SCREEN Holdings Co., Ltd.

Hello, everyone. It is now time to commence the quarterly financial results briefing session for Q1 of the fiscal year ending March 2026 of SCREEN Holdings Co., Ltd.

Thank you for taking time out of your busy schedule to join us today. I am Mr.

Miura of the Investor Relations Department, Corporate Communications Office, Corporate Strategy Division, SCREEN Holdings Co., Ltd., and I will be the moderator for this session. Thank you very much for your cooperation.

A recording of today's presentation and the question-and-answer session will be available on our website on Monday, July 28. We hope you will make use of this information.

In addition to the Japanese-language conference room, an English-language conference room is also available. Simultaneous interpretation into English will be provided there so that overseas investors can also participate.

Let me now introduce today's presenters. This is Masato Goto, President, Member of the Board, Chief Executive Officer.

My name is Goto. Thank you for your cooperation today.

This is Yoichi Kondo, Executive Vice President, CFO.

My name is Kondo. Thank you for your cooperation.

In addition to the CEO and CFO, three other related directors are present today. This is Manabu Ishimura, Managing Executive Officer, Head of Financial Strategy Division.

My name is Ishimura. Thank you.

This is Akihiko Miyagawa, Senior Executive Officer, Head of Corporate Strategy Division.

My name is Miyagawa. Thank you very much for your cooperation.

This is Chiho Otobe, Executive Officer, Head of Corporate Communications Department, Corporate Strategy Division

My name is Otobe. Thank you very much for your cooperation.

Now, Mr. Kondo, Vice President, will begin his presentation on the consolidated financial results and forecasts.

Vice President Kondo, thank you for your time.

I will now present a summary of consolidated financial results for Q1 of the fiscal year ending March 31, 2026. Sales increased and profit decreased compared with the same period of the previous year.

Net sales totaled JPY135.7 billion, up 1.2% YoY. Operating income was JPY24.3 billion, a negative 12.2%.

The operating margin was 18%, down 2.7% from the same period last year, but within our expectations. For SPE, both sales and profits declined YoY.

This situation is also as expected. FT reported a significant increase in both sales and income compared to the same period of the previous year.

Against the backdrop of a strong display market, we are off to a good start, or rather, we are back on track. The balance sheet has been compressed, resulting in an equity ratio of 64.5%.

Consolidated results. Sales were JPY135.7 billion and operating income was JPY24.3 billion, up 18%.

Ordinary income was JPY24.5 billion and net income was JPY16.6 billion. Net sales increased JPY1.5 billion YoY, operating income decreased JPY3.3 billion, ordinary income also decreased JPY3.3 billion, and net income decreased JPY1.5 billion, respectively.

This is the ratio of sales by region. Japan accounted for 15%, Taiwan 29%, China 34%, Korea 5%, other Asian countries 4%, North America 9%, and Europe 5%.

This is the ratio of sales by segment. SPE continues to occupy a large portion of the market, 80.7%# GA was 9.5%, FT 7.4%, and PE 2.3%.

This is a breakdown by segment. SPE sales were JPY109.5 billion, operating income was JPY25.6 billion, and operating margin was 23.5%, in the box on the right.

Sales and profit decreased. Sales to foundries and DRAM decreased, and the percentage of sales to China also declined.

As a result, sales decreased by JPY2.6 billion in figures and operating income decreased by JPY3.3 billion compared to the same period last year. GA.

Net sales of JPY12.9 billion, operating income of JPY500 million, and operating margin of 4.4%. Sales increased and income decreased.

Although equipment sales increased, income decreased due to the impact of foreign exchange rates. Net sales were up JPY500 million, and operating income were decreased JPY200 million.

FT. Net sales of JPY9.9 billion, operating income of JPY1 billion, and operating margin of 10.5%.

Both sales and income increased. Sales of OLED and other equipment increased significantly.

Net sales increased by JPY4.7 billion and operating income increased by JPY1.3 billion, showing significant signs of recovery. PE has sales of JPY3 billion and negative operating income of zero.

Decrease in sales and profit. The Company is struggling to meet expectations for a recovery in demand for cutting-edge packaging.

Net sales, minus JPY0.8 billion YoY, and operating income, minus JPY0.5 billion. This is the financial situation.

The consolidated balance sheet shows a decrease in total assets to JPY639 billion. Cash and deposits have been significantly reduced.

