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

Thank you very much for taking time out of your busy schedule today to attend the SBI Holdings press conference. I'd like to take this opportunity to thank you all for your continued support. First, allow me to introduce today's participants: Mr. Yoshitaka Kitao, Representative Director, Chairman, President, CEO of SBI Holdings; Mr. Frank Huang, Chairman of Powerchip Group, Chairman of PSMC; Mr. Joe Wu, Representative Director and President of PSMC Japan; Mr. Yoshihiro Murai, Governor of Miyagi Prefecture; and Mr. Masato Takamura, Executive Vice President and Representative Director, SBI Holdings, President and Representative Director, SBI Securities. First, we'd like to ask Mr. Kitao, Chairman and President of SBI Holdings, to start the slide presentation on the progress of the establishment of the semiconductor foundry. After that, we will ask for greetings and presentations from other participants. President Kitao, please take the floor.

Thank you for your introduction. My name is Kitao. Thank you so much for sparing your time out of your busy schedule to be here. The things have been set here to a certain extent, so I'd like to explain to you what has been decided upon. First, I'd like to speak about the establishment of the organization for semiconductor for foundry business in -- we decided in July 2023, with the MOU signed with PSMC on a proprietary company for establishment of a semiconductor foundry, and we have been working on the preparation in many ways. So let me explain to you what has been done by this proprietary company. The consideration of market research, product configuration and construction site of the foundry, determination of the policy for capital structure and fund raising, establishment of the organizational structure and also personnel system. In that respect, we can say that we have to work on the training of large number of personnel. So the first step would be to recruit staff and engineers. All these are very important, and also in what way are we able to have a connection with academia and others. So we have -- they have been working on the consolidation for that. Then next step was that we established JSMC Holdings as a new entity to serve as the operating body for the foundry business. So SBI Holdings and PSMC formed a joint venture, JSMC. And under that umbrella, we decided to have JSMC Holdings. And then for the executive team, this is the plan. And I'll be serving as the Director and Chairman, and Frank will be the Vice Chairperson. And Mr. Wu would be Representative Director and CEO, and Mr. Nakano, who have been responsible for finance, will be the Representative Director and CFO. And Oda-san and Martin Chu will be the directors. So this is the executive team that we have in mind. We are not only establishing foundries and that's it. So far from it, we try to promote the establishment of the semiconductor foundry ecosystem. We have been thinking about this for a while and try to work on it. When I say ecosystem, well, this is something we have been working on in the financial world. And so we have a foundry. The strongest foundry ever should be established in order to make sure that it is the most competitive in the world. It is important to have the supporting functions. So we have the preprocess and also post processes, many related processes will be involved in the foundries, and we have to work on that, too. And also, it's important to have technologies, right, and the investment is needed here, as can be seen here, for the circuit development and -- of the IP. And generally speaking, the product will be put into the process of the foundries, such as in the case of PSMC. And then a huge amount of investment is being made. So we'd like to continue working on the investment, as can be seen. This is really the agreed upon. So the money has not been put into this process, but the amount of money is already decided upon. And also, as you know, Korea is very strong in this arena and many semiconductor-related companies are already there. So there are as many as 22 companies. So we are making investment for as many as 22 companies, and also the processes. So AI-driven, we try to leverage AI to optimize semiconductor processes. So we have these companies, which will be covered by our investment. So as I just said, we are in the process of the preparation for the establishment of ecosystem. We have been steadily working on it. So in various areas, we will have the ecosystem so that they will have a synergy effect and they will have mutual evolution. This has been already done in the financial world, and we are quite sure that this will hold true in all the industries. So