Good morning, this is Shibata speaking. The earnings results this time, had a divestment of the timing business during the period.

Because of the divestment of timing business, it may be more difficult to understand the numbers than is the case usually. Later, Shinkai-san will explain and would like to provide as much clarity so that apple-to-apple comparison is possible, as much as possible.

All in all, I believe we had good Q1 results. Generally, in comparison to the guidance that we issued last time, we had stronger results overall.

As a result, and since anticipated demand will be growing, we wanted to build up channel inventory, but we were able to also by a smaller margin than we expected, and we will have to increase channel inventory more. Automotive results were also stronger than expected.

It is still small, but Generation 4 SoC of R-Car is ramping up very successfully. On the other hand, the previous generation of R-Car and microcontrollers are also showing strong growth.

Automotive results were generally very strong. As for sectors other than automotive, data center AI may be attracting attention.

Data center AI and client-side AI were both growing strongly. Regarding these, towards the end of last year, there was a major earthquake in Taiwan, as some of you may recall.

Our partners were affected by that large earthquake. To begin with, demand and supply was already tight.

On top of that, because of the earthquake, the supply is not catching up. After Q2, we did our best to catch up.

Demand is very strong, but because of the limiting factor of production, the first quarter there is an impact. That in Q2, we have a strong outlook.

Of course, there are some products where there is a seasonal factor, and there may be a decline as a result of such seasonality factors, but overall impression is that results are very strong. Automotive is strong, and other segments are also strong, especially in non-automotive segments.

We find that the supply to catch up with the demand, the bottleneck is on supply. Of course, if we can successfully address this, we may be able to see results better than the guidance that we will be issuing today.

Execution is the key. That is the overall situation.

The conditions are very strong. For the future, we anticipate the conditions to be strong.

Now I would like to turn it over to our CFO, Shinkai-san.

Thank you very much. This is Shinkai, CFO.

I'd like to present the results for Q1 using these slides. Next slide, please.

Page 3. Page 3, you're seeing on the screen is the disclaimer.

In February 2026, we announced timing business transfer as is known. After the announcement, February and onwards, in terms of non-GAAP reporting, timing business is excluded.

In Q1, only January, the month of January, is included, and beyond February, timing business is not included anymore. For the sake of apple-to-apple comparison, we also included numbers excluding timing business entirely for comparison's sake.

Next page, please. In Q1, non-GAAP results are shown on the fourth column, column shaded in blue.

Revenue is ¥379.3 billion. Gross margin 59.2%, operating profit ¥125.4 billion, operating margin is 33.1%, EBITDA ¥146.2 billion, net profit ¥124.9 billion.

Exchange rates, dollar ¥156, euro ¥183. Regarding timing business, last earnings time, the forecast that we announced, forecast which included 3 months of timing business.

However, in actuals, only the month of January is included. Therefore, for apple-to-apple comparison, both forecast and actual results, it would be better to exclude timing business.

Pro forma numbers are shown on the right, the most right columns. It's after adjustments for timing business, assuming that there is no timing business in forecast and actual results.

The shaded columns are actual results for pro forma basis. ¥369.1 billion in revenue, which is above forecast by 1.4%, and gross margin is 59.1%, above by 1.1 percentage points against forecast.

Operating profit is ¥123.7 billion, is above the forecast by 2.5%, gross operating margin is 33.5%. Based on this pro forma basis, I would like to turn to the next page.

This shows revenue, gross margin, and operating margin in Q1. This is on pro forma basis numbers.

Company's total is given on the leftmost column shaded in blue. Revenue is up by 1.4% from the forecast.

About 80% of that is due to yen depreciation, and the remainder due to automotive segment, which Japanese clients are outperforming. Gross margin is above forecast by 1.1 percentage points.

About 1/3 of this is due to mix improvement, and 2/3 is due to decline in manufacturing costs. As for the mix improvement, to begin with, we expected deterioration in mix, but it was flat.

It did not deteriorate. Those that will be impacting gross margin the most are the power products with a lower gross margins than company's total, and in comparison to forecast, results were lower due to some supply factors.

