Thank you very much for taking the time out of your busy schedule to participate in this [unclear] financial results briefing for the first quarter of fiscal year 2026. In this financial results briefing, we have speakers Shinji Miyazaki, Director and Senior Executive Officer, and Takehiro Mizutani, the Group Manager of IR.

I am serving as a moderator for this session. I am Kitaoka from Corporate Planning and IR Division.

Thank you for your participation and support. First, Miyazaki, the Director and Senior Executive Officer, would provide an explanation for 15 minutes, followed by Q&A session.

We have 45 minutes for Q&A, and we are scheduled to end this session at 45 past 10:00. The presentation materials will be projected on the screen, but the materials are also available on our website.

For internal recording purposes, we'd like to record this session. Now we'd like to begin with the presentation from the company representative.

I am Miyazaki, the Director and Senior Executive Officer. Let me walk you through the financial results for the first quarter of fiscal year 2026.

Earlier, we have disclosed the financial results and these are visualized with graphs here. This time around, we are using three slides to talk about the forecast for FY2026 as well.

Revenue and operating profit and net profit are shown here as disclosed yesterday. As for the first quarter results, revenue came in at 123.2 billion yen and electronics representing 75.5 billion yen.

Based on this result, we are making upward revisions for the first half results to 253 billion yen, 10% up, and also increasing the forecast for electronics as well. Operating profit came in at 26.9 billion yen, electronics 21.4 billion yen.

We are raising the first half forecast from 38 billion yen from May the 11th's forecast to 54.5 billion yen. That is an upward revision of 43%.

Electronics, we are increasing from 33 billion to 47 billion. That is an 44% increase for the operating profit forecast.

Net profit as well, we have raised the forecast from 23 billion to 34 billion yen, that's an upward revision 48%, with the expectation of net profit margin to come in at 13.4%. As you can see in the heading on the top side of this slide, the reason for the upward revision is driven by the strong demand for the GPU and high-end CPU.

Although Cell 8 production has been stabilized and existing plant's utilization has improved, and driven by these, the sales volume exceeded the initial plans. In terms of the selling prices as well, selling prices have been strong based on the strong demand, especially for the high-value-added products.

Therefore, we have made upward revision of 2 billion yen for electronics for the first half. Ceramics as well, there is a temporary increase in orders for DPFs, there was an increase in revenue and profit for the first quarter, but the automotive-related sector remains unpredictable.

The forex assumptions are shown on the bottom left. Next, the full year forecast of FY2026, let me elaborate numbers first.

The revenue has been raised from 500 billion yen to 550 billion yen, that's a 10% upward revision. Electronics, based on the strong results in first half, we are raising the forecast for electronics from 350 billion yen to 375 billion yen, 14% increase.

Operating profit as well, we forecasted 90 billion yen as a whole with the operating margin of 18%, but with the strong results of electronics in the first half and with the upward revision for electronics, we have raised the forecast for full year to 127 billion yen, that's a 41% increase. With the operating margin expectation now raised from 18% to 23%.

Net profit in FY2025, we recorded 63 billion yen, including the gains on sales of stocks, and for FY2026, we have raised the forecast for full year to 84 billion yen. A significant upward revision has been made on this front as well.

Overall, the background of the strong performance is especially in the second half in the electronics segment, high-end products mainly. We are expecting strong demand to continue.

Selling prices as well, the strong selling prices are expected to be kept in the second half as well. With the strong demand, the plant utilization rates are expected to be at high level.

These are the strongest drivers. With these drivers, we have made the upward revisions for the full year forecast.

For the ceramics business, from first half to second half, automotive environment has been tough, we are expecting lower revenue and profit in the second half. In the other segment, we are expecting higher sales, revenues, and profit in the second half.

This is the last slide that I'd like to explain. In the electronics segment, we show the waterfall to show the changes from the May the 11th disclosure.

Right-hand side shows the operating profit. We are expecting the operating profit to increase from 75 to 110 billion yen.

