SCREEN Holdings Co., Ltd. (SCRNY) Q1 2027 Earnings Call Transcript

Good afternoon. The time has come, so let us start the Screen Warnings Complete Remittance Earnings Call for the First Quarter for the Fiscal Year, Elegate March 2027. Thank you very much for your participation, despite your busy schedule. Now, let me introduce you to today's presenters. The Presentative Director, President and Chief Executive Officer, Masato Gotou. I'm Gotou. Thank you for this opportunity. managing executive officer chief financial officer manabu ishimura thank you for this opportunity i'm ishimura senior executive officer head of communication strategy chiho otobe this is otobe nice to talk to you now let us invite cfo ishimura to give you the consolidated business results and the forecast. Now, I'm Mr. Shimura, microphone is yours.

Now, I want to talk about the summary of FYI 2027, March 1st quarter earnings and guidance for next fiscal year, the full year. This is the summary of consolidated earnings. The net sales is 121 billion. so year on year it's minus 10.3 percent minus 14 billion yen year on year op income is 14.3 billion which is minus 41.1 percent year on year it's minus 10 billion yen off the margin is 11.8 percent and it's minus 6.2 percent young year so all in all sales and profits both decreased young year SPE sales and profits fell young year however this is within our expectation so there's no particular things happened the slide projects are the memory project for China and the revenue for this company will be posted in second quarter it's almost it's going to happen as planned and GA sales and profits glow year-on-year sales of recurring business increased for FT sales and profits rose year-on-year equipment sales for OLED and LCD increased so there was a situation in first quarter but we have received record high order and full year forecast was guided upward and the annual dividend plan was increased from 175 to 183 increased by 8 yen next is the first quarter consolidated earnings in detail for net sales as I explained it's 121.7 billion which is minus 14 quarter on quarter and the OP income is 14.3 billion and orderly income is 15.4 billion and minus 9.1 billion and net income is 10.4 and it's minus 6.1 Q on Q. This is the sales by destination. The China portion was 41 in fourth quarter and now decreased to 27 in first quarter. On the other hand, the EU increased from 8 to 16 percent by 8 percent and Taiwan increased from 19 to 23 increased by 4 percent and Korea also increased next is the sales price advice segment so SP actually was a bit low so 76.5 is from SPRE which is slightly less than 80 and other business are basically no change so this is the consolidated earnings by segment in first quarter SPE the sales and profit both failed it's 93 billion and the OP was 14.3 billion and the OP margin was 15.4 percent it's all sales and profits fell and the sales decreased by minus 16 and op increased decreased by minus 11. so the china taiwan declined and the sales for a foundry and logic decreased and sales from a delay project to be posted in second quarter as i have explained earlier for ga the sales of the first quarter is 13.8 and op income is 1.4 and op margin was 10.3 percent the revenue increased by 0.9 billion and op income increased by 0.8 for ga sales and profits both grew and it's driven by recalling business and for ft sales was 10.8 and op incomes 1.2 op margin was 11.8 percent so it's 0.8 percent uh sorry 0.8 billion increase and 0.4 billion increase in op and pe was 3.1 and op income was 0 minus 0.2 so sales slightly increase however due to fixed cost increase the profit fell this is the balance sheet in consolidated the net assets is net assets reached 497.3 billion and equity ratio is now at 60 point 4.6 percent so we believe equity ratio is in appropriate range next please this is the consolidated cash flow the first quarter was 9 billion so due to the income tax payment we had this number 9.0 billion for investment cash flow is minus 10 and the The total free cash flow is minus 0.9 billion, financing cash flow is minus 16.2 billion. This is due to the dividend payment. Next is R&D and the capex and depreciation or amortization, R&D is 10.1. so we had almost expected landing and capex were 17.8 billion in first quarter so from the trend of past it seems to be high but this is due to atca in new york so for rental equipment we had to post all the rental cost in this time and if we exclude everything is ordinarily and the depreciation is 4.0 billion yen so full-year forecast hasn't been changed from last time r&d or it or production those are the investment target but looking at The order, we have to be ready for the increased capacity for the production. Next is the analysis of operating income growth. Compared to the first quarter last year, it's decreased from 24 to 14. The major factor is the SPE sales declined in SPE, and also utilization has impacted. and profitability improved mainly due to ft plus 2.5 and for fixed cost spe mainly in spe we had gross investments so minus 3.5 exchange rate mainly impacted ga plus 1.0 so profitability and exchange rate had 2.5 and 1.0 and that will be cancelled by this fixed cost decrease. Next is the business forecast for full year of FI 2027. For first half we haven't changed as a company total the revenue. The net sales is 317 and OP is 56 and net income is uh op margin is 17.7 percent and ordinary income wave is 56 point uh billion so ga ftpe there was some correction made however uh in the consolidated we don't have any major change to the right is the full year forecast so this time the net sales is 743 so we have increased from 725 in may forecast and op is 156.5 again we have seen we have made some increase from 150 billion and ordinary income similarly increased to 156.5 and net income is 115 so we have seen made some increase from 110 in may forecast if we look into segments spe sales is 620 so increased by 20 from may forecast and accordingly op income will be increased to 159 from 153 and op margin will be 25.6 percent and for ga the sales and op both increased by 1 billion yen from may forecast ft we expected 47 in may forecast but in the sales of advanced packaging was examined this time so now we are estimating 43 billion and for pe the sales is going to increase by 1 billion from may forecast so next is the operating income gross forecast last year was 122 billion and our estimate now is 156 and breakdown is the sales and capacity utilization has an impact of plus 74.5 so compared to last time we have increased it 3 billion and profitability in SPE the product mix will change so we are estimating minus 8.5 and for fixed cost is minus 31.5 and exchange rate is minus 0.5 billion so So, together with the sales increase, we are estimating profit increase. That's the major trend in this fiscal year. And the dividend outlook, interim forecast was not changed. So 60 yen, but for the year-end is 150 yen in the May forecast. but now we are announcing 123 so total will be increased from 175 to 183 this is going to be record high dividend for us this concludes my part thank you very much thank you cfbo mr ishimura now let us invite president goto to give us a business environment