As for manufacturing expenses, fixed costs decreased, maintenance expenses were also reduced, and we had more conservative forecast. As for operating margin, up 2.5% from forecast.

Gross margin increase and revenue increase aside from those, operating expenses decline impact accounted for about 1 percentage point. Expense decline, however, was mostly one-time or others time differential, which will be booked, and therefore expenses will be booked in Q2.

That will be a deteriorating factor for Q2. The next column, Q1 results, the majority is repetitive with what has already presented.

Regarding gross margin, it improved due to depreciation of the yen, and mix was flat. Operating margin, because of increase in volume and one-time factor improvement, we have decline quarter on quarter.

By segment shown on the right, automotive, there is nothing in particular to be noted. Industrial, infrastructure, IoT, operating margin on QoQ, there was a significant decline by 9 percentage points.

OPEX seasonality is one factor, and there is also decline from the higher level of last year in Q4, and a 10% increase of revenue, and there is operating leverage, and a 3 percentage point is accounted for by all of these other factors each. Next, revenue by quarter.

This is based on non-GAAP numbers for the first quarter up to January, the timing business is included. In the non-GAAP results, we have company-wide and by-segment results year on year and QoQ.

Please refer to the numbers on the right-hand side. Please go to the next page.

This is about inventory on the left-hand side, in-house inventory. For the first quarter, on QoQ, both inventory actual amount and DOI increased in line with our expectations.

As for the second quarter, in terms of the actual amount, we are expecting flat to an increase. On the other hand, for the DOI, due to increase in revenue and in sales, we expect DOI to decrease.

As was mentioned during the previous earnings results announcement, as for the buffer and making advance arrangements for certain risks, our target for DOI is 150 days. Considering the risk for both die bank and finished products, accommodating buffer needs for safety inventories, this is a policy that we will have.

On the right-hand side is the channel inventory. For the first quarter, the channel inventory increased QoQ.

As for automotive, both sell-in and sell-through had upside against the expectations. We had originally planned for expansion of the channel inventory, but due to the increase in sell-through, we were not able to achieve the expected increase.

As a result, the channel inventory decreased. As for the industrial, infrastructure, IoT, generally speaking, we were able to have a slight build-up of the channel inventory mostly for data centers.

For the second quarter, looking ahead to anticipated demand, the policy is to continue to build up channel inventory. We expect a higher sell-through increase as for the ratio in terms of WOI for automotive and IIoT, we expect WOI to decrease.

Looking by segment, for automotive, we expect increase in demand and also to respond to short delivery demands. The policy is to build up channel inventory.

As for IoT, including the mass market and for the general market, we continue to build up inventory, and also for data centers, we have new products. Before certification, we plan to have advance shipments.

Also for mobile mass production ramp-up before the high season, we will also have advance shipments. These are mostly advance shipments.

From the actual amount basis, we plan to continue to build up channel inventory. If we could go to the next page, this is the utilization rate and CapEx.

On the left-hand side is the utilization rate based on front-end wafer inputs. For the first quarter, utilization rate was around 55%.

That's previous quarter, the fourth quarter in the previous year. Since then, we have seen utilization rate increased by about 6 points.

Naka factory 12-inch MCU 40-nm MCU and also Saijo digital power products, these are mostly seeing increase in demand, and as a result, we also increased the wafer inputs. For the second quarter, we are expecting flat to a slight increase from the current state.

As for CapEx, as shown on this graph, for the first quarter, we made a decision to invest in capacity expansion. This is a rather substantial investment decision made in terms of the amount, ¥94 billion.

And 80% of that will be investments for capacity expansion. Specifically, AI, data center strong power for these applications will be made in-house.

Most of these are for front-end investments, Kofu, Naka, Saijo factories. This is for 8 inches.

We hope to make these investments for capacity expansion of these factories, and also for the back-end process as well for package, module, mass production. For the development of parts, we'll make investments.

For the front-end, those investments for digital and power products have been completed. We are now considering investments for the back-end process.

