Renesas Electronics Corp

Good afternoon, ladies and gentlemen. Thank you very much for joining us. It applies to a busy schedule for the RENESAS Electronics second quarter 2026 earnings call. With regards to the starting time of this earnings call, I would like to deeply apologize for making the change in short notice. We have simultaneous interpretation channel available. Please use the interpretation icon at the bottom of the screen to choose the language of your choice. and so please could I have other speakers turn on their videos please. In today's earnings call we have our CEO Mr. Hidetoshi Shibata as well as our CFO Mr. Shuhei Shinkai as well as our other staff attending this earnings poll. First, we will have our CEO, Mr. Shibata, give you an opening remark and then Mr. Shinkai will be explaining about the second quarter earnings. and that will be followed by Q&A. And we're planning to spend a total of 16 minutes for the earnings call. And the materials that are used in this earnings call are the same as the materials posted in our webpage IR site. Mr. Shibata, please turn on your mic.

Hello, my name is Shibata. As Sato-san mentioned earlier, Very sorry about changing of the time on a short notice. And in regards to the earthquake, we've had to make some internal confirmation work, so very sorry we had to change the time for this earnings call. And as for this earthquake, of course, there are some things that are not yet known and But overall speaking, the impact to our earnings should be limited. And as for the Nishiki factory, the back-end factory, the full production has been resumed and the impact seems to be limited. And as for the Kawashiri, the front-end factory, this accounts for about 13% of the company-wide sales. and already the wafer testing has been resumed and in operation. And now for the pure water and the water leakage repairs and confirmation has been going on and there has been some damages to the facilities which we are trying to repair and resume. and we expect the production to resume on August 5. But as for the Daiba Bank and the inventory, fortunately speaking, we have secured those beforehand. So we think that these impacts on our performance should be limited. And as for the Kyushu area, OSAT partner, has been impacted by the earthquake as well, and as of today, their outlook, we think, is going to be limited on the business as well. So, all in all, the impact of the earthquake should be limited to our results. However, on the other hand, when it comes to our customers' situation, There are some cases that supply chain has been suspended, so we need to be very carefully monitoring them in the future. So that is about the earthquake. And in terms of the human safety and injuries, it is limited and it's nothing serious.

And at the same time,

As for the Takasaki site, the 6-inch power plant that is for the front end and also for the power analog R&D site is also at this site. And so from now on, we will take our time and gradually suspend and close our operation, which has been already announced. and please refer to that information. And looking back the second quarter, versus our guidance for automotive and IoT, both have been very strong and we have exceeded our expectations. And as for automobiles overall, there has been quite a strong demand, especially in Japan, the Gen 4.

Our car has been going very well.

And from the first quarter, there has been some increase compared to the first quarter. And some of the customers, in some cases, the inventory were too small. Thank you very much. There are some issues of memory shortage in some areas, but for our customers, the memory shortage issue has been absorbed to a certain extent, and we have strong sales for those and customers who have secured the memory beforehand. And for the third quarter, like it was mentioned earlier, the impact of the earthquake to our business itself should be limited, but for the supply chain and the automobile especially, we need to carefully monitor moving forward. And so those are the unknown parts, but in terms of the automobile, Overall speaking, versus last year, we are doing very well in sequential demand. We expect to be quite flat. And as for IoT, we expect things to be quite strong continuously, especially industrial and also in the infrastructure area. The strength from the second quarter should be continuing. And on the other hand, as for IoT, like I indicated earlier, the memory price hike and the memory shortage impact has been seen to a certain extent. And overall, we expect a slight increase. And like I mentioned earlier, for our main customers, I wouldn't say they were not impacted, but there are some customers who have been able to absorb their impact, which we would like to sell strongly, so that's why we expect a slight increase. And so from the second quarter to the third quarter, we expect the strong demand to continue. That is our current situation and the outlook for the third quarter. That is my view. And from now on, we will move on to our presentation and the details of the numbers from the CFO, Shinkai-san.

Shinkai-san, go ahead, please.

