You have revised your sales forecast for this fiscal year upward by 10 billion yen, most of which is for the automotive industry. Please tell us the background to your decision to make this upward revision given that sales for the automotive industry are not growing as much as expected.
A.
Due to the impact of COVID-19, there were lockdowns, operational adjustments, and supply chain disruptions. However, despite this environment, production continued thanks to the efforts of each factory, resulting in increased customer satisfaction. As a result, our order allocation increased due to an increase in new orders and transfers, etc., we have revised our plans for the second half of the year upward.
Q.
Although the plan for smartphone tablets has been revised downward, what is the background to the expansion of business performance in the second half of the year?
In the first half of the year, our customers were also affected by the semiconductor shortage and reduced production. In response, our customers have made preparations to increase production by changing semiconductors, promoting in-house production, and normalizing semiconductor supply and demand. In addition, smartphones have fewer parts than automobiles, so we estimate that a recovery will be quick once semiconductor supplies are restored.
Q.
EMS is planning to increase sales in the second half of the year and turn a profit, but please tell us about any changes, such as progress on the long chair project.
A.
Long chair projects are delayed due to the impact of COVID-19. EMS did not grow in the first half due to the semiconductor shortage. In the second half, this will gradually be resolved due to an easing of semiconductor supply and demand and changes in customer parts, etc., and we expect to turn a profit through high value-added businesses.
Q.
Please tell us about the operation status and capacity of Guangzhou, Wuhan, and Vietnam. Since each factory is already operating at high capacity, will you be able to increase sales?
A.
As you pointed out, all factories are operating at full production capacity. - At the Wuhan factory, we have expanded capacity through bottleneck investments. - At the Vietnam factory, we will be expanding bottleneck process capacity in the future, so production will increase next fiscal year. - Investment in module package substrates has been completed, and we would like to increase sales in this field as well as in flexible and flex-rigid substrates.
Q.
The Yamagata office will invest 20 billion yen in the second phase and will also build a development center, but how will the funds be raised?
A.
We will cover this with borrowing and cash on hand.
Q.
I believe you have set out the direction of your efforts in terms of the scale of investment in module package substrates and SAP compliance, but what is the background behind your decision to strengthen your operations?
A.
・We have been working on module package substrates for some time, but as it is not a dedicated factory, yields are low and we are in the red. With an eye to the future, we have decided to make it a dedicated factory. ・As Japan is strong in materials for module package substrates, we have decided to set up a dedicated factory in Ishinomaki. ・This field is expected to be a growth area for semiconductor and module manufacturers, and if manufacturing progresses smoothly, we can expect to see both sales and profits increase. ・As module package substrates will continue to grow, we would like to strengthen this field as well, and make it our third pillar in response to the trend towards thinner wires and higher density.
