Slide 1: Fiscal Year Ended March 31, 2023 Consolidated Financial Results
Fiscal Year Ended March 31, 2023 Consolidated Financial Results April 28, 2023 Socionext Inc.
Slide 2: Consolidated Financial Results for the Fiscal Year Ended March 31, 2023
Consolidated Financial Results for the Fiscal Year Ended March 31, 2023 ─ FY23/3 Results ─ FY24/3 Forecast Mid-Term Financial Model
Slide 3: FY23/3 Consolidated Statements of Income
FY23/3 Consolidated Statements of Income (Yen in billions) （Reference） FY22/3 FY23/3 YoY YoY % Disclosure as of Sep. 2022 Jan. 2023 Net Sales 117.0 192.8 75.8 64.7% 170.0 190.0 Product Revenue 84.6 156.8 72.2 85.3% － － NRE Revenue 28.1 34.9 6.8 24.0% － － Others 4.3 1.1 -3.2 -73.3% － － 49.8 103.9 54.
Slide 4: FY23/3 Consolidated Statements of Income (Quarterly)
FY23/3 Consolidated Statements of Income (Yen in billions) FY22/3 FY23/3 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q YoY YoY % Net Sales 27.1 28.3 29.8 31.8 39.9 42.8 56.1 53.9 22.2 69.8% Product Revenue 19.2 21.2 20.4 23.7 31.0 35.3 43.9 46.5 22.8 96.3% NRE Revenue 6.4 6.4 7.7 7.5 8.7 7.4 11.5 7.3 -0.3 -3.9% Others 1.
Slide 5: Quarterly Net Sales and Operating Income and Changes
Quarterly Net Sales and Operating Income and Changes Net Sales Operating Income （Yen in billions） （Yen in billions） Product Revenue 56.1 Operating Income NRE Revenue 53.9 10.0 Others Margin 11.5 7.3 42.8 14.0% 39.9 7.4 11.2% 8.7 11.4% 31.8 29.8 27.1 28.3 9.2% 8.9% 8.7% 7.5 5.0 8.0% 6.4 7.7 46.5 6.4
Slide 6: Details of FY23/3 Annual Financial Results
Details of FY23/3 Annual Financial Results Net Sales & Operating Income Operating Income YoY Changes Analysis （Yen in billions） （Yen in billions） （Yen in billions） 210.0 Product Revenue 25 （Yen in billions） 200.0 192.8 30.0 Operating Income Decrease in IP 9.8 21.7 190.0 NRE Revenue 180.0 Margin 2.1
Slide 7: Details of 4Q FY23/3 Financial Results - YoY Changes
Details of 4Q FY23/3 Financial Results - YoY Changes Net Sales & Operating Income Operating Income YoY Analysis （Yen in billions） （Yen in billions） （Yen （Yenininbillions） billions） Product Revenue （Yen in billions） Operating Income （Yen in billions） NRE Revenue 53.9 3.5 ｰ1.0 Margin 9.2% Others 7.3 2
Slide 8: Details of 4Q FY23/3 Financial Results - QoQ Changes
Details of 4Q FY23/3 Financial Results - QoQ Changes Net Sales & Operating Income Operating Income QoQ Analysis Product Revenue （Yen in billions） （Yen in billions） （Yen （Yenininbillions） billions） （Yen in billions） Operating Income （Yen in billions） 7.0 ｰ3.9 NRE Revenue Margin Others 11.2% 56.1 -1.6
Slide 9: Consolidated Balance Sheet (As of March 31, 2023)
Consolidated Balance Sheet（As of March 31, 2023） Cash on Hand and in Banks (Yen in billions) (Yen in billions) As of As of Change Mar.31,2022 Mar.31,2023 Total Assets 118.4 193.9 +75.5 53.0 Total Current Assets 90.6 156.1 +65.5 46.3 45.1 37.2 38.1 Cash on-hand and in banks 46.3 45.1 -1.1 Accounts re
Slide 10: Capex-Depreciation & Amortization / Cash Flow
Capex-Depreciation & Amortization / Cash Flow Capex1-Depreciation & Amortization Cash Flow (Yen in billions) (Yen in billions) Depreciation & Amortization Factors in operating cash flow change Capex in FY23/3 1Q-4Q 1Q: Increase in other assets (current) 8 25 40 2Q: Increase in other liabilities (cur
Slide 11: Breakdown by Application Market (Yearly Ratios)
Breakdown by Application Market (Yearly Ratios) Net Sales NRE Revenue 100% 100% 14% 21% 24% 32% 80% 41% 41% 80% 39% 39% 44% 50% 50% 57% 30% 28% 24% 60% 60% 22% 22% 25% 29% 27% 26% 30% 18% 40% 40% 23% 28% 30% 20% 32% 24% 16% 20% 20% 28% 16% 21% 27% 14% 34% 18% 26% 21% 13% 16% 14% 9% 11% 9% 8% 4% 5% 0
Slide 12: Breakdown by Geographic Region (Yearly Ratios)
Breakdown by Geographic Region１ (Yearly Ratios) Net Sales NRE Revenue 100% 100% 10% 11% 7% 11% 10% 7% 8% 12% 12% 12% 19% 18% 80% 80% 26% 31% 44% 36% 51% 52% 60% 59% 60% 66% 63% 55% 21% 71% 56% 25% 20% 40% 40% 33% 24% 18% 20% 17% 20% 45% 14% 16% 34% 37% 15% 19% 12% 14% 14% 18% 16% 7% 11% 11% 6% 6% 0%
Slide 13: Breakdown by Process Node (Yearly Ratios)
Breakdown by Process Node (Yearly Ratios) Net Sales NRE Revenue 100% 100% 14% 10% 21% 17% 25% 23% 29% 12% 80% 80% 45% 43% 42% 18% 10% 55% 64% 19% 30% 60% 22% 60% 33% 30% 46% 28% 28% 29% 40% 16% 40% 37% 34% 59% 36% 9% 20% 31% 16% 20% 44% 40% 43% 33% 28% 15% 20% 13% 15% 5% 9% 3% 1% 0% 0% FY18/3 FY19/3
