[Q&A Text] Financial Briefings for the Second Quarter of the Fiscal Year Ending Mach 2024 (April 2023 to March 2024)

The fastest action is usually taken by the major memory manufacturer. However, when we look at the current environment, we can't say anything too decisive about the outlook for next year. 

When it comes to batch productivity, it is very much superior. In each of the markets, to boost productivity further, we are creative in accelerating the deposition speed. From that perspective, we want to try to exert our strength even further, and that's something that we want to drive going forward. When it comes to the competition with single wafer, I think there is almost no overlap. However, how devices are being used as well as how film is going to be used in the devices will be very complex going forward. Within that context, our batch deposition equipment usage and application are probably going to be expanding, and that's something that we do expect. 


We refer to a technique for thin-film deposition at an atomic layer level involving a process of cyclical supply of multiple gases as “ALD”.

I realize that not much has changed. Our products have traditionally had an advantage, especially in NAND, but the areas in which our products excel are also expanding in DRAM and Logic, and as market conditions recover, we hope to further demonstrate our strengths in more advanced devices.

Although there is quarterly volatility, we expect orders to recover considerably from 3Q. From the second half of FY2024/3 to the first half of FY2025/3, we are seeing strong demand in China is very strong, in logic and DRAM on the mature node, we expect them to drive orders. 

Regarding GAA, we have obtained multiple PORs even for new processes to date, and we hope to begin mass production from the FY2025/3. I believe the device structure will become more complex, and expectation for our batch ALD is growing stronger. 

The main reason for the upward in 2Q profits was a change in the product mix from our initial expectations. This has also exceeded the earnings forecast announced at the time of listing. Gross profit margin improved, and SG&A expenses were lower than expected. Although we have left our full-year earnings forecast unchanged, we will continue to closely examine whether this upward swing is temporary or whether it will continue into 3Q and beyond.

As investment in other regions has become softer than before, the proportion of China is expected to be relatively high for the full year, and we forecast that over 40% will be directed to China. Many new projects have been launched in China since last year, and we believe that there will be expansion of these projects, so we believe that investment in mature nodes in China will continue next year.

It depends on the type of film, but the application plays a more important key.In cases where a film with a function remains in a highly complex device structure, we believe that films formed using our batch ALD technology will be used. I think areas such as sacrificial films used during processing and areas that are not very complex are areas where single-wafer ALD excels.

We will continue to maintain our strength in 3D NAND, and we hope to significantly increase our share and sales ratio in other DRAM and Logic products. In that sense, I imagine Logic and others to be around 40%, with DRAM and NAND accounting for the remaining 30% each. We will refrain from answering the composition ratio by product.

There is no trend towards higher or lower gross profit margin, depending on the type of application or device.

I think the WFE market will grow significantly in the future, as devices will be used in various areas such as AI and IoT. We believe that by applying the batch ALD technology that we have cultivated in the 3D NAND field to DRAM and Logic, business opportunities will increase. We also believe that our high-temperature processing technology can be utilized in areas such as SiC power devices, and we are confident that business opportunities will expand.erm?

For next fiscal year and onwards, we have not changed our forecast at this moment. 

When it comes to the world of GAA, transistor is going to be vertically aligned. Therefore, structurally, it's going to be very complex. In some cases, it is necessary to form a film not only in the depth direction but also in the lateral direction, so we believe that batch ALD will be used more often as a functional film that will remain inside the device.

We are thinking about the next three to five years. 

Treatment equipment has enjoyed a competitive advantage in recent years. Our treatment equipment uses radicals rather than ions to perform isotropic oxidation, nitridation, and annealing. Since it is characterized by isotropy, it is a very effective technology for isotopically modifying the film on the surface of a device with a very complex structure as well as batch ALD technology. Therefore, we believe that it will be used not only for NAND but also for DRAM and Logic in the future.

At this stage, demand is mainly increasing for DRAM in China. HBM is showing signs of activity, but currently the focus is on investments in the advanced packaging and packaging fields, and we expect orders to increase as demand for cutting-edge DRAM increases.

The main reasons for the increase in service business revenue from 1Q to 2Q compared to the same period last fiscal year were sales of equipment for wafer sizes of 200 mm or less, sales of parts, and relocation/modification. We expect 3Q to be at the same level as 2Q.