Please go to the next page. This is the second quarter forecast.

On the left-hand side, the fourth column from the left, in the shaded column, please refer to that. Revenue midpoint forecast is ¥380 billion, gross margin 57.0%, operating margin 29.0%.

Exchange rate assumptions is ¥156 to the dollar and ¥180 to the euro. In relation to the timing business, the second quarter forecast does not include the timing business.

Timing business has been excluded from the non-GAAP results since February of this year. Therefore, it is not included in the second quarter forecast.

However, for comparability's sake, we have year on year and QoQ results adjusted for timing business figures are shown on the right-hand side. As for the second quarter forecast, on the pro forma basis, QoQ, this is the two right columns.

The far right column to be kept in mind as I make this comment. For the revenue midpoint of ¥380.0 billion, but on a pro forma basis, we expect increase by 5.1% QoQ.

Excluding FX impact, revenue is expected to increase by 5.0%. Both automotive and IIoT, we expect both sectors to increase.

As for gross margin, we are forecasting 57% on a pro forma basis, that would be -2.1% percentage points QoQ. Due to production absorption, we expect improvements, but due to FX impact and also product mix this mix also includes currency mix impact there, and also increase in manufacturing costs result in expected QoQ deterioration.

As for operating cost margin, we're expecting 29.0%, that will be -4.5% on QoQ, rather significant decrease. This is due to deterioration of the gross margin decrease.

Excluding that factor, this is also due to variation coming from operating expenses increase that contributes about 3%, and of which 1% concerns one-time factors that was mentioned during the first quarter and the timing differentials. About 2% is the net increase in operating expenses for the second quarter expected.

If we look at the breakdown, first is labor cost increase, the annual salary to be increased from April. A term that will be affecting the second quarter results, and also the continued investments in R&D as well as seasonality factors all contributing to operating expense increase by 2%.

As for the FX sensitivity, you can see the table at the bottom. In the appendix, there are several items that I would like to highlight.

Please go to page 18. The highlights, please look at the far left.

R-Car Gen 4 is ramping up. These are the specific customers that will be using this.

Please go to the next page. Regarding Altium, I would like to also give a progress update.

First quarter, ARR was an increase by 8% year on year compared to the past growth rates. This is a slight slowdown.

In the short term, rather than maximizing the ARR growth in the short term, we would like to promote the adoption of platform and also increase in the number of accounts. That has been our priority.

As a result of that, we've seen this results. In some services and some regions, we are seeing transition from the older model to the new model, and this has resulted in temporary decrease of the ARR.

As for our approach to ARR, and how we should proceed with the transition period, we should apply thinking of KPIs that will be updated. On the right-hand side, we started the general availability of Renesas 365 as shown here.

That concludes my presentation. Thank you.

Thank you very much. Thank you for taking my question.

This time you emphasized that the limiting factor was supply not catching up with the demand. Towards April to June quarter, what are you focusing on in terms of bottleneck?

What can you do to increase sales more? As for the CapEx, when will CapEx start to make contribution?

Is it in the second half of this year? What is the pace that you expect increase of supply with, as a result, sales?

Digital power mainly has been strong. You've also mentioned that automotive perform was also strong.

Is there any issue regarding automotive, but conversely, why is demand so strong from automotive segment?

As for the capacity of Renesas itself, realistically, I believe it will be having tributary effect from the beginning of next year. In a step-function way, we are not expecting increase in supply.

Bottlenecks change constantly in a small way. What are we doing recently to address bottleneck?

We are looking at testers. Even though we receive wafers, since the number of units of tester is not sufficient, wafers just lay idle in some cases.

We have placed orders for testers some time ago, but as you are aware of overall, there is a shortage in general. We would like to receive testers earlier and by greater number, even by 1 unit.

As we continue these efforts, we expect bottleneck to be resolved and shipments to increase. If this is successful, then it could be an upside factor in Q2.