environment and outlook. So this is Gotoh. Let me give you a presentation about business environment and outlook. First of all, about the full-year outlook overview. As was explained by Ishimura a moment ago, full-year forecast was raised, or we made an upward revision. because mainly with the ai investment we have we witnessed a very strong demand from the market so the record the high level of the inquiry and order have been witnessed and in the second half we're going to turn them into the sales so that's why we made upward division for the second half forecast and given this situation we have to catch this demand an opportunity to achieve the further growth and in previous fiscal year we opened the 80 ca united states as an research and development hub and in hikone we enhanced the production capacity so with these we'd like to deal with increasing demand and about spe we will capture the strong investment in leading edge foundry logic and memory the situation is getting better so we will surely capture this demand and will outperform wfe market growth that's what we'll surely achieve and under the current midterm management plan we made the investment and for these investment or for these projects we'll carry them out and harvest results and in that sense And the ATCA process evaluation process will be established and launched. And preparing ourselves against further growth in the market, we will increase the production capacity of SBE. And we have the plan for them, so we'd like to prepare ourselves against the coming opportunities. and we have made preparation for the enhancement of the competitiveness of the products and also the production capacity from these as through these we'd like to capture the opportunities in expanding a market next page please and this is a situation in the market as I mentioned a moment ago for the whole WFE in calendar year 2026 we expect about 20 percent growth and in the same way in calendar year 2027 we expect a similar level of growth so the balance between the two years may change because of the situation but the coming two years will be the one with the very steady market growth and as you know including the middle east situations there is a geopolitical situations which may which might seem uh settled down a little bit but again the uncertainty is rising so we'll continue to pay the close attention to the geopolitical situation so that we can be flexible enough to take the appropriate measures when things happen and investment trends by application as you can find here foundry ai driven leading edge investments to be the primary driver of wa-free growth logic the large scale project launches is a background for the recovery and in addition to that we have the support by the asic demand so logic related strong demand is expected from now. In excess memory, as you know, DRAM and HBM, the advanced products, is in shortage now. So the CAPEX into DRAM will drive the recovery in the memory market. And not only the advanced HBM, but the existing DDR is also in shortage. So in addition to the HBM, the general type of EDL, will also receive the capex. So for two years to come, we can expect a very strong investment into memory in general. And the same situation can be expected with NAND. There was a recovery in the investment into the data center. So the domestic and overseas NAND manufacturers are now planning investment. So memory, both for the DRAM and NAND, we can expect a very strong demand. And next is image devices. It was sluggish, but now we see the recovery in the situation. So Japanese major auto manufacturers now started to increase production. So as for the image devices, we can expect a growth from now. And power devices and others, compared to the other types of devices, the process was rather slow but finally we see the size of recovery in investment so in that sense compared to the other advanced devices the start is a little kind of slow but by dealing with that situation we'd like to capture the demand from the market and next is advanced packaging so wlp applications to lead initially followed by the growth in plp applications. So our key areas of advanced package should be dealt without fault. And China market, same as the other device manufacturers, not only among the existing foundry and memory clients, investments are becoming active, especially among the emerging and falling affiliated clients so globally the market from 2026 to 2027 we can expect the big growth in the SPE business next page please and this is the composition of equipment sales by application for SPE and as you can see here this is a result of the first quarter so about half is coming from foundry and we have the strong d-rub and this is a current situation and q on q basis and also on the basis we can see the sales increase of d-rub which is very clear trend in application sales next place please and this is the poster sales about poster sales the higher publications rates by the customers as a background we can see the stronger demand for the replacement of consumable parts and units so this is an area of business we can expect a further growth so in addition to the sales of the new equipment we will have the lineup of the consumable partial units for the replacement and forced sales next page please and this is the spe composition of cells by destination as you see here taiwan and china accounts for almost half and in addition to that japan north america and europe follow so when you see the overall situation in the first quarter on a q and a good basis sales to north america rose and taiwan remained solid and here on the basis we saw the increase of sales to North America this is the