My name is Shinkai. I'm the CFO, and I will be explaining based on the presentation material. Next page, please. Next page, please. Well, this is a disclaimer, and please refer to number four, the timing business. The transfer of the business was closed on July 1st of 2026, and so with regards to that, the reporting segment for timing of business used to be categorized for auto and IoT, but it has been changed to others. and we are record actively making the changes for the comparison years up to 2025 and this is the next is the overview of the earnings call please refer to the bottom blue column from fourth from the left Revenue is 45.3 billion yen and gross margin is 58.1% and OB margin is 132.7 billion and OB margin is 32.7%. EBITDA is 154.3 billion yen. Profit attributable to owners of parents is 113.3 billion yen and FX is 159 yen to a dollar and 185 yen to the euro. Please refer to the shade of four columns to the right for cumulative results and excluding the timing business. In fact, the apple-to-apple basis comparison, year-on-year, as well as queue-on-queue, is shown on the light blue column on the right-hand side. And on the next page, I would like... to explain on the comparison against guidance as well as Q&Q. Next page, please. First, regarding the Q4 result against the expectation, which is shown on the right-hand side of the screen. In terms of revenue, it was 4.5% against the forecast median, and it was an upside of 4.5%, and more than half was due to effects, and the others were Contribution from the increase in demand for automotive and IOT. And that was mentioned from the comments from Shibata-san. The auto and the end market demand was very strong. And also for IOT, in addition to data center, the industry of IOT and the mass market were better than our expectation. And with regards to growth margin, which is the second line, compared to the guidance, It was increased by one point and a factor was due to depreciation of the yen and also mixed improvement and that mixed improvement counted one-third each. And in terms of the manufacturing costs, there's an increase in labor costs and fuel costs and also maintenance costs increased. were in line with the expectation, but the inventory valuation that was considered more conservatively was contributing positive, and for OB, it was 32.7%, and so compared to the median, it was plus 3.7 points, and so there was a significant upside of revenue and gross profit. There are three major factors. One is the About 30% is regarding the investment that we're considering where the executives were pushed out. For example, the hiring has been delayed or the arrangement with the partners has been delayed or the plan itself were revised and we might have pushed it to the next period. And because of that, the expenses are expected to be postponed. and around 20%, or a little bit less than 20%, the ERP integration schedule was revised and was shifted to next year onwards. The company that was acquired, the ERP of the company, were planned to be integrated and we were planning to execute that in the second quarter. but because of considering the recent supply situation we realized that this is not the appropriate timing so we have postponed that to next fiscal year onwards and the cost related to that was expected to happen this quarter but it did not occur and the rest is the timing The delay of the project and also between Q1 and Q2, we were expecting some seasonal factors that were conservatively considered, but they're not happening. And next is the Q on Q. In terms of revenue, it was plus 9.8%.

And gross margin on a Q on Q basis was minus 1.0 points.

and this is because of the OPEC increase like fuel cost and labor cost increase and maintenance cost increase were the reasons for the decline. And OP margin on a K-on-Q basis was 0.8 point decline. And the major factors are the increase in operating cost compared to the expectation the OPEC were much lower, but on a two-on-two basis, they have gone up, and half of them were the one-time cost increase in the first quarter, and there's a rebound from that, and more than half are the increase in equipment, mostly the labor cost increase reflecting the bonus from Q1. And on the right-hand side, you see the segment results. There's not much to highlight, but the open margin of Odo has gone down 0.9 points on a Q2 basis, and there was a rebound increase from the first quarter, and that has impacted the Odo business. Next, please. Next is the revenue trend on a Q2 basis. I have explained this in the disclaimer and for the timing basis from the first quarter of 26 it's been categorized into others which is shown in white and you see the dotted line but anything beyond Q1 is explained in the same definition and in the second quarter the results are shown on the right hand side at the top and in total on a year-on-year basis it's 24.8 Thank you. Thank you. Thank you. have increased mainly on a two-on-two basis. And with the production capacity increase, the input has increased, and also because of the seasonality of mobile, we have been working on more products, and there's more working process. And for DOI, because of the sales increase, the DOI has gone down. And for a third quarter outlook, on a two-on-two basis, we're expecting inventory to increase, and we will continue to increase capacity, and because of that, the input will increase, and also Daibank will be enhanced, and based on that policy, we're planning to increase inventory. And on the right-hand side, you see the channel inventory. In the second quarter, on a Q&Q basis, the absolute channel inventory amount has increased, but WOI, because sell-through has increased a lot, WOI has declined. And for auto and IOT, we are planning to increase inventory because of the demand, but we have not been able to increase inventory in the second half. In the third quarter, we will continue to increase inventory, but on the other hand, for WOI, because the sell-through size will go up, so we're expecting WOI to decline. And on a second basis, although because of increase in demand, we will continue enhancing our inventory, and for IIoT, it will be the same. In general, we are planning to enhance Inventory, but mainly around the data center segment, the sell-through demand continues to be strong, so the WOI will look like it's going down. On a segment basis, there's some difference in color. Next page, please. Next is related to utilization and capex. On the left-hand side, you see the utilization rate. In the second quarter, the actual support are 58%, and The input utilization has gone up compared to the forecast. And in the third quarter, we are expecting this to increase slightly. And for CapEx, as you see here, in the third quarter, sorry, in the second quarter, R&D investment were the main CapEx. Next page, please.