The cash balance for April amounted to JPY11 billion. We have experienced a significant decrease in cash due to these factors such as taxes, dividends, and share buybacks Trade receivables have also decreased due to progress in collections.

Inventories are doing well but have increased slightly. On the liabilities side, trade payables decreased slightly.

Net assets have also been reduced slightly by including profits after paying dividends, but we have also made progress in reducing net assets and have been able to achieve an equity ratio of 64.5%. This is the consolidated cash flow.

Operating cash flow in Q1 was only JPY6.9 billion due to the large payment of income taxes while profits were accumulated. Operating cash flow in Q1 was JPY6.9 billion, negative JPY9.7 billion for investments, free cash flow was also negative JPY2.7 billion, and JPY28.9 billion was used for financing.

The financial situation is almost entirely based on dividends and share buybacks, which is almost the only number that is being used. We are not too worried.

As for R&D, capital investment, and depreciation, we have not changed our forecast for the full year, and as I reported in the last financial statement, we are currently forecasting R&D expenses of JPY38 billion, capital investment of JPY28 billion, and depreciation of JPY15 billion for the full year. For Q1, JPY8.5 billion was spent on R&D, JPY4.4 billion on capital investment, and JPY3.4 billion on depreciation and amortization.

This is an analysis of changes in operating income. Q1 operating income was a positive JPY2 billion from JPY27.7 billion in Q1 of the previous year due to the contribution of FT and GA with increase or decrease in sales and increase in capacity utilization.

Profitability was negative JPY1 billion, mainly due to GA and foreign exchange effects. Fixed cost factor was minus JPY4 billion due to enhanced investment in cutting-edge facilities and increase in head count, mainly in SPE.

Foreign exchange was minus JPY0.5 billion, also due to GA. This is the earnings forecast.

As I said, we will not change the full-year forecast that we stated at the time of our last earnings announcement. Net sales of JPY621 billion and operating income of JPY117 billion with an operating margin of 18.8%.

Ordinary income is JPY117 billion and net income is JPY88 billion, and SPE is JPY502 billion and operating income is JPY121 billion or 24.1%. GA is JPY53 billion, operating income is JPY2.5 billion, and operating margin is 4.7%.

FT has sales of JPY45.5 billion, operating income of JPY5 billion, and operating margin of 11%. The PE projection is JPY15 billion in sales and JPY1 billion in operating income or 6.7% of total sales.

The analysis of changes in operating income is also unchanged, as it is the same as before. Increase in operating rate of sales increase from JPY135.6 billion, plus JPY8 billion contributed by FT and GA.

Profitability is minus JPY2 billion. SPE is a bit of a tough spot.

Fixed costs are minus JPY19.5 billion, and the situation is one of investment in growth and R&D, mainly in SPE. The exchange rate impact was a negative JPY5.5 billion, and the assumed exchange rate is as shown here, with a slight appreciation of the yen.

We have not changed the assumed rate either. The rate is a bit far from the actual level, but since we cannot read President Trump's move, we are not going to waver and will keep the rate at JPY135 and JPY150.

Dividends are unchanged from the initial forecast. With an interim dividend of JPY123 and a year-end dividend of JPY157, for a total of JPY280, we would like to promise a dividend payout ratio of more than 30%.

That is all from me.

Thank you, Vice President Kondo. President Goto will continue with an explanation of the business environment.

President Goto, thank you for your time.

I would now like to explain the business environment and our business forecast. This is a summary of the forecast for the fiscal year ending March 31, 2026, for the full year.

For SPE, we expect to continue to invest in foundries, advanced investments in memory for AI, and mature node foundries, and we want to ensure that we can capture these investments and maintain sales. In the FT market, panel makers are expected to recover on the back of brisk investment, and we intend to take full advantage of this recovery.

In the area of advanced semiconductor packaging, we will increase sales of wafer cleaning equipment launched last year, Lemotia, a PLP coater, and LeVina, a direct-write exposure system, which will generate sales this fiscal year. Although the outlook for the market is difficult to predict, we are determined to steadily invest in growth and prepare for the next stage of growth.

Continuing on, here is the status of the SPE's business. Regarding WFE, we would like to maintain our May forecast.

Calendar year 2025 but is assumed to be about the same as calendar year 2024. Although it is difficult to predict significant growth for 2026 compared to the calendar year 2025 at this point, we expect the market to turn around with growth in the low single-digit range at least.