this will hold true in the semiconductor industry as well. And also at the same time, we will fund money, we will raise the money. And so we will establish a fund, the size of which would be JPY 100 billion. Then when the success of Japan is achieved and the -- we've achieved, we are considering the expansion overseas by relocating the entire ecosystem abroad. So that means that we will start in Japan. We will make success. And then the entire process or entire ecosystem will be brought to other countries where this kind of ecosystem is totally lacking. That's something we try to work on. So that's the reason why we have the holding company system. So we have this kind of -- the umbrella structure. Now about the planned location for the semiconductor foundry and the reasons for its selection. We have already decided upon the location for semiconductor foundry to construct -- for foundry construction. We had 31 candidates. So the construction of the semiconductor foundry received too much attention, and there are highly constructive proposals given from 31 municipalities, from Hokkaido to Kyushu, and they're encompassing various aspects, including infrastructure development, site selection and diverse economic conditions. So we'd like to extend our sincere appreciation to all these municipalities for their effort. So many local governments are interested. And so in the past 4 years, we've been working to invigorate or revitalize the local communities. And I think this is the best solution for that. The impact that it gives to various communities is so large. It creates income and jobs. Not only that, by making one foundry that leads to the ecosystem and various companies will gather there. And so that community will be transformed as a result of this kind of a project. So this location is in Miyagi Prefecture, and it's the Second Northern Sendai Central Industrial Park. This is what we selected. We're not experts, but -- so we asked the PSMC to look into this. We left it up to them to decide the location. So from various perspectives, they considered the location. And so the land has to be larger, a certain size or larger, must be easy to use also and industrial water and wastewater facilities, power supply must be available. Are there multiple substations? Are there gas supply? All those things were checked. And also those engaged in construction, developers, construction companies, they are in short supply. They are so busy, and they say that they are too full. So are we able to get the cooperation of the construction companies? Those are all the things that were considered, and we decided on this location. Of course, in terms of infrastructure, in terms of the access, what's the access time over land, sea and water? And how about the human resource availability? Are there universities? And there is -- with a school of engineering. And so what's the size of the population? Miyagi has the only ordinance-designated city in the Tohoku region with a population of 1 million in Sendai. And so in various parts of Tohoku, including Miyagi Prefecture, there are multiple number of supply chains related to the semiconductors. And that multiple supply chain or broad supply chain helps to conduct efficient semiconductor manufacturing and creating an ecosystem. In Miyagi Prefecture, there are companies that do etching equipment, semiconductor laser and photolithography equipment manufacturers. And also material suppliers, they have various bases in this region. And according to statistics from the Development Bank of Japan survey on planned capital spending, semiconductor-related investment in Tohoku is JPY 104.5 billion in fiscal 2020. So it's an 83.8% increase from JPY 56.9 billion the year before, which surpasses the national average growth rate of 42.9%. So -- and also in terms of the future outlook, we want to start this business as quickly as possible. And so we want efficient production, the most efficient production possible. Now the design of a foundry takes quite a long time. Now PSMC is constructing foundry in Taiwan. Foundry P5 is expected to start in 2024. So it's the most modern, the latest one. And so the design has been completed. So if we can copy that and do it in Japan, that would be the fastest. So that was the idea that the PSMC gave us. And we said, if this is possible, this would be great. And so we were able to secure the land, that makes that possible. But it is -- and it's still during the diet session. And in terms of the subsidy, the newspapers reported JPY 140 billion, but nothing has been decided yet. So without a subsidy, I don't plan to do this project. I don't intend to do this project. 