Nitto Boseki : Main Questions and Answers at the Financial Results Briefing (Fiscal Year Ending 2024/Mar 2Q) （336KB）

Nittobo

Main Questions and Answers at Financial Results Briefing For the First Half of the Fiscal Year Ending March 31, 2024

（Held on November 2, 2023）

Q : Please tell me about Special Glass demand trends.

A : Demand for low-dielectric glass (NE-glass) for generative AI servers is expected to remain strong in the second half of the fiscal year and beyond. Demand for low thermal expansion glass (T-glass) for semiconductor packages have been on the rise since the latter half of the first half of this fiscal year, and we expect orders to be stronger in the second half due to the recovery of semiconductors used in high-performance PCs and mobile devices.

1. : Please tell me about the production and the supply situation of low-dielectric glass.

A : Demand for low-dielectric glass has exceeded our expectations. Higher demand is expected to continue. Consequently, in addition to the furnaces already in operation at the Special Glass factory in Taiwan, we have decided to set up new furnaces in order to increase capacity in a speedy manner with a sense of urgency.

Q : What is the reason for the downward revision of the operating profit forecast for the Glass Fiber Yarn segment. In addition, why has the profit deteriorated while the sales increased when comparing the first half (1H) and the second half (2H) of the year?

A : At the time we announced the forecast in August, we had assumed that demand for general-purpose products would recover in 2H of the fiscal year. Although there are signs of demand recovery, the recovery is slower than expected and we lowered our forecast in view of the current situation. Regarding the profit trend between 1H and 2H, we maintained operations in 1H in anticipation of a recovery in demand in 2H, but sales did not reach the expected level, and we expect to see a difference in capacity utilization rate in 2H as a result of lower production.

Q：Glass core substrates are being talked about as semiconductor package

substrates; how do you perceive the situation?

A : We do not expect glass core substrates to replace glass fiber in a few years and occupy a large share of the market, as there are still many technical issues to be addressed.

Q : What is the reason for the upward revision of the business forecast for the Glass Fiber for Industrial Materials segment?

A : This is due to the effects of price revisions and cost reductions in insulation materials, as well as an increase in shipments, mainly to non-residential applications such as logistics warehouses. We believe that the energy conservation regulations in 2025 will be a tailwind for insulation material

sales, and the gradual penetration of higher thermal insulation is assumed to be one factor.

※This document is provided for reference purposes only and is not a word-for-word transcript of the question-and-answer session at the briefing, but rather a concise summary based on our own judgment.

※The forecast figures and business environment forecasts contained in this document are based on information available to the Company at the time of publication. These statements include potential risks and uncertainties, and therefore do not imply a commitment or guarantee of future business performance and measures. Factors that may affect the Company's performance include, but are not limited to, economic conditions, demand trends, exchange rate fluctuations, and fuel price fluctuations.