SBI Holdings, Inc. (8473) Earnings Call Transcript & Summary

And I would like to thank you for participating in the press conference of -- for the establishment of the preparatory company in the semiconductor field. And I would also like to take this opportunity for all your support in our day-to-day business. First, I would like to introduce the participants for today. SBI Holdings, Inc. Representative Director, Chairman, President and CEO, Mr. Yoshitaka Kitao; SBI Holdings, Inc., Representative Director, Vice President, SBI Securities Representative Director and President, Mr. Masato Takamura; PowerChip Group, Representative Director, PSMC Representative Director and Chairman, Dr. Frank Huang; Representative Director, President of PSMC Japan, Mr. Joe Wu; Professor Emeritus of Tokyo Institute of Technology, Professor Shunri Oda. Now we would like to have SBI Holdings Representative Director, Chairman, President and CEO of Mr. Yoshitaka Kitao to present about the preparatory company for establishment of a semiconductor foundry. And after that, we plan to receive a presentation and explanation from other participants. Mr. Kitao, over to you.

Thank you very much for gathering here today despite your busy schedules. All of you probably think that we are a financial company. Therefore, what are they talking about preparing for -- a preparation company for the semiconductor field. So I would like to talk about the background first. This is related to the announcement for today. In Japan, domestically, we would like to establish a semiconductor foundry in Japan. Our partner is PSMC, which is a major semiconductor foundry in Taiwan. With these 2 companies, we would like to create a proprietary company and we will discuss where the factory site will be or what kind of products we will be manufacturing. And what kind of funding will we have. It's something that both companies will study moving forward. Of course, we are a finance company. So we don't have expertise that much for semiconductors. So we have to hire a semiconductor expertise moving forward, and we have to have a semiconductor experts brought in from Taiwan to Japan. Regarding the start-up construction and operation of the plant will be announced as soon as they are finalized. So briefly, I would like to go over the content of the MOU. So SBI and PSMC regarding the establishment of the new company and the initial configuration is something that we will be considering from now onwards and focus on automotive IC chips using the mature logic technology nodes of 40 nanometers and 55 nanometers in the short term. Also, this is for the industrial use. And for the medium term and lever towards high added value by moving to Wafer-on-Wafer 3D stacked wafers as well as process node of 28-nanometer and below, and for the long term, we'd like to establish a research institute to develop a more advanced semiconductor technology. The role that we will be playing, of course, is to lobby the Japanese government for potential subsidy, including government subsidies and land and infrastructure availability and tax incentives and also lobby towards the municipal governments and as a company ourselves in terms of financing we would like to participate in the newly established company. And also, we would like to work on globally financing, and we like to support that effort as well. And in terms of selecting the site for the plant, providing advice for that, already from several candidate sites, we are receiving explanation. But after this meeting today, I believe that there will be more invitations of the plant sites moving forward. So would like to select the most beneficial one. As you know, we will need industrial water and electricity and also whether we will have a thorough logistics that can be in placed or it is available is something that we need to further review. Furthermore, on the PSMC side, the PBTO plan, build transfer and operate services will be provided. Foundries, of course, they will make the product. However, my understanding is that basically, they're in the service business. Therefore, towards their customers, they will provide the best product and we would like them to focus on that. And also the planning of the plant or dispatching the construction teams or transfer of technical information or the factory operation or the training for local employees of the joint venture will be probably provided by PSMC Group as well. And also, what's very important is that, the IP that will be created in the company in Japan, the IP, the Intellectual Property will belong to the newly established company. TSMC if they establish a plant in Japan, the IP will belong to TSMC, generally speaking. But for this partnership with PSMC, this will be a unique setup. So it will provide a unique benefit to Japan is what we think. At this timing entering the semiconductor field is the timing vouchsafed by heaven, advantage of the land and harmony of the people. As you know, the Japanese government has placed the semiconductor industry as the national industry because there's a U.S.