My name is Saeki.
I would like to report the financial results.

This is a summary of the interim financial results.
With net sales increased 7.1%, ordinary income increased 20.1%, and net income attributable to owners of parent increased 27.0%, we achieved higher sales and income.

The highlights of each business are as follows:
As for the CN Business, IT investments remained steady, and this led to the strong performance of both product sales and services.
The EC Business achieved a successful result with the transfers of customer commercial rights advanced, and effects of a weak yen in addition to the improved supply of semiconductors. As for the PB Business, difficulties in obtaining parts and materials were on an easing trend, and as a result, design & manufacturing services remained steady.

Let's go on to a summary of financial results.
As I mentioned at the beginning, we achieved higher sales and income. Net sales increased 7,928 million yen year on year to 119,698 million yen. In terms of profit, gross profit increased with net sales increased, while selling, general & administrative expenses increased approximately 1.3 billion yen year on year, mainly due to personnel expenses. As a result, ordinary income increased 1,045 million yen year on year to 6,253 million yen. Net income also increased 966 million yen, and amounted to 4,551 million yen.

This slide contains the figures from the revised financial forecasts announced on October 13. The results greatly exceeded the initial plan with net sales increased by 11%, ordinary income increased by 25%, and net income increased by 28%, from the forecasts at the beginning of this fiscal year.

This graph shows changes in net sales.
From net sales of 111.8 billion yen for the interim period of the previous fiscal year, the CN Business increased 1.7 billion yen, the EC Business distribution increased 5.6 billion yen, and the PB Business increased 0.7 billion yen, resulting in net sales of 119.7 billion yen for the current interim period. All Businesses increased net sales year on year.

The next slide is for sales and income by segment.

Net sales in the CN Business increased 1,682 million yen year on year to 14,353 million yen, and segment income increased 360 million yen year on year to 1,263 million yen. In the previous fiscal year, the failure to promptly respond to rapid exchange fluctuations resulted in a lower income ratio, but in the current fiscal year, the income ratio improved partly due to the proper handling of foreign exchange rates, in addition to strong product sales and services, resulting in higher sales and income.
Net sales in the EC Business increased 6,246 million yen year on year to 105,344 million yen, and segment income increased 685 million yen year on year to 4,990 million yen. Boosted by improved semiconductor supply, expanded commercial rights, and the effects of a weak yen, higher sales and income were recorded.

Segment information for the CN Business.
By product category, sales of network-related products and security-related products remained strong. Maintenance & monitoring services were also steady.
By field, sales of network-related products to data centers and cloud business operators as well as maintenance and monitoring services for telecommunications carriers were strong.

Segment information for the EC Business.
By product category, sales of processors and memory ICs increased due to transfer of commercial rights.
By application, sales for industrial equipment, in addition to sales of processors increased due to transfer of commercial rights, design and manufacturing was also steady due to the easing of difficulties in obtaining parts and materials. For automotive equipment, sales of processors, logic ICs, and memory ICs increased due to transfer of commercial rights, and demand for analog ICs were also steady.
On the other hand, sales of computers and peripherals remained weak.

The results of consolidated overseas subsidiaries.
Net sales on a yen basis decreased 108 million yen year on year to 25,876 million yen. Net sales ratio in the EC Business slightly declined to 24.6%.
Net sales on a dollar basis decreased 10 million dollars to 183 million dollars, a more significant decrease than the yen-based one. Due to the yen's depreciation by seven yen from the previous year's level, we recorded slight decrease on yen basis.

Sales in the PB Business increased 688 million yen year on year to 6,776 million yen, an increase of slightly more than 11%.
In design and manufacturing services, sales for medical equipment and semiconductor manufacturing equipment were steady.
TED Nagasaki, one of our affiliated subsidiaries, achieved steady sales of products for semiconductor manufacturing equipment and private brand products.
As for FAST, sales of image-related products showed a recovery trend.
Overall, the easing of difficulties in obtaining parts and materials led to an increase in net sales.