And for the third quarter forecast, as you can see on the left-hand side of the leaf, refer to the dark blue center of the table, the revenue median, 430 billion, the gross profit margin, 57.5%, operating margin, 32.5%, and exchange rate assumption is 159 yen to the dollar and 184 yen to the euro. And for each of the items, let me give you the background. For the revenue median, 430 billion EUR is up 28.7%, and it's up 6.1% Q on Q. As Shibata-san mentioned in the beginning, for automobile and the industrial infrastructure and IoT are expected to grow, and for automobile, the China mainly the new product we expect to increase the 28 nano MCU and also Japan the channel inventory should be building up in Europe excuse me the industry infrastructure with the data center growth we expect increase and also Now, the growth margin, 57.5%, so that is down 0.6% Q1Q, and there are some improvements from the increased utilization, but with the margin expected to decline Q1Q due to rising manufacturing costs. And as for the manufacturing costs, that is for the energy costs, the maintenance costs, an increase from the summertime. And also, as for the OPU margin, 32%. 2.5% QOQ minus 0.2% slight decrease we expect. And QOQ, the OPEC should be increasing slightly. So, as I mentioned about the second quarter results, Those things that were not able to be used will also be shifted to the third quarter. And so as for the FX sensitivity, you can see here, with the ¥1 fluctuation, there is an impact. of 1 yen fluctuation of 2 billion to the revenue and to 0.9 billion to the OP in the US dollar and to 0.2 billion revenue and 0.1 billion OP to the euro. And so for the Q3 forecast based on the constant currency rates, the USD 100 yen and the euro 120 yen, operating profit margin will be 27%. And please look at the page 17, the gap. Overview Financial Results of the Gap Excuse me, not in the second quarter, but it will be included in the third quarter. And this is about the update on the Takasaki site. And next page, please. So, the impact of the Kumamoto earthquake on operations. This is the slide that's about the earthquake, and that concludes my presentation.

Thank you very much. We would now like to move on to the Q&A session. Shibata-san, please turn our video on. First, I would like to explain how we take the Q questions. If you have any questions, please use the raise your hand button on Zoom. And we will be asking the company name and the name in the order of raising your hand. And once you are pointed, you are able to ask. So please unmute yourself. And because of time limitation, we are limiting two questions per person. Thank you very much for waiting. Now, first, from Nikkei BP, Kojima-san, please ask your question. Please unmute yourself and ask the question. This is Kojima from Nikkei BP. Can you hear me? Yes, we can hear you. Well, I would like to extend my deepest condolences for the impact from the earthquake. And I would like to ask you the impact of the earthquake. This time, the impact on the performance is going to be limited, is what you have explained. But the impact of the earthquake, it's compared to 10 years ago. Is it fair for us to believe that the impact was smaller than 10 years ago? And the second is that I'm sure you're taking different countermeasures. But the restart of the operation seems to be pretty fast, but is there any effective countermeasure you have taken? There are many things that are still under confirmation, but as of now, compared to 10 years ago, the impact from the earthquake is smaller. In the first place, the size of the shake in the factory, I've already talked about the level of the shake at the factory, I believe, was much smaller than the earthquake 10 years ago, as a fact. And obviously, we had an experience from the earthquake 10 years ago, and we had been gradually taking countermeasures against the earthquake. and in some cases we have been placing the equipment on top of the anti-seismic facilities and in some cases we had some BCP inventory that we used to call a little while ago and by taking those different kind of measures, Thank you very much.

Thank you very much. Next, from Daiwa Securities, Mr. Okawa, please ask your question. Thank you very much for today. This is Okawa from Daiwa Securities. I have two questions. One is for the third quarter, the gross margin plan. I want to ask about, there are some energy costs you mentioned, and when it comes to utilization, and the revenue should be... So maybe I'm thinking that my gross margin could be higher with a higher utilization. Like you have been mentioning about the data center complexity and that's limiting the earnings increase. We know. So how do you view the gross margin moving forward?

