Q1You forecast a recovery in industrial equipment sales from the second half of the year. What are the factors behind this?

A1One factor is that the impact of Chinese government investment is gradually becoming apparent. Another is the optimization of inventory levels. After repeated discussions with customers regarding inventory levels, we have concluded that market conditions will remain sluggish in the first half of the fiscal year, with a recovery expected in the second half.

Q2What is the ratio of the Contract Development Business and the Measurement and Inspection System Business in the PB Business in the fiscal year ending March 31, 2030? Also, please tell us about your target customers.

A2Although we do not disclose the ratio of the contract development business to the measurement and inspection equipment business, we will focus on the highly profitable measurement and inspection equipment business, and therefore the ratio will increase. Our target customers are Japanese companies and Japanese companies manufacturing overseas, and we are currently developing inspection equipment while receiving various advice from them. As for the field, we are focusing on wafer manufacturers first.

Q3What is the outlook for the use of AI in the CN Business?

A3To improve the quality of our customer support and services, we are using AI to utilize internal data and will increase its use in the future.
In addition, more and more of the IT infrastructure equipment and security products we offer are equipped with AI functions, and we are preparing new products for the future.

Q4Please explain the impact of tariff policies. In particular, will there be any impact on the forecast for a recovery in the Chinese market in the second half?

A4It is extremely difficult to quantify the impact of tariffs, but we believe that the direct impact on our business performance will be limited. However, our customers, industrial equipment manufacturers, may be affected in their business with China, and if tariffs are imposed significantly in the second half of the year, which we assume to be the recovery period, there may be a macro impact.

Q5Considering the level of order backlog for the CN Business, isn't the earnings forecast for the fiscal year ending March 2026 conservative?

A5The increase in order backlog in the CN Business continues, but stock businesses such as multi-year maintenance, services, and subscriptions account for a significant portion of this. The order backlog includes not only orders for the fiscal year ending March 2026, but also orders for future sales.

Q6I would like to know your view on the semiconductor market.

A6In the past few years, the semiconductor market has been growing at a high rate, partly due to the influence of AI, and it has been called a super cycle. However, there is a sense that the traditional silicon cycle is beginning to show itself, as inventories in the supply chain increase and tariff policies affect product production. We believe that we are now entering an upside cycle. Although there are many variables in the semiconductor environment, we believe that the importance and future potential of semiconductors in the market is unwavering.

Q7I would like to know about the use of AI within the company.

A7We are currently introducing generative AI within the company, and at present, it is being used for tasks such as creating minutes for online meetings and searching for information across the company. We will continue to measure the effectiveness of each application and verify the use of AI.

Q8What business opportunities do you consider will be lost due to customers adopting AI?

A8Customers may no longer need our services if they introduce AI for security, infrastructure, cloud operation, and monitoring, but this will not happen immediately. In addition, many customers are currently in the process of introducing AI, so there are both positive and negative factors to consider.

Q9What are the future developments for the technology developed jointly with KOSÉ Corporation?

A9At the CES exhibition held in Las Vegas in January 2025, we exhibited a makeup simulator device that allows users to experience virtual makeup using projection mapping, in collaboration with KOSÉ Corporation. In the future, development will be necessary to expand color expression. We are also receiving inquiries from entertainment companies.

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