This is the investment trend by application. For foundries, we continue to expect investment momentum in cutting-edge nodes, especially demand for AI, to continue.

As for the logic, at this point, we would like to carefully review the plan properly and act after proper scrutiny regarding these investments. Regarding memory, we expect investment in HBM and DDR to be strong, driven by AI demand.

As for NAND, we believe that the main investment will be for the increase in the number of tiers. On the other hand, as for the image elements, there are some plans that have been revised, etc., and we would like to act in accordance with these plans.

For power devices and others, the power devices for automotive applications have weakened a little due to a drop in demand for automobiles. We are now expecting a recovery from 2026 onward as well.

For an advanced package, we believe that investment in cutting-edge PLP will continue to advance, and we will strengthen our efforts in this market. In the Chinese market, we expect that existing Chinese customers, especially foundries, will continue to invest in WFE.

This chart shows sales of new SPE equipment, by application, and by post-sales. As shown in the vertical bar graph on the far right, the percentage of foundry sales is slightly lower than in the previous quarter, but DRAM sales are on an increasing trend in the QtoQ.

Both logic and flash have increased slightly. As for the increase in logistics, China is contributing to the increase.

In addition, we would like to ensure that post sales are stable, and we would like to ensure that they are properly secured. The next section shows the sales ratio of the SPE segment, by region and destination.

In the QtoQ, there was a slight increase in sales to Taiwan. Looking at the YoY data, there was a large increase in shipments to Taiwan and a slight increase in shipments to Japan.

I suspect that this trend will continue. This is the forecast of SPE's sales ratio.

The following is the status of new equipment by application and post-sales. As you can see in the H1 forecast, logic is in a very difficult situation, but I believe that DRAM will be a major driving force in this area.

In addition, based on Q1 results and Q2 forecasts, we expect DRAM to grow significantly. As for the forecast for H1 and H2 of the fiscal year, the situation for existing logic customers continues to be difficult, but we expect to see demand for logic from new customers, and we expect to see an increase in this amount.

Next is the sales ratio forecast. This is on a destination basis.

Q1 results and Q2 forecast. For Q2, a large increase is expected in China.

Regarding the H1 and H2 forecasts, we expect an increase in Japan, Asia, Oceania, South Korea, and North America in H2. As for the full-year results for the previous fiscal year and the full-year forecast for the current fiscal year, the current situation is that we are forecasting an increase mainly in Taiwan, Japan and other Asian markets.

GA. As for GA, the recurring business has been stable.

Although we are affected by the tariff policy of the US, we intend to improve our profitability to recover from it. Next is the sales trend of FT.

As I mentioned earlier, sales in this area are on an upward trend due to the upturn in the display market. As the shift from LCDs to OLEDs will continue, we expect that investments in OLEDs will take center stage.

In the previous fiscal year, the Company returned to profitability for the first time in three fiscal years. In addition, we expect stable sales and profits in the future, as we have seen a significant improvement in earnings in Q1.

PE. For PE, the market continues to be difficult.

We expect a full-fledged recovery in investment for packaging, which has been affected by the miniaturization of substrates, after the end of the calendar year this year. However, since post-sales business continues to be strong, we intend to properly develop our business, focusing first on post-sales.

This is a summary of the resolution regarding treasury stock. As we have released this afternoon, we will proceed with the cancellation of treasury stock.

We would like to cancel 6,209,746 shares of our common stock on August 29, 2025. In addition, the Company would like to make an additional contribution to the performance-linked stock compensation plan and dispose of treasury stock through a third-party allocation of 415,200 shares of common stock, amounting to JPY5,128,000, as of August 13, 2025.

ESG initiatives. The TCFD document has been updated annually with respect to the environment.

This is available on our website, etc., and I hope you will take a look at it. We are updating the information on governance and other matters, so we hope you will find it useful.

This is recent group news. Among the new businesses that SCREEN Holdings is working on is the start of test provision of MEA systems capable of simultaneous measurement and recording, which we have also announced as a new area in the life science field, and we hope you will take a look at it again.

For other topics, please see our website and other information.

Thank you, President Goto. Now, I would like to start the question-and-answer session.

Due to time constraints, each person is limited to two questions. We appreciate your cooperation in allowing us to have Q&A sessions with as many people as possible.

Now, CLSA Securities, Mr. Yoshida.