Yes, Shinkai-san can answer that, please.

For the third quarter, gross margin, Q on Q, 0.6% decrease is what I mentioned, and when I break this down, the improvement from the utilization increases 50 basis points plus, and the increased production cost is 100 basis points minus, and net net-wise, 0.6 percentage points. So, the impact from the effects is not so much, and for the mix is almost quite flat, plus minus zero. And as a result, as you can see, the impact of the mix is not really likely. And moving forward, the outlook, When it comes to utilization, like I mentioned, for the third quarter and the fourth quarter, gradually will increase, and we will expect some contributions from those. And as for the manufacturing costs, because there are some crude oil costs that will be linked to it, there's not much certainty about that, and I think after summer it will be peaking out. Thank you.

Thank you.

My second question is about the data center-related business. So this time, for ASIC, you said it has significantly increased compared to a plant. Is it about the share or the supply? I think last time in the call, you said that might be a bottleneck. Is it that they turned out to be fine? And in the next... Well, digital power and memory, how do you compare them for the memory data center? Well, for the second quarter and the third quarter as well, as you can see from the major MPU earnings, the MPU has been very strong, and as a result, our memory interface as well has been strong. growing quite strongly and continuously. And when it comes to digital power and both, as well, it's both strong. And as for digital power and memory interface, the difference could be that the customer base, the spread of the customer base for power, we have the ASIC customers, and ZPU customers as well. And we have multiple customers as such. And for each of them, for each of their products, and depending on their generation, the share could be changing quite a lot. So I think I will be repeating myself from before. As of now, I think... We are in a very good position. I'm confident about that. In order to maintain our good position, we have to do a very strong execution that is very important. So if we can do that, I think we will be able to maintain our high share. And for the second quarter, what was very good is that because I think based on our assumption, I think as of now, we The demand for the customers that we have been supplying quite exclusively has been very strong, and they are coming to us for their business, and that's why things have been very strong. And when it comes to supply, the WOI numbers, you can see in those numbers as well that we are seeing continuous tightness. and everywhere you look, everything seems very tight. And it's not like we had a breakthrough around that, but we have been trying to gradually increase supply. And from here on to the end of the year and next year, the step function type of increase is something we are working on right now. And if that could happen, I think we will be able to Thank you.

Thank you very much.

Let me move on to Takaki-san from Pankei newspaper. Please unmute yourself and ask your question. This is Takaki from Pankei newspaper. Can you hear me? Yes, we can hear you. With regards to the earthquake, I'd like to understand how you're going to communicate the information from the CEO. You mentioned that the impact on the performance has been explained, and you have changed the timing of the early call to confirm the status, but with regards to communicating the information, I'd like to understand how you can communicate Think of the importance of communicating the information and I believe this is important. There were other major earthquakes like the Great East Japan earthquake and also you had experienced the earthquake in Kumamoto 10 years ago and is there anything you were extra careful of in communicating the information? This time there was nothing particular based ever since I assumed the CEO position. I have been trying to be most transparent about communicating the information. I think there is confusion in the line.

Yamamoto, please.

Can you mute yourself, please? Thank you. Thank you. So, therefore, we tried to disclose as much information as possible. And, of course, the situation can change, but at this point, for whatever information that we are aware of at this point, we have disclosed as much as we can at this point. That's all. Thank you. One more question is that this time the impact on the business performance is limited and also that the mesh was relatively limited too. But for the semi-industry, the impact that's given on the economy in general is increasing and With regards to the overall recovery of the economy in Kumamoto, what is your intention or what is your idea around promoting the recovery in Kumamoto as a region? Well, as soon as possible, we want to bring the utilization back to full utilization. And of course, we need to do some ketchup production as well. And with that, we would like to try and recover the damage and hope to make our contribution as we can. And of course, the economy is important too, but most important is ensuring the safety of the life and of the people. And we're not an industry that has a strong... Thank you very much.

Thank you very much. Next, question from Mizuho Securities, Mr. Yamamoto. Please ask your question. This is Yamamoto from Mizuho Securities. Do you hear me? Yes, we can. So, I have a question about the semiconductor chip price. So, the peers have been hiking their price and we hear news like that and ask, Thank you very much. Thank you very much. I understand what you're asking because I have to respect one side and also the other side as well when I answer. So from July 1st, some of the products, we have revised the pricing and as a result, for the second half,

We will see the effect of that price hike.