On the other hand, concerning some products, as I discussed earlier, last year on December 27, there was an earthquake in Taiwan and there were also subsequent earthquakes, and there was also black-out, and that resulted in wafer being a bottleneck. Wafer side, we are making efforts to pull in.

Depending on what that product is, the situation is different. We want to pull in incrementally.

We want to increase gradually. We are making a great effort in this, and we will continue to make these efforts.

Gradually, we expect capacity to increase. As for suppliers, especially beyond Q3 and beyond, suppliers are already increasing supply as these materialize.

Then Q3 and beyond, in particular regarding wafer which I mentioned earlier, I believe that we expect significant increase in supply from some time in Q2 at the earliest, supply may begin to increase. If not, we expect wafer supply to increase from Q3.

As for automotive segment, I did not mean to emphasize that the performance is extremely strong. It is stronger than we expected mainly for one thing, Gen 4 R-Car.

40-nm MCU and Gen 3 R-Car are also contributing. R-Car fluctuates from quarter to quarter as we discussed before, but the trend is stronger trend.

I have covered this last year as well. The environment surrounding automotive industry has changed more so than we expected.

I believe there is a tendency to continue to use previous generations' products. As for 28-nm microcontrollers, we see steady growth.

In particular, because China is large, especially some customers in China, their production and sales are affecting our results. There is some volatility in the short term, but overall the trend is smooth growth.

Microcontrollers, older generations, new generation, and R-Cars, older generation, we're seeing ramping up of the new generation not by very large margin, but steady increase. As for older generation, they are being used longer than we expected, and I believe the combination of this resulted in stronger results.

I see. Thank you.

Second question is about the pricing environment. I'd like to understand better.

Some non-Japanese players are commenting to the effect that there may be price increase. How do you see the situation, and what are the movements that you expect?

That is a question that is difficult to address because of different expectations from investors and customers. Raw materials, transportation, as costs are rising.

There are also supply constraints. Memory price as a result is increasing, and when necessary, our competitors are also increasing their prices.

That is the actual situation. Given this situation, it would be very difficult for us alone to not increase price.

At some point in time, by some magnitude, we may have to adjust our price.

Thank you very much.

Thank you. This is Hirakawa of BofA Securities.

The first question is regarding gross margin for the second quarter, how we should think about that as per Mr. Shinkai's presentation.

We have the breakdown, but looking at that, what I struggle to understand is that as sales is expected to be flat QoQ, you are accepting 2% decrease. How should I think about that?

To what extent have risk incorporated? Is there any upside risk?

If you could talk about both things, I would appreciate that. Also for power, gross margin slow mix deterioration is stated as per your presentation.

What is the contribution in terms of OP margin? That's my first question.

Thank you. Regarding gross margin, decrease by 2.1 percentage points.

As for the breakdown, due to production absorption, we expect slight improvement, but because of the FX impact and manufacturing costs increase, we expect overall deterioration. As for the contribution in the breakdown, FX impact is 1/3 and manufacturing costs is about 2/3 in terms of the impact.

As for the FX, second quarter we expect appreciation of the yen, appreciation of the yen. In terms of that, FX there is an upside based on our current view.

As for the mix, there is the product mix and also currency mix, so that's also impacting the results. For the second quarter, the yen portion is expected to slightly increase.

Foreign currencies' upside would decrease in turn. Therefore, the currency mix would contribute to deterioration.

In terms of product mix, we have legacy power. These are low gross margin products.

Shipments of those products is expected to increase QoQ, and this will impact the overall gross margin. As for the manufacturing costs, this accounts for about 2/3 of the overall impact.

For the second quarter, there is a unique factor to the quarter. The utility cost, energy costs with higher temperatures, utility costs increase.

The operating expenses when I talked about that, I mentioned this briefly. Due to the merit increase, we also expect labor cost increase.

Periodic repairs and maintenance will be done during the Golden Week holiday and also in preparation for the capacity expansion. There are some inspections are done.

Contributing to overall increase in costs. As a result, manufacturing cost increase and contributing to lower gross margin for the second quarter.

