Renesas Electronics Corp

Thank you for taking the time to join the Renaissance Electronics first quarter 2026 earnings conference call. Simultaneous interpretation is available during the call. Please click the interpretation icon at the bottom of the screen and select a language. At this time, speakers are asked to turn the video on. Joining me on the call today are Hidetoshi Shibata, Representative Executive Officer, President and CEO, Shuhei Shinkai, Senior Vice President and CFO, and some members of the staff. After initial remarks by Mr. Shibata, the first quarter results will be presented by Mr. Shinkai, which will be followed by Q&A session. The earnings call is expected to last for 60 minutes. The materials that will be presented are the same as those posted on the IR page of the company's website. Shibata-san, please turn on the microphone. The floor is yours.

Good morning.

This is Shibata speaking. The earnings results this time had the effect of the divestment of the timing business during the period. Because of the decision to divest timing business, it may be more difficult to understand the numbers than is the case usually. Later, Shinkai-san will explain and would like to provide a thorough information so that Apple to Apple comparison is possible as much as possible. All in all, I believe we had good Q1 results. Generally, in comparison to the guidance that we issued last time, we had stronger results overall. And as a result, and since our outlook is that demand will be growing, we wanted to build up channel inventory. But we were able to do so by a smaller margin than we expected. And we will have to increase channel inventory more. Automotive demand was also stronger than expected. It is still small, but Generation 4 SoC, our car, is ramping up very successfully. On the other hand, the previous generation of our car and microcontrollers are also showing strong growth. Automotive results were therefore strong. As for sectors other than segments, other than automotive, Data center AI may be attracting much attention. Data center AI and client-side AI were both growing strongly. Regarding these, towards the end of last year, there was a major earthquake in Taiwan, as some of you may recall. Our partners were affected by that large earthquake. Originally, to begin with, supply demand supply was already tight and on top of that because of the earthquake the supply is not catching up and after q2 we did our best to catch up demand is very strong but because of the rate limiting factor of production The first quarter, there was an impact from that. In Q2, we have overall strong outlook. Of course, there are some products where there is a strong seasonal factors, and there may be a decline as a result of such seasonality factors, but overall impression is that results are very strong. Automotive It's strong and other segments are also strong, especially in non-automotive segments. If I may repeat, we have to catch up with the demand. The bottleneck is our supply constraint. And if we can successfully address this, we may be able to see results better than the guidance that we will be issuing today. So execution is the key. That is the overall situation. The conditions are very strong, and for the foreseeable future, we anticipate the conditions to be strong. Now, I would like to turn it over to our CFO, Shinkai-san. Thank you very much. This is Shinkai, CFO. I would like to present the results from Q1 based on these slides. Next slide, please. Page 3.