Good afternoon. Thank you very much for joining the earnings conference call of Samsung Electro-Mechanics. Today, we will start with the company's presentation, followed by Q and A session. If you have a question, please press star one on your phone. Now we will start the 2026 Q1 earnings conference call of Samsung Electro-Mechanics. Good afternoon. This is EVP Dong Woo Lee, Head of IR and Planning Team at Samsung Electro-Mechanics. Thank you for joining our 2026 Q1 earnings conference call. On today's call, I am joined by our CFO, Sung Jin Kim, EVP Taegon Lee, Head of Strategic Marketing, VP Kyu-Taeck Park, Head of Support Team, Component Division, EVP [Tan Bee Kim], Head of Support Team, Package Solution Division, and Hun-Jun Kim, Head of Support Team, Optical Solution Division. We will start with a presentation on our Q1 company level and divisional business results, followed by market trends and outlook by product before we take your questions. First, a look at our 2026 Q1 results. Q1 revenue was KRW 3,209.1 billion, which is an approximately 11% increase on a QoQ basis and a 17% increase on a YoY basis. The details regarding revenue increase or decrease factors by division will be explained later on during the briefing on divisional results. Q1 operating profit was KRW 280.6 billion, an approximately 17% increase QoQ and 40% increase YoY, beating market expectations even after the one-off retirement pay provisioning expense recognized in Q1. Q1 pre-tax profit was KRW 316.4 billion, and net profit was KRW 249.2 billion. In terms of our financials, as of end of Q1, total assets was KRW 15,660.5 billion, or roughly 7% QoQ increase. To look at our major financial indicators, liability to equity increased 6 percentage points to 55% from Q4's 49%, and debt to equity increased 4 percentage points QoQ from 22% to 26%. Equity ratio was around 64%, decreasing 3 percentage points from Q3's 67%. Are the divisional results and future outlook. First is a look at our Component Division. Component Division's Q1 revenue was KRW 1,408.5 billion, a roughly 7% increase QoQ and 16% increase YoY. AI-related revenue, including server, power, network applications, recorded high growth. Automotive MLCC supply also increased with increasing electronic content in vehicles. Revenue increased across all applications, but especially around industrial and automotive applications. Q2 MLCC market is expected to see continued strong demand for industrial high-end MLCCs for AI servers and data centers. We will focus on developing and supplying cutting-edge products targeting AI server and data center applications, such as small size, ultra-high capacitance MLCCs. Given the continued growing demand for automotive MLCCs driven by greater XEV demand and ADAS adoption, we will also focus on accelerating design in of high capacitance, high voltage automotive MLCCs and diversification of our automotive customer base. Next is Package Solution Division. Q1 revenue was KRW 725 billion, or roughly 12% QoQ and 45% YoY increase. For our Flip Chip BGA supply of high-end substrates for global big tech AI accelerators, server CPUs, and network equipment increase, and automotive substrate supply also increased tied to ADAS and automotive drive, autonomous driving. Revenue increase across all application but particularly tired to AI servers and automotive. BGA revenue also increased with increased supply of substrates for Arm processors and memory chip. Q2 Flip Chip BGA market is expected to see continued strong demand for high-end Flip Chip BGA substrates. We will focus on timely supply of next-generation high multilayer large area embedded products for AI accelerators and server CPUs and scale up supply of our new products targeting big tech AI data center network applications. Lastly is the Optics Solutions Division. Q1 revenue was KRW 1.0756 trillion, or roughly 15% increase QoQ and 5% increase YoY. For IT camera modules, revenue increased with full-scale mass production of high-performance camera modules, such as the 200-megapixel modules for the strategic customer and slim folded zoom. For automotive camera modules, revenue increased with increased supply of camera modules to our global EV OEMs and adoption of our in-cabin cameras in a wider lineup of the Korean OEM's vehicle models. Q2 IT camera module market is expected to see some seasonality, but demand for differentiating camera modules for flagships will continue both for Korean and global OEMs. We will focus on timely mass production of high-performance camera modules, such as next-gen high image quality folded zoom and 200-megapixel OIS. For automotive, we will focus on mass production of next generation modules targeting the switch of the global EV platform and continue to increase supply to the Korean OEMs. That completes the presentation on our Q1 results. Now our EVP Taegon Lee, Head of Strategic Marketing, will talk about market trends and outlook by key product. Good afternoon. This is Taegon Lee, Head of Strategic Marketing. I will go over the current market situation and outlook for MLCC, our substrates, and camera modules respectively. For MLCC, in Q1 overall MLCC demand maintained an increasing trend with MLCC demand relevant to Semco becoming even stronger, especially for premium MLCCs tied to AI servers, driven by wider adoption of agentic AI and automotive MLCC demand remaining solid around ADAS. By application, industrial MLCC grew significantly, both QoQ and YoY, thanks to increased demand tied to AI server GPU and CPUs, combined