situation from the first quarter and this is the composition of sales by application first of all the foundry has a large portion followed by DRAM and this situation will continue so the proportion will continue in this way and this situation is not limited to the first quarter but we expect the same situation into the second half of the fiscal year next page please and this is a post sales for the SPE forecast as I mentioned earlier

in order to secure the profitability and in order to follow or maintain the equipment we sold we'd like to follow this post sales so for the first time in this fiscal year the post sales post sales will exceed the 100 billion yen and will further enhance this field of business to ensure the profitability so in addition to new businesses this is another key business we have and next is the sp is composition of sales by destination forecast as i mentioned earlier as for the situation we do not expect any big change so taiwan and china these two regions will continue to achieve the big growth followed by North America and Europe so as you see here in the second quarter compared to the first quarter uh top line will grow but the proportion by destination will not change so much so China and Taiwan uh this their ranks are reversed but this may change quarter by quarter but the situation will not change so china and time one will continue to lead the positions next page please this is a ga sales trends and forecast so as we have been explaining to you we want to increase the recurring business in addition to the sales of the equipment so that we can secure or improve profitability. And in GA business, we newly released the low-fed digital printing process, which received a strong inquiry in North America, so we'd like to grow this business. And in Japan, the so-called CTP, offset printing equipment, has a strong demand. But also in Japan, we'd like to promote this new digital printing process. Next page, please. And next is the sales trend and forecast. So led by the OLED, we are promoting the sales so that we can secure the stable profits. And from this fiscal year, we integrated the advanced packaging business into the FT. In that sense, compared to, in addition to the display business, we can have the synergy with advanced packaging business so that we can secure the sales and profit and next is PE sales trend and forecast we struggled in this business but finally the market has recovered so investment into memory and inquiry from the packaging business has increased so finally as for the PE segment from the second of this fiscal year we can expect a full first recovery of the market so we'll capture the opportunities in this market so that we can achieve the sales and profit secured for the pe business next page please and these are about the recent screen group news and they were already released so i think some of you already know about these so there are two news about SPE and one news release about GA. And one of them is this news. So SCLEEN joins Applied Materials Epic Center as innovation partner. This center will be newly launched in California and through various research developments have been done together with Applied Materials. and through this partnership we can enhance or deepen our relationship with them so we'd like to be involved in this uh launch of this new api epic center next is about the related ga so about the geoda gravias we collaborate on promoting digital printing of flexible packaging and we'll move on to the full-scale production. And Ciota Gravia has the market and into which we provide the flexible packaging. So from the conventional paper-based packaging, we move on to the film-based packaging. And we'll take this opportunity to provide the flexible packaging into the market in addition to the conventional printing equipment and let me give the microphone to Otobesan to explain the next page this is Otobes so as usual we have the small group meetings after today's earnings call so we host the small group meetings to follow up this earnings call today so we have the japanese version one in the morning of september 2nd and english version one in the morning of september 8th and for the investors in united states i'm sorry for this time frame but we directly give you the opportunities to follow up us at the conferences and other opportunities and i ask for your kind of participation to these events please go to page 17 and goto and talked about the uh wfe outlook and cut here's our announcement we expect about 20 percent growth in calendar year 2026 and let me give you the breakdown about this part because i think you may ask questions on this point and from the forecast in May, we made an update. First one is that about the advanced logic foundry, a little bit less than 25% was a comment we made, and we'll change it to over 20%. Next is memory, especially about DROM. A little bit less than 25% was a comment we made, and through the revision, we changed it to the over 25%.