The biggest drivers are the ASP and sales volumes. Overall, ASP and product mix will have a positive impact of 26.5 billion.

Other than that, the sales volume increase, exchange impact, and cost increases are expected to drive the operating profit. For the revenue, we show the breakdown: AI server, switching IC, and general purpose server and PC.

Compared to the previous disclosure, in all of these subsegments, we are expecting growth. As you can see in the heading, in terms of the expectation for the future, AI server and general purpose servers are expected to perform strongly and we are expecting higher demand for switching ICs.

We are expecting the strong demand for switching ICs to continue as well. Overall, the situation where demand exceeds industry supply capacity is expected to continue.

Based on this background, selling price, mostly for the high-end products, are expected to trend strongly. In terms of glass cloth, we had some procurement risks in the beginning, but we mitigated those risks in the beginning of the year.

Existing production capacity will be used flexibly as much as possible so that we can capture the customers' demands, and that is the policy that we have going forward. That concludes my Q1 earnings result.

Thank you very much. Now we would like to start with the Q&A.

In order to help your understanding, we would like to prioritize research analyst who really understand the interests of institutional investors as a whole. If you have a question, please press the button in the center of the screen, and when your name is called, please state your name and affiliation before asking the question.

We would like to receive questions from as many people as possible, please keep your questions to maximum of two at a time. We can also do follow-up IR meetings as well, please focus your questions on your market view and business strategy as much as possible.

We would like to do follow-up as much as possible for the institutional investors later. Chat is not available, please use the Q&A box.

Now we would like to start the Q&A session. Takayama-san, please ask your question.

Thank you. Goldman Sachs, Takayama.

Thank you for the opportunity. Thank you.

On page 5, selling price and also the product mix, 26.5 billion yen. In just three months, things changed quite a lot, what happened?

In greater details, is it about the selling price, ASP, or product mix? Which is the bigger driver?

Also, I don't know to what extent this is impactful, but GPU, CPU, and also switch, by customer, do you think that impact is different? My estimation is agentic AI CPU and also switching, I think allocation and customer orders are changing, and you want to prioritize certain things.

This is how you have successfully increased the pricing. If there's a rush order or if nature of the order changes very quickly, I think there's an opportunity for you to increase the prices.

Can you please elaborate on what has happened? That's my first question.

Thank you.

From May 11th disclosure, operating profit was up 26 billion, and also the ASP and product mix improved. What happened in the background?

We're talking about ASP and product mix, but majority of this is ASP. Specifically as to what has happened, Kawashima and myself have explained this from before.

According to our business plan, every quarter, we incorporate price reduction. Because of our past engagement with the customers, we reflect that price reduction.

However, in the negotiations since 11th of May, this price decline curve became less steep, or in some cases, we didn't have to reduce the price throughout our negotiation. That's one factor.

Another factor is there is supply shortage in general for the whole industry, and pricing for different models in this competitive environment is actually increasing over time. That's another factor.

We are increasing the prices, but we are trying to be fair as well, as Kawashima has explained to you before. The substrate supply is generally in shortage, and more than our expectation, I think there was an environment where the customers was willing to accept a price increase.

There is of course negotiation for price down, but there is a price increase in general for substrate. That's a factor as well.

GPU, CPU, and switching IC, there are different products, including PC. This is not very specific to a particular customer, but across the board, various customers, ASPs are increasing.

So 26.5 billion, this is not really concentrated to a particular client or customer.

Thank you. In order to understand correctly, I have a follow-up question.

You had a very conservative plan, but on apple-to-apple basis within the same product, there was no price reduction, and also you talked about pricing of model, you're talking about new initiatives and you have been able to reset the price at a higher level. Is that what you meant?

Yes. Your understanding is correct.

I see. My second question is about capacity enhancement.