with increased demand for routers, switches and power modules for data centers, which particularly drove up supply for the X6S high capacitance MLCC. For automotive MLCC, despite the impact of decreased finished car demand in Q1, our addressable demand increased, especially around the global Tier 1 and ADAS applications. In the case of IT applications, despite the seasonal market demand decrease, we recorded revenue similar to the previous quarter, thanks to increased volume of high capacitance MLCCs for the strategic customer's new flagship model. To look at Q2 MLCC outlook, in Q2, our MLCC demand is expected to grow QoQ across all applications. First, for industrial, supply is expected to get even tighter with data centers power infrastructure becoming more advanced and MLCC content in AI servers increasing with greater AI server power consumption, as well as continued growth in demand for high-end, high reliability MLCCs. Given that the next generation AI server platform has higher power consumption, we launched a new 47 microfarad product, doubling the capacitance from our existing 22 microfarad product, targeting GPUs and power modules. This has received great responses from our customers who are eager to sign long-term supply contracts to secure stable supply. More AI servers are adopting the 800 voltage system typically used in EVs for better power efficiency, which is driving demand for the more expensive 1 kilovolt plus high voltage MLCCs, and we are keen on capturing this demand. Data centers are also adopting high-speed network equipment, the 800 gigabytes and 1.6 terabytes optic modules to handle greater traffic. This is continuously driving demand for the 100 microfarad plus ultra-high capacitance, 125 degrees Celsius high temperature MLCC demand, which we will also target to continue to increase our market share within the AI-related high-end MLCC market. For automotive, global OEMs are launching new EV models. The sudden surge in international oil prices is driving higher electrification demand, including EVs. Q2 automotive MLCC demand is expected to increase QoQ. We are increasing supply of high-end MLCCs, such as high capacitance, low ESL, to meet latest ADAS requirements to major tier one and SOC customers. We are also strengthening our position in the automotive market with our 100 volt class ultra-high capacitance MLCC needed for the 48 voltage electronic platforms and ultra-high voltage MLCCs for the 800 voltage charging platforms, which are becoming adopted by more global OEMs. Based on our solid partnership with key strategic customers, we will continue to sign more preemptive mid to long-term binding volume contracts in Q2, as we have done in Q1, to lock in early volume visibility and build a sustainable growth engine. For IT applications, despite the risk of set demand decreasing due to the so-called chipflation, we expect IT MLCC demand to increase in Q2 versus Q1 around high-end products. We will actively capture demand for ultra-high capacitance MLCCs for flagship smartphones and focus on designing of mid-voltage new MLCCs for the ultra-quick charging units to increase sales of high-end products. We will also capture increasing demand for the low ESL, low profile MLCCs driven by new semiconductor packaging technology and drive revenue growth by increasing supply of small size, high capacitance MLCCs. Regarding MLCC pricing, continued strong demand tied to AI servers has increased overall supply tensions. Raw material price increases is another factor to consider, and we will strategically respond to pricing while monitoring market situations. Next is a look at the substrate markets. Q1 Flip Chip BGA market demand saw strong growth again, mainly around server CPUs and AI accelerators as customers' AI investment continued. Our related revenue also increased significantly in Q1. The Q1 BGA market demand was weaker than Q4 due to seasonality and the memory supply issues for smartphone and PCs. Our addressable demand grew in Q1 with increase of products such as SSD controllers. Q2, FCBGA demand is expected to continue strong growth around AI applications, and supply is expected to remain tight, leading to significant QoQ and YoY growth. We are expecting increase in revenue and profits as we continue pricing discussions with customers considering the tight supply situation for FCBGA substrates and raw materials, increase supply of server and AI application substrates to existing customers, and start mass production of new products for our big tech customers, which will further improve our product mix. In addition to the large area, high multilayer substrates for server and AI applications, We are seeing growing demand for substrates with multi-core embedded technology, which is our strength, and are needed to implement better performance. We will focus on leveraging this strength to successfully start supply to big tech customers starting from Q2, and increase our synergies with our Component Division. For BGA, Q2 demand is expected to decrease QoQ due to smartphone seasonality coupled with memory supply issues. Substrate demand for SSD controllers is expected to grow YoY, driven again by AI data center demand growth. We will conduct pricing talks to reflect the raw material price increases and focus on increasing supply of substrates for high-end AP applications in Q2, and also focus on capturing demand of the growing SSD controller customers for data centers. We will also continue to expand into new applications and design-in