Thank you for your cooperation.

Thank you for your help. CLSA Securities, Yoshida.

Thank you. First of all, regarding SPE's thinking for Q2, DRAM is expanding in terms of sales by application, and by region, China is expanding, so do you see DRAM sales to China as a driving force?

Also, considering the composition ratio for H1, I wonder if there is a slight change from the previous view by application, so I would appreciate it if you could also comment on how the situation by application for Q2 has changed compared to three months ago. Thank you.

Goto will answer. First of all, there has been no major change in the situation by application.

As you know, the future of the market is uncertain, and the timing of the start of each customer's planned investment is different from what we had originally expected, so the sales composition ratio has changed slightly, resulting in these figures. However, we do not expect any major changes in the situation itself.

Am I right in understanding that DRAMs for China were the driving force behind sales in Q2?

Yes. We hope that you understand the situation that way.

Thank you. I just wanted to confirm one more comment regarding the 2026 WFE.

You mentioned earlier that you expect the market to grow in the low single digits, but what do you expect the market to grow in the low single digits by application or by region? I would appreciate it if you could provide a more detailed breakdown of how you see in 2026.

It is very difficult to provide detailed information on the situation by application and region in 2026 as of today, but our overall sense is that demand for WFE will be stronger in 2026 than in 2025, based on our various surveys we have conducted. In that sense, I think we will be able to get more detailed information on the specific areas of growth and by how much later this year, but at this point, it is difficult to provide detailed information.

I hope you will understand.

What kind of applications or regions, for example, are you getting the sense that there is a strong demand?

As you know, the demand for AI is becoming stronger and stronger, so I think that devices related to AI will grow.

I understand. Thank you.

That's all.

Thank you very much, Mr. Yoshida.

Next, Mr. Nakamura, Goldman Sachs Securities.

Thank you for your cooperation.

Thank you for all your help. Thank you for your cooperation.

First, I would like to ask you to evaluate the sales and operating income for Q1 and also to explain the movement of SPE's profit margin. It seems that the progress rate of the plan for H1 is a little low compared to the annual plan, but Mr.

Kondo said earlier that it is almost in line with the plan. Can I have some comment on that?

Also, regarding the profit margin for SPE, you expect it to rise reasonably from Q1 to Q2, but I feel that it should rise a little more, given the relatively large increase in SPE sales and the increase in China's share of sales. I would like to know your impressions of this area as well.

This is the first point.

As Kondo mentioned earlier, the Q1 results were generally in line with our expectations in terms of the sales composition. In this sense, when you look at it from the overall viewpoint, the sales for Q1 period are within the range of our expectations, with no major changes from the overall plan for the current fiscal year.

I hope you will understand that this is within the range of our expectations. SPE's profit margin is also largely a function of product mix, but I hope you understand that it is basically a reflection of the effects of our various efforts to improve profitability.

Although there are some bumps in the road from QtoQ, the overall impression is that our efforts to date are gradually showing results. In that sense, I hope you understand that in the big picture, earnings are on an improving trend.

Okay, thank you. Secondly, I would like to know about your approach to business in China.

Looking at the composition of SPE sales for H1 and H2, I believe you are planning for the composition of sales to China to fall in the mid-30% range for H2. On the other hand, we are aware that local semiconductor manufacturers' appetite for capital investment is probably still strong, so we would like to know if there have been any changes in the outlook for this area over the past three months, and if there is any continuity in the future.

That is all.

Regarding business for China, as we have been saying for some time, the ratio of sales to China has been very high for the past two years. When we have been asked many times about our future prospects, we have said that the ratio of business to China will gradually settle down.

I think we have told you that it is roughly in the mid-30% range. In addition, we initially thought that business to China was limited due to restrictions imposed by the US, but business to China has not been subject to such restrictions to the extent that we had expected and has not declined to the extent that we had expected.

In this sense, we expect that business to China will continue to be in the mid- to high 30% range, although there will be a slight decline.

Thank you very much. Just to confirm one point, is it my understanding that there has been no significant change in your view of sales to China in H2 of this fiscal year compared to three months ago?

Yes. That understanding is fine.

I understand. Thank you very much.

Thank you very much, Mr. Nakamura.

Next, Mr. Shimamoto, Okasan Securities Co.

Thank you for your cooperation.

Thank you for your help. My name is Shimamoto, Okasan Securities Co.

