Kenji Yasui

Asked about the company's strategy for adopting AI on a company-wide basis for total optimization and the current stage of this implementation.

Answer

The company recognizes the immense potential of AI and is actively working on it. Ideas for using AI in development and material selection are already prevalent in internal forums. AI is a key part of their business innovation and DX projects, with the IT unit integrated into these efforts to enhance governance, security, and overall efficiency.

Questioned the gross profit margin forecast for fiscal 2025, specifically the reasons for the dip in the first half and the significant improvement in the second half. Also asked for the rationale behind the timing of the JPY 80 billion share repurchase announcement given the stock's high valuation.

Answer

The executive explained that the gross profit margin improves in the second half due to the launch of new high-value-added products, increased sales volume, and enhanced efficiency. The share repurchase was a flexible decision based on market conditions, cash position, future growth potential, and a commitment to total shareholder return, considering it the right timing.

Kenji Yasui of UBS Securities asked about the primary driver for 2025 SoC tester demand, questioning whether it would be GPUs or custom ASICs. He also requested more detail on the custom ASIC business and Advantest's market share expectations within that segment.

Answer

Executive Douglas Lefever described the topic as sensitive, stating it's difficult to disclose a specific breakdown as Advantest works with all 'Mag 7' companies and their custom ASIC partners. To quantify the TAM, he suggested analysts use public statements from those customers and apply a higher-than-average test intensity. He concluded by confirming that Advantest assumes it will gain market share in the custom ASIC segment.

Kenji Yasui asked which application, GPU or custom ASICs, will be a bigger driver for 2025 SoC tester demand and inquired about the company's market share outlook within the custom ASIC segment.

Answer

Executive Douglas Lefever declined to specify the larger driver, citing business sensitivity, but confirmed the company works with all 'Mag 7' companies and their custom ASIC partners. He stated that the company is 'very bullish and positive' on its custom ASIC business and assumes it will gain market share in that segment. He suggested the TAM could be estimated by analyzing public statements from those customers and applying a higher-than-average test intensity.

Kenji Yasui of UBS asked what will be the bigger driver for 2025 SoC tester demand between GPUs and custom ASICs, and whether Advantest expects to gain market share in the custom ASIC segment.

Answer

Executive Douglas Lefever described the topic as sensitive and declined to specify the demand breakdown between GPUs and custom ASICs, noting they work with all 'Mag 7' companies and their partners. However, he confirmed that Advantest is 'very bullish and positive' on its custom ASIC business and stated, 'We assume we will gain' market share in that segment.

Kenji Yasui of UBS Securities asked for confirmation that the projected 10-20 year energy 'supercycle' implies sustained high performance for Hitachi Energy and inquired about Hitachi's preparations for political uncertainties in the U.S. and Japan.

Answer

Hitachi Energy CEO Andreas Schierenbeck affirmed that the long-term supercycle, driven by data center growth and extended grid planning horizons, underpins confidence in sustained strong performance. Executive Tomomi Kato added that while the company monitors political situations, the fundamental need for IT and energy infrastructure replacement in both the U.S. and Japan provides a stable demand base regardless of administration changes.

Kenji Yasui of UBS Securities sought confirmation that the projected 10-20 year energy 'supercycle' implies sustained high performance for Hitachi Energy. He also asked about Hitachi's scenario planning for potential political changes and risks in the United States and Japan.

Answer

Hitachi Energy CEO Andreas Schierenbeck affirmed his belief in the supercycle, citing long-term grid planning and strong demand drivers like data centers as reasons for sustained performance. Executive Tomomi Kato addressed political risks, stating that while they monitor the situation, Japan's IT demand is steadfast, and the fundamental need to upgrade aging U.S. power grids persists regardless of the administration, mitigating potential impacts.

Kenji Yasui asked for details on the robust JPY 140 billion in Nuclear Energy orders, including any potential related to data centers. He also questioned the significant growth in the Power Grid business, asking if this level of upside was anticipated at the beginning of the year and what drove the upward forecast revision.

Answer

Executive Tomomi Kato clarified that the large Q3 Nuclear Energy order was for a domestic project in Japan related to meeting new standards, not yet for data center applications like SMI, though a partnership with GEH for a Canadian project is promising. For Power Grids, Kato acknowledged that while an increasing trend was expected, the order inflow, particularly for HVDC in Europe and the Middle East, surpassed initial expectations, leading to upward revisions each quarter. He added that a further JPY 15 billion potential upside for GEM was included in corporate items.