200,000 shareholders support our business. So if there is no subsidy and if it's going to negatively impact management, we're not going to do it. We must make sure that, that doesn't happen. So a certain amount of subsidy, which is commensurate with the size of this project, if that is provided, then in Miyagi Prefecture, together with PSMC, we will do this project. For a long time, PSMC has built up knowledge in IP, and we can capitalize on that. And this is something that is very beneficial for Japan. And so I would like the government to understand that. And at the diet, I want also the opposition parties to also understand to ensure that this materializes. Now in terms of production plan, there are 2 phases, Phase 1 and Phase 2. In Phase 1, that will be '27. And semiconductor wafer type would be of 40-nanometer to 55-nanometer. And the monthly production, 1,000 wafers, 12-inch -- in terms of 12-inch wafers. And in Phase 2, that will be 2029, planned in '29. In addition to the 40 and the 55, there will be 28-nanometer and WoW. Mr. Wu will explain this later. So in total, 40,000 wafers. It will be a huge plant, huge foundry that produces 40,000 wafers. JSMC will contribute to the domestic production of semiconductor wafers to quite substantial amount. There's 28- to 55-nanometer. The domestic demand for different wafers in 2022 is JPY 710 billion. In 2031 it's exceeded -- it's expected to increase to JPY 1.1 trillion. So as of '22, 90% of the semiconductors are produced by overseas foundries, JSMC in full operation, at the full capacity operation. As of 2031, we'll be able to meet 14.5% of the domestic demand. So the domestic self-sufficiency rate of these wafers will increase from 5.2% to 43.7%, of which JSMC contribution will be 14.5%. So semiconductor called the rise of industry to be able to produce that in large volumes at a low cost, that will make a huge contribution to various manufacturing industry is what we think. Now there will be the OSAT to be established in Japan, and that will enhance the supply chain. So in Taiwan, the preprocess and the post-process plays in the same area around these fabs, but that's not the situation in Japan. Japanese automakers, what are their wishes? They want the post-process to be located in the same area as the preprocess. That is a very understandable need. It says the same country, but I want to correct that to the same area. So Japan and Taiwan, various companies will establish these post-process operations, and that will help to strengthen the resilience of the semiconductor supply chain in Japan. And so these kinds of semiconductors, those who use it, like automotive, they will have much better resilience. Now JSMC has already started collaboration projects with OSAT factories. So for the quasi-advanced process semiconductors and power semiconductors, these kinds of general purpose products, reducing package cost is going to be an important theme. And we're already working on this, starting this from various angles. And also, we're considering collaboration with university-led cluster hub initiative. So we need industrial academia collaboration technologies advancing minute by minute. So it's very important to have such collaboration. So case 2, considering the possibility of the 3D packaging OSAT, OSAT is the post process by Taiwanese company expanding into the vicinity of JSMC and collaborating with them, so the people who are actually producing and using in Taiwan. So PSMC is going to call on various companies. I think that's what this is actually meaning. So in terms of funding to build and operate the foundry, we would need about JPY 420 billion for Phase 1. SBI Group will put in JPY 100 billion. And for Phase 2 and onwards, and of course, we don't know what will be the foreign exchange rate, but the total will be over JPY 800 billion with Phase 2 and onwards included. And so ourselves and PSMC basically will invest more than 50%. And then in addition to that, we will have or solicit investments from investors in Japan and abroad. Also, we will consider borrowing from bank syndicates, our main bank, Mizuho and SMBC, we are already discussing with them. And also Shinsei Bank, which is one of our subsidiaries, we are talking with them as well. And -- but we want to have as much capital as possible. And we'll also consider Development Bank of Japan as well. And so we want to get in the [ black ] as much -- as quickly as possible and this as quickly as possible. So I think time is up. So I will end my talk right here. Thank you for listening.

Thank you very much, President Kitao. Please go back to your seat. Next, we'd like to ask Mr. Frank C. Huang, Chairman of Powerchip Group, Chairman of PSMC, to say a few words. Mr. Huang, the floor is yours.

