Slide 1: Fiscal Year Ended March 31, 2024 Consolidated Financial Results
Fiscal Year Ended March 31, 2024 Consolidated Financial Results April 26, 2024 Socionext Inc.
Slide 2: Disclaimer
Disclaimer This presentation has been prepared solely for the purpose of presenting relevant information regarding Socionext Inc. (“Socionext”). This presentation and the information contained herein does not constitute or form part of any offer for sale or subscription of or solicitation or invitat
Slide 3: Cautionary Note Regarding Design Win Amount and Design Win Balance
Cautionary Note Regarding “Design Win Amount” and “Design Win Balance” Cautionary Note Regarding “Design Win Amount” and “Design Win Balance” The calculation of “Design Win Amount” and “Design Win Balance” involves a considerable degree of future estimation and subjective judgment, including assumpt
Slide 4: Consolidated Financial Results for the Fiscal Year Ended March 31, 2024
Consolidated Financial Results for the Fiscal Year Ended March 31, 2024 ─ Actual Consolidated Financial Results FY24/3 ─ Consolidated Earnings Forecast FY25/3
Slide 5: FY24/3 Consolidated Statements of Income
FY24/3 Consolidated Statements of Income (Yen in billions) (Reference) FY23/3 FY24/3 YoY YoY % Disclosure as of January 2024 Net Sales 192.8 221.2 28.5 14.8% 217.0 Product Revenue 156.8 182.9 26.1 16.7% － NRE Revenue 34.9 37.6 2.7 7.9% － Others 1.1 0.8 -0.4 -33.8% － Cost of Sales 103.9 111.2 7.3 7.0
Slide 6: 4Q FY24/3 Consolidated Statements of Income
4Q FY24/3 Consolidated Statements of Income (Yen in billions) FY23/3 FY24/3 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q YoY YoY % Net Sales 39.9 42.8 56.1 53.9 61.4 55.5 52.7 51.6 -2.3 -4.3% Product Revenue 31.0 35.3 43.9 46.5 52.9 48.5 40.5 40.9 -5.6 -12.0% NRE Revenue 8.7 7.4 11.5 7.3 8.4 6.8 11.9 10.5 3.2 44.8% Othe
Slide 7: Quarterly Net Sales and Operating Income
Quarterly Net Sales and Operating Income Net Sales1 Operating Income1 （Yen in billions） Operating Income （Yen in billions） Product Revenue including Margin 15.0 Special Demand 61.4 17.6% 56.1 16.5% 53.9 8.4 55.5 52.7 NRE Revenue Others 51.6 15.4% 6.8 14.7% 11.5 7.3 14.0% 42.8 11.9 10.5 10.0 39.9 11.
Slide 8: FY24/3 Annual Financial Results
FY24/3 Annual Financial Results Net Sales & Operating Income Operating Income YoY Analysis （Yen in billions） Operating Income （Yen in billions） （Yen in billions） Product Revenue including Margin Special Demand 16.1% NRE Revenue 221.2 192.8 11.3% 37.6 34.9 -6.1 0.7 2.5 35.5 16.6 182.9 156.8 21.7 35.5
Slide 9: 4Q FY24/3 Financial Results - YoY Changes
4Q FY24/3 Financial Results - YoY Changes Net Sales & Operating Income Operating Income YoY Analysis （Yen in billions） Operating Income （Yen in billions） （Yen in billions） Product Revenue including Margin Special Demand NRE Revenue 14.7% 53.9 51.6 2.3 -0.6 7.3 0.9 10.5 9.2% 7.6 0.0 7.6 46.5 40.9 5.0
Slide 10: 4Q FY24/3 Financial Results - QoQ Changes
4Q FY24/3 Financial Results - QoQ Changes Net Sales & Operating Income Operating Income QoQ Analysis （Yen in billions） Operating Income （Yen in billions） （Yen in billions） Product Revenue NRE Revenue Margin 17.6% 1.4 -1.4 14.7% 52.7 -1.5 51.6 -0.2 11.9 10.5 7.6 9.3 9.3 40.5 40.9 7.6 2 FY24/3 3Q FY24
Slide 11: (Reference) Mid-Term Financial Targets Announced in Sep. 2022
(Reference) Mid-Term Financial Targets Announced in Sep. 2022 Mid-Term FY23/3 FY24/3 FY21/3 FY22/3 Target1 Results Results 221.2 Net Sales 99.7 117.0 High teen% 192.8 billion yen Growth billion yen billion yen CAGR2 billion yen CAGR2:37% OP 1.6% 7.2% Low-to-Mid 11.3% 16.1% Margin (1.6 billion yen) (
Slide 12: Consolidated Balance Sheet (As of March 31, 2024)