-China struggle for supremacy regarding semiconductor and also, there is an increasing geopolitical risk of having a unipolarity concentration in Taiwan. So that is why the government and also U.S. providing the support led to the thought, establishing the foundry in Japan. With the advantage of the land increase in global semiconductor demand due to advances in AI, DX, IoT and EVs. And Japan has many semiconductor-related companies with high international market shares. I will mention about this later, but the semiconductor material or semiconductor manufacturing equipment companies to exist. And also, the demanders meaning the companies that use the semiconductors, such as automotive companies. Japan is 1 of the top automobile manufacturing countries. So there's quite of a strong demand from the automobile industry and also harmony of people, PSMC, Taiwan's third largest and the world's sixth largest semiconductor foundry. We will be partnering with them. And in addition to that, we will embody the foundry in Japan. Being able to do this, I really greatly appreciate your partnership, Frank Huang. In the past, Japan was winning in the semiconductor industry. But in Japan, the resources have declined. So SBI through this project can provide investment and financing opportunities to many regional financial institutions through this project. I always said that go beyond finance and finance at its core and always enter new fields of business. So what kind of new fields of business should we enter is something that I've been thinking for a long time. And at that time, we've been focusing on a regional revitalization. And also, we've been putting efforts to attract a global financial center to Osaka, which is in relationship with regional revitalization and initiatives, and we want to create a Osaka Fintech center in Osaka for a -- by creating cluster of Fintech companies in the Kansai region. This is something that we have been thinking of and at that timing, this project came about. And we thought that the semiconductor business is the best business to embody that we were aiming for. And as you know, Elpida went bankrupt. And technology-wise, they had a very good technology. And the reason why at the end is because they ran out of funding. Technology-wise or technical wise, even though they're successful, if they don't have enough funding, they won't be able to move forward. Because semiconductors, they have quite a volatile up and down and it's a very cyclical industry. And when they require the investment to be competitive in the world, when they're down, they needed funding and I think that if Elpida was able to hold on for 6 months, they didn't have to go bankrupt. But the DPJ, Japan lost, it's a ruling seat in the Japanese government and live to support. So financial support is very important for the semiconductor business. And what kind of financial support can we -- we provide. we have over 10 million customers in SBI Securities, and we'll be able to contribute by financing from Japan and from the international arena. We have the balance -- asset balance of JPY 18 trillion. And in addition to that, together with the regional financial institutions, for the last 3.5 years, we have been establishing a good relationship. And the regional financial institutions -- of course, they have many funds that they can provide, but they don't have local industries. So they have money, but they cannot provide it. And so creating the structure that we can finance -- the blue chip companies is what we thought that we can do. And of course, the main banks, Mizuho, in addition to that, SMBC, of course, we will consult them as well and seek various financings and lending in loans. We have been always thinking of the Fourth Megabank concept. And with over 100 banks, we have various type of alliance and partnerships. And in that way -- so SBI Shinsei Bank, together with them through this project, we would like this time to be able to contribute to the local area. And as for the venture capital, we have been investing in 1,156 companies and the amount of investment that we have made up till now is 545.9 billion amount of capital commitment is JPY 711.7 billion. So we have the largest venture capital in Japan, and we have the abundance in the funding. And we are focusing on investments in privately held companies in the next generation of core industries such as AI, blockchain, FinTech, IT, biotech, life science, healthcare and green energy, which are the cutting edge technology and semiconductor is at the cutting edge. And I think that it is a good investment and it just happened that we have established over -- we are planning to establish a fund that is over JPY 100 billion. Japan as the national policy is going to focus on semiconductor field. So the Japanese Government finally started to think about that. Of course, they should because this is the Per Capita Nominal GDP ranking of OECD countries. 