President Kitao, Mr. Wu, Governor Murai, ladies and gentlemen, my name is Huang, Chairman of PSMC. I'm very pleased, happy to be here, to announce the establishment of the JSMC, okay? I must admire the effort, the persistence of Kitao-san. We together, less than a year, made this final decision. This is, to me, impossible in Japan business society with such quick decision, okay? And I really have to thank his effort to establish this JSMC, okay? As we discussed before, Japan is such a big generic industrial country, so many big companies. But Japan has to have its own supply chain, especially handotai. With all this, Japan will be relying on other countries including Taiwan to support the industry, the chip, okay? Now we have moved to AI industry and so 3D semiconductor technology. This is ultimately important for Japan to move to that direction. And why I make a decision, I had to mention our TSMC former Chairman, Morris Chang. In 2 occasions, he said to me and he said to public, he think Japan is the next good place for handotai. That's Morris Chang-san said, because probably successful common models, okay? So with this encouragement, I think the decision together with SBI and PSMC to form JSMC, it's a very, very important decision and has a great impact for Japanese industry, especially chip supply chain is so ultimately very, very important. Okay. For Japan manufacturer industry, to raise the game, to compete in the world, you need AI technology. You need to have your own chip supply chain. Without this, Japan is slightly [ recuperating ]. During this COVID-19 time, worldwide, all the automotive manufacturers is finding a shortage of chip. And after this, every country begin to think they want their own supply chain, including European country, Indian, Saudi Arabian, Vietnam, Thailand. Without this, your manufacturer will have a big problem. Some of my friends, Japanese auto industry, told me they don't have no idea, without chip supply, they cannot decide how many automotive to be built next month. This is serious. So I think with all these conditions, I believe Japan has its own chip supply foundry. The fab that the SBI and the PSMC to build is a fab which is feasible for Japanese industry in the future for the diameter from 55, 40, 28 and -- plus 3D AI, I think, is the next phase of Japanese industry need, especially AI. Japanese has a huge electric and automation in many, many industries. The world relied on Japan, technology export. But Japan much have its own AI technology, okay? This is ultimately important in this decision, okay? Of course, TSMC has, in fact, working with Sony and so we are different. JSMC is a Japanese company. TSMC is a Taiwanese company, okay? That's making a big difference because it's going to be important for Japanese handle their supplier. Powerchip has been -- started 30 years ago. We are working with Mitsubishi Denki and transfer 8-inch fab, DRAM. And our COO, Martin-san, has been trained by Mitsubishi Denki 30 years ago. And with these 30 years, we have moved from 8-inch to 12-inch, become one of the 3 major foundry companies in Taiwan, okay? Powerchip appreciate the effort of Japan industry collaboration. So I feel the best way is to come to Japan again. And there is several change. First of all, Morris Chang and I has thought Japan -- today, Japan's cost structure in the industry right now can compete. The cost structure of Japan to manufacture semiconductor now is okay. It's much cheaper than United States, European anywhere. So with this cost structure, Japan now can move to its own chip. And then secondly, I think, because no foundry, okay, my experience, if your country has no foundry itself, it will not create a chip design company because nobody will support you to manufacture. With this JSMC form, I believe the new fab, Toho Scientific Park, will be gradually aggregate many potential designer. When I think back 30 years ago, we very, very respect Japanese engineering design ability. But since Japanese in next 30 years with DRAM decent, so not so much anymore on the semicon. This is -- I think it's a sign then. We want to have this comeback in Japan. I believe there are very good Japanese engineers, and we should able to encourage and formulate design house in Japan and other semicon-related industry begin to develop. In this idea, because most important Japan is this [ debt ] because your neighbor, China, has made so much effort to try to do some semiconductor, but I think Japan should do its own. And it's vital, important. That's why I think Kitao-san and the government believe this is a good beginning to recover or rediscover Japan handotai industry. And I myself, I have a very long-term relation with Japanese staff from Mitsubishi, and my parents lived in Japan during a war. My mother lived in Japan 18 years. So our relations, especially myself, has a very tight relation with Japan, okay? My grandpa has been a congressman of Japan when Japan do China and Taiwan. So returning back to Japan is a familiar environment for me, and I really like to do this. Especially, I think of all the review, [ Kitao-san ] has explained why I go to Sendai Miyagi because we are very objective together with SBI, reviewed