Consolidated Balance Sheet（As of March 31, 2024） Cash on Hand and in Banks (Yen in billions) (Yen in billions) As of As of Change Mar.31,2023 Mar.31,2024 Total Assets 193.9 186.8 -7.1 69.7 55.9 Total Current Assets 156.1 138.9 -17.2 46.3 53.0 47.5 38.1 45.1 37.2 33.9 Cash on-hand and in banks 45.1 6
Slide 13: Capex-Depreciation & Amortization / Cash Flow
Capex-Depreciation & Amortization / Cash Flow Capex1-Depreciation & Amortization2 Cash Flow2 (Yen in billions) (Yen in billions) Depreciation & Amortization Factors in operating cash flow change in FY24/3 4Q Capex Increase in Profit and decrease in inventories 8 25 40 20 6 20 15 4 10 0 2 5 -20 0 0 1
Slide 14: Breakdown by Application Market
Breakdown by Application Market Net Sales NRE Revenue Automotive Data Center & Networking Automotive Data Center & Networking Smart Devices Industrial & Others Smart Devices Industrial & Others 100% 100% 14% 21% 19% 23% 24% 32% 80% 41% 41% 80% 39% 39% 44% 50% 50% 57% 30% 21% 21% 28% 24% 60% 60% 22%
Slide 15: Breakdown by Application Market
Breakdown by Application Market Net Sales NRE Revenue Automotive Data Center & Networking Automotive Data Center & Networking Smart Devices Industrial Smart Devices Industrial Others Others 100% 100% 6% 6% 6% 14% 11% 10% 8% 16% 14% 13% 23% 23% 8% 29% 27% 17% 13% 11% 16% 80% 21% 80% 27% 25% 26% 18% 3
Slide 16: Breakdown by Geographic Region
Breakdown by Geographic Region Net Sales NRE Revenue US China Japan Others US China Japan Others 100% 100% 10% 7% 8% 10% 7% 8% 12% 12% 11% 12% 11% 14% 19% 18% 80% 80% 26% 31% 20% 38% 36% 44% 51% 52% 60% 59% 60% 63% 21% 18% 66% 71% 55% 56% 25% 20% 40% 40% 39% 33% 24% 18% 17% 45% 48% 20% 20% 16% 14% 3
Slide 17: Breakdown by Process Node
Breakdown by Process Node Net Sales NRE Revenue 3-7nm 10-16nm 20-28nm 40nm & above / Others 3-7nm 10-16nm 20-28nm 40nm & above / Others 100% 100% 10% 8% 14% 17% 22% 23% 21% 25% 12% 29% 12% 80% 42% 80% 45% 43% 18% 10% 9% 55% 64% 21% 19% 30% 60% 22% 60% 33% 30% 28% 46% 17% 28% 29% 40% 16% 40% 37% 71%
Slide 18: Strong Design Wins
Strong Design Wins ◼ “Design Win Amount1” has more than doubled through transformation since 2018 The amount was at level of 250 billion yen in FY24/3 following FY23/3 “Design Win Amount” (LTR) acquired in each fiscal year Approx. Approx. 250 billion yen 200 billion yen Approx. 100 billion yen FY18/
Slide 19: Large-Scale Design Wins Increasing
Large-Scale Design Wins Increasing ◼ Large-scale Design Wins have been increasing both in numbers and total amounts Significant portion of future product shipments is expected to come from large-scale projects, which will improve our business efficiency 1 Size : ≥¥30bn “Design Win Amount ” (LTR) acq
Slide 20: Design Win Balance: Breakdown of Changes
Design Win Balance: Breakdown of Changes ◼ Although new Design Wins expanded, Design Win Balance increased only slightly, due to revision of sales forecasts for existing projects in response to customers’ business environment and the cancellation of mass production for a few projects mainly in Japan
Slide 21: Design Win Balance by Application Market and Region
Design Win Balance by Application Market and Region Automotive Japan By By DC&NW US application region1 Industrial EU SD China Others Aisa excluding China As of FY24/3 As of FY24/3 ◼ “Automotive” and “US” increased respectively following the recent strong design wins ◼ Design Win Balance in “Data Ce
Slide 22: Abundant Global Design Win Balance
Abundant Global “Design Win Balance” ◼ In FY2024/3, Design Win Balance1 from “Automotive” and “Smart Devices” increased. ◼ Design Win Balance in “Data Center & Networking” expected to increase, as new business in US is in progress Automotive Data Center & Networking Industrial Smart Devices Applicat
Slide 23: Consolidated Earnings Forecast
