast given that there is some expectation in the market that MLCC demand may recover with the effects of the Chinese reopening. Second question is about your camera module business. The smartphones that adopt the 200-megapixel camera modules have been very well received in the market. Considering that going forward, do you have plans of increasing your supply of high spec camera modules such as the 2-megapixel or folded zoom camera modules? 질문 주신 가동률 현황 및 전망에 대하여 답변드리도록 하겠습니다. 1Q 출하량 증가와 함께 가동률도 상향되었으며, 2Q에도 가동률은 점차 개선될 것으로 전망하고 있습니다. 하반기에는 중국 리오프닝 가시화와 함께 주요 거래선의 신제품 출시에 따른 수요 확대 그리고 세트의 고성능화 추세로 인한 MLCC 소요 원수 증가, 이와 더불어 전장용의 지속적인 성장을 바탕으로 점진적인 가동률 확대를 기대하고 있습니다. To answer your first question about our MLCC utilization, as our shipments, MLCC shipment increased in Q1, our utilization also increased. In the second quarter, we expect utilization to continue gradual improvement. Looking towards the second half of this year, we expect there to be greater tangible effects of the Chinese reopening. Also, there is some upside in terms of increased demand as major mobile customers launch new products. Also, as the sets become more high performance, the MLCC count per box is increasing, which is another factor for increased demand. Automotive MLCC is expected to continue growth. Based on these factors, we are anticipating there to be a gradual increase in our utilization going forward. 고사양 카메라 모듈의 공급 확대 계획에 대해서 말씀드리겠습니다. 고사양 카메라 모듈은 국내외 주요 거래선 플래그십 모델의 주요 차별화 포인트로서 고화질, 줌 배율 등 성능 업그레이드 수요는 향후에도 지속될 것으로 전망됩니다. 당사는 이러한 시장 수요에 맞춰 렌즈, 액추에이터 내재화 기술력을 기반으로 2억 화소급 카메라 모듈의 흔들림 보정 기능 향상 및 폴디드 줌의 슬림 소형화, 줌 배율 성능 개선 등을 통해 차별화 제품을 적기 개발하고 국내외 거래선 대상으로 공급 확대를 추진하겠습니다. Your second question was about the high-spec camera modules. As you know, major mobile customers, both in Korea and overseas do use these high-spec camera modules as a key point of differentiation in their flagship models. That is why we expect the major mobile OEMs to continue to demand for upgraded performance. For example, in picture quality or high-power zoom in camera modules. Leveraging the internal technology edge that we have in key parts such as lens and actuators, we will focus on developing differentiated products in line with market demand, such as 200-megapixel camera modules with enhanced stabilization, the slimmer and smaller camera modules in folded zoom, and also improved performance of zoom in order to develop and deliver differentiated products on time. Also we will focus on increasing our supply to both domestic and overseas customers. 네, 다음 질문 받아주시기 바랍니다. 다음으로 질문해 주실 분은 Mirae Asset Securities의 Yumi Cha 님입니다. The following question will be presented by Yumi Cha from Mirae Asset Securities. Please go ahead with your question. 네, 안녕하십니까? 질문해 주셔서 감사합니다. 저도 오늘 이제 신사업 관련 그리고 컴포넌트 사업부 각각 한 가지씩 질문드리고 싶습니다. 첫 번째 이제 신사업 관련해서 지난 삼월 저희 주주총회 당시에 이제 전고체 전지 관련 내용이 언급된 걸로 파악하고 있습니다. 요 전고체 전지를 포함해서 혹시 계획하고 계시는 신사업 내용이 있다라고 하시면은 요 계획에 대해서 공유 부탁드리겠습니다. 두 번째 이제 컴포넌트 사업부 같은 경우는 이제 최근에 뭐 삼성전기 전장용 MLCC 관련해서 뭐 점유율 증가와 같은 이제 긍정적인 그런 언론 보도들이 계속 나오고 있는 걸로 파악하고 있습니다. My first question is about your plans of pursuing new business opportunities during the general meeting of shareholders that was held in March. There was mention by the company of pursuing, for example, all-solid-state batteries. All-solid-state battery as a future business opportunity, including all-solid-state batteries. Can you share with us some of the company's plans of pursuing new business opportunities? Second question is about the automotive MLCC business. We are hearing reports by the media that Semco is increasing its market share in automotive MLCC. Overall in automotive MLCC including, for example, MLCC for powertrains, can you give us your current MLCC supply update and plans of increasing, expanding your automotive MLCC business going forward? Your second question was about our automotive MLCC supply update and future plans. If you look at some of the key market research firms, they are saying that EV sales would be increasing by more than 30% year-over-year, and that around more than 30%, around 30% of