1992, we were in fourth place. In 2012, we were in 10th. And in 2022, we fell down to #21 in ranking. That is why the yen is weak, too. So we have to do something about that. To do that, we have to revive the manufacturing industry is what I think. And in order to do so, we need to have the semiconductors as industrial base and create a strong ecosystem of the industry. And of course, without the regional revitalization, we cannot seek any economic growth in Japan, and that's what the late former Prime Minister Abe was saying. And so what we are talking about is deeply related to that. We made the decision to go into the semiconductor business and once we decide on the plant site, the income of that local area and the industry of that local area is going to revive because there will be many related industries that will be revived. And this a great contribution and [indiscernible] is having the target of achieved total sales over JPY 15 trillion for domestic semiconductor manufacturers by 2030 and ensure stable supply of semiconductors in Japan. And granting a commutative total of JPY 330 billion to Rapidus, which seeks to manufacture next-generation semiconductors in Japan are approved up to JPY 476 billion for the construction of the plant and Kumamoto by the TSMC, these are the things that are done by the Japanese government already. And of course, this is something they should do if they want to develop the semiconductor industry. I think this is not enough yet. And they are saying that the government plans to invest JPY 2 trillion over 2 years but that's not enough because Germany or South Korea or Taiwan is investing more than that money. And towards the PSMC, from India, there was a very strong invitation to India is what I've heard. But in India, the modernization is going to advance -- accelerate more, and there is going to be a #1 country in the world in terms of economic development, and they need a lot of home appliance, they need a lot of automobiles. So from a country like that, a bringing in, in semiconductor manufacturing plant or foundry, of course, is very meaningful. And this is something that we are focused on is to -- the Japanese government is committed to creating new industries under the start of development plan. Of course, this is a promising area so the government needs to invest. Japan during the global semiconductor market was 50% in the past. However, that decreased and decreased and now it's around 10%. So once again, the semiconductor industry needs to be revised as representing the manufacturing industry once again. If we just simply think about -- I suddenly studied about semiconductor. And there is the Moore's’ Law regarding semiconductor and probably all of you know about this. In order to -- the technology base Moore's law is miniaturization, larger wafer size and integration. But when I read into it more, it seems that miniaturization is almost coming to a limit. If it has reached the limit or if it's close to the limit, I thought that now it's the perfect time to enter the semiconductor foundry field, enormous capital investment due to the sophistication of the technology base is what's happening, and there's a decrease in new entrants in the market because it's difficult to enter the market. And there's a decrease in competition, and we're very lucky to be able to enter the market in such a situation. And regarding semiconductor technology, where the government spending or money providing support is the high end of semiconductors, but we don't have to focus on that. More of a middle range or the matured semiconductor products, there's quite of a large demand, but it's now a bipolar situation. The more you go to the high end it requires more CapEx. And in a way, the competition becomes more severe. In the high end, at the 7 nanometers and as is run here of 10, 14, 16 nanometers. And the percentage that it comprises is only about 10% to 20% of the total. The rest is the middle range and mature. So a 22/28, 40/45, 55 /65 nanometers. So this middle range and the mature semiconductors are still continued to be necessary. And actually, in a way, it is more demanded. Semiconductors of 28-nanometer or more account for more than 90% of the total demand for automotive applications. This is also the current situation. And Taiwan's PSMC, which is the leading semiconductor foundry has its strengths in the so-called semi-advanced fields. Here it says the semi logic, semiconductors and others are listed here, and there is accumulation of [ know-how ]. High-performance next-generation material, silicon carbide are the a power semiconductors, they decided to have a mass production from 2025. They have the such technology as well. And in terms of human resources, they have the graduate school advanced technology. Together with TSMC, they have created this graduate school. So they have that to foster human resources. So utilizing, building a robust ecosystem for the semiconductor industry in Japan by leveraging the strength of Japan semiconductor infrastructure because we do have the demanders in automobile biotechnology and AI for the product, you can look at this later. And different growth rates per product due to variations in the composition of the final market is what's shown here. The high end DRAM and NAND is saying that the performance is struggling. But microcontroller unit or a power transistors are, on the other hand, quite strong if you look at these numbers. So depending on the semiconductor product type, there is a difference of whether they're performing strong or not. An application-specific semiconductor demand outlook by SBI Securities. At the end market, there are the forecast for automobiles and industrial