First of all, regarding your view of the 2025 WFE, can you give us an idea of the growth rate for each application, if you have one?

Otobe will follow up regarding specific numbers.

Thanks for your help, Mr. Shimamoto.

I am Otobe. It's about the 2025 calendar year.

By application, in increments of 5%, I think the foundry will add about 10%. I suggest that Logic is about minus 20%.

In terms of memory, we see a 10% gain in DRAM, plus or minus 0% in NAND, and a positive or negative balance in both. We are currently estimating that the negative 5% is about 5% for imaging elements, power, and others.

And what about China?

I have the impression that China in the WFE is about to decrease slightly.

Minus one-digit percent, or something like that?

That's about it.

I understand. Just a follow-up, in terms of the current numbers, am I correct in thinking that the breakdown, or rather the outlook, by application has not changed, generally speaking, from the previous view of three months ago?

Yes, that's right. As Goto mentioned earlier, I do not see much change.

It was May, so not much has changed from this closing to today, less than three months.

I understand. Second, this is a qualitative discussion, but I'm wondering if there is some talk of uncertainty about customer demand for end products due to the impact of Trump's tariffs, etc., and whether there is some talk of investment postponement in end products.

In the past three months, would you say that there has not been such a significant change in customer sentiment? Or whether we should be a little harsher on the 2026 view.

What is your view of the feel of this investment trend of semiconductor manufacturers as it is being communicated?

Our feeling is that there will be no major revision of investment plans due to the impact of Trump's tariffs, and we have not heard of any specific plans to change them.

I understand. Thank you.

That's all.

Thank you very much, Mr. Shimamoto.

I would like to move on to the next questioner. Nomura Securities, Mr.

Yoshioka. Thank you for your cooperation.

Thank you for your help. I am Yoshioka of Nomura Securities Co.

Thank you very much. Now let me ask my question on the concept of sales by application.

You have shown the full-year plan for the current fiscal year and a breakdown by application. And I think that you are probably looking at a flat sales level for NAND for the fiscal year ending March 31, 2026, in terms of YoY.

I have a feeling that other WFE companies in the industry have different views on this. My sense at this point is that the investment is still in the NAND area, and that there are still some areas that are not showing up or that are not yet visible.

Or is it that the investment will be centered on laminating, as I believe you commented during this briefing. In terms of your company's cleaning investment, the exposure, or rather the intensity, is a little lower with respect to high stacking investments.

Is there some kind of influence from that kind of thing? Could you tell us a little bit about NAND's approach to sales for the current fiscal year?

Regarding the concept of NAND sales, I think it should be understood that it is more due to the instability of customers' investment timing, which has not yet been properly decided. The future of memory prices in the market is also difficult to predict.

In this sense, we believe that our customers who manufacture NAND memory have not yet officially decided when they will invest in NAND memory, and this is why we are in the situation we are in.

I understand that the intensity of the cleaning equipment is not really relevant. Thank you very much.

So, the second point, and this is also the concept of sales by application, is at the foundry. I won't mention specific names of customers or anything like this, of course, but we believe that the 2-nano investments, including quite a bit of up-front investment, have contributed to sales this quarter.

However, I am aware that sales have increased considerably in the current fiscal year, including such advancements, and I wonder if there is potential or room for another level of growth in foundry sales for the next fiscal year. I would appreciate a few brief comments on the foundry's sales concept for the next fiscal year.

This is a 2-nanometer advanced device, but we have not yet moved to mass production. Since the current situation is that there are only pilots, I do not think that the 2-nanometer part will directly contribute to sales yet in terms of whether it will generate volume in our business.

However, since there is strong demand for 3-nanometer and 5-nanometer products, which are already in cutting-edge mass production, we think that there will be reinforcement in this area. In addition, since the ban on business for China has been lifted for companies that manufacture devices for AI in the US, I think that business for foundries will increase in order to cover the Chinese market.

Thank you for your response. Understood.

Thank you very much, Mr. Yoshioka.

Now let's continue with BofA Securities, Mr. Hirakawa.

Thank you for your cooperation.

Thank you. One is the profitability, but the operating income analysis on pages 11 and 13 shows that SPE is negative, but FT, GA, and PE are positive for the year.

Can you give us an idea of how much SPE's profitability has increased or decreased this year? I think the customer mix is negative in terms of profitability of individual products, but I would like to know how much improvement has been made in operations this fiscal year.