newly delivered vehicles would be with ADAS level 2 or above. This is all supporting the view that automotive MLCC market will continue to grow this year again. As you know, Semco has been consistently outgrowing the market in the automotive segment, and we plan another year of continuous revenue growth this year. Specifically in order to achieve this, we will focus, number one on increasing the market share that we have in areas such as ADAS and infotainment, which is currently the largest markets in the automotive segment. At the same time, we will focus on further e-expanding our high temperature, high voltage MLCC product lineup for the EV powertrain applications, which is the area that has high growth potential. By doing this, we aim to deliver higher than market revenue growth again. The following question will be presented by Hyungwoo Park from SK Securities. Please go ahead with your question. 안녕하세요. SK 증권 박향우입니다. 두 가지 질문드리겠습니다. 먼저 패키징 기판 관련인데요. 조금 조심스럽긴 하지만 이제 PC 시장에 대해서 삼 분기부터는 수요 회복을 기대하는 의견들도 있는 것 같습니다. PC를 포함한 삼성전기의 하반기 FCBGA 사업 전망에 대해서 여쭤보고 싶고요. 두 번째는 컴포넌트 질문인데요. 전자소자를 제2 MLCC로 육성하겠다는 언론 보도가 있었는데, 전자소자 관련해서 사업 현황, 제품군 그리고 전략 방향에 대해서 공유 부탁드립니다. 감사합니다. 이상입니다. First question is about the package substrate business. There are cautious and hopeful views in the market that perhaps PC demand may recover from the third quarter of this year. Considering such views, what is your outlook for your flip chip BGA business in the second half of this year, including those for the PC applications? Second question is about your electronics component business. I think there was a media report that Semco plans to develop and grow its electronics component business to something that's comparable to what it currently enjoys in MLCCs. With that in mind, can you give us an update on your electronic components business? What kind of product groups you are considering and how you plan to grow the business? 하반기 FCBGA 사업 전망에 대해 답변드리겠습니다. 코로나 특수 이후 수요가 급감하기 시작한 PC 시장은 2023년 상반기까지 재고 조정이 진행되면서 하반기 출하량 증가에 대한 시장의 기대감이 증가하고 있습니다만 아직 본격적인 수요 회복을 전망하기는 어려운 상황입니다. 당사는 PC 시장 수요 회복 여부에 대해서 시장 상황을 면밀히 주시하면서 노트북 PC용 CPU 기판 등 하이엔드 제품 공급을 확대해 나가겠습니다. 당사가 그동안 추진해 온 서버, 네트워크, 전장용 등 고다층 대면적의 고부가 제품의 공급을 지속 확대하여 어려운 상황에서도 상반기 대비 매출 성장을 달성할 수 있도록 노력하겠습니다. To answer your first question about our second half FCBGA business outlook. When we look at the PC market itself, even though it enjoyed some special demand during COVID, that demand quickly decreased. There are market hope, market outlook, as you mentioned, some in the market are hoping and anticipating that perhaps even though the PC inventory adjustment may continue until the first half of this year, that may be followed perhaps by an increase in PC shipments in the second half. That is what some in the market are thinking. However, our position is that still it is difficult to confidently forecast a full-fledged demand recovery for PCs. Based on that focus on increasing our high-end product supply, for example, for laptop PC CPUs. At the same time, we will focus on increasing the supply of our high-end substrate products, such as the high multilayer and large size high-end products for server and network and automotive applications, in order to strive to deliver revenue growth in the second half versus first half, despite the various challenges in the market. 컴포넌트 사업부에는 MLCC 외에 파워 인덕터, 탄탈륨 캐패시터 등 전자소자가 매출의 약 십 프로를 차지하고 있으며, 이 중 파워 인덕터의 경우 스마트폰의 고성능화에 따른 전력 소모의 증가로 채용 원수가 확대되어 지속적인 매출 성장을 기록해 오고 있습니다. 당사 파워 인덕터는 코일을 정밀하게 형성할 수 있는 패키지 사업부의 기판 기술과 컴포넌트 사업부의 칩 기술이 융합된 제품입니다. 특히 모바일용 소형 고효율 제품은 글로벌 수준의 기술력을 보유하고 있으며, 이를 바탕으로 시장 점유율을 확대해 나가고 있습니다. 또한 올해는 전장용 파워 인덕터 제품 라인업을 확보하여 향후 전장용 사업도 본격적으로 추진해 나갈 계획입니다. 