Yesterday, post-earnings call, you mentioned that from this fiscal year toward next fiscal year, you will have to make some decisions, and before the end of this fiscal year, you will have to now make the decision, your tone has changed. You are in a more of a hurry.

Now, within that, what do you need to increase and by how much? Maybe you have not decided yet, but what are your priorities?

Is it EMIB or GPU? Can you please talk about the size?

You have already decided the 500 billion yen investment, but on top of that, how much additional investment do you think you'll need? Can you please give us an outline of the needs?

Timing of capacity enhancement,

as you said, Takayama-san, we explained this fiscal year or next fiscal year, but we have changed the tone. That's true.

At the latest, before the end of this fiscal year, that's what we say now. We are trying to accelerate our decision.

We're discussing that, and we would like to do this as early as possible before the end of the fiscal year, current fiscal year. Capacity enhancement is not just for GPU or EMIB-T.

This is basically for everything. Almost all the customers have asked us to enhance our capacity.

Having said that, though, if you look at the land capacity, Gama and Ono have some vacant space next to the plant. The Cell 7 and Cell 9 would be the names that will be given to those vacant land to be used.

We have to figure out how to enhance the capacity on those vacant lots. We're discussing that, but that's not maybe everything because customers want even more.

Our resources are limited, and we cannot have many plants being built at the same time. We don't have sufficient resources to support that.

Taking our resources into account, also at the same time, we will try to respond to our customers' requests as quickly as possible, and we're discussing this internally.

Gama and Ono, these vacant lots, you'll use the full land to build the capacity, you're thinking about both?

Yes. Because in terms of land space, those are the only two options we have.

Buying another plant building is also being considered as a potential option, but including those options, we are now looking at land for Gama and Ono. Not one of the two, but both at the same time?

Right. Yes, that's correct.

That's very clear. Thank you very much.

Thank you. Naito-san, please go ahead with your questions.

Thank you for your presentation. Citigroup Securities, my name is Naito.

Thank you for taking my questions. My first question is also about the selling prices, ASP.

You made the upward revisions for the fiscal year, and the reason why is because strong selling prices are expected to be maintained. That's my understanding.

Would this trend continue into next fiscal year? The positive impact from ASP and product mix, are you expecting a stronger impact from this in the next fiscal year?

In terms of the product mix, this fiscal year, GPU, and over the next two fiscal years, the GPUs will evolve, and are you expecting the ASP to further increase? Or EMIB-T, once it is introduced, the product mix would enhance, but there is a certain supply constraint, and existing products' prices, are you expecting them to further increase?

Are you expecting further acceleration of the ASP positive impact?

Thank you for your question. The packaging substrate, the current situation is that the substrates are becoming larger in size, and towards next fiscal year or the fiscal year after next, we are expecting further evolution for the size to be bigger.

The AI server demand is also expected to increase. As you can see with the second line, the demand is exceeding the industry supply capacity.

I believe the situation would continue for some time, and the difficulty level of the substrates are going to increase. In line with that, when it comes to question whether the ASP would increase at an accelerated pace, but at least we're expecting the current ASP, the selling price level, to be maintained.

My follow-up question is regarding the next round of investment. When you execute the next round of investment, the fixed cost would increase temporarily.

Are you offsetting that with the ASP increase? Is that your intention?

The next round of investment, how we think about this is that as much as possible, we'd like to receive the advance payments to compensate for the increase in the fixed costs as much as possible. Including that as well, we'd like to consider the appropriate selling price to make sure that we offset the increase in fixed cost.

My second question is the glass core substrate. The visibility has increased from the beginning of the fiscal year.

What is actually happening here? On the customer side, the production capacity would increase, or the number of suppliers would increase?

Or

in terms of the allocation among the industry, are you in the advantageous position? Glass cloth supply situation has improved, and what are the factors behind them?

In the industry, we believe that we are in the advantageous position when it comes to our supply capacity of the glass cloth. That remains unchanged.

The number of suppliers of glass cloth has increased. That is a big factor as well.