This is the first point.

It is difficult to give specific amounts of improvement in operations themselves, but of course, as a manufacturer, we are working daily to improve productivity and costs, and in that sense, we have milestones to achieve the OP margin targets we are aiming for. In this sense, we have a milestone to achieve the OP margin target we are aiming for, and we will work toward it step by step.

We are aiming to improve the ratio of such improvement as we will continue to make improvements year after year in accordance with the targets and goals set forth in the management guidelines.

Yes, sir. Does this mean there is still room to work towards that this year and next year?

Yes. Improving basic profitability is an important theme for us, and we will continue to do so in a measured manner.

However, as mentioned earlier, the results may vary depending on the mix of products and circumstances, but we will continue to improve our base initiatives, and I understand that the results we are aiming for are being achieved.

Thank you very much. Second, I'm sorry to be so persistent, but regarding the concept of sales in Q1 and Q2, although it was not in Q1, President Goto mentioned earlier in the WFE section that the timing of the start of investment was off due to uncertainty, so I was wondering if the gap in Q1 was due to SPE.

Also, given that the acceptance inspection is based on Q2, can you tell us if the shipments for sales in Q2 have already been completed and are now visible? I am afraid that this is a very short story for the year, but I would like to know if there was a gap in SPE sales in Q1 and if you can tell us about the certainty of Q2.

It is true that sales are cut off by quarter, so there is some replacement every quarter. As for Q2, we are currently seeing almost all of the Q2 sales as you mentioned.

Yes, sir. As a supplement, what, if any, risks do you see in Q2 sales?

Or how about a situation where there is no particular risk to be noted because it is business as usual?

At this point, there are no major risks that we are aware of. However, since we are using the installation completion standard, there may be some cases in which our products are not installed, but we do not think that this is a major risk because this is not so big.

Thank you very much.

I am Kondo and I would like to add something. Because of the trouble we have caused, we are extremely strict about the so-called installation completion criteria.

I would like to state for the record that I believe it is possible for cases to differ from the intentions of the field, and I cannot assure you that a slight delay in term will not occur in that sense. It will not disappear.

Thank you very much.

Thank you very much, Mr. Hirakawa.

Now, please continue with Mr. Nakanomyo from Jefferies Securities.

My name is Nakanomyo from Jefferies Securities. I am really sorry to ask the same question over and over again, but I feel very uncomfortable with the increase in China and DRAM in the Q2 breakdown.

I can kind of understand if the increase in DRAM is in Korea, but if the ratio in Korea does not change much and China increases, and then DRAM in China increases, I guess that means that DRAM in China will increase, but is this really a story that we can see to some extent? Or is it possible that the Q2 figures are seen as a subtraction because the H1 forecast has been slightly changed from the initial plan by application but not by region?

In other words, are the Q2 sales by application or by region due to the accumulation of sales, or are you saying, as you mentioned, that you will be able to achieve the H1 figures as a whole?

It is not our intention to have this sales structure. We have been providing products in line with the investment plans of our customers, and this is the result of our efforts.

It is true that the sales of DRAMs in China in relation to the sales in Q2 were high in this quarter, as you say, but this was not done with any particular intention.

Miyagawa would like to make a few additional comments. I wonder if there is a possibility that the installation and installation completion standards Mr.

Nakanomyo mentioned earlier are not in line with the shipping standards of other companies, and that the timing may be slightly different from the trends that you are seeing.

I understand. In that sense, it does not mean that there is a deviation from the original plan from Q1 to Q2, but rather that DRAM will increase in Q2 as expected based on the installation completion standard.

Yes. That understanding is fine.

Also, completely differently, you have been increasing R&D to capture cutting-edge processes, but I was wondering if you could tell us anything about the status and prospects for acquiring PoR for GA, DRAM micro processes, and cutting-edge processes.

We are working on various initiatives to obtain a proper PoR for our cutting-edge device process, which is a unique area by nature. I can't give you all the specific details here, but I would like to share with you what we are doing, such as IR Day.

The establishment of overseas development bases in the future is one of the measures we are taking to further strengthen our efforts in cutting-edge devices. I hope you will understand that we are working to expand our business in the areas where we excel.

How about something like the outlook for this fiscal year for the [inaudible] cleaning equipment?

We are working on it. It is difficult to give specific details about the status of these efforts here, so I would like to make a proper announcement when I have the opportunity to do so again.