앞으로도 당사는 소형 고효율 기술력을 바탕으로 파워 인덕터, 탄탈륨 캐패시터 제품의 라인업을 확대하고 신규 고객 디자인인을 통해 사업을 지속 확대해 나가도록 하겠습니다. Now, your second question was about our electronics components business. If you look into the revenue of our Component Division, electronic components other than MLCC, such as power inductors or tantalum capacitors, account for about 10% of the Component Division's revenue. In the case of power inductors, as the smartphones become more high performance, their power consumption is increasing, and this is leading to a higher number of power inductors being necessary on the smartphone per box. This is a driver to continuous revenue growth of power inductors. Especially our power inductors embodies the technology edge of two divisions. One is the substrate technology that comes from our Package Division, which is used to make the precision shaping of the coils. It also embodies the chip technology of our Component Division. Especially the small size, high efficiency power inductors that are used for mobile applications are recognized to have technology that is global top level. This technology edge is how we have been able to expand the market share. Also this year, in addition to our mobile power inductors, we are planning to add on automotive power inductor product lineup in order to develop our automotive power inductor business full-fledged. Going forward, using the technology edge we have in the small size and high efficiency components, we will focus on further expanding the power inductor and tantalum capacitor product lineup and also grow the business further through additional and new customer design-ins. The following question will be presented by Woon-ho Kim from IBK Securities. Please go ahead with your question. Look at the current economic situation. It is very challenging. Also, the macro situation is also quite challenging. Given such, even under such external environments, when we look at your performance and what you have said today, it seems your MLCC inventory is reaching normal level, which is very good to see. Other divisions have positive upsides that they can look forward to. Considering that, can you share with us your guidance for second quarter and also future performance? To answer your question about our outlook for second quarter and also the remainder of the year. In second quarter, while there are some downside factors for demand, especially related with the set demand, such as the possible wearing off of the effects on the camera module business, the effects of the strategic customers launch of the new flagship model, and also the expected continued weakness of PC demand and that leading to continued weakness, softness in flip chip BGAs for PCs. In the second quarter, there's also some upside factors that we can expect for demand, such as the automotive products, probably expected to maintain solid demand. Also, the key customers expecting planning to launch new products, and that would also have some positive effect on our MLCC demand. Considering both of the downside and upside, we think that overall in second quarter we will be able to achieve quarter-on-quarter revenue growth. Beyond the second quarter, looking towards the second half of this year, even though business visibility still remains limited, there is some upside factors that we can expect on the demand side, such as more tangible results being delivered from Chinese reopening. Also there would be the seasonal volume increase of IT products such as PCs, and also the continued growth of the automotive related markets. We will focus our capabilities on these areas so that we're able to capture these opportunities and deliver improved business performance. Looking at the external environment, there is still quite a lot of business uncertainty and challenges. There is emergence of risk in the financial sector recently, and there's continued concerns of a global economic recession. That said, we will focus on, number one, creating new business opportunities by continuously pioneering growth markets such as automotive and servers, and also concentrate on creating greater competitiveness internally, through productivity improvement, cost saving, better investment efficiency and better free cash flow generation to minimize volatility in our business performance going forward. That completes our first quarter earnings conference call. If you have any further questions, please forward them to the IR team. Thank you very much.