equipment. And you can see in this area, Japan has its strength and application-specific ICS shipment trends. For automobile, they're going to continue double-digit increase. In Japan, we're falling behind in terms of EVs. So from now onwards, they're going to enter the EV market in full scale. That means that the demand for EV and all solid-state batteries are necessary as well and significant growth opportunities in non-memory semiconductors and automotive and industrial machinery is something that we can expect to grow as well. And this is showing in the long term, the semiconductor industry is expected to grow at a high rate due to the mega trends such as AI, DX and GX. And as an [ export ] purpose, there is a meaning to manufactured in Japan. Making Japan, the global supplies hub. If we can develop in that way, that will be the best. In a way, Japan has its strength. That is, as I have mentioned before, if the semiconductor manufacturing equipment in Japan, both in equipment and material has a very high share. U.S., 35%; Japan, 31% for the manufacturing equipment. For semiconductors in terms of the semiconductor component materials, Japan is 49%. And here, it is showing in what areas of semiconductor manufacturing equipment that we have a large share. The green part is the Japanese company. So you will see that there are many areas that the Japanese companies hold a strength in. So Japan needs to create an ecosystem, including these companies. In Japan, we only have the vertical integration, but we have to progress in the horizontal integration. And then it's not going to be the Renesas Electronics, Socionext have been increasing to utilize the foundries instead of just being self-sufficient. We need to become that way. We, from the past have been saying, go beyond finance. Finance as its core. It's been exactly 24 years since we have been founded and we've been saying this because always behind products and services, there is a financial services. So we need to enter various type of industries. In other industries, there were not that many financial institutions entering. They just provide the money and they only provide the money once and that's it. If we do only that, the industries are not going to grow or develop. And Japan -- and financial industry is an information technology industry. So that's why we have been focusing on this industry. We're going to go JSMC, is what it's going to establish. That's how we will name it, it says Japan on it. So in various ways, we will be establishing the financial functions so that we can contribute to the recovery of Japan semiconductor industry. Now my time is up, so I would like to conclude my presentation. Thank you very much for your kind attention.

Thank you very much Mr. Kitao. Next, we would like to invite Dr. Frank Huang, Powerchip Group Representative Director, Chairman and PSMC Representative Director and Chairman.

Of the SBI and hello everybody who attend to this meeting from industry, financial community and the media. I'm honored to be -- give some expression of my thought about this Joint Venture. First, I would like to express my appreciation and honor to have this opportunity to work as a great entrepreneur and the powerful executive Kitao-san which was really given me a great opportunity to come into Japan to work together. You see -- Powerchip has been from Japan 30 years ago from Mitsubishi Bank. So we have bond as a Japanese technology and other supporter. And Powerchip actually is the only semiconductor company in the world using Japan technology for foundry, both in logic and the DRAM, okay, and very unique. And after 30 years, today, we like to -- opportunity come to Japan to work together, especially when I meet Chairman, I was very appreciate that there's opportunity. And the worst situation is like that. Japan is a great industry country. 30 years ago, Japan has a 50% of worldwide semiconductor market, not only DRAM product and equipment and the raw material. Today, raw material equipment in Japan is still very strong as the Chairman said, but the manufacturer is no longer strong, but I think it's time to a great industry country of Japan to have its own foundry. In the joint venture, I would like to have with the Chairman -- is to have [ JV's ] on this foundry and will be important for Japanese supply chain. Japan is such a great industry country require in many -- right now, most automotive and other component is import. It's not much sense because even China was trying to catch up the semiconductors have every component made by itself. I believe Japan is also helped to do so. And we are really like to feedback, our technology and supporting and to -- together with Mr. Chairman, hope to build next foundry country, a company in Japan. Japan maybe have a TSMC, maybe in the other countries, but it's not Japan. TSMC is TSMC. But Powerchip with SBI will create a Japanese entrepreneur. It will be a Japanese company for Japanese, made in Japan, and which is important if Japan will continue to successful industry to control its own semiconductor, it's vital and very important. I'm very -- appreciate the speech the Chairman said, it's time to do the right thing. It's time to a bit change because the resources, human