And next, about NAND.

Previously, we said it is a little bit less than 15%, and we made the upward revision to about 20%. And the power devices and others, no much difference, but it's been about a little bit less than 10%. and this time about the industry we changed the slides related to SPE so especially about the one by application so far we had application plus alpha and up we added had postal sales but we have the page for the application so we separated application and postal sales so as was explained by Goto a moment ago we have the page for the application sales by application and post sales separately and you can find the appendix to show you page 32 and page 33 to show you the composition of sales by application and post equipment and post sales so thank you very much uh mr goto and miss ottobe i would like to go into q and a session because the time is limited so now yoshida-san from clsa would you please thank you very much i am yoshida from clsa first of all sp sales is going to expand towards second

half but lead time for equipment is how long and how much visibility you have in the order taking and maybe if you break down into third quarter and fourth quarter can you please tell us the breakdown of the second half goto is going to address this question the lead time for equipment Of course, it differs depending on the type of model, but currently maybe 4.2 months on average, 4 to 5 months on average, and order visibility. So the order for the sales of this fiscal year is almost fixed, and based on that, we are making upward revision. so for the sales of this fiscal year is almost visible so the breakdown between third quarter and fourth quarter like fourth quarter is higher than third quarter so the sales is going to be flat but looking at customer demand as you may know already the memory they have to increase production so memory device maker makers are asking the delivery accelerated so probably the demand is now stronger than our capacity right now thank you very much my second question is wfe market is probably same level of growth in next fiscal year to from this fiscal year there was application update in this fiscal year but toward next year do you see any different trend in any application if you have any comment by application would you please so the outlook for next year is almost no change in the trend from this fiscal year As you may know, the DLAM and memory device makers are going to be very aggressive in investment from the second half to next fiscal year. So their CAPEX or production plan, looking at that, probably early next year to second half of next year. so the centering around memory we have seen strong order and also latest logic foundry will be similar to this year level so there will be no major change in the trend so how about logic so maybe some customers are changing in their tone do you have any upside as you may know some customer makes announcement logic customer as well making some announcement in strategy

and we are seeing some inquiry but it's not fixed yet and individual device maker the situation there's not much we can share with you right now so as soon as we see any a concrete business we would want to disclose to you thank you very much thank you very much next let me invite mr shibano from city group securities this is shibano from city group securities the first question is that uh how to how should we think about your capacity so you explained it both for the fi 26 and 27 you are for calendar yeah expected the uh 20% growth and when I make the simple calculation in 27 17 or 18 billion yen is expected if the demand grows further and in 2027 if it reaches 20 billion or 25 billion yen in 2028 or or maybe close to 30 billion yen demand exists. As screen holdings or the supply chain of screen holdings, is it possible to respond to such scale of demand? This is my first question.

So about the capacity.

In this fiscal year and next fiscal year, we have the capacity, we already have the capacity to cover the demand coming in two years from now. And if this market situation changes further, and if the further increase of the capacity is requested, in order to prepare ourselves, we have equipment in Nagaoka, in Kyoto, and we are now remodeling them so that we can increase our capacity. And that has started in the fiscal year and will be complete in the beginning of next fiscal year. So this is where we can see the expected increase of production capacity. And also in Hikone, we have the existing capacity, and we are already going through the measures to enhance their capacities. So if the demand goes up to 30 billion yen in the short period of time, we have to solve the issues of the supply chain and others, so it may be difficult to jump to that level. but when we think about the realistic situations so when we think about the suppliers of equipment to the others or the materials I think even if there was any further increase demand we would I think we are prepared so that will not be behind the other suppliers for example when it a WFE 2027 and 28 do you see any visibility about how much capacity you can increase or so as was mentioned by Otobesan a moment ago or as I explained to you WFE growth we are going to perform the growth of that WFE market itself that means that we are going to have the capacity to achieve that and how much we can achieve is hard to be described but as i mentioned a moment ago not only by ourselves but we also have to see look into the supply capacity of other suppliers and i have the confidence that we can cover the demand so we are now establishing the next meter management plan so including this point we'd like to make another announcement when we are ready but as for the currently expected market growth for this fiscal year and next fiscal year and plus alpha can be covered by our current capacity thank you very much my next question is about the first quarter semi in sales was a little bit slow and how do you expect the situation in the July to September period. I think you expect a big recovery. And it includes the delayed project and also the increasing shipment from the April to June period. And how about the probability of this delayed project you mentioned? So the probability of recording the sales for that delayed project is 80% to 90%. And in July to September period, you are going to record high sales, and how much of the sales was already shipped.