activities, including preparing supply of MLCC embedded substrates for VPD to a new AI-related customer in the second half. Lastly is a look at camera modules. Q1 IT camera module demand was affected by soft global smartphone demand due to increased memory prices, but our addressable demand increased QoQ with the launch of our strategic customer's new flagship smartphone. For automotive cameras, despite the decrease in finished vehicle demand, our addressable automotive camera demand increased with increased supply and mass production of new vehicle models by our key automotive customers. Q2 IT camera demand is expected to slow down versus Q1 due to seasonality. We will focus on capturing opportunities created by wider adoption of folded modules across more handsets and on preparing the initial supply of camera modules for the new mobile phone scheduled for launch in Q3 by the strategic customer and other global customers. We will also aim to improve ADAS, ASP, and deliver high profit-driven growth by increasing share of high-end products such as continuous zoom, slim modules, large angle OIS, and aperture. Automotive camera demand is expected to increase QoQ as we enter new model launch season of global OEMs. We will preemptively prepare for the future autonomous driving market with high pixel heating cameras for next generation autonomous driving platforms by developing in module small size active cleaning technology to further strengthen our technology leadership. For humanoid cameras, we continue to work with major global humanoid customers in developing high-resolution recognition modules, and we will focus on becoming a early leader in humanoid markets by securing small size thin camera technology for precision gripping motion. Thank you. [Non-English content] Now Q and A session will begin. Please press star one, 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 Joonsuh Lee from Goldman Sachs Securities. Please go ahead with your question. [Non-English content] I have two questions. The first question is about substrates, and the second question is MLCC. During the shareholders meeting, the AGM, the company had mentioned that the Flip Chip BGA demand for servers and data centers have gone above 50% or more of your production capabilities, or expected that to happen. Also during April, there was media reports about possible price increases. Also, during the last call in January, therefore, you've shared your 2026 full year guidance, but at this point of the year, do you see any changes versus the guidance that you had provided earlier this year? Second question is about the MLCC demand. We are seeing continued growth of AI MLCC demand tied to AI-related applications, and I think there is in the market expectations of long-term supply contracts or price increases that you mentioned during your presentation. Can you give us any comments or your insights regarding the overall current situation and outlook about MLCCs for AI applications? [Non-English content] To answer your first question about the substrates. Regarding demand for high performance agentic AI chips is rapidly increasing due to adoption of agentic AI. We're also receiving requests from existing customers for more supply, and the demand from the new customers starting supply from Q2 has already been upward adjusted from the original volumes. At this point, the Flip Chip BGA total demand is indeed exceeding our production ability. Regarding price increases, as you know, we are talking with our major customers about pricing to reflect the increased raw material prices such as gold and copper, as well as the T-glass shortage, as well as the overall tight supply situation. Regarding the 2026 full year guidance, while we are still cautious given potential impact from external factors, we still expect our gradual utilization to gradually increase, reaching full utilization in the second half, and especially with a strong increase in big tech and other key customers, we look forward to a significant revenue jump for our FCBGAs this year. We will at the same time, actively respond to demand by closely talking with customers and vigilantly manage risks by carefully monitoring market demand. [Non-English content] To answer your question about the MLCCs related with AI applications, as mentioned during the market outlook, the AI application related MLCC demand continues to grow, and supply demand tensions are increasing in the market. AI big tech and other customers are engaging with us in talks about long-term supply contracts, and such long-term supply contracts will give us a source of continuous revenue growth and a foundation for us to expand our business with a mid to long-term perspective. With greater GPU computing power and faster server network equipment, cutting-edge high-end MLCCs, such as the hundred microfarad plus ultra-high capacitance and maximum 125 degrees Celsius high temperature MLCCs, are where demand is growing strong tied to AI servers. These cutting-edge MLCCs require leading technology and also stable quality control capabilities, and therefore, only a few companies, key players, including Semco, can be the sources of these cutting-edge MLCCs. In addition, major metallic and petrochemical raw material prices have been going up, increasing cost burdens, and we will therefore strategically respond to pricing by carefully monitoring market supply demand situation as well as raw material price movements. Given the expected increase in cutting-edge high-end MLCC demand for AI and