So I don't think it's not like a significant price hike that become a news headline or anything like that. It's not like we have done so across the board or anything like that. We have done the price hike for those that we really had to. and made our adjustments as such. And so from third quarter earnings onwards, I think we will see the effect of those initiatives. Okay, so from the third quarter, All of a sudden, the GEM goes up, or it's not like that then, I see. And so, because from before, you have adopted the surcharge system for passing on the cost hike to the price, and with the tight demand and supply situation, maybe you have not really hiked your price from the past. And that conventional system is still in place? Yes.

That's right.

I see. Thank you very much. That's all for my question.

Thank you very much. Next.

From Jomo newspaper, Master-san. Please unmute yourself. This is Master from Jomo newspaper in Green Mappy picture. Can you hear me? Yes, I can hear you. Thank you very much. Earlier, in Takasaki, You said, announced that the gradual close down of the Takasaki factory in Gunma Prefecture. I'd like to understand from Shibata, from the CEO, in terms of the reason why you have decided to close down the Takasaki factory. And according to the material, you mentioned that the basic policy is to maintain employment. So I'd like to also understand your thinking about employment. Well, as we have announced already, this is basically in line with what we have announced, Takasaki Factory is a 6-inch factory, and ever since the operation started, it's been more than 50 years. And the semiconductor factories, of course, it depends on the companies, but ourselves, as well as many semi-manufacturers, are now producing the production equipment themselves. I mean, right now, the SDEs who are enjoying very strong performance are selling the equipment to us, and we're purchasing from them to conduct the production. And unfortunately, 6-inch is a very old manufacturing process, and as the industry in total, the 6-inch production The manufacturing is shrinking and taking that into account, the maintenance from our suppliers and also the supply of the parts are becoming more difficult in those lines. If they continue the manufacturing, if there's any problem with the manufacturing, Thank you very much. We have decided to discontinue the production of 6-inch and for 8-inch plus, where we can still expect the support from the SBEs, we are going to migrate the production and migrate into those products. And employment is going to be maintained and a photo factory Thank you very much. Thank you very much. and so on. We are expecting for them to demonstrate their capabilities in the other locations and we will start communicating that to those employees. But on the other hand, if this applies to our factories as well as to the Overall manufacturing industry, are there strong needs for human resources? I mean, it's different to before. I mean, the employees have more options to choose from. That is what we're seeing now. and so if they were to relocate and had to move to a different location they might, a lot of employees would prefer to work for another company and for those type of people we will work to support them to change jobs more smoothly and of course ensuring employment is a very important thing but The sensitivity at this point, at least compared to the time I joined this company, has changed. I mean, right now it's easier for the employees to look for jobs. That is the situation now. Thank you very much. I have one more question. With regards to the Takasaki factory, I think it's a very familiar business in Takasaki, and the residents and the farmers have been very familiar with the factory. And so, Shibata-san, if you have any comments to the people who are in the surrounding neighborhoods, please share them. Well, once again, For more than 50 years, we have been working with the local people, and the factory has been flourishing along with the local people, and so to the people, as well as the local administration, I would like to thank you deeply for your support, and at the same time, because of the reasons I had illustrated before, physically, it's becoming very difficult to continue the operation, and I hope we will get your understanding about the reason why we are closing the factory and because the factory is physically difficult to continue the operation but for the value-added R&D efforts, we will continue the operation and we will put in the efforts to try and enhance the R&D and through those efforts we would like to contribute to the local society and we look forward to gaining your support so that we can work on the design and development of value-added study and we would like to develop R&D with your support and so I look forward to your continued support. Thank you very much.

Thank you very much.

Next question.

Nishigata-san from NHK, please ask a question. Nishigata-san, we can't hear you.

Hello, this is Nishigata from NHK. Do you hear me? Yes. Hello. So, from Kawashiri Plant, I want to ask you. You said that you will resume production from August 5th. Is that going to be a full... Well, how long do you think you need to reach full operation, resumption? Yes. Now, we don't have a sure information about that. So, since resumption of our operation... Maybe, I think it will take three weeks or so. And of course, each day at a time, we will try to front load and advance the full operation resumption so that we can report to you and let you know that everything is back and normal. So, as of now, we are expecting about three weeks To go back to full operation, that is our target as of now. Thank you.