If I may add a supplement, Mr. Shinkai already gave the forecast for the second quarter, but generally speaking, as for the currency and product mix, simply we expect fluctuations.

The power for AI demand, we have low gross margin product to high gross margin products. There's a rather wide range of products with gross margin levels.

Our customer share is also expected to change drastically. It's a bit difficult to forecast, but our intention is to have a higher gross margin products and higher customer share.

As this starts to be realized, then if we have an increase in power for AI demand, this should not contribute to lower gross margin. For the time being, we expect some fluctuations.

Generally speaking, as Shinkai already mentioned, manufacturing costs are expected to increase given the current crude oil situations. According to the media reports, we should expect impact in 6 months' time or so.

Maybe looking at the second half, we should expect impact in terms of the energy costs. Generally speaking, we do not expect gross margin to continue to rise.

The key is how to manage the manufacturing costs increase, including the energy costs through such measures as improvement in mix, for example, for products for AI. By improving the mix, we can absorb to an extent the increase in manufacturing costs.

You should not expect to have a steady increase. Sorry, I forgot another part of the question.

In terms of the OP margin, we should expect positive impact.

Thank you. Another question.

Maybe I misread, but on page 9, the FX ¥156 to the dollar is the assumption in the second quarter. That's for the first quarter.

Would that have an impact QoQ?

Sorry, for euro

In terms of the euro FX sensitivity, we don't see much impact in terms of the ¥1 fluctuation. That's rather limited impact, correct?

Yes, the currency mix has a bigger impact, bigger yen. This is expected to increase in sales for Japanese customers, contributing to that.

I see. I understand.

Thank you. Relates to my first question.

Automotive business, you said that it is stronger than your expectation. On the other hand, for the second half, demand for automotive is still uncertain.

What we hear from the peers, given the macro environment with what you know so far, what is your expectation for the second half outlook?

It is uncertain for sure. I don't know how I should phrase this.

Macro uncertainty affecting automobile consumption certainly exists, and that's a big factor to consider. If there are no such factors, we do not expect such substantial increase, but depending on what platforms to be launched and other factors all included, we do expect a increase going forward to some extent.

Outlook is rather bright. The Middle East situation is affecting the crude oil prices by and large, and maybe this will result in sales of gasoline cars, hybrid, or EVs.

All factors need to be considered. Having said that, as for sales for ourselves, as was shown during Shinkai's presentation, recently we are seeing stronger results coming in compared to our expectation.

Inventory, particularly channel inventory, has to be built up. Adjustments in that sense has to be made, and that will give the necessary support to an extent.

As for our sales outlook, relatively speaking, we have an optimistic view for our sales going forward. That is an honest assessment of where we are.

Thank you.

Thank you very much for taking my question. Ogawa from Daiwa Securities.

I have two questions. First about SG&A.

Last year, labor cost increase, R&D cost increase was mentioned. This accounted for close to 2 percentage point increase.

The second half onward, what is your outlook? QoQ in terms of percentage, are you going to be increasing OPEX?

If sales also increases in terms of percentage, will the increase be more milder? How do you perceive the second half?

This time between Q1 and Q2, there were some timing issues when expenses are booked in Q1 or Q2 and accounted for 1 percentage point. As I said for that in Q2, operating expense will be about ¥100 billion or more.

In Q2, a labor cost increase, seasonality factors are taken into account. In the second half, this also depends on the foreign exchange rate.

Every quarter, ¥100 billion or so of operating expense is what we generally expect towards the second half of this year.

I see. Thank you very much.

Second question is about data center-related business. Large CapEx amount this time was decided.

Compared to 3 months ago, has your outlook changed? In the past, AI-related business doubling was your projection.

Does that remain changed? In terms of non-AI, non-AI may be an area to be attracted, attention, but outlook, medium- to long-term vision in the mid- to long-term?

At least as far as until the end of this year is concerned, our outlook remains more or less unchanged. At least it is not deteriorating, and so it is not unchanged in a good sense.

As for next year onward, I believe strong momentum will be maintained. Thus, as soon as possible, we would like to increase our internal capacity to capture that stronger momentum.

