Screen : FAQ (Jul. 2022)

		July 2022
		SCREEN Holdings Co., Ltd.
		FAQ on Earnings Presentation for FY2023 1Q
Q1	HD/SPE	Can you disclose the target net sales figures by segment for the final fiscal year of
	GA/FT	the medium-term management plan? If that is difficult, what is the general direction
		from the guidance for this fiscal year?
A1		The figures have not been disclosed by segment, but the general idea for the SPE
		segment is likely to be a target of around ¥420.0 billion in net sales when S3-4
		reaches full capacity utilization. We revised the FY2023/03 full year sales forecast
		of GA upward, so that will be on a plus-alpha level. Because customer's investments
		in each project have been pushed out, we expect a relatively challenging situation
		to continue in FT.
Q2	SPE	What is your forecast for WFE next calendar year? What is it for each application?
A2		Regarding WFE next calendar year, although various discussions may be held in
		the next two or three months, right now there is no change in our stance that
		performance will not decline much in CY2023. Deliveries delayed from CY2022 will
		likely be carried over as is to CY2023, so although there may be a slight dip, WFE
		will probably not decline as much. Regardless of the WFE situation, we expect to
		achieve our sales targets for the next fiscal year.
Q3	SPE	At SEMICON West, people were talking about cancellations and requests for
		delayed delivery from major memory manufacturers. What is SCREEN's situation
		like?
A3		I have heard such rumors, but the forecasts we have received from our customers
		have not been affected much. We still expect a high level of orders to continue for
		2Q and 3Q. And at meetings at SEMICON West, there was still a strong desire for
		trade with us from customers.
Q4	SPE	Regarding market share, people are saying that SCREEN's sublimation drying with
		liquid phase deposition has been beaten out in various application. Has there been
		any traction toward a recovery moving forward?
A4		As previously explained, we recognize that new drying technologies from
		competitors have been adopted in some of the processes of memory customers. We
		are also aware that we provide various drying technologies in line with the device
		structures of customers and there is no significant fluctuation in the share in other
		parts.
Q5	SPE	At present, amid the rapidly changing business environment, how certain is the
		forecast of higher revenue and profit in the next fiscal year?

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A5		We are paying attention to the changes in the situation during the last month or two.
		We need to monitor these effects in 2Q, but with just the information we gathered
		from customers at SEMICON West, we have not heard of a slowdown in major
		investments. Because exposure is low in memories, we might even benefit.
Q6	SPE	The OP margin has held steady at a high level in 1Q, but was this impacted by
		temporary factors? And what is the direction from 2Q onward?
A6		1Q sales of modification and parts were higher than expected. As for the product
		mix, profitable projects have come in ahead of schedule. Considering current sales
		mix, the 2Q OP margin is unlikely to reach 1Q levels.
Q7	HD/SPE	Regarding the ¥500.0 billion or more sales target in the final year of the medium-
		term management plan, is the possibility of exceeding the target dependent on
		capacity or on the external environment?
A7		First, an important task is to launch S3-4 and establish production capacity.
		Customers who form the core of our sales will be the key to how much will actually
		be invested.
Q8	HD	Regarding sensitivity to foreign exchange rates, which segments have been
		positively affected?
A8		Our foreign exchange rate sensitivity for a ¥1 change in the US$ rate is ¥170 million
		yen and in the euro between ¥30 to ¥40 million. SPE is fundamentally denominated
		in yen, so the foreign exchange rate sensitivity is low. But modification and other
		foreign-denominated business has increased, and, with it, so has exchange rate
		sensitivity. However, the business that is highly sensitive to foreign exchange rates
		in absolute amounts is GA, which mainly has foreign-denominated sales.
Q9	HD/SPE	From 1H to 2H, prices for parts and materials will jump, but what kind of parts and
		materials are expected to see a further jump?
A9		Prices are soaring for various parts and materials, but plastic parts have had the
		biggest impact on costs. Because cleaning equipment uses a lot of plastic, we are
		reaching a level where they cannot be offset by cost reduction activities.
Q10	SPE	I would like to know more about the specifics of the ¥1.8 billion year-on-year
		improvement in profitability compared to 1Q.
A10		It was partly due to an increase in sales, but major contributors were cost reduction
		activities and value engineering (VE) at factories. The scale of improvement is not
		as much as before, but we expect effects to steadily emerge going forward.
Q11	SPE	Can you disclose the breakdown of orders in 1Q?
A11		Our policy is not to disclose the percentage of orders for each application from this
		quarter on. Overall, though, the orders coming in are in line with previously released
		forecasts. (Logic and foundry are still strong, and memory has held relatively
		steady.)

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Q12	SPE	Since completing S3-5, will sales reach ¥500.0 billion just with SPE? Do those figures
		take into consideration the medium- and long-term investment trends of major
		customers? Will the investment slowdown from memory customers have any
		impact?
A12		Our sales forecast is just as you stated. It reflected not only customer investment
		trends but also the broad adoption of the cleaning solutions we offer due to
		miniaturization. Regarding memory customer investment scale revisions and
		slowdowns, when announcing 2Q results, I would like to discuss this with greater
		focus on the situation. No matter what, though, we are not considering the
		suspension of investment plans.
Q13	HD/SPE	Regarding the ¥500.0 billion sales target in the final year of the plan, was this figure
		set in a top-down way based on the forecast for this fiscal year? Or do you assume
		there will an increase in cleaning TAM due to miniaturization? It seems a strong
		revised target was released when the market was said to have reached its peak, but
		will it be possible to change this later on?
A13		Looking at long-term forecasts from customers too, this level of sales target seems
		necessary, and we are confident in an increase in cleaning needs and applications.
		Some adjustments may be made going forward, but WFE will likely increase again
		over the long term, and we plan to conduct forward-looking capital investment to
		support demand and established sales targets for the final fiscal year. We did not
		set the target as ¥460.0 billion, then simply jump to ¥500.0 billion. We steadily raised
		the target figure after carefully assessing each business operating company.
Q14	SPE	The 2Q forecast ratio by application is the same as the full-year forecast, but does
		it seem like it will be a bit higher or lower? If possible, will you put out a full-year
		forecast by region?
A14		The ratio is in 5% increments, so the difference with the full-year forecast is not
		visible, but the figures are based on actual inquiry data. Regarding sales forecasts
		by region, we intend to consider disclosing such a full-year forecast from the next
		quarter.

Notes:

HD = SCREEN Holdings Co., Ltd.

SPE = Semiconductor production equipment business

GA = Graphic arts equipment business

FT = Display production equipment and coater business

PE = PCB-related equipment business

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