In the past, the two companies are in Japan and Taiwan, and the third company we have been considering, and third and fourth supplier is now visible for us. How much capacity would increase in the future, we might have to assess better in the future, but there are four glass cloth suppliers that we now have certain visibility for us to use their products in our mass production.

The Japanese glass cloth supplier is going to increase their capacity, and I believe that the tight supply situation of glass cloth would be resolved or would simmer down in the future.

Thank you very much. That's all from my side.

Thank you.

Thank you very much. Sato-san, please ask your question.

Yes, this is Sato, Morgan Stanley Securities. Thank you very much for your presentation.

Thank you.

26.5 billion yen, this is ASP and product mix. Can you please explain the breakdown and the background once again to me?

Glass cloth, CCL costs are increasing. How are you passing through that cost to the price?

Is it basically zero time lag, or almost zero time lag? Is that the correct understanding?

Also, looking at this waterfall, where is that captured? In terms of material sourcing risks, you mentioned that it has been mitigated.

However, if you increased the volume of sourcing, do you think production can be increased, or do you already have a plan in place to secure enough materials when you increase the production capacity so that you can do full production?

Glass cloth and CCL cost increase, these increases are passed through to the cost in a timely manner, and that is included in the 26.5 billion yen, ASP and product mix. We are in constant communication with our customers, and we are revising the ASP as we go every time we get a cost increase from our suppliers.

Yes, cost pass-through is happening in a timely manner. With regard to the materials risks, we would not say that there is zero risk.

It's not just our company, though. Our competitors as well have made the decisions to make huge investments, and we have to compete for resources, in other words, materials and facilities as well, equipment as well.

We have many Japanese material manufacturers with long-standing relationships with us. In terms of relationship, we would say we're in an advantageous position.

Currently, we don't have any bottleneck for specific material, but this year, next year, and the following year, various companies will be investing more. Depending on the situation, there's a possibility that there would be a capacity constraint on the material supply side.

Right. The current capacity that you have in terms of material and equipment, you already have visibility in terms of sourcing?

Right. For the revised plan for '26, please understand that the sourcing has already been secured.

Understand. Thank you.

My second question is about EMIB-T. Right now, what is the status toward budgeting, and what are the challenges?

Also, at this point in time, when do you estimate the production as well as sales to start? Cell 4 and Gama, two locations have been suggested, but Cell 4 will start in advance before the Gama plant is completed.

Is that the correct understanding?

Yes. EMIB-T development, this is done by three players, including Ibiden.

Two other companies, and we believe that we are at the leading edge. A test vehicle has been shipped, and things are progressing.

You asked about the challenges. Silicon bridge needs to be embedded, and getting the interconnection right is still challenging.

It hasn't changed. Power supply will be stronger, and the core structure has become more complicated.

We did the printed circuit board as well, so as far as the core is concerned, we believe that we have an advantage over our competitions. Embedding silicon bridge in the buildup and also higher power supply and the core is becoming more challenging.

This means that in the future, yield could be challenging. The sound has been disrupted.

[unclear] Excuse me, is it just us? We cannot hear what is being said.

That's what we think, but it's still quite fluid. Cell 5, small lot, and then in '28, Gama plant will launch, and then we can go into mass production.

That's the story.

Excuse me. Cell 5, small lot, is going to start from next fiscal year?

Is that the correct understanding? I do apologize that the voice was disrupted, let me go back to the beginning.

Thank you. I appreciate that.

EMIB-T, what's difficult? Silicon bridge has to be embedded in the buildup for the interconnection, and that is challenging.

In addition to that, higher power supply complicates the structure of the core. Structure is becoming more challenging.

Ibiden has a printed circuit board experience, and therefore, we have an advantage. Still, challenging, and we expect this product to have lower yield.

As for mass production, Gama plant mass manufacturing will start in '28, but before that, not Cell 4, but Cell 5 for Intel will be used for small-lot production, hopefully. The timing of shipment is still fluid.