As for non-AI, it's not glamorous, but certainly it is increasing, growing, and we expect this growth to continue. It is true for power, but memory interface also is one of the driver for profit, our return, enjoy the benefits.

We would also like to make sure that we capture that benefit. Overall, I think we are similar to our peers in the near future.

We expect a strong momentum. Because of that expectation, we will need to expand capacity.

Towards next year, supplier partners from Taiwan, as I mentioned earlier, we would like to increase capacity further. We are discussing with them as such.

We believe we will be able to secure necessary capacity. I expect a strong growth in step-function way at the third quarter and also in next year.

Thank you. As for power, do you have any outlook about share in digital power, memory interface?

Do you expect any change in outlook in positive or negative sense?

In memory, in a positive sense, we do not expect any change, especially Gen 5 and beyond. We believe we are in a good position.

We would like to maintain that good position. As for AI power, I have been discussing on numerous occasions.

We would like to maintain our share or increase share, but in the short term, there is going to be a large competition, we should not become complacent. I believe that's a way to put this.

Thank you.

Thank you. This is Fujiwara from Citi Group Securities.

I have two questions. First, related to automotive.

Earlier, Shibata-san, you said that automotive mix may change. The other day in Europe, EVs are selling in increasing volume, and due to the changes in the energy prices, EVs are now regaining traction, particularly the battery prices are rising.

Generally speaking, battery costs and EVs, I believe the semiconductors usage, content is quite high. For Renesas, the fact that EV is growing, what does it mean?

Your company's exposure to EV is not as significant. With the change in the mix, for your company in the medium to long term, is it going to be a tailwind, or is it going to be a headwind?

That's my first question, please.

In comparison to the peers, we do not consider it to be a tailwind. There are two factors to consider here.

First, we have power discrete, but we do not sell this in large quantities. SiC, MOSFET, companies that sell such products would be directly impacted more by EVs and BEVs in a positive way.

That's the first thing. The second thing, I believe last year or the year before that, from that timing in a continuous manner, this is something we've talked about.

As for share of microcontrollers, as a fact in terms of EV, our German competitor has higher share. This situation is not expected to continue for some time.

As I've said before, of course, we are implementing certain measures, and we expect the results of those measures to be realized going forward. In the short term, for the next quarter and the quarter before that, there are timing differentials.

With shift to BEV, we do not expect negative impact on our company alone. In comparison to our peers, our growth rate will be muted.

Thank you. This is my second question.

You made a decision to have large investments in capital expenditure, Naka, Saijo factories. I have a question for Kofu factory.

Far, we have not seen the introduction of the mass production phase with this CapEx. I believe this is mostly for digital power.

Now you have a visibility to start off operations at Kofu factory. Once the operations starts, I believe the costs would also increase.

How should we interpret the P&L impact?

P&L impact will be explained by Shinkai. Yes, we do have a visibility as to the operation will start at Kofu.

This is going to be 300, what used to be 8 inches products using 8 inches so the line. The running change is something customers do not readily accept, but we will expect a gradual shift, and we do have visibility now.

As for the impact on P&L, with the investments that was covered, the actual start of the production is expected to be FY 2028. Depreciation will start from the time of the start of production.

As for the actual duration of mass, the back-end and the intermediate process investments are yet to be determined. The finalized amount will be determined after determining these other processes in the investments.

I believe the CapEx ¥94 billion and you mentioned about 80% of that is for capacity expansion. Just to get a general idea, what would be the allocation to each factory of this investment?

For capacity expansion is 80%, so that would be about ¥77 billion in investment for capacity expansion. About half of that is for Kofu, over 20% is for Naka, and around 15% is for Saijo.

The remaining amount is for the back-end processes.

I see. Thank you very much.

This is Yamamoto from Mizuho Securities. Thank you for taking my question.

I also have two questions. In the second half, I have a question regarding automotive.