being ended, people, Japanese abundant but we have put things together so that we will be have this opportunity. The opportunity to have this entrepreneurial success. It's not only -- it's only -- it's a good opportunity. Long time ago when I was in -- see today, we still have a business with Mitsubishi Bank. A long time ago, we have the really respect Japanese under the interest, we just learn everything. But today, when Japan is no longer compete strongly in manufacturing of semiconductor, I think it's a lost opportunity. Chairman has said that Japan should not lose some DRAM and other entrepreneur because of the financing. I totally agree. The fall of the some Japanese semiconductor because of shortage of funding. So I'm here to really appreciate this opportunity to walk to -- with SBI, especially if Japan Semiconductor needed success, it's not only technology, it's not only industry, it's financing. And with a strong partner like SBI and the Kitao-san. I think we are no longer so worried about the future financing. And this is a key to success. It's not technology, it's Technology, we do have, its not industry, industry Japan has, but money is a key word. So I'm really appreciate that the Kitao-san has decide to support such kind of joint venture and with such kind of financing capacity, I believe -- sorry, I believe there is a great opportunity for us to success. And I strongly believe this is important for Japanese itself. I have a deep -- our family has a deep relation with Japan. My parent was in Japan during the war. Some of my brother, sister born in Japan. For me, have opportunity to come back to Japan to work together. This opportunity, I think it's golden opportunity. There is many countries like to work with us. As Chairman say, like India, like other countries, but our priority is Japan, if Chairman -- when Chairman decide to do this so, I'm very pleased, and I'm really appreciate. And I'm looking for our team, it's capable to build a fab, transfer technology, training people and making the product. So I guess this is great with financing technology industry capacity, this new entrepreneurial and the new joint venture should have an opportunity to success. It will -- and I'm really -- so I appreciate that Chairman has made it such a great decision to form the joint venture with us. And I'm really appreciate -- our team is very happy, able to do this following other Taiwanese company, we have a site in Japan. And the relation between these 2 countries Taiwan and the Japan in The case of semiconductor, it's very tight together and we have this opportunity to work together with Japanese industry and especially automotive. I believe it will be a great opportunity for us to success. And on behalf of a Powerchip, PSMC, I really want to thank everybody who is supporting us and especially all the team of SBI in such a short time. Chairman has put things together -- to my surprise, it's a great work. I want to thank him and his team. And we are really going to go [ forward ]. Okay. Thank you very much, and I hope everybody's health and success.

[Interpreted] Thank you very much. From PSMC Japan, Representative Director and President Mr. Joe Wu we would like to receive a presentation on PSMC Japan.

I will present in Japanese. Let me introduce PSMC. In terms of the world ranking, we are ranked sixth in the foundry ranking and third in Taiwan. Within the foundry, we are the only company that can handle and provide foundry service for logic and memory. We have 5 fabs and 1 under construction. We plan to start mass production by the end of next year for the new factory. Currently, we have 8,200 employees. Last year, the revenue was JPY 350 billion, and this 46.8% was RGB margin. Let me introduce our management team. Dr. Frank Huang is Chairman and CEO; and Taiwan IoT, Technology and Industry Association Chairman and also he is the Chairman of Taiwan Advanced Automotive Technology and Development Association. Mr. Chu and the CFO and CTO are all in Japan today. Last year, I came to Japan and established PSMC Japan, and it's been a year since I came to Japan. There -- we have a two 8-inch fabs and together, 120,000 is the capacity and three 12-inch fabs and together, monthly capacity of 110,000. And new [ P5 fab ], we'll start the mass production from the end of next year. This is overseas factory, but actually, this is a company called NextChip. This is the joint venture of PSMC. In 2015, at [indiscernible], we established a foundry. And last year, we were able to mass produce 100,000 on a monthly basis and May of this year in Shanghai at the exchange in Shanghai, this company was listed. The gross margin last year of Nextchip is same as PSMC itself. This is our business. Logic-related business makes up 60% of the revenue -- there's PMIC microcomputer display IC image sensor. We work in these areas. And next-generation power semiconductor, SiC and GaN, we plan to mass produce them for 2025. Memory business, it's not a general purpose, but more focused on niche market where price fluctuation is less. This is what we would like to introduce in the AI age. What we can do -- what PSMC can do is the cutting-edge package. We have 3D interchip Wafer-on-Wafer technology. PSMC is the