Earnings Release

1Q FY2014 Earnings Release Conference Q&A

  • What is the order forecast for the July to September quarter, including the trends by individual applications?

    The general direction that we anticipate is an increase in SPE orders compared to the April to June quarter. Orders from NAND flash memory manufacturers and foundries will increase, and orders from DRAM and logic manufacturers will remain flat. With respect to FPD, we expect orders to fall in the July to September quarter, partially due to the impact from orders being pulled in the April to June quarter. PVE orders are also expected to be at low levels. Overall, we expect orders to remain at the same level as in the April to June quarter.

  • What is the order forecast for the October to December quarter?

    We believe that orders will increase. Orders from foundries for next-generation nodes (20 nm) and from new fab in China are about to pick up, and we believe that orders will further increase compared to the July to September quarter.

  • TEL indicates the wafer fab equipment (WFE) market is expected to achieve double-digit growth in 2014. What will be the contributing factors to this? Also, when are orders expected to rapidly increase?

    Investment in new NAND flash fabs will be a major contributing factor. We also expect continued investment in cutting-edge logic. Mass production of 20 nm nodes will begin this year, and as the development of 16 nm and 14 nm nodes is becoming active, there is a possibility that investment in pilot lines and the start of mass production will occur earlier than initially anticipated. We expect investment to accelerate in the second half of this year through spring of next year.

  • With respect to the 40 billion dollar WFE market that is the basis of the medium term management plan, what percentage of investment is in memory? Also, what do you project for EUV and 450 mm wafers?

    We expect the percentage of investment in memory to be 35% to 40%. While EUV technology continues toward being established, we anticipate that it will be adopted in only a limited number of processes, and there will not be any dramatic changes in patterning technology. Capex for 450 mm wafers is not included in the plan for 2016.

  • What are your projections for fixed costs and R&D expenses in relation to the medium term targets of net sales of 920 billion yen and an operating margin of at least 20% for the fiscal year ending March 2017?

    Our policy is to control fixed costs as much as possible. We have set a target of an operating margin of at least 20% in the fiscal year ending March 2017, and we are working to reduce the ratio of selling, general and administrative expenses to sales to 20% or less. With regard to R&D expenses, we have already made capital investments in our main R&D bases and we plan to maintain the current level of R&D expenditure.

  • With regard to share buy-backs, is there any change in policy in light of the current share price level?

    We do not comment on the specific timing, but we will consider the matter flexibly.

  • Can you comment on increasing your share of the etch systems market?

    We see the technological changes now taking place in the semiconductor business as an opportunity to expand business. Specifically, FinFET, multiple -patterning, and 3D NAND will be adopted. With regard to FinFET, our RLSA etch systems, which feature low damage and high selectivity, are already being used by U.S. logic manufacturers, and we expect our position in the etch systems market to rise in conjunction with the future deployment of the 14 nm and 16 nm nodes. We do not yet have an established share of the front-end conductor etch market (Poly etch market), but we believe that we will have the opportunity to make a full-scale entry into this market in the future. With respect to patterning technology, multiple patterning will become mainstream, and we plan to increase sales through major chamber reforms and products that achieve high levels of etching uniformity. In relation to 3D NAND, we possess highly-advanced technology and extensive experience, and we will use high aspect ratio contact etching technology to establish our superiority. We are targeting to capture 40% market share in the next three years.