Earnings Release

1Q FY2015 Earnings Release Conference Q&A

  • Why were orders in the April to June quarter slightly higher than the initial guidance?

    Orders for DRAM and post-sales service were higher than expected.

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

    We expect orders for SPE to remain generally flat from the April to June quarter. There will not be any major changes in trends by individual applications. Orders for FPD will briefly decline, but we expect them to increase in the October to December quarter.

  • What is the SPE order guidance for the October to December quarter and beyond?

    We believe that orders will increase, particularly capital investment in memory equipment. We also believe that the SPE market will grow in 2015 driven by capital investment in cutting-edge technologies.

  • SPE sales in the July to September quarter are expected to be at generally the same level as in the April to June quarter, so why will the operating income margin decline?

    The profit rate was somewhat higher in the April to June quarter because of the product mix. The operating income margin will decline in the July to September quarter compared to the April to June quarter because of an anticipated increase in SG&A expenses.

  • The gross profit margin in the first half is expected to be in the 36% range; can this be considered the normalized margin for SPE and FPD?

    We are taking ongoing measures, such as those aimed at increase of the marginal profit ratio, and it is improving.

  • Regarding the proposed business combination between Tokyo Electron and Applied Materials, does the refiling of the Merger Notification Form with the Chinese Ministry of Commerce (MOFCOM) mean that the review is being delayed? Has some problem occurred?

    This is a large-scale business combination, and the product lineups of both companies are quite extensive, so the review requires some time. It appeared that the Chinese review period would exceed 180 days, so we refiled the notification form. This does not mean that the review will be re-conducted from the beginning; it only means that the review period has been extended. The overall review process is proceeding as expected and there is no change to our expectation that we will conclude the business combination in the second half of 2014.

  • You indicated that there has been no change to the timing of the closing, so why was the effective date of the business combination submitted to the Tokyo Stock Exchange changed from September 24 to December 30?

    In light of the status of the review under anti-monopoly law, we provisionally changed the date to December 30, but if approval is received from each country before December 30, it will be possible to move the closing date up. We have been working closely with the regulatory authorities of each country, and as we explained earlier, we continue to expect to close the transaction in the second half of 2014.

  • Is there any possibility that countries including China will condition approval of the business combination on the divestiture of a portion of business?

    We are not going to comment on speculation. There is little overlap between our products and Applied Materials' products, and we believe that we will receive approvals.

  • What is the status of the review in countries other than China?

    We have already received approval from Israel. The review process is ongoing in other countries. We do not have any particular concerns regarding the review in any country, and there are no changes to our plan to close the transaction in the second half of 2014.