only foundry that can handle both logic and memory. And through this, the packaging wafer-on-wafer was made possible. There are 2 benefits. One is the reduction of power usage through 3D stacking solution, the electric power on memory access because there's no wiring between chips, the required power can be saved by 90%. And the second point is the read data volume from memory, since there is no wiring, the data volume can be increased 10x and more. These are the 2 major benefits so-called next-generation green semiconductor uses this technology. This is our PSMC open foundry model. Compared to other foundries, at PSMC, we cater to the specific needs of customers, and we have the customization process. This is a concrete example as you can see here. The blue part is a 28 nano or 40 or 45. This is handled by PSMC logic office. And each IDM adds a special device, the unique device and compared to IDMs new product development, cost can be reduced, and the time required for development can be shortened. And this is the process that we are concentrating in compared to major foundries, rather than following them at PSMC, as Mr. Kitao, and Frank said, we are focused on the semi advanced process. The reason is that regarding the shipment of the semiconductor globally, 28 and below makes up 10% or lower. And 90% uses 28 nano or larger or even older process. This is the IC supply chain for automotive application in Japan, and we believe we can contribute to this in the automotive industry in Japan. Japan is set to be #1. However, the semiconductor parts and ICs, there is a shortage of capacity. The major foundries focus on the cutting edge technology. However, more than 90% are using 28 nano or larger. Therefore, PSMC focuses on the 90% or larger market share. This is the difference of semiconductor industry between Japan and Taiwan. This is the sales of semiconductor in 2021. Annually, in Taiwan, roughly JPY 21 trillion was the total of sales. On the other hand, Japan -- in Japan, it was nearly JPY 15 trillion. Material equipment is the area Japan has strengthened. However, IDM and fabless design house, I believe there's a potential for growth in these areas. So if PSMC builds a foundry in Japan, and then IDM and fabless, we can also contribute in these areas as well. In order to strengthen the competitive advantage of IDM, cost competitiveness is important and this company size is almost the same as PSMC, but the person production profit is nearly double in case of PSMC and we want to provide that benefit to customers. So that customers can secure profit from their products. And customers can strengthen their price competitiveness and thus, they can expand their market share. Here, I talk about human resources development in Japan, in Taiwan, the Taiwanese government and national university has -- including PSMC, it established a university on the semiconductor with 4 public entities and more than 10 semiconductors companies support. Of course, the government provides us support and several hundred engineers are being educated every year. And using that, we will be able to train a Japanese semiconductor engineers, and we would like to build a platform to train Japanese process engineers. In fabless area, there's a potential for growth in Japan. So especially, they are capable, experienced staff in Japan. And in order to generate new innovation, we would like to build an ecosystem. So the -- there's a foundry fab and start-ups and design houses, we would like to provide backup to design houses and start-ups. And we intend to provide support so that these are expanded in Japan. The third point is that we would like to build an R&D center in Japan to focus on the development of the cutting-edge technology, and we would like to collaborate with the government and Japanese companies as well as universities. And what was developed? Through that. IP and technology information, we plan to transfer them to Japan. This is a summary. Last page. If PSMC comes to Japan, what can we contribute to the Japanese semiconductor? There are 5 points. One is the building of supply chain of the semi-advanced process foundry in Japan. And thus, we would like to reduce the geopolitical risk and BCP risk. And also, we want to achieve stable supply of industrial specialty semiconductor. We are entering the age of AI and optimum cutting-edge package, 3-dimensional wafer-on-wafer technology is what we would like to transfer and provide to Japan. And also, we would like to achieve the -- provide support to semiconductor companies so that they can secure profit and strengthen their price competitiveness and expand market share. Another is a human resources development program. We would like to copy the success example in Taiwan and replicate in Japan and provide support to start-ups and design houses, so that the motivation for entrepreneurs in Japan will be raised. And finally, we would like to establish an R&D center and transfer the technology information and IP add to Japan on the cutting-edge semiconductor. 30 years ago, our company started as a Mitsubishi Electric. And 30 years later, to Japanese semiconductor industry, we believe that there's something that we can contribute. Thank you for your kind attention.