Consolidated Earnings Forecast (Yen in billions) FY2024/3 FY2025/3 Full Year Results Full Year Forecast YoY YoY % Net Sales 221.2 200.0 -21.2 -9.6% Operating Income 35.5 27.0 -8.5 -24.0% Margin 16.1% 13.5% -2.6%pt Profit 26.1 19.5 -6.6 -25.4% Margin 11.8% 9.8% -2.0%pt Basic Earnings per Share1,3 148
Slide 24: Consolidated Earnings Forecast (vs Previous Results)
Consolidated Earnings Forecast (vs Previous Results) Net Sales Operating Profit （Yen in billions） （Yen in billions） Product revenue decreased Product gross profit decreased • Slight decrease in real terms • Slight decrease in real terms +) New mass production increased • Cost rate almost unchanged -
Slide 25: Illustrative Image of Growth
Illustrative Image of Growth ◼ While expansion of new mass production continues, Net Sales will possibly be flat or slightly decrease in FY25/3 and FY26/3, due to end of Special Demand and weakening of Chinese and consumer markets → Another growth acceleration will follow driven by new mass producti
Slide 26: OP Margin Trend and Outlook for Future
OP Margin Trend and Outlook for Future ◼ OP margin has shown improvement in recent years, and while it may temporarily remain flat, it is expected to grow again due to the increase in product revenue Long-term OP margin trend after FY2022/3 FY24/3 Level Forecast under the same exchange rate assumpti
Slide 27: Market Trend, Background of FY25/3 Forecast and Outlook for FY26/3 & Beyond
Market Trend, Background of FY25/3 Forecast and Outlook for FY26/3 & Beyond Market trend and Design win FY25/3 forecast FY26/3 & beyond outlook ◼ Product Revenue ◼ Product Revenue Automotive ◼ Overview ◼ FY26/3: Same level as FY25/3 or slightly lower - Sales from new mass production will increase si
Slide 28: Growth strategy
Growth strategy ─ Further Growth through “Phase 2 Transformation” ─ Solution SoC Business Model ─ Growing Demand for Custom (Bespoke) SoCs ─ Positioning of Socionext in Custom SoC Market ─ Socionext’s Development Platform for “Entire Design” for Diverse Fields and Products Investing in Leading-Edge
Slide 29: Further Growth through Phase Transformation
Further Growth through “Phase 2 Transformation” ◼ Aim for further growth and development through new and distinctive Solution SoC business model and “Phase 2 Transformation”, while maintaining top line growth and solid profitability achieved by “Phase 1 Transformation” “Phase 1 Transformation” Furth
Slide 30: Socionext's Mission
Socionext’s Mission “Together with our global partners, we bring innovation to everyone everywhere” Socionext will help to bring about a prosperous society by delivering new value to our customers and to people around the world beyond them. We will do this as a valued partner of customers seeking un
Slide 31: Transformation into Global Custom SoC Vendor in Advanced Technology Areas
Transformation into Global Custom SoC Vendor in Advanced Technology Areas ◼ Through a transformation of our business and company culture, Socionext has turned into a global leading custom SoC vendor with a new and distinctive business model that we refer to as “Solution SoC” Expansion of Business Mo
Slide 32: Solution SoC Business Model
Solution SoC Business Model ◼ Socionext has established new and distinctive “Solution SoC1” business model to provide optimal custom SoCs to customers who require advanced and innovative chips “Solution SoC” ◼ Collaborating with customer to design optimal SoC architecture to meet customer requiremen
Slide 33: Features of Solution SoC Business Model
Features of Solution SoC Business Model ◼ The primary difference between “traditional ASIC2” and “Solution SoC1“ is how to interface with customers ◼ The primary difference between “Solution SoC” and “ASIC designed by ASSP vendors2“ is the breadth of optional customization 2 Custom SoC (ASIC) ASSP T