A slide for balance sheet.
Total assets amounted to 146,342 million yen, a slight increase year on year.
This change was largely due to a decrease in notes and accounts receivable and an increase in inventories. Notes and accounts receivable decreased due to the progress of collection of those for the large sales recorded in the end of the previous fiscal year.
Inventories balance increased partly due to a buildup of inventories associated with the expansion of commercial rights.
As for liabilities and net assets, notes and accounts payable decreased due to a decrease in purchases. Interest-bearing liabilities slightly increased due to an increase in inventories despite a decrease in notes and accounts receivable.
Net assets increased due to an accumulation of profit for the period.

Statement of cash flows.
Operating CF turned positive for the first time in a while and amounted to 2,895 million yen, largely affected by factors of increased funds such as an increase in profits and a decrease in trade receivables.

Investment CF amounted to -1,018 million yen due to the factors such as the acquisition of fixed assets and the payment of a deposit for the new headquarters to be relocated next year.

Financing CF amounted to -2,083 million yen due to dividend payments and other factors while there were no repayments of borrowings.

Changes in orders received.
Orders have remained at a slightly low level since the third quarter of the previous fiscal year.

In the CN Business, while IT investments have remained steady since the first quarter, orders were on the slightly lower side partly due to a decrease in large orders received in the previous year. As for the EC Business, the amount of orders remain at a level sufficient to meet the sales forecast for the current fiscal year despite the declining long-term orders.

That is all for my explanation.

My name is Tokushige.
Thank you very much for taking time to attend our financial briefing today.
I will explain our business forecasts and Medium-Term Management Plan.

This page is to add the current changes to the business plan announced at the beginning of the fiscal year. We had assumed that fiscal 2024 would be the "adjustment" phase, which is the leveling off stage.
Though we assumed stagnation in the semiconductor market, the impact of market stagnation was minor in the first half of the fiscal year. We foresee that the impact will become apparent from the second half but the impact for the full year will be smaller than initially assumed.
While we had assumed that foreign exchange rates would remain at the same level as in the previous year, we have changed it to a weaker-yen level compared to the previous fiscal year's, considering the recent currency movement.
Also, the expansion of semiconductor commercial rights is progressing smoothly, but we foresee that the full-fledged decline resulting from the shift to direct sales by semiconductor manufacturers and other factors will start in or after the second half.
Based on these, it is expected that the performance of the second half will also exceed our initial forecast, and for the full-year forecasts for fiscal 2024, we are planning to increase both sales and income year on year.
As for fiscal 2025, we expect recovery of the semiconductor market to be slower than assumed due to stagnation in the Chinese market.

Considering the assumptions for the second half as discussed earlier, we have revised our consolidated forecasts for the second half upward, following those for the first half, to:
- Net sales to increase approximately 9.6 billion yen year on year to 250.0 billion yen;
- Ordinary income increased approximately 1.0 billion yen year on year to 13.5 billion yen; and
- Net income to increase approximately 1.0 billion yen year on year to 9.77 billion yen.

The year-on-year rates of change are a 4.0% increase in net sales and an 8.2% increase in ordinary income.

As for net sales by segment, we are planning:
- 32.18 billion yen in the CN Business; and
- 217.82 billion yen in the consolidated EC Business.

Despite our initial assumption that the current year would be an adjustment period, we are planning higher sales and income. If they are achieved, net sales, ordinary income, and net income will all hit record highs for three consecutive years since our establishment.

For further profitable growth, we are continuingly focusing on the CN and PB Businesses.
As for the themes "strengthening service businesses" and "strengthening manufacturer functions" we have worked on to accelerate profitable growth, the key point common to them is to offer our own unique products and services by ourselves.
In the PB Business, we have been focusing on ODM products and private label products, and have made progress in several businesses.
In the CN Business as well, we are aiming to evolve into a DX vendor that offers its own services taking advantage of the technology trading company function.

Let’s go on to the next slide to explain our initiatives for strengthening service businesses.

We have offered highly novel and highly specialized products and services mainly in the fields of cloud, IT infrastructure, security, and AI, which are expected to have high growth potential. In addition, we are also focusing our efforts on the development of services to support customers' system construction and operation currently, offering our own original services such as a security monitoring service at TED-SOC, an AI verification assistance service, and ZenOne, an automation service for infrastructure maintenance. We will continue to develop and offer services that can solve our customers' issues.