Slide 14: Consolidated Earnings Forecast
Consolidated Earnings Forecast (Yen in billions) FY2023/3 FY2024/3 Full Year Forecast Full Year Results YoY YoY % as of April 2023 Net Sales 192.8 200.0 7.2 3.8% Operating Income 21.7 22.5 0.8 3.6% Margin 11.3% 11.3% 0.0%pt Profit 19.8 17.5 -2.3 -11.5% Margin 10.3% 8.8% -1.5%pt Basic Earnings per Sh
Slide 15: Background of Earnings Forecast / Market Trend
Background of Earnings Forecast / Market Trend Revenue forecast Operating Income forecast Product revenue Operating Income Application Market: FX rate assumption: 1USD = 115JPY − Increase for Automotive, Data Center & Networking and Industrial FX sensitivity (annual): 1.3 billion for net sal
Slide 16: Strong Design Wins
Strong Design Wins “Design Win Amount” has approximately doubled through transformation since 2018 Acquired approximately 250 billion yen in FY23/3, keeping growth trend “Design Win Amount1” (LTR) acquired in each fiscal year Approx. Approx. 250 billion yen ~ 200 billion yen Approx. 100 billion
Slide 17: Design Win Balance: Breakdown of Changes
Design Win Balance: Breakdown of Changes Design Win Balance increased from March 2022 with acquisition of new design wins and increase of amount for products currently in production stage Approximately 60% of current Design Win Balance expected to be turned into net sales in FY25/3 to FY28/3 (Ye
Slide 18: Mid-Term Financial Target - Top Line Growth
Mid-Term Financial Target -Top Line Growth Sales growth are driven by product sales from existing design wins and acquiring new design wins “Growth beyond the Mid-Term Plan (1)” and “Effect of FX (3)” are expected “Effect of Special Demands (2)” also contributes to growth Effect of FX 3 Effect
Slide 19: Design Win Balance by Application Market and Geographic Region
Design Win Balance by Application Market and Geographic Region By application market: - Reflecting the recent strong design wins in automotive market, approx. 30% of Design Win Balance is from “Automotive”, 20+% is from “Data Center & Networking”, and 10+% is form “Smart Devices” - Growth in deman
Slide 20: 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” represents the company’s estimate of future life-time demand from the outstanding “Design Win Amount” that has been acquired up to a particular date. “Design Win B
Slide 21: Mid-Term Financial Model
Consolidated Financial Results for the Fiscal Year Ended March 31, 2023 ─ FY23/3 Results ─ FY24/3 Forecast Mid-Term Financial Model
Slide 22: Mid-Term Financial Targets
Mid-Term Financial Targets Mid-Term FY23/3 FY21/3 FY22/3 Trarget1 Results Net Sales 99.7 117.0 High teen% 192.8 Growth billion yen billion yen CAGR billion yen Low-to-Mid OP Margin 1.6% 7.2% 11.3% teen % The mid-term targets presented herein represent our plans and expectations as of September, 2022
Slide 23: Roadmap to OP Margin Target
Roadmap to OP Margin Target Increase product revenue through accumulated design wins Improve profitability with product revenue increase and operating leverage Roadmap to OP Margin Target OP Margin OP Margin (FY22/3) (Mid-Term target2) 1 2 3 Low-to-Mid 7.2% Decline in Improvement in Improvement
Slide 24: 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” Mid-Term Financial Targets “Ph
Slide 25: Toward Future Growth
Toward Future Growth Beyond the mid-term, Socionext aims to continue acquiring additional design wins in pursuit of further growth Market Trend Growth Strategy AD/ADAS Continue to leverage the competitive strength of the Solution SoC business model Increase in demand for “Solution SoC” to continue
Slide 26: Strengthen R&D and Investment in Leading Technologies
Strengthen R&D and Investment in Leading Technologies Subsystem configurations and bus architectures are becoming similar across major applications Building a common design platform improves development efficiency and profitability Design trends 5nm 7nm 7nm Common complexity to achieve optimal
Slide 27: Transformation of R&D Structure
Transformation of R&D Structure Rebuilding global R&D structure in line with the change of focus business areas and the business model (Concept-In / Spec-In) Reinforcing flexible and scalable “Solution SoC” development platform 2022 ～ Measures ～March 2018 ～ 2021 Global R&D Leading Team Sales Sal