That's the story for now.

Just to double-check, thank you for your explanation, Cell 5 small-lot production is second half of next fiscal year? Is that the correct understanding?

Gama will launch in FY2028, we want to do it before that, which means latter half of '27 is our expectation.

Okay. Power supply is going to be enhanced, and that will make things more difficult.

That's what you said. Passive devices will need to be embedded into the core layer.

Is that the challenge you're talking about?

Yes, exactly. It's not limited to EMIB-T.

Generally, this is a new trend to embed, and that adds another layer of complication.

I see. Thank you.

Thank you. Hirata-san, please go ahead.

Thank you. This is Hirata from UBS.

Thank you for the opportunity to ask questions today. My first question is regarding demand for CPU for AI inference has been highlighted this time around.

ARM-based CPU business opportunities, how do you assess that? In the past, you haven't been proactive to work on that opportunity, but this fiscal year and over the medium term, what contributions are you expecting to come from this?

The performance requirement and ASP and the profit margin, what are your expectations compared to those with the existing AI GPU business? If you could give us a clue, that would be appreciated.

ARM-based substrates, when it comes to that, well, the specs of those substrates will be similar to the specs of substrates we are currently supplying, we believe that we have the capability to supply those. We'd like to increase the new businesses as well.

For the new business to represent 20% of the overall in FY2027, but there is no room for us to allocate capacity to that enough. We're expecting a certain level of demand to arise, but we may not be able to initiate or undertake a large-scale initiative.

Thank you. The difficulty level remains unchanged.

That means the difficulty level will be similar with the AI GPU or high-end CPU? The GPU.

The difficulty level will be similar with the AI GPU that we are currently working on.

Thank you. My second question is regarding page 5, the drivers for upward revisions.

The ASP and product mix is contributing largely, but there is certain impact to come from the productivity improvement, yield, and productivity upside, maybe material. Are you expecting this portion to go up in the future, or you have achieved certain level of productivity already?

For that this fiscal year as well as for the midterm plan period, what sort of contributions are you expecting from this? Cell 4, Cell 5, Ono, Gama, the existing plants' yield has come to a matured level, and we may be able to increase the yield by several percentage points.

Cell 8 Ono plant, with the investments, we are planning to increase the production capacity for this fiscal year as well, and we would like to achieve certain level of productivity enhancement based on that. Not the yield, but the production capacity, we are expecting to enhance.

Production efficiency as well, we're looking to increase that as well.

Thank you.

Thank you very much. Goto-san, please ask your question.

This is Gotoh, Mizuho Securities. Can you hear me?

Yes. Please go ahead.

I have two questions. First question is about this particular slide.

Sales volume, this is 3 billion, it's not that big. Since FY2026, because of agentic AI, CPU network demand should have increased quite a lot.

Agentic AI impact, how does it actually impact your sales volume and how did it play a role in this revision? Maybe something that's intended for other applications are maybe allocated to CPU or CPUs, maybe it doesn't have a big impact on volume, but it is working on the product mix.

That would be my read, but what is the reality?

If you look at the details of what we disclosed on 11th of May, AI server is growing, but switching IC and general purpose servers are the ones that are really growing. I hope that you can get that from this information.

As you have said, the product mix, AI server is not just AI server GPU now, we have switching and also CPU, high-end CPU. The type of substrates that customers want are changing and product mix has changed and ASP has increased.

Rather than the volume increase, it's the product mix that is contributing. It used to be mostly GPU, but now switching and CPU server as well.

I see. I understand.

The volume is growing for the whole market, I wanted to see you do better, but maybe because of capacity constraints, you could not get a bigger volume. Is that the reality?

Right. In terms of utilization rate, apart from Intel Cell 5, almost everything was at full capacity utilization.

The question now is how much capacity utilization increase can we see in Cell 5, Intel Cell 5, and yes, it is improving, and this is why the sales volume is increasing. This is what we mean by utilizing existing capacity.