[Interpreted] Thank you very much. Next, we would like to invite Dr. Shunri, Professor Emeritus of Tokyo Institute of Technology to give us a presentation titled, "Evaluation of PSMC from an objective point of view".

[Interpreted] This is Oda speaking. I am not affiliated to SBI nor PSMC. So I am -- I'm going to share with you how I look at PSMC objectively from an independent perspective. So first, I would like to explain who am I, Shunri Oda? In 1979, I have completed the Doctoral course at Tokyo Institute of Technology. And at the time of that year, I was hired as the research associate and then became the associate Professor and Professor. During this time, I was engaged in research regarding semiconductor devices and quantum nanoelectronics. And in 2017, I have retired and became the Professor Emeritus of Tokyo Institute of Technology, and I have served as the specialty appointed Professor for 2 years. And during that time, I have observed as the visiting professor and visiting scholar at MIT, Cambridge University with Federal Institute of Technology, Nanjing University and National Jiaotong University, Taiwan. And also in terms of the academic society, I became the life fellow and [indiscernible] lecturer of IEEE and the Society of Applied Physics member and also the Japan Industrial Academy member. So as the expert of the semiconductor in Japan, from the time that I was at a student at university, I've been researching this area for the last 50 years. And as I have mentioned from before, the Japanese semiconductor industry's is a global -- our ranking in 1987, out of the top 10, there are 5 Japanese companies. So it had a great momentum. And as you see at the bottom and during that time in 1979, Japan is #1 or the Japan that can say no, titled books were published. So these are representing the times when Japan was very strong. And in 1986, the U.S. Japan semiconductor agreement was concluded. And since then, the R&D of semiconductor R&D activities regarding semiconductor in Japan because of this agreement was restricted. And as a result, in 2021, within the top 10 ranking, there are no Japanese companies that are included. The Japanese companies have disappeared. In the top 10 ranking of semiconductor manufacturers sales. There were 5 Japanese manufacturers in 1987, but none in 2021. However, the law or -- excuse me, Economic Security Promotion Act was enacted in May 2023, and designated semiconductor at specified material or products. And so the Japanese government is also taking this seriously. And during the Hiroshima summit, it was mentioned that there's a need in Japan to establish a semiconductor supply chain through international cooperation. So it is the time for the revival of Japanese semiconductor industry. And there's Moore's law. This is showing the progress of semiconductors. A number of transistors integrated on a semiconductor chip will increase fourfolds in 3 years and 100 volts in 10 years. The integrated circuit was invented around 1958. And now there's a several billion units or even more. And the progress of this, of course, the dimensions of the transistors have become -- became small. And every 3 years, it's the factor of 0.7% and an area site is half in 3 years. And this trend has continued for more than 50 years, meaning that it has started from 1960. So it's more than 50 years, about more than 68 years. This trend is continuing. Therefore, until now, Intel and TSMC, semiconductor manufacturers have followed Moore's law which pursues miniaturization to improve performance and have been pursuing cutting-edge technologies, but this requires an enormous amount of CapEx. However, the reverse Moore's law advocated by PSMC, this is to not put a burden on the material manufacturers of literal industries and build a healthy supply chain. So it is a semi-advanced technology. It's matured and it doesn't require that much cost type of technology area. However, they're still quite crucial for businesses that are focusing on this area to build up a healthy supply chain. And another point is that logic and memory. TSMC is the only company that has both the logic and memory technology. And with the conventional method, as you can see at the diagram in the bottom -- on the bottom on the left-hand side, the memory and logic were place next to each other horizontally and the wiring connected the 2. But now it's a wafer-on-wafer technology -- stacking up the wafers. This enables the combination of logic and memory to be stacked. Therefore, the wiring itself is very short. And as a result of that, it will be high speed and low apparel consumption by far and will achieve low cost. Therefore, it is a technology that should be paid attention to. That is all from my side. Thank you very much. [Statements in English on this transcript were spoken by an interpreter present on the live call.]