Presentation Transcripts

Let's move on to Motor, Lighting & Sensing (MLS) segment.

Among all the businesses in this category, I was most concerned about the backlight business and thought a lot about how we should proceed with it. Backlights were once our top profit engine and the driving force behind the 60 billion yen in operating income we generated before our integration with MITSUMI. However, due to the rise of OLED, LED backlights are now only used in low-priced models and the business volume has decreased considerably. Therefore I have been stewing over the small management issue of how we should make use of Ban Wa plant amid backlight sales decline, which had been operating at full capacity in the past. We have recently received an order for a project involving luxury car applications totaling 100 billion yen in seven years, although I cannot give you any details now. We should be also able to win contracts for other luxury cars going forward. While the Ban Wa plant was a cause of concern, we now have good prospects for leveraging it to utilize for automotive products. Furthermore, as backlight production continues to increase, we will have to build more factories in the future. With regard to the aforementioned order, it is for the automotive models of the year 2025 and later.

The motor business is performing well overall. We expect demand for motors to increase by 100 billion yen from 2023 to 2026. 70% of that figure will come from the automobile industry. The biggest problem is HDDs. The utilization rate is currently low despite the high profit margin of HDD motors. Besides HDDs, we witness the same situation for memory and flash drives. Consequently, we consider this to be an economic cycle and will closely monitor the market to see how it bounces back.