In addition, to secure continuous earnings, we are going to aim not only for the conventional form of business of selling IT equipment and providing maintenance support but also for a recurring-type business to have more products introduced and services used by a wider range of customers.

Let's go on to strengthening manufacturer functions. Explanations on the recent business acquisition will be given by Mr. Shinoda, who is in charge of the wafer inspection system business. This business is expected to be a pillar of continued profitable growth.

My name is Shinoda. Let me explain about the wafer inspection system business.

RAYSENS is a visual inspection system for compound semiconductor wafers. It automatically detects manufacturing defects such as cracked, chipped, and uneven wafers, in place of visual inspection by a person. It is characterized by its ability to process translucent compound semiconductors at a high speed. This business has been commercialized in collaboration with FAST, an image processing technology company, a company specializing in optical technologies, and a company with strengths in machine and mechanism design.

After starting to sell this wafer inspection system in 2020, we have expanded its features in ways such as increasing the number of cassettes and making the wafer diameter larger. In the future, we are going to develop products that will meet SiC(silicon carbide), and GaN(gallium nitride) which are expected to grow in fields for power semiconductors. We are also currently focusing on operating activities in Europe and Asia.

To accelerate the growth of this business, we have recently acquired the wafer inspection system business from NED, Nippon Electro-Sensory Devices Corporation. As a result of this business acquisition, NED's manufacturing and sales operations for the wafer inspection system business and incidental maintenance operations were transferred to us on October 2. NED has a long track record in the system delivery in this business, as well as customers, inspection techniques, and know-how, especially in the silicon field. We will expand our business domain and improve profitability through this business acquisition.

This slide provides a summary of the synergy effects of this business acquisition.
Fields and specialty areas of Tokyo Electron Device and NED are shown.
- As for inspection methods, we are specialized in macro-optics, while NED has strength in magic mirror, crack, crystal defect, and so on.
- As for inspection objects, we inspect compound semiconductors, while NED inspects silicon.
- We inspect wafers of 200 mm or smaller while NED inspects wafers of 300 mm.
- Both companies’ sales areas are in Japan and outside Japan. We can say that the two companies are mutually complementary in major areas.

With the combination of these resources of the two companies , we can acquire new technologies and shorten product development lead time. This is the greatest effect of this business acquisition. Another major benefit is the possibility of expanding the customer base. We can have access to silicon wafer manufacturers, who are NED's customers, in addition to compound semiconductor wafer manufacturers, our RAYSENS' customers.
Yet another major advantage of this business acquisition is that we were able to secure human resources with high engineering skills.

Regarding the market and future business development.
In the wafer inspection system market, we position macro inspection systems and unpatterned wafer inspection systems as our targets, and estimate the combined size of the markets of these two systems to be 1,400 million dollars in 2026.
The semiconductor market is expected to achieve a high rate of growth in the medium to long term, despite its cyclical nature. In particular, compound semiconductors, which are applied in power semiconductors and other products, are projected to grow at an average annual growth rate of 10% or more over the next eight years. In the long term, we can expect high growth potential in our target market. As for future business development, the first thing is to inherit NED's technologies and support their customers to further strengthen our business base. In terms of technology, we will accelerate technological development by combining the technologies of the two companies to expand our new product line as quickly as possible, and offer competitive products for both the compound semiconductor market, which is expected to grow at a high rate, and the silicon semiconductor market, which is large. The next step is overseas expansion and market cultivation for sales to semiconductor device manufacturers.

This business is part of our challenges toward our vision set in VISION2025, “To become a manufacturer with technology trading company functions,” and is one of the examples most advanced at present. We will continue to carry out initiatives toward further profitable growth. That is all for my explanation.

(Tokushige)
Lastly, I will explain about dividends.
We have revised the dividend forecasts, in accordance with the revision of the financial forecasts.

The interim dividend per share will be 183 yen, a 43 yen increase from the initial forecast.
As for the annual dividend forecast combined with the year-end dividend forecasted as 210 yen before split and conversion, or 70 yen after conversion, it will be increased by 38 yen to 393 yen.
This will be a record high for the fourth consecutive year.

That's all for my presentation.
Thank you for listening.