The volume increase is coming from that.

I see. Understand.

My second question is about follow-up on Sato-san's question, EMIB-T technological challenges. You have already explained that, but what is the progress on improvement of those challenges or addressing those challenges?

I'm sure that you're trying right now, but how much progress have you seen? How good do you feel right now?

Size is getting larger over time, realistically speaking, do you think you can actually handle this at a mass manufacturing scale?

I cannot really disclose the actual yield number, but compared to the beginning of the development, yield has improved quite a lot. Numbers now tell us that we will be able to ship to our customers, development is actually on track.

We want to further improve the yield. There's still room for improvement leading up to mass production, we will be focusing on completing that.

I see. You're saying that there are no big barriers that you may not be able to overcome.

You're just working on honing on the technologies?

Yes. There is no showstopper.

We will be just doing steady yield improvement, and we will continue on these activities. We will have to continue on those activities.

I see. I understand.

Thank you very much.

Thank you. Akizuki-san, please go ahead.

This is Akizuki from Nomura Securities. Thank you for taking my questions.

There are a couple of questions, and I'd like to ask a question about the core as well as the overall situation. Earlier, you mentioned that EMIB-T, the power supply core has become more challenging.

For instance, IVR, while inductor is embedded in the core substrate, that is the spec. Originally, it was just a condenser that had to be included, the multi-terminal condenser or capacitor.

The components that are embedded into the substrate have changed. Is that the right image?

This is also related to the core question, and glass core, TSMC is jointly developing that with you, and glass core, I believe that realistically speaking, that would not be completed in the near future. Glass core roadmap and the component embedding, how should we think about that?

That was my first question.

In my understanding regarding the core, from the beginning of the development, the components to be embedded haven't changed, really. That's my understanding.

The components to be embedded, we have the same assumption as before. Overall, the glass core and component embedding, that was your question, as explained, we are doing the joint development effort.

We are working with them. At this point in time, the two options are pursued simultaneously.

At some point in the future, we may focus on just one of the two, but without any pre-assumption, glass core and the embedding structures, we are pursuing both options right now. The glass core and component embedding, for the time being, these are two separate options, there is a roadmap for each of these.

That's our understanding. We are proceeding with the developmental efforts to pursue both options for the time being.

Thank you. My second question, Miyazaki-san, earlier, you said that you wish to have the advance payments from the customers and make investments, especially EMIB-T-related business.

Taiwanese company is being very aggressive, and there are certain questions regarding the feasibility of that, but they are raising their hands and have become aggressive. It seems like the customer side is ready to make advance payments.

Is that the tone? Is that the right understanding?

Or you are negotiating with them and negotiation has become tougher than before. Is that the case?

In terms of customer's attitude, tone, customer's stance hasn't changed from the Cell 6 situation. Taiwanese company is working very hard to grow their businesses.

We understand that as well. At the customer side, it's not that customers have become tougher and has become hesitant to pay the advance payments.

We still see strong demand coming from them, we are asked to build the capacity as much as possible. That tone or nuance has remained the same.

The fact that you haven't made any announcement about building the factory is because there are certain reasons at your side, what to do with the building, what to do with the production allocations and resource allocations. There are certain adjustments that have to be made at your side, so that's why you haven't made any announcement.

Is that the right understanding?

We are talking to customers, of course, but Cell 2 and Cell 8, we are progressing with the production at them, and after passing certain milestones, such as placing orders, we may be able to decide allocations for new businesses and other portions. If we decide all of them all at once, it may not work as well.

While looking at the operations status at Cell 8 and Cell 6, we'd like to adjust the allocations. That way, we can optimize the overall operations and that is a challenge that we are trying to address.

Thank you. Understood.

Thank you very much. Nishimura, please go ahead.

Yes, this is Nishimura, Okasan Securities. Appreciate the opportunity.

