Advantest Corp Sp/Adr

Thank you very much for attending today's briefing on Advantis Corporation's financial results for the third quarter of fiscal year 2023. I would like to introduce the company's attendees today. Representative, Director, President and CEO, Group CEO Yoshida. Representative Director, Corporate Vice President, Group COO, Douglas Lefevre. Senior Executive Officer, CFO and CSO, Executive Vice President, Corporate Strategy Group, Mihashi. Senior Executive Officer, CCRO, Executive Vice President, Sales Group, Nakahara. I'm Kobayashi, IR department, corporate strategy group, and I will be the moderator for today's session. First of all, Mihashi will report on the financial result for the third quarter of fiscal year 2023, followed by Yoshida's presentation on fiscal year 2023 outlook. After that, we will take your questions. The meeting is scheduled to end at 5 p.m. Today's financial briefing will be delivered with simultaneous interpretation in English and Japanese. If you wish to listen to Japanese audio channel, please click on the globe icon in the lower left corner of the web screen and select Japanese from interpretations language menu in the pop-up. If you move the slide bar of the balance menu to the right, you can listen to the Japanese interpretations while English is being spoken. If you would like to hear the original audio in both Japanese and English, there is no need to change the setting. Please join us using the default setting.

Please download the materials.

Those who are joining us via telephone in the briefing sessions, we will be projecting the Japanese materials. Those of you who wish to listen, if you would like to refer to the English material, please download the English language material. Before the presentation, we would like to remind you of a few important points. In this presentation, we may state a forward-looking statement based on the current expectations, but all such statements are subject to risks and uncertainties. Please be aware that actual results may differ from those discussed in the forward-looking statement. Mihashi will give the presentation first. I'm Mihashi. I will present the financial results. Please turn the page to four on the third quarter result for FY2023. The third quarter sales and profits exceeded those of the second quarter. Unfortunately, as you can see, they are still trending in negative territory year on year, but signs of recovery are starting to emerge. In the area of generative AI, sales grew by responding to robust demand for memory testers. In addition, sales of testers for some high-performance SOC semiconductors and system-level tests increased quarter on quarter. Details will be explained sequentially in the following pages. Let me move on to the next page. On FY23 third quarter sales by segment. Regarding the third quarter of fiscal year 2023, all segments recorded an increase in sales quarter on quarter. Regarding semiconductor and component test systems, SOC tester sales were 63.3 billion yen, almost flat quarter on quarter. Sales for mature processes such as automotive and industrial applications decreased quarter on quarter, as there was a low in customer investment after an elevated level of delivery up until the previous quarter. On the other hand, for advanced processes, An increase in sales for applications processors, in addition to high performance computing, offset a decrease in sales for mature processes, although such increase in sales does not represent full-fledged recovery. Memory tester sales were 25 billion yen, an increase of 6.2 billion yen quarter-on-quarter. Sales for high performance DRAM for generative AI increased. For mechatronics systems, sales of device interface product increased in tandem with an increase in tester sales. Regarding service, support, and others in SLT business, sales increased for high-end SOC. Please turn to next page. On FY23, third quarter sales by region. As you can see for Taiwan, in addition to a large increase in sales of SOC tester cells for high-end SOC, sales of SLT increased. Regarding South Korea, while SOC tester cells declined, memory tester cells increased mainly for DRAM. As a result, total sales remained elevated as in the previous quarter. Regarding China, despite a decline in sales for high-end SOC, the overall level of sales remained at high level. Please turn to the next page. On sales, gross profit, and operating income. While sales increased quarter-on-quarter, gross profit margin increased only slightly quarter-on-quarter. SG&A increased 3.5 billion yen quarter on quarter. However, second quarter includes approximately 3.2 billion yen of other incomes, which includes settlement income. Therefore, SG&A was effectively on par with the second quarter.