Slide 34: Competitive Advantages of Solution SoC Business Model
Competitive Advantages of Solution SoC Business Model ◼ Socionext features “Entire Design” (from SoC architecture to thermal design and quality) and “Complete Service” (full turnkey and production) and deliver unique (“Bespoke”) SoCs for all types of customers in diverse industries and products Comp
Slide 35: Growing Demand for Custom (Bespoke) SoCs
Growing Demand for Custom (Bespoke) SoCs Background of Growing Demand for $Bn Custom (Bespoke) SoCs and Solution SoC partner 15 Emergence of new services and applications Others 1 New services and applications emerge through evolution of technologies; Demand expands for SoCs optimized for such servi
Slide 36: Positioning of Socionext in Custom SoC (ASIC) Market
Positioning of Socionext in Custom SoC (ASIC) Market ◼ With the exception of Apple, Socionext has the 2nd largest market share of 12% within the Custom SoC(ASIC)1 market, where some players can design 5nm/3nm SoCs. Custom SoC(ASIC) 1 Market Share2 (2022-2023) ASSP1 Market Share2 (2022-2023) Market S
Slide 37: Strengthening Investments in R&D and Leading-Edge Technologies
Strengthening Investments in R&D and Leading-Edge Technologies System, subsystem configurations and bus architectures are becoming similar across Computer architecture-based design & development ◼ major applications and closer to computer architecture ◼ In major markets in the advanced technology fi
Slide 38: Advanced SoC Developments on Computer Architecture Basis in Diverse Fields
Advanced SOC Developments on Computer Architecture Basis in Diverse Fields ◼ Common development platform established as system configurations across major applications become similar towards computer architecture-based ◼ Addresses PPA optimization challenges due to design complexity such as chiplets
Slide 39: Design Wins Expanding in Each Application Market
Design Wins Expanding in Each Application Market Smart Devices Industrial Advanced RF 5/7nm Test & Measurement 5/7/12nm 28nm DSLR/Action Printer 5/7nm Network cameras EDA Tool AR Computer Architecture Based Platform Application Framework Software Specific API AI API Linux API Automotive Data Center
Slide 40: Design Wins Expanding in Each Application Market
Design Wins Expanding in Each Application Market Smart Devices Industrial Application nm Customers1 Advanced Application nm Customers1 RF Major Major Players FA Players Network cameras DSLR/Action 5-12 Test & Measurement 5-28 Printer Design win balance Design win balance EDA Tool Computer Architectu
Slide 41: Expanding Business in Each Application Market
Expanding Business in Each Application Market Smart Devices Industrial Advanced ◼ Demand for new technologies in smart devices RF ◼ Demand expanding for Solution SoC with area continues to be strong due to expanding advanced technologies in industrial use of AI applications, due to expanding use of
Slide 42: Transformation of Global R&D Structure
Transformation of Global R&D Structure ◼ Rebuilding global R&D structure in line with the change of primary business areas and the business model ◼ Reinforcing flexible and scalable “Solution SoC” development platform Measurement 2022 - Reinforce “Entire Design” capability • Reinforce the team as gl
Slide 43: Appendix: Overview
Appendix: Overview ─ Consolidated Financial Statements ─ Breakdown of Net Sales (Quarterly) ─ Detail of Design Win ─ Company Overview and others
Slide 44: FY24/3 Consolidated Statements of Income