I have two questions. My first question is about your plan for allocation going forward.

Capacity is very tight for the whole industry, and you have to prioritize certain products when you allocate your capacity. Product mix was not really a big driver, I can see, for the quarter, but as we continue with the midterm plan, maybe allocation improvement can improve the product mix more than expected, and the profit expected for the midterm plan could be pushed up.

What do you think about this possibility?

FY2026 was upwardly revised, and from '27 and beyond, where we cannot really say. At the time of the mid-year earnings call, we want to revisit the midterm plan.

ASP has increased, product mix also changing, whether we can improve our profitability or not will be included in the discussion that will take place in the next several months so that we can say something in the mid-year earnings call.

I see. The way you view allocation, you want to increase new business as well, but you want to prioritize value-added products within existing customers in order to improve the product mix.

Is that the correct understanding?

Yes, we want to get new business, new customers as well, and 20% in '27, that is the current assumption. I don't think we can go any higher than that for the time being.

That's another aspect that we will discuss internally leading up to the mid-year earnings call.

Thank you. Second question is about resources.

In the last earnings call, you mentioned that resource is a bottleneck, and you are talking about shifting your engineers to the newly launched plant or new capacity. Compared to three months ago, risk for bottleneck as well as resource securing, have you seen any changes?

I understand that you'll be hiring people as well. Is that going to progress according to your plan?

Can we expect that it will progress according to your plan?

As I explained before, Cell 6 and Cell 8, we want to see the progress and then allocate accordingly, including new graduates and mid-career. We want to hire across the nation, not limited to certain plants.

We are considering various approaches and maybe using more different channels to access mid-career resources. That's the concept that we have to secure the headcounts for the next round of investments.

Thank you. Understand.

Thank you. Kiyota-san, please go ahead with your questions.

Thank you. This is Tokai Tokyo Intelligence, my name is Kiyota.

I have a couple of questions as well. In terms of the new capex, can you elaborate on that more?

Cell 6 and Cell 8, you look at the pace of the operations at these two cells, but when it comes to accelerating the timing of investment decisions, the ramp-up of Cell 8 or Cell 6, are you able to accelerate the timing of operations at Cell 6 or Cell 8? The timing of the operation commencement, could it be moved forward as well if the investment decision is moved forward?

Cell 6 and Cell 8, we have made approximately 50% orders for the equipment, we are on track with the pace planned, but it is difficult to accelerate the timing. Within FY2027, we will commence the operations, and we are expecting positive contribution to business performance in FY2028.

It could be challenging to move forward the timing. The new investments will be made based on the operations of the Cell 6 and Cell 8, and the additional investment will be based on that as well.

The second is regarding the ASP and product mix, and that is a large driver for upward revisions. Can you elaborate more on the revised plans?

The supply shortage is continuing, in the first quarter, ASP increased. What about the situation in the second quarter and onwards?

What ASP assumption have been factored into Q2 and onwards? Supply shortage is expected to continue in second quarter or beyond, if the ASP increase continues in Q2 onwards, could it be an upside potential for the full year performance?

Can you elaborate on that, please?

For FY2026, with the limited production capacity, we are operating at full capacity in all of the plants for electronics, and Cell 5, if we are able to increase the utilization rate, the sales volume could be increased a little more. Overall, we are operating close to at the full level, it could be difficult to expect huge contributions.

ASP has been revised. We are happy if we can double the ASP, but that could be very challenging realistically.

This is not only us that can determine the ASP, it has to be determined in our negotiation with the customers. 26.5 billion yen is expected impact, and we have certain visibility to realize this amount within the year, and that way, you can understand this.

Understood, thank you.

Thank you very much for all the questions. It's time to close the Q&A session.

That concludes Q1 earnings call for FY2026. Please find the questionnaire on the screen.

In order to further improve our IR activities, we appreciate your kind feedback. Thank you very much for your participation today.

Thank you. Thank you.