all the 20 to 30 counties in Japan. We find this is suitable. It's no politics. It's just super correct price, okay? I have told a [ Katsuchi ], this place is like Taiwan's beginning of the 30 years ago, beginning of the Taiwan handotai, TSMC, Shinshu University, Toho University is a great technology university. With the space and the local government support, that's how Taiwan created today's industry. This, I think we can do it again and prevail in Japan. Okay. So Taiwan Semiconductor have achieved world-class leadership through the hardworking and persistent and, of course, the leadership of Morris Chang and TSMC and UMC and ourselves. I don't believe Japan cannot do the same thing, okay? 30 years ago, we had to ask. I think then I was in a giant company, Mitsubishi Denki, to tell us or teach us, to train us, how to do handotai. Now it's time to Japan come back to industry, handotai, again. And it aligned with Taiwan, we make Taiwan-Japan handotai association will be so strong, and we can't compare it to anybody else. This alliance is such an important decision, start from here. I was -- feel terribly sorry about what happened to Japanese semiconductor in the past 30 years. I'm so tight to Japan. Mitsubishi Denki, all these things, it's time to come back. So I believe that Powerchip's efforts to transfer technologies, to collaborate with SBI, to form JSMC is so essential. And I have to admire Kitao-san. Within such a short time, he make a decision, so brave and courage. And I really -- all my Japanese friends, nobody has that kind of guts as Mr. Kitao-san. It's incredible. I must admire. Together, we have the same thought. That's why this company, JSMC, get formed in such a short time. And also appreciate the -- when I was so enthusiastic working to support the entire commitment of semiconductor manufacturer in their county. I was very pleased, and I would like to thank you for -- our team, county, SBI, everybody working day and night. According to my experience with Japanese companies and Japanese business behavior, normally this kind of decision take 2 or 3 years before they can make a decision, but time is short, we cannot delay it . So we make a decision today. And to me, other countries has before, we work in Japan, come to me, but they are so -- we decided Japan is the best place we should do right now. So as my experience, 30 years in semiconductor from the beginning of the Mitsubishi Denki up to today, I certainly believe that this joint venture is ever definitely have the bright future for renewing the Japanese handotai industry, I think it's a must. For me, Japan is still one of the biggest industry complex of the world. But without your own supply chain in semiconductor, it's a [ back ]. It's not -- it's no good. It has to do it. So all the people today attend, I must reemphasize JSMC, we will make it a success. We saw the so many upside down and change in handotai. Today, we believe the new JSMC can succeed. And Powerchip itself will make every effort possible to make sure we can support this new entity's success. And with collaboration between us, SBI and JSMC, I think this is a very important investment and have a bright future. And again, especially in the Toho area, Toho University, technology is very good. We will -- they have support in many, many areas. So PSMC is the only company in the world, the Japanese style technology in foundry. [ USC-TSMC ] is American technology. We are Japanese technology. So we have different angles. Somewhat we are very competitive, we are very good. I must appreciate the technology we have ever for Mitsubishi Denki is still in ourselves and not move. So this time, I believe this is a great opportunity. And I hope I can contribute and our company can contribute the future of Japanese handotai industry. Then to support the Japanese industry, automation, many things, you need AI. We will make sure Japan will have sufficient ability to produce a cost-effective AI. Powerchip is leader in the world, making the AI chip, which is a high speed, low cost, affordable cost, lower power consumption. And we are the only company today able to achieve such kind of goal. We will share this technology with JSMC, make sure Japan industry has -- can enjoy cost-effective AI chip because I understand Japanese industries very well. I understand it is imperative, it's important that Japan has automatic electricity battery. And other things in Japan, you require to compete worldwide. You can make -- you have to have affordable cost of AI chip. And this is going to be -- as soon as the fab finished building, it can produce this kind of thing together with PSMC. We're also making tremendous speed-up effort. We're making our new fab, it's in Taiwan Tongluo, the same -- fortunate that we have the same time. We can direct transfer to a new site of the Toho Scientific Park. So we can shorten the design fab time. So all the prospects look good. And I must -- again, I want to thank Kitao-san, his effort and SBI's staff has worked with us, make it possible in such a short time. To me, it's just incredible to be a Japanese [ intensively ] so fast. It is this kind of spirit, I believe, we can succeed for JSMC. Thank you very much.

