00:00How much of the growth in the quarter was driven by the components around artificial intelligence?
00:06Yeah, actually, as you just mentioned, that, you know, major contributor, you know, was kind of hard disk drive, you
00:14know, for data center, for example, and also like smartphone, like production.
00:18Part of the smartphone is getting into the AI smartphone.
00:22So our key components for hard disk drive and also like smartphone contributed to a major extent to our result
00:30last fiscal term.
00:31We have mega cap tech earnings like a quarter of the S&P 500 market cap reporting this week.
00:36Do you expect all of that CapEx spending to continue?
00:41I mean, that would make a big difference in your results as well.
00:45Right. Right. I think this uptrend, you know, will continue, you know, not only short term, also mid and long
00:52term.
00:53However, the degree degree may, you know, change.
00:56But what I want to emphasize is that upward trend is going to continue.
01:00That's for sure.
01:01Why the degree?
01:03Why the degree? Yeah. Yeah, that's right.
01:04I mean, why the degree will vary and how?
01:08It depends on the, you know, the investment, you know, from each or related companies.
01:14Right. That, you know, total, you know, total of this investment against the actual, you know, possible kind of growth.
01:23There may be a kind of some some gap.
01:25That's what I'm pointing out.
01:27That that degree may change.
01:30However, this trend is going to continue.
01:33That's we are seeing also a little bit of a of an issue in the smartphone side of things, especially
01:39with memory chip prices continuing to go up.
01:41A lot of it because those investments were geared towards advanced chips, right?
01:46Exactly. Exactly.
01:47Will that affect your business?
01:49Yeah, to some extent.
01:50And we have reflected that kind of memory chip shortage, like especially in ICT products like smartphone.
01:57And we are kind of estimating that the smartphone, like a production of this fiscal term, our fiscal term, will
02:05be 10 percent less.
02:08Oh.
02:08Right. Right. Yeah.
02:09Yeah.
02:09That's what we are, you know, estimating the kind of trend.
02:13However, the impact, you know, in the smartphone area mainly be in a lower kind of end smartphone.
02:22The high end smartphone, we don't see a kind of a huge impact.
02:25That's how we see the trend of this fiscal term.
02:29Like Apple, for example, to whom you supply.
02:32We are expecting an incoming CEO, John Ternis.
02:35Do you have any views as having a hardware head really leading Apple into the new era?
02:42Does this signal perhaps more focus on hardware?
02:45Does that sort of help with your vision of what sort of parts you could supply as well?
02:50Yeah, actually, Apple is the company who, you know, which has been driving always technology, innovation and so on.
02:56And that trend, I believe, is going to continue.
03:01We've seen, of course, the supply chain disruptions already by the war in Iran.
03:06Is that having an impact in your business?
03:09Yeah, to some extent.
03:11However, in short term, we don't see a kind of significant impact.
03:14But we are carefully watching or paying our high attention to that.
03:19Like, you know, the material from NAFTA, NAFTA, kind of solvents, for example.
03:24It is a kind of, you know, we are sourcing.
03:28So that's what we are paying our highest attention to this.
03:31And due to this supply, of course, price, to some extent that we have also reflected into this new fiscal
03:39term kind of earning.
03:41Are you going to have to change pricing as well?
03:45Our price?
03:47Our price is a slightly different topic that we have many other cost structure, right?
03:52But our, you know, direction is that to provide a kind of appropriate price to our customers.
04:00When you're seeing these supply disruptions, does that mean that you're using the stockpiles that you already have?
04:05Or are you trying to diversify?
04:07What does your timeline look like from here on out?
04:10Not only, you know, kind of oil-related kind of materials.
04:14So we have several other materials, et cetera, et cetera, that we have already started kind of diversifying sources.
04:22That's what we are paying our highest attention to mitigate our risk.
04:27Not only short term, but also long term.
04:30Because China's export restrictions, for example, on rare earths continue, right?
04:34What's the pace of approvals at this point?
04:37Approval?
04:37Yes, for the rare earth materials to be sent to suppliers.
04:42Actually, you know, we keep communicating, of course.
04:46But at the same time, as I mentioned, we keep kind of diversifying to mitigate such a risk.
04:53That kind of parallel action we are taking.
04:55At what point does it start hurting?
04:58In short term, we don't see any, you know, significant impact.
05:02But we are always looking from a long-term point of view.
05:06That's why we have started already taking action.
05:08Like what?
05:10Diversifying.
05:10And diversifying the sources.
05:12Towards where?
05:13From where?
05:14Depends on the material.
05:16Depends.
05:16Yeah, several materials, you know, we are taking care.
05:21Therefore.
05:22Let's talk a little bit about your batteries business as well, of course.
05:25We have seen a little bit of a slowdown on that market.
05:28Do you expect that to pick up, especially given seasonality issues?
05:32Not actually seasonality.
05:33As I mentioned, that throughout this fiscal term, we have to estimate kind of, you know, demand down because of
05:40the, you know, memory shortage.
05:42Right?
05:43Oh.
05:43Yeah.
05:44Like a smartphone, as I told you, like we are expecting 10% down, right?
05:49That to some extent impacting, right?
05:51That our business.
05:52However, that we are also, you know, keep developing our new high-end kind of batteries to try to, you
05:59know, compensate such kind of the downturn.
06:02So, we keep investing on the, you know, R&D research and development and also, you know, CapEx, et cetera,
06:10et cetera.
06:11And I see that this memory shortage will not be kind of a years and years issue.
06:18Will not be?
06:19Will not be.
06:20How long do you think it can take?
06:21Ah, it's very difficult to say, you know, precisely.
06:24But, you know, I don't see that it's a kind of long years or, you know, many years of issue.
06:29You have a joint venture with CATL as well, right?
06:33How do you see the Chinese market?
06:35Yeah, I think Chinese, for us, China is one of our most, you know, important markets.
06:42The biggest, you know, big demand, you know, will continue to be there.
06:45Therefore, I see that, you know, China is and will be one of our most important markets.
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