servers, we will use our ultra-high capacitance lineup to capture customer demand, while at the same time focus our development resources to quickly follow up with launches of next generation high-end products. We are building a stable supply platform by preemptively securing capacity, and we will use this to further strengthen our lead in the AI server market. [Non-English content] [Non-English content] The following question will be presented by Jongwook Lee from Samsung Securities. Please go ahead with your question. [Non-English content] I have two questions regarding MLCC. First question is, can you follow up on your presentation and give more detailed data points about your Q1 MLCC shipment inventory and ASP results, and also, second quarter guidance? Second question is, we've recently heard through media reports that Semco has now entered in supplying MLCCs for aerospace applications. As you know, currently, in the market, there's growing interest in the sector itself, aerospace. Can you give us a bit more detail of the growth potential you're seeing of that MLCC market and what kind of benefits you are looking forward to? [Non-English content] To answer your first question about our first quarter MLCC data points and second quarter outlook, Q1 MLCC shipment increased QoQ thanks to increased industrial MLCC demand for AI server and data center power modules, also coupled with solid growth continuing from our automotive MLCCs. Blended ASP continues to increase with improved product mix around high-end industrial and automotive MLCCs. Revenue increased on a QoQ basis, and overall inventory slightly decreased in first quarter on a QoQ basis. In second quarter, a strong demand for high-end MLCCs is expected to continue tied to AI servers. Automotive MLCC demand is also expected to stay solid with wider ADAS adoption and XEV demand supported by the recent higher oil prices. Overall, second quarter MLCC demand is expected to increase across all of our applications, and also shipment and blended ASP in second quarter are both expected to increase on a QoQ basis. [Non-English content] To answer your question about our aerospace related MLCC supply. Aerospace related MLCC market can be classified into two large parts. One is MLCCs that are used on terminals that are used on earth, and then there are MLCCs that go into the low orbit satellites themselves. The MLCCs for the terminals are similar in specification to the those used in AI servers, such as small size, high temperature and high capacitance. Semco is naturally participating as a major supplier in that space. The low orbit satellite uses more than 100,000 MLCCs, which is more than an EV, and requires high reliability. We are using our high reliability, high specification MLCCs from our automotive lineup to supply to leading global customers. We will focus on gaining a first mover lead in the growing aerospace MLCC market and develop it into a mid to long-term growth engine. [Non-English content] [Non-English content] The following question will be presented by Bo-Young Choi from Kyobo Securities. Please go ahead with your question. [Non-English content] I have two questions. First question is that during mid-April, there was media reports about Semco making large scale investments in FCBGA capacity in Vietnam. We've already been told that you're expecting to be at full utilization in second half, and that your capacity up to 2027 is already fully booked. There are expectations for further capacity expansions. Can you give us your current thoughts and plans about capacity expansion? Second question is going back to the March AGM, the company had mentioned projects such as the acceleration of robotaxi, humanoid market growing, and also mass producing parts for humanoids starting from the second half. Relating with these new areas, can you give us your current progress update on the camera module business? [Non-English content] To answer your first question about our Flip Chip BGA capacity expansion plans. With a strong surge in FCBGA demand from existing and new big tech data center customers, and the capacity erosion that naturally happens with higher spec substrates, we are currently not able to sufficiently meet all of the customer requested volume with our current capacity. In anticipation of this, we had already formed and launched a task force last year, and this task force has been carefully analyzing market situation as well as customer specification and volume requirements. Also, closely communicating with customers. Based on that, we have been carrying out supplementary and new capacity expansion investments. On top of that, we are actively considering additional investments to increase next generation production supply after 2027. We are prepared to actively respond to the demand for high-end package substrates tied to the rapidly increasing AI and data center applications, and we plan to continuously increase our FCBGA business scale. [Non-English content] To answer your question about the camera module business tied to these new areas, there is definitely accelerating change in the autonomous driving and humanoid markets. We're seeing commercial robo taxi services being launched in many places, thanks to advances in autonomous driving technology. Many companies are looking into different ways of adopting humanoid robots in the actual shop floor. As a company with camera module knowhow from our IT applications as well as internal core part technology, we will expand our lineup of high pixel