It's about the delayed project.

We have the very high probability, so the final stage of the confirmation of the auditor is waiting. So probability is higher than 90%. And as for the July to September period, how much of the shipment was made against the expected sales? I think about half of the expected sales is already shipped. So, half of the expected sales was shipped, and about the remaining half in order to record the sales by the end of September. So, that means by the first week of September, we will complete the shipment.

So, you said that about half is already shipped. so at so this is not the end of the June but as of now you shipped about half yes as of today uh almost half of the cells was already shipped thank you very much it's clear thank you very much shibano-san then the tamara-san from morgan stanley would you please thank you very much i am tamra from morgan stanley so full year guidance i wanted to ask about full year guidance

the third quarter and fourth quarter when somebody asked earlier maybe it's going to exceed the capacity of fourth quarter so for monthly revenue in SPE so if there is some more upside do you think that we should believe that you can achieve and also in the last presentation we have some discussion so you are going to increase sales in this fiscal year so profit has to increase we believe so again I want to ask your take on the profit for this fiscal year the third quarter and fourth quarter the further sales increase if there may be or not as we have received in the first question the revenue for this fiscal year we have also almost made production plan so there is no more room that we can change drastically however if there's slide upside we could still take it so in that sense the possibility is not zero however as i said earlier there's no drastic increase like 30 percent or twenty percent going forward that's very difficult and also for profit as i explained earlier the further capacity has to be prepared so our out of profit maybe some percentage has to be used for investment for next phase so the increase of profitability or and also close investment we need to look at together in making plan that's why we are making this kind of plan so so in the fixed cost increase in the plan as you have explained in the last presentation are you seeing even more upside or not no for fixed cost it's no change sorry some investors is not muted would you please mute yourself if you're not giving question so and another question is the equipment makers are now increasing prices so So you are in a very favorable position to increase prices, I believe. So not like maybe price increase, but you have a very better position in negotiating. Or are you taking the lead in the price negotiation or do you have any plan? we are not making the negotiation because we are in strong position but we are now improving performance of the equipment and those are evaluated and those are reflected in the price in addition recently there are many geopolitical risk and raw material cost is increasing and for this increase we are making our corporate effort however at the same time we are reflecting those raw material price to the equipment price so it's not like we are in the strong position we are increasing prices but our performance of equipment is improving and also the low material price is increasing that's why we need to ask customer to reflect into the prices so the situation in last year or compared to the past do you think it is easier to pass on to the price or like additional value can be reflected in the price more easily yes for additional value yet we are asking day-to-day basis to customer to understand and as long as customer understand that it's reflected into the price and for low material increase it's not only affecting us but entire market and the customer understands because their raw material is increasing so we they are fully understand that we need to share this kind of situation or environment so we will continue this effort

and negotiation with customer and for cost increase we want to share with customer thank you understood very well thank you thank you tamara-san next let me invite mr shimamoto from okasan securities this is shimamoto from okasan securities i have two questions first one is about wfe i want to confirm some figures you gave us so finally so you may uh change the figure from the less than 25 percent to 20 percent is just a decline or increase so how do we understand this change so we raise the figures so previously it was between 15 to 20 percent and we had assumption on the case of the 15 percent or 20 percent and a little bit less than 25 percent is assumption when we have the 20 percent so uh it depends on how much increase we can expect it but anyhow this is an increase of the figure we look into the situation of the investment by the customers we came up with this assumption my expectation thank you very much second question is about wfe in china so did you give us how you see the situation i think there are some differences in expressions you used.

So about situation in China, as you know, the AI related new solutions or new AI as released.

So when we have, when they have such products released, they need infrastructure for the operation of the AI. That means they need the high functional devices and data centers, and they have to make investment into these and that is a field where we have the competitive edge and strength so the situation is hasn't changed so much from the past and WFE in China is growing of course there are the Chinese local manufacturers for the general type products but as I mentioned a moment ago the needs is growing not only for the general type ones but especially for the advanced type ones and the situation is same in China and that trend is favorable for us so that is the situation we find in China without the FE so previously you said that you expect a flattish situation in China you haven't changed it China is growing. Please understand in this way.