Thank you very much.

Thank you very much, Mr. Nakanomyo.

Next, Mr. Yasui, UBS Securities.

Thank you for your cooperation.

There are no significant changes in regulations. We have received information that the number of items subject to the regulations is likely to increase somewhat, but if you ask us whether the regulations that pertain to our business have specifically changed, there has been no change.

As for what has changed from the Biden administration to the Trump administration, there have been no major changes. It is impossible to predict when and where President Trump will say what he will say.

At this point, I have heard that he is thinking about how to regulate China a little, perhaps with Russia in mind, but I have not received any specific information on this. We will continue to deal with regulations as we have in the past.

Thank you very much. Secondly, in the Chinese business, I have the impression that local players in China have gained considerable strength.

I heard that [inaudible] China was also very active, so here, we have in-house production or in-house production in terms of market share. I think that Chinese semiconductor customers have always given priority to local customers in China, but if you could tell us about your thoughts on this, whether the number of customers is decreasing or whether the relationship with leading-edge customers is getting stronger, even if it is just a feeling or experience, we would be very happy to know your thoughts on this.

That is all.

It is true that local suppliers in China are gaining strength. I think you probably feel that local Chinese suppliers are entering various areas every year.

However, in the cutting-edge areas where we excel the most, there are still no local Chinese suppliers. In this sense, there are many local Chinese manufacturers in the memory and power device fields, but we are making various efforts to further differentiate ourselves from them.

In this sense, it is expected that the distance will eventually get closer and closer, but at the moment, it is not clear that it will be a very big threat or have an impact on business in the near future. However, as I mentioned earlier, local manufacturers in China are rapidly gaining strength, and we will continue our efforts to keep up with them.

Thank you very much.

Thank you very much, Mr. Yasui.

Mr. Wadaki, please.

Since I am at the end, just one point. You mentioned that panel level packages are getting active, but could you give us specific sales forecasts for the current and next fiscal year, as well as your outlook for the future?

In the area of packaging, as I mentioned at the briefing, we are good at cleaning wafers, and we also have Lemotia, the new PLP coater we released last year. The direct-draw equipment is now visible in sales again this year.

We expect sales to be in the latter half of the double-digit billion yen range this fiscal year, so we are now looking forward to achieving this level of sales and moving on to the next stage.

I'm looking forward to the next one, but do you think we can expect this to reach JPY10 billion or something next year?

I think it depends on the market situation, but the trend in the world is that way, so I would like to take that part of the market and be like that.

Thank you very much. That is all.

Thank you very much, Mr. Wadaki.

We have two minutes. Next will be the last person to ask a question.

Mr. Shibano, Citigroup Securities Inc.

Thank you for your cooperation.

Thank you. As for the outlook for Q4, it is difficult to say clearly what the outlook is for Q4.

Now that the tariffs on Japanese products have finally been decided, I believe that not only we but also our overseas customers who buy a lot of Japanese-made manufacturing equipment and materials will be making final decisions on how to proceed based on these tariffs. In that sense, I think it will take another month or two before we have a final outlook.

If this is the case, we will be able to have a certain degree of visibility at the beginning of next year and beyond, and we would like to examine the situation carefully. I think your question is about what you will do when President Goto took over.

In that sense, we need to properly review the current projects and properly expand the areas that can be expanded. We also believe that this is a period to properly prepare for the next step.

We have secured a proper budget for capital investment, research investment, and strategic investment, and I believe this is the year to do it right, put it into a concrete plan, and plan to reap the rewards. We would like to spend the next year building on this point, and we will reflect this in the next medium-term management plan, and we will work as a group to advance toward the targets of the general plan that we are aiming for.

As you have pointed out, the SCREEN Holdings Co., Ltd. still has a lot of work to do.

I tell the group's employees that the SCREEN Holdings still has room to grow. We are not a perfect company, and I believe there is ample room for growth if we take the right steps.

I am sure that if we do things properly, the results will be worth it. I will let you all know when we have something concrete in mind, so please look forward to hearing from us.

That is all. Masahiro Shibano Citigroup Inc., Research Division Thank you very much.

Thank you very much, Mr. Shibano.

This concludes the financial results briefing of SCREEN Holdings Co., Ltd. for Q1 of the fiscal year ending March 31, 2026.

Thank you for taking time out of your busy schedule to join us today. [END]