Thank you, Mr. Frank Huang. Now we would like to have remarks from the governor of the Miyagi Prefecture, Mr. Yoshihiro Murai. Mr. Murai, please.

This is Murai, Governor of Miyagi Prefecture. As the site for the semiconductor manufacturing plant of JSMC, a new company formed by SBI Holdings and PSMC, Miyagi Prefecture has been selected. I express my wholehearted welcome and appreciation for the selection. This past July, Chairman Kitao and Chairman Frank Huang explained the establishment of domestic corporation and the establishment of a fab in Japan. And so we propose the most favorable site in our prefecture. The site survey was conducted surprisingly quickly and also in great detail. And we are very pleased that our prefecture was chosen as offering the best location environment for the plant, and we're able to see this day materialize. As you know, semiconductors are used in just about every industry and play an important role in supporting our social infrastructure. As we look ahead to the future of DX and GX, it's certain that semiconductors will become even more important, and we strongly feel the need to make a national effort to promote the semiconductor industry in Japan. As the only foundry in the world that develops both logic and memory devices, JSMC is expected to mass produce semiconductors that are in high demand, such as for automotive applications as well as advanced semiconductors that combine logic and memory devices. And thereby, we expect that it will contribute greatly to the stabilization of semiconductor supply in Japan. Now PSMC has stated that it will transfer its superior semiconductor manufacturing technology to JSMC. While the IP created by JSMC will belong to that domestic corporation, JSMC, and that it will also actively engage in the training of semiconductor-related human resources. And SBI Holdings has also stated clearly that it will support the sustainable development of the semiconductor industry in Japan by providing support through the silicon cycles with the power of finance. I deeply sympathize with the ideas of both companies. In Miyagi Prefecture, there are excellent institutions led by the Tohoku University, a national university, which conducts world-leading research and development of semiconductors and develops human resources. In addition, the national government is also vigorously promoting strategic and ambitious initiatives in order to survive the fierce international competition. We believe that local governments need to work more closely with each other to improve the siting environment and to promote cooperation between industry, government and academia. In particular, the development of human resources for semiconductors is important in order to create an environment that is receptive not only to students or researchers from Japan and abroad, but also the people with work experience. We at the local government level will work together with the national government, universities, companies and financial institutions to create an all-Japan approach to the development of talent. I'm confident that the siting of JSMC will serve as a catalyst for the semiconductor industry in Japan to regain its strengths, solve various social issues and create an affluent society filled with hope in JSMC and its effort to construct and operate its new plant, Miyagi Prefecture, together with all the municipalities committed to make a wholehearted effort to support them. In addition to actively cooperating in the construction of the plant, securing talent and the various licensing procedures, knowing Chairman Frank, Mr. Frank Huang, is a man who cares about his employees, we will take full responsibility for ensuring that the employees from Taiwan and their families will have a comfortable and secure life here. In addition, currently, there are 17 flights a week between Taiwan and Sendai. We will work to increase the number of flights to improve the convenience. As was mentioned and shown in the material, Sendai Airport is a 24-hour airport. You can take off during the night time as well. I believe in improving the welfare of our people of the prefecture through industrial and economic development. 18 years ago, when I assumed office as governor, the total domestic production of Miyagi Prefecture was JPY 8.5 trillion. I've been working hard to increase that to JPY 10 trillion. And once in 2008, we're able to exceed JPY 10 trillion. But after that, due to the COVID, it has been lower than JPY 10 trillion. Now with JSMC locating here and with the expected related companies coming here, we expect that we'll be able to maintain over JPY 10 trillion and also contribute to the development of Tohoku and Japan. In conclusion, I'd like to express my sincere gratitude to Chairman Kitao, SBI Holdings; Chairman, Frank Huang of PSMC; and President Joe Wu of JSMC, for making this occasion possible, making today possible. I'd like to conclude my speech by wishing for long-term relationship as we, as a prefecture, becomes a member of the team, aiming for the development of domestic semiconductor industry.