sensing camera modules and further develop our specialized technology, such as all-weather camera products. We are also focusing on leading next generation humanoid camera module development and differentiating our core technologies. Based on our automotive quality and global supply network, we are deepening our strategic cooperation with the global top-tier customers, and in Q2 plan to supply camera modules for the new robot axis and camera modules for humanoids in the second half. We will also prepare a new solution for the next generation physical AI in time to preemptively respond to customers' new product needs and future markets. [Non-English content] [Non-English content] The following question will be presented by SK Kim from Daiwa Securities. Please go ahead with your question. [Non-English content] I have two questions. The first question is about your CapEx plans this year. You've just mentioned you're considering additional CapEx and package substrate capacity expansions to meet the strong AI-driven demand growth. That probably implies a large change in your existing CapEx plan for 2026. Can you give us any updates on your CapEx plans this year? Second question is about your future business results guidance. Despite the one-off expense that you recognized in Q1, still the company delivered better QoQ and YoY business results in Q1, even though, yes, there is uncertainty related with the Middle East situation. Can you give us, at this point, what you expect in terms of business results in Q2 and in the remainder of the year? [Non-English content] To answer your first question about our CapEx, because demand for MLCC and package substrates related with AI and server applications are rapidly growing above existing expectations, prompt response to this growing demand is necessary at this point. That's why we are making already active supplementary and new capacity investments for the AI server related high capacitance, high spec MLCCs, as well as the high-end FCBGAs for AI accelerators and network equipment. We're also planning preemptive investments in new business areas, such as Silicon Capacitor and glass substrates, to continue this momentum of building core technology and business foundations. Considering all of this, our investments CapEx this year is expected to more than double versus last year. We are currently talking with customers about mid to long-term supply volumes, to actively respond to the AI data center related demand. Our investments for the next three year period is also expected to increase greatly versus previous years. [Non-English content] To answer your question about our guidance in Q1, despite the one-off, all of our divisions delivered QoQ and YoY based improved better results, thanks to the strong demand tied to AI servers and ADAS, and the strategic customers flagship phone launch. In second quarter, in Q2, MLCC and FCBGA supply is expected to become even tighter with AI server, network, and automotive demand increasing continuously. We will increase supply of higher margin, high capacitance, high temperature, high voltage MLCCs for AI server, network, and automotive applications, and strategically respond on the pricing front to account for tighter supply and the raw material price increases, and pursue also long-term supply contracts with key customers. Specifically for a Flip Chip BGA, we will increase supply of high-end products for AI accelerators and server CPUs. Also continue talking with our customers about pricing to refresh the market situation. Overall, we expect second quarter to deliver again improved business performance on both QoQ and YoY basis. Regarding the second half of this year, while uncertainties remain high with the higher oil price and supply chain instabilities tied with the Middle East geopolitical risk, fluctuations in exchange rates and raw material prices, the strong demand tied to AI, server, network, and automotive is expected to continue regardless of these geopolitical factors, driven by increased AI data center investments and advances in the autonomous driving technology. Both MLCC and Flip Chip BGA markets are likely to see even tighter supply in the second half around the high-end products needed for AI and data centers. The effect of long-term supply contracts and ASP increases are expected to continue in the second half, driving further significant upside in our business results in the second half. We will focus on further upgrading our business structure around AI server automotive by strengthening high-end MLCC lineup for the AI and server, as well as automotive applications, increasing Flip Chip BGA revenue tied to new big tech AI accelerators and data centers, and increasing high-end, high reliability camera module supply for the automotive applications. At the same time, we will thoroughly prepare for the mid to long-term growth by securing core technology in new business areas, such as Silicon Capacitor, glass substrates, and robotic components, and collaborate closely with global top-tier customers on developing commercial projects. Lastly, I would like to comment that we will continuously monitor the external business environment and preemptively increase capacity to promptly respond to market and supply chain changes to do our best to deliver maximum business results. Thank you. [Non-English content] That completes our earnings conference call for 2026 first quarter. If you have any further questions, please forward them to our IR team, and thank you very much for joining.