Shibata-san said that demand side, energy cost increase and consumption were mentioned as concerns, but memory procurement, the difficulty or inventory for Tier 1 in terms of procurement of raw materials, is there going to be impact in the second half of the year 2027 in terms of impact on the production of automobiles? Do you have any concerns?

Since last time, personally, my view has not changed so much. It is a concern, but it's not materializing, but I have a sense that it will not be a large impact.

DRAM often times is highlighted, but not only DRAMs, but for example, devices to be mounted by PCBs for sample are in shortage. Because of short supply, it is not possible to produce.

That is a possibility. As I repeat, many people are anticipating this, and they are taking preemptive measures.

I do not think that there will be too huge an impact. That is my take at the moment.

Thank you. My second question is about price increase.

About 5 years ago, surcharge mechanism was adopted for the incremental cost for the price would be increased so that margin would not deteriorate more. I believe that type of price increase was implemented.

Often times, American companies also say that because of higher weights price increase is on top of the increasing cost, and gross margin as a result would be higher. Which approach would you be adopting?

It may be difficult for you to discuss this, but to the extent possible, if you could share your thoughts on this.

It is difficult to say on our part. We would like to what is best for shareholders and customers, what is reasonable for shareholders and customers in terms of pricing.

As for surcharge methods, it is difficult to implement this in reality in many respects. We would like to have a more clear-cut way to adjust price.

That is all.

Regarding automotive, you have long-standing relations with customers since the days of the former Renesas. You may not be able to increase price aggressively.

The business of formerly acquired company may have the leeway to aggressively increase price more in IIBU. Can I have such expectation?

Former Renesas and other businesses, we do not make such distinction anymore. In the short term, if you do something radical about price, of course, no customers would like to see that.

We would like to be sincere, and I think we focused primarily on customers when we try to be sincere, but we would like to be sincere vis-a-vis customers as well as vis-a-vis shareholders when we consider price. That is my take.

Thank you very much.

This is Tsuda from SemiAnalysis. Thank you for this opportunity.

Regarding AI and data center applications, you mentioned digital and power products as products for these applications. You have power, and you also have driver.

You have analog, you have MCUs. This digital power signal chain exists in the company.

Are you referring to that, or what specifically do you mean when you say digital power?

Thank you. In principle, basically, what we mean is using digital technology to manage and control.

That's what we mean.

I think it's a strength of Renesas that you have everything covering the whole range. Are you going to sell in a bundled way?

Right. We have to controller using digital to control various devices and components, and also for designing such products.

We also have the environment. This is unique characteristics for us.

In recent media reports, finally, NVIDIA's strength, CUDA, is now highlighted in more occasions. Of course, those in the industry have been aware of this for quite some time.

For our digital power as well, it's the same kind of differentiation. For each individual device performance, of course, we work to further improve and enhance that, but more so, we focus on the use of these devices.

That's where we find attractive in our solutions. We provide solutions that are attractive in the usage.

I think 48-volt DC is currently selling?

Yes, of course. We also from grid to core, including GPU, we cover the whole range.

We originally focused on core where devices actually operate, but then we've expanded gradually towards the grid, including the 48-volt. We are still in the process of expanding towards the grid.

I see. So 800 volts that is currently attracting attention, and you will eventually target that area of business as well?

We already have solutions for that. A certain GPU manufacturer, a publication covers our solution.

We do have a full suite, but, of course, we intend to further expand and innovate in terms of our offering. Yes, your understanding is correct that we will be pursuing these areas going forward.

I see. Thank you very much.

At the risk of repeating myself, due to macro factors mainly, uncertainties remain. Despite these uncertainties, we also have several structural drivers that are becoming more visible.

In the meantime, we would like to deliver as much upside as possible, and we will focus on execution. If all goes well, we hope that we will have higher inventory next year and stronger expanded capacity to achieve further growth.

I hope we will be able to realize that trajectory. We look forward to your continuous support.

Capital Market Day, which will be held in about 2 months' time, I don't expect any major news, but rather than providing simple updates, we would like to have a good Q&A session, a longer time for Q&A session. Thank you very much for joining us today.