Thank you very much, Mr. Murai. At this point, we'd like to invite Mr. Joe Wu, Representative Director and President of PSMC Japan. Mr. Wu, please take the floor.

Good afternoon. My name is Joe Wu. I'm from JSMC. I'd like to share with you the vision of JSMC. We -- PSMC is aiming at expanding the business centering around Japan. The most important would be 28 nano, 40 and 55 and wafer-on-wafer. These are the leading-edge processes. So what we try to do is to develop these technologies in Japan, and on top of that, supply chain and businesses and also the human resources and IP. These are the 4 areas with which we are able to contribute to Japan. First, I would like to explain to you about the supply chain. Needless to say, this is indispensable for the stable supply for Japanese semiconductors. Up until now, the -- in Japan, the production has been stopped, have been up to 40 nano. So if you are talking about sub-40, which is 28 nano, we have to say that there is almost no capacity for the production. JSMC would serve as a Japanese company and do our best to increase that kind of capacity. The second is business. Business is needed to stay based on the stable supply of chips, but business should be worldwide. So what we try to do is to have a worldwide business. Especially important is the EV-related business, industrial machines and also the AIs. So we'd like to center our attention on these areas as well. The next point is IP. Unlike other non-Japanese companies, the IPs or intellectual properties have been owned by these non-Japanese companies. But this time, we have a joint venture between SBI and the PSMC. So JSMC is a Japanese company. So that means that the IT -- or IP developed by JSMC is owned by JSMC. And also about the human resources. In the last 30 years, Japan's semiconductor business was not doing well. And many of the good people could go outside of the country or sometimes it is difficult for Japanese companies to get into this field, inviting many good people. So it is important to make investment for human resources. Next, I'd like to speak about the supply chain stability. It is very important to use JSMC process as a basis. So that means that users can customize and optimize products by adding their own devices based on the JSMC process. So this is about customizability. And for example, the IDMs can work on the development. But rather than doing it all by themselves, it is possible for them to utilize our own technology. So that will be the basis for that. That means that the -- by utilizing JSMC-based process, they can shorten development time and reduce development costs. When I say 28, 40 and 55 nano, about the target business, the most important will be the EVs. 30 years ago, PC was the biggest application area. But in the last 10 years, smartphones were the most important one with a large volume of semiconductors. But the reopening hopes on 3 things. One is the EV. The second is the communications infrastructure centering around 5G and 6G. And the third is AI-related industry. So these 3 industry segments will grow for sure, and semiconductors would be the driving factor for that. And also at the same time, it is very important to work on the advanced technologies. But in the case of the large volume of usage, we have to center on 28, 40 and 55. So JSMC will focus on these areas where the volume is expected -- large volume is expected. So as I just said, I talked about these 3 segments, and we'd like to focus on these areas. So there are these -- these are the products that we have. Microcomputers for automotive or power management ICs or communication, connectivity-related, telecom-related and also ISPs. This is the sensors with cameras. So it's an image signal processor. And also AI-related semiconductors and combination of the above. So we are established -- trying to establish production lines for these. And I want to explain to you here this 3D stacking technology, wafer-on-wafer. So compared with 2D, the biggest difference is that with 2D, between logic and memory, you have long wiring, many wiring. With wafer-on-wafer, there is no such wiring. And so 2D, let's say, you have 100 to 200 wiring, but that doesn't exist within the wafer-on-wafer. Instead, you have about 2,000 contact pads, so you eliminate 100 wires and you introduced 2,000 contact pads. And the transfer, well, there are 2 benefits. Power consumption can be saved, especially memory interface, power, you can save 90%. So there's no input and output wire that helps to reduce the power. And also, we have 2,000 contacts, and so speed grows by tenfold. So wafer-on-wafer. So we can do logic and memory. PSMC is the only country that can do both. The other foundries, they're mainly focused on logic. They can only do logic. So other foundry makers, even if they want to do wafer-on-wafer, it would be logic plus logic