FY24/3 Consolidated Statements of Income (Yen in billions) FY21/3 FY22/3 FY23/3 FY24/3 FY25/3E Net Sales 99.7 117.0 192.8 221.2 200.0 % YoY -3.7% +17.3% +64.7% +14.8% -9.6% Product Revenue 73.1 84.6 156.8 182.9 - NRE Revenue 23.0 28.1 34.9 37.6 - Other Revenue 3.6 4.3 1.1 0.8 - Cost of Goods Sold (4
Slide 45: Consolidated Balance Sheets
Consolidated Balance Sheets (Yen in billion) FY21/3 FY22/3 FY23/3 FY24/3 FY21/3 FY22/3 FY23/3 FY24/3 Assets Liabilities and Equity Cash on-hand and in banks 42.7 46.3 45.1 69.7 Accounts Payable-trade 12.0 16.6 23.4 15.7 Accounts receivable-trade, net 28.6 25.1 40.8 35.3 Accrued Expenses 7.4 6.9 30.3
Slide 46: Breakdown by Application Market (Quarterly Ratios)
Breakdown by Application Market (Quarterly Ratios) Net Sales1 NRE Revenue1 Automotive Data Center & Networking Automotive Data Center & Networking Smart Devices Industrial & Others Smart Devices Industrial & Others 100% 100% 10% 9% 12% 14% 13% 17% 23% 23% 23% 24% 23% 24% 22% 28% 27% 33% 35% 33% 30%
Slide 47: Breakdown by Application Market (Quarterly Ratios)
Breakdown by Application Market (Quarterly Ratios) Net Sales1 NRE Revenue1 Automotive Data Center & Networking Automotive Data Center & Networking Smart Devices Industrial Smart Devices Industrial2 100% Others 100% Others 4% 5% 3% 2% 6% 8% 7% 5% 5% 8% 10% 7% 7% 8% 8% 11% 13% 11% 10% 8% 13% 17% 20% 1
Slide 48: Breakdown by Geographic Region (Quarterly Ratios)
Breakdown by Geographic Region (Quarterly Ratios) Net Sales1 NRE Revenue1 US China Japan Others US China Japan Others 100% 100% 6% 3% 4% 5% 6% 7% 8% 7% 8% 9% 7% 8% 7% 8% 12% 11% 12% 11% 12% 11% 12% 11% 20% 22% 31% 23% 80% 80% 17% 34% 30% 22% 26% 17% 43% 40% 37% 39% 38% 37% 42% 28% 13% 48% 48% 22% 49
Slide 49: Breakdown by Process Node (Quarterly Ratios)
Breakdown by Process Node (Quarterly Ratios) Net Sales1 NRE Revenue1 3-7nm 10-16nm 20-28nm 40nm & above / Others 3-7nm 10-16nm 20-28nm 40nm & above / Others 100% 100% 1% 8% 11% 10% 11% 6% 8% 15% 15% 4% 23% 23% 21% 21% 22% 7% 20% 21% 27% 7% 27% 31% 10% 80% 40% 41% 37% 35% 80% 21% 46% 44% 24% 13% 13%
Slide 50: Detail of Design Win Amount to Revenue
Detail of “Design Win Amount” to Revenue Illustrative Description of “Design Win Balance” “Design Win Balance1” ・・・ “Design win balance” (LTR; Life Time Revenue) represents our estimates of remaining accumulated “design win amount” that is associated with projects that are active as of a particular
Slide 51: Socionext at a Glance
Socionext at a Glance ◼ Socionext has developed a new and distinctive “Solution SoC” business model to provide optimal custom SoCs to customers who need advanced and innovative chips Company Overview Business Overview (Ratio is NRE revenue breakdown for FY24/3) History Business model Primary Areas P
Slide 52: Detail of Custom SoC and ASSP
Detail of Custom SoC and ASSP ◼ Socionext operates mainly within Custom SoC market, where products are designed for a specific customer (Although ASSPs are designed also for specific applications, they are not designed for a specific customer ) Logic Application Logic IC Specific IC Socionext mainly
Slide 53: The Image of Timeline from Design Win to Mass Production
The Image of Timeline from Design Win to Mass Production Illustrative Description of “Design Win Amount” “Design Win Amount１” ・・・ “Design Win Amount” represents estimate of the lifetime demand from design projects. “Design Win Amount” is divided into NRE-based and product-based amounts. “Design Win
Slide 54: Transforming into a Global SoC Company with Cutting-edge Technologies
Transforming into a Global SoC Company with Cutting-edge Technologies ◼ Shift in NRE revenue1 composition illustrates the steady progress of our business transformation FY18/3 FY21/3 FY22/3 FY23/3 FY24/3 1% 5-7nm Advanced 28% 40% 43% 3-5nm Process Nodes 19% 59% 9% 30% 71% (NRE Revenue1) 28% 10-16nm
Slide 55: Socionext
Socionext