Slide 28: Appendix: Overview
Appendix: Overview ─ Socionext at a Glance ─ Solution SoC Business Model ─ Transformation ─ Market
Slide 29: Socionext at a Glance
Socionext at a Glance Socionext has developed a new and distinctive “Solution SoC” business model to provide optimal custom SoC to customers who need advanced and innovative chips Company Overview Business Overview (Ratio is NRE revenue breakdown for FY23/3) History Business model Application Mark
Slide 30: 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 31: Features of Solution SoC Business Model
Features of Solution SoC Business Model 1 The primary difference between “traditional ASIC”2 and “Solution SoC“ is how to interface with customers The primary difference between “Solution SoC” and “ASIC designed by ASSP vendors”2 is the breadth of optional customization 2 Custom SoC(ASIC) ASSP T
Slide 32: Transformation into a Global Custom SoC Vendor in Advanced Technology Area
Transformation into a Global Custom SoC Vendor in Advanced Technology Area Through a transformation of business and company culture, Socionext has turned into a global leading custom SoC vendor with a new and distinctive business model that the company refers to as “Solution SoC” Expansion of Busi
Slide 33: Illustrative Description of "Design Win Amount"
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 34: Transforming into a Global SoC Company with Cutting-edge Technologies
Transforming into a Global SoC Company with Cutting-edge Technologies Shift in NRE revenue composition illustrates the steady progress of business transformation FY18/3 FY21/3 FY22/3 FY23/3 1% 5-7nm Advanced 28% 40% 43% Process Nodes 19% (NRE Revenue) 28% 30% 59% 10-16nm Revenue Outside Japan from
Slide 35: Positioning of Socionext in Semiconductor Market
Positioning of Socionext in Semiconductor Market With the exception of Apple, Socionext has the 2nd largest market share of 10% within the Custom SoC(ASIC)1 market, where some players can design 7nm/5nm SoCs. Custom SoC(ASIC) 1 Market Share2 (2022) ASSP1 Market Share2 (2022) Market Share Market Sh
Slide 36: Socionext Based on Growing Market
Socionext Based on Growing Market Total global market size of focus areas is expected to grow at 15.3% CAGR¹, higher than that of custom SoC (ASIC) Automotive custom³ SoC(ASIC) market is expected to grow at 14.1% CAGR¹ Custom SoC2,3(ASIC) 27 Custom SoC(ASIC)/ SAM2,4 (Billion USD) 19 (Billion USD
Slide 37: Appendix: Breakdown of Net Sales and Operating Income (Quarterly Ratios)
Appendix: Breakdown of Net Sales and Operating Income (Quarterly Ratios)
Slide 38: Breakdown by Application Market (Quarterly Ratios)
Breakdown by Application Market (Quarterly Ratios1) Net Sales NRE Revenue 100% 100% 10% 9% 12% 14% 23% 24% 30% 28% 33% 35% 33% 35% 80% 40% 40% 40% 80% 46% 28% 25% 27% 40% 24% 21% 60% 16% 60% 10% 24% 24% 14% 33% 24% 27% 31% 27% 33% 28% 23% 23% 40% 40% 29% 29% 31% 41% 10% 24% 29% 30% 14% 16% 19% 49% 2
Slide 39: Breakdown by Geographic Region (Quarterly Ratios)
Breakdown by Geographic Region (Quarterly Ratios1) Net Sales NRE Revenue 100% 100% 7% 6% 7% 3% 4% 7% 5% 6% 12% 11% 12% 11% 8% 12% 11% 12% 31% 23% 80% 80% 17% 34% 30% 22% 43% 40% 42% 28% 48% 48% 49% 51% 14% 60% 55% 55% 60% 10% 26% 23% 15% 34% 37% 40% 40% 33% 29% 16% 24% 43% 16% 29% 57% 55% 20% 19% 45
Slide 40: Breakdown by Process Node (Quarterly Ratios)
Breakdown by Process Node (Quarterly Ratios1) Net Sales NRE Revenue 100% 100% 8% 11% 10% 15% 23% 7% 20% 21% 27% 27% 35% 7% 31% 80% 40% 41% 37% 44% 80% 46% 24% 13% 14% 11% 30% 24% 21% 11% 21% 12% 60% 60% 23% 23% 23% 16% 30% 27% 20% 12% 30% 40% 29% 40% 30% 34% 72% 15% 18% 66% 55% 58% 17% 46% 20% 45% 9
Slide 41: Upfront Investment toward Future Growth
Upfront Investment toward Future Growth Aiming to increase upfront investment gradually under “Sufficient & Efficient investment” policy (upfront investment accounts for the larger part of 2 R&D not linked to individual design projects) Image of Socionext’s R&D Structure ~Amount~ 1 Cost linked to
Slide 42: 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 43: 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 44: Socionext
Socionext’