or memory plus memory they can do. But logic plus memory, we're the only company. That's the strength of PSMC. So logic plus logic, memory plus memory. That is something that JSMC can also do. So we can provide 3 choices. So what would this wafer-on-wafer be used? So it will be used for AI, telecom, 5G, 6G and drones. For example, drones can only hover for like 20 minutes, but with wafer-on-wafer technology, that time can most likely be elongated. Also, it's a supercomputer here, quite differently in Japan, there is this supercomputer project that we are cooperating on. So related to memory part of the super computer using wafer-on-wafer technology, we are providing cooperation. And so next year, I think that there could be a new contract, and we're working hard towards that. So finally, about human resources. So in semiconductors, of course, you need funding, you need technologies, you need business. Each are important, but the most important is talent, human resources. As I explained, past decade or so, Japanese semiconductor industry has not been successful in developing new talent. And so several points about human resources. The quickest way is to bring about 200 to 250 experienced engineers from Taiwan, bring them to Japan. 2 missions: to actually go to the JSMC fab and start working there, to start up the fab, they can contribute to that. And the other mission they would have is to educate the young engineers here in Japan to provide them training. Secondly, we will recruit Japanese engineers, young engineers. And then -- so it will take more than 2 years for the plan toward the fab to be started. So until that time, maybe 6 months, 1 year, these Japanese engineers, we will send to Taiwan, and they will receive training at the PSMC Taiwan for 6 months, 12 months, and then they'll come back to the newly established JSMC. So the experienced people from Taiwan and then the trained Japanese engineers, they will now be ready. And so that's another way. And also, there are still a large number of Japanese semiconductor engineers working outside of Japan. I've been with the company 23 years, I have Japanese friends, and those who are experienced in the industry, still very young, I mean even at my age. And so they're not in Japan because there was not a lot of work about the semiconductors. So they're in neighboring countries now. They have a lot of experience. And they are, I think, starting to think they want to go back to Japan. And so this kind of talented people, I will call on them, I will talk to them. So that's number three. The very experienced Japanese engineers, senior engineers, quite numerous, that we can recruit them back to Japan. Number four, so we need to develop the individual human resources, but also about the ecosystem, design houses and start-up design houses. We are thinking of providing support to them. As a fab, we make wafers, but we have to be concerned about where are the customers. And there are people who are working in IDMs, many design houses. But in order to reestablish the Japanese semiconductor industry to become #1 or #2 in the world, for that, we need not just manufacturing but also design, post-processing, that the whole ecosystem has to be established to strengthen your industry. So we're just at the starting point. The front-end production is going to be done by the joint venture between PSMC and SBI. That's the starting point. In addition to that, Japanese universities and companies, government needs to work together and maybe establish a semiconductor academy. We would like to have that kind of organization established. So through these 5 measures, we are set to secure the necessary personnel. And I'm very happy that we're starting this venture. And now there's a lot of challenges going forward. There's going to be difficulties. And as I said, technology development, recruiting people and winning the trust of customers, all of these takes time. And what I want to explain here is that, as Mr. Kitao and Mr. Huang said, JSMC, this company -- well, we have the 12-inch fab at PSMC just completed. That fab, the production line there is going to be completely copied. It's going to be sort of like a mirror fab. So until JSMC starts up, it will be 2 or 3 years, but developing new products for semiconductor, the tape-out takes at least 2 years. So we have to start next year as a business. So from next year, concerning business, I'm going to exert my efforts. And then until the new JSMC fab is started up, since we have the mirror fab in Taiwan, we can do the test run and do evaluation. So that 2 years later, that can be copied 100% to the Japanese fab. That will be the most speedy and most efficient. And so that is the mission of the JSMC. Thank you very much.

[Foreign Language] [Statements in English on this transcript were spoken by an interpreter present on the live call.]