Thank you. Thank you very much.

Next, from Nikkei News Petal, Ojiwai-san, please unmute yourself and ask your question. This is Ojiwai from Nikkei News Petal. At the beginning, you were saying that you were trying to clarify the impact, but you have a lot of confusion in the auto industry and supply chain, and throughout the region, there's a lot of confusion, and this is caused by regions other than semi. But with the closing of your semi factories, is there any case where your semi products are going to be short in the customer side. Is there any concern? Or because you're restarting the operation within one week, from our perspective, is it difficult to see that the auto production is going to be confused? Well, yes, I believe the impact right now is going to be limited. Okay, that is great. Thank you very much.

Thank you. Next, from Taiwan Securities Minister Okawa, Go ahead, unmute yourself and ask your question. Sorry, this is my second time to ask. I have two questions. One is about the demand environment for automobiles, overseas semiconductor manufacturers. There are some restocking manufacturers, or maybe there are some peers with content increase they're working on. How's your view? Well, yeah. I think both could work. It could be either case. In case of our business, the Gen 4, our car and SOC, we have, and the 28 nano micron as well. I don't know if we can call it content increase, but They are the products that can drive new growth, so which we can expect the continuous growth. And for instance, let's say that that is the X axis, and now I'm talking about the Y axis would be the customers regions. So as of now, looking at the situation, relatively speaking, of course, there are some ups and downs depending on the quarters, but as a trend, there are some trends, the stable growth trend can be seen in Japan and China. And on the other hand, there are some uncertainty in Europe

and the US.

I don't have a sense that it's going to grow so much, but I don't think it's going to go down either, so it's quite stable, I think. And so, in that sense, there are some different characteristics in each region, and so there are different product groups in each region we can expect, and also the There are some product growth that can drive our business that could determine our growth in the future. And as of now, compared to last year, I think we can see strong growth in a moderate pace continuously. That is our view. And in another words, Thank you very much. Thank you. My second question is about the SG&A. What's your view? So with the system introduction, you have postponed the ERP release, and so R&D has been shifted. And so... Because I think you said like six months ago that you will be more active about that, but with the production, I'm very active right now. So is it like the SGMA going to increase gradually, or are you going to be trying to stop the growth of it at some point in time? Well, actively speaking, mainly we will be using... and more SG&A for R&D, of course. We will be using those expense for the environment of the employees' workplace and mainly R&D would be the target for the SG&A. And we don't expect the SG&A to increase continuously, I hope you don't understand. And in terms of ERP integration push-out, because we wanted to risk any risk that could arise, so like I mentioned in the earlier Q&A session, so especially for data center, in a very tight situation, execution is the key. And if ERP should and so on. In some cases, that's something we really want to avoid. And that's why we decided to postpone in the very short notice. And as Shinkai-san mentioned, those things that were expected to be used turned out to be not used. I think... When it comes to R&D, long-term future growth, so there are some capitalized investments and expensive investments. So rather than being very cautious about making investments, I think we want to build a very solid ground right now. And that's how we allocate our budget. My point is that If our budget is very tight, we don't want to really keep on saving money or anything like that. We are allocating budget to be able to step on our accelerator as well. So it's just that it is less than we expected initially.

So this trend I think will

Continuously, I think it's possible that this trend will likely continue. I think it's not good to really exceed the expectation either, so the financial outlook based on the guidance. I think we want to try to limit these volatility so that we do some haircuts in order to do so. So that the range of the change we want to make in a Thank you very much.

Thank you very much.

We have received some questions, but because we're getting close to the end time, so we would like to close the Q&A session. We will have Shibata-san making a closing remark.

Yes, I think I will be repeating myself, but when it comes to data center, it will be the main thing, that is the data center and the AI, when it comes to underlying demand. The demand itself likely to continue very strongly, and as for consumers and IoT-based, there are some mixed situations, but mainly around our main customers, I think we will be able to continue this strength. and the business. And also with automobiles, like I mentioned earlier, at least by the end of this year, I think things will continue to be quite moderate and positive trend likely to continue. And also, for this outlook, I hope will materialize. We need to recover from the earthquake and also The supply chain around the data center execution is very important and at the same time for the mid to the long term investment as well as the post earthquake and the Takasaki related support for the stakeholders will be provided. so that we will be able to report to you on that in the next earnings call. So we will kindly request for your continuous support. Thank you very much for your time today.

Thank you.