Thank you very much. That's all from me.

Thank you, Shimamoto-san. Nakamura-san from Goldman Sachs, please.

Thank you very much. Can you hear my voice? Yes.

Yes, please. The sales and profit of first quarter is as you planned. That's what you said. but in semiconductor segment sales and profit dropped so sharp so can we explain only from the sales drop or not can you explain again yes this sales goes so much down so profit has to come down so this is solely due to the sales drop. There's no other particular reason, so no other particular reason other than sales drop. So annually you're planning the fixed cost, are you consuming as plant from the first quarter will slightly increase is less but almost as per plan thank you and the semiconductor in second quarter the how do you look at the profitability you said second half is almost full capacity and full sales so in that situation the profit ratio that you can consider from our your product mix if there is any change in product mix would you please share with us so any like one-time event we expect we are not expecting so we have this volume of the project and product mix that we are assuming will be a good to make this kind of profitability so there's no any special factor thank you very much

Nakamura-san thank you very much next let me invite Mr. Yoshioka from Nomura Securities thank you for this opportunity this is Yoshioka from Nomura Securities can you hear me yes I have two simple questions including confirmation first one is that the sales of the post sales so on page 19 and on page 22 you explained the post sales and page 22 in the second half against the first half there's a decline of the post sales and the quarterly basis the sales is about 26 billion yen and from the second half of the previous fiscal year i think there's no big change in this figure so my question is that in the second half post sales you have a kind of conservative view or you expect to the increase of the literalization and there's a shortage of the green room. So there's a kind of growth of the postal sales first. So expect a kind of decline in the second half. So how do you see or interpolate these postal sales in the second half? So about the postal sales itself, we have the maintenance or guarantee period for them. So two years after the sales of the equipment, we can expect the growth of the postal sales so for this fiscal year postal sales coming from the sales of the equipment two years ago this is a background we have about the growth or performance of postal sales so when there's any change in the situation in the market in this fiscal year that may have some impact on the consumable sales but as for the major trend of the post sales as we see in fiscal year when we have the big sales of the equipment in the second half the proportion of the post sales may decline so we have the plan for the growth of the post sales based on the actual well-established plan so there's no special factor for that and as for the improvement of the performance upgrade the utilization ratio has is quite high at this moment customer's side so it is difficult to stop it to give the uh upgrading of their equipment so this is a kind of situation we now face so we'd like to cover this situation up with the offering of the consumables and given these situations we come up with a plan understood thank you very much my second question is about confirmation of some figures and looking at the page 12 and operating profit others an adjustment column and in the q1 it is the 2.4 billion minus and if you deduct this in the second second quarter, we can explain about six billion yen or more of the minus figures. So, would you explain this big figure for the adjustment and others in the second quarter? So, I think there's a kind of buffer from the operating profit from the first quarter. So, would you explain this figure for the second quarter? So, this is just an adjustment. So, it includes a kind of buffer. and a consolidated adjustment is also included so there's no there will not be there will be no big change understood so this figure is because of the buffer understood thank you very much so closing time is coming soon we would like to have the final question from sbi securities So I have a question about China.

So it's going to explode, that's what all of you see here.

So they're trying to get the equipment as soon as possible, and they're very fiercely competing over that. So what's the situation? As you have mentioned, in the China situation, they have to be prepared, the AI-related infrastructure, so cutting-edge devices in strong demand so we are seeing a lot of inquiry in China as I said earlier the cutting-edge device we are very strong so we don't want to receive we are receiving so many inquiries not only from China but also from different regions so market situation is maybe record high the inquiry we are receiving so going forward it's going to continue for a while so the ratio of china we get questions so often but originally it will be maybe around 30 percent that was our forecast the manufacturing plan or inquiry will make some effect but the basic situation is not going to change so drastic and the next one is about plp so how much in this fiscal year and next fiscal year can you share the outlook for plp so the concrete number in plp is very difficult to share at this moment but next fiscal year as you know so it's not happening mass production is not happening yet but evaluation phase is starting so compared to this fiscal year probably it's going to be double that's the market forecast we don't have a concrete number and at the end of this fiscal year we hope we can share some number so double of that will be maybe coming to next fiscal year this is our assumption thank you very much thank you wadaki-san so we apologize but due to time we'd like to conclude this meeting so this concludes the last quarter presentation of screen holdings thank you very much for your time and thank you very much for your participation