Slide 1: 2Q FY2025/3 Consolidated Financial Results
2Q FY2025/3 Consolidated Financial Results October 31, 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 6 Months Ended September 30, 2024
Consolidated Financial Results for the 6 Months Ended September 30, 2024 ─ Consolidated Financial Results 2Q FY2025/3 ─ Consolidated Earnings Forecast Full-Year FY2025/3
Slide 5: 2Q FY2025/3 Consolidated Statements of Income
2Q FY2025/3 Consolidated Statements of Income (Yen in billions) FY2024/3 FY2025/3 1Q 2Q 3Q 4Q 1Q 2Q YoY YoY % Net Sales 61.4 55.5 52.7 51.6 52.8 46.4 -9.1 -16.5% Product Revenue 52.9 48.5 40.5 40.9 42.3 37.7 -10.9 -22.4% NRE Revenue 8.4 6.8 11.9 10.5 10.3 8.4 1.6 23.5% Others 0.1 0.2 0.2 0.2 0.2 0.3
Slide 6: 1H FY2025/3 Consolidated Statements of Income
1H FY2025/3 Consolidated Statements of Income (Yen in billions) FY2024/3 FY2025/3 1H 1H YoY YoY % Net Sales 117.0 99.2 -17.8 -15.2% Product Revenue 101.4 80.0 -21.5 -21.2% NRE Revenue 15.2 18.8 3.5 23.3% Others 0.3 0.5 0.1 41.6% 62.7 45.2 -17.5 -28.0% Cost of sales Product Cost Ratio 61.8% 56.5% Sel
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 19.4% 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 52.8 15.4% 14.7% 6.8 11.5 7.3 14.0% 46.4 42.8 11.9 10
Slide 8: Details of 2Q FY2025/3 Financial Results - YoY Changes
Details of 2Q FY2025/3 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 15.4% -5.3 55.5 11.4% 6.8 46.4 8.4 1.4 0.5 0.2 8.6 8.6
Slide 9: Details of 1H FY2025/3 Financial Results - YoY Changes
Details of 1H FY2025/3 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 16.0% 15.7% -6.3 117.0 2.5 15.2 99.2 2.4 -1.7 18.8 18.7
Slide 10: Details of 2Q FY2025/3 Financial Results - QoQ Changes
Details of 2Q FY2025/3 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 19.4% -3.3 52.8 46.4 11.4% -1.6 10.3 8.4 0.5 -0.7 10.3 10.3 42.3 37.7 5.3 5.3 2
Slide 11: Consolidated Balance Sheet (As of September 30, 2024)
Consolidated Balance Sheet（As of September 30, 2024） Cash on Hand and in Banks (Yen in billions) (Yen in billions) As of As of Change Mar.31,2024 Sep.30,2024 Total Assets 186.8 177.8 -9.0 69.7 69.1 74.0 55.9 Total Current Assets 138.9 132.3 -6.6 53.0 47.5 46.3 45.1 37.2 38.1 33.9 Cash on-hand and in
Slide 12: Capex-Depreciation & Amortization / Cash Flow
Capex-Depreciation & Amortization / Cash Flow Capex1-Depreciation & Amortization2 Cash Flow2 (Yen in billions) (Yen in billions) Factors for operating cash flow change in FY2025/3 ➢ Collection of accounts receivable and Reduction of inventories 8 40 6 20 4 0 2 0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1
Slide 13: 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% 6% 6% 100% 11% 6% 8% 6% 4% 14% 14% 13% 10% 23% 23% 16% 8% 29% 27% 17% 19% 13% 18% 11% 16% 80% 21% 80% 27%
Slide 14: 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% 8% 10% 7% 8% 10% 12% 12% 11% 12% 11% 14% 19% 18% 80% 80% 26% 20% 31% 20% 38% 36% 44% 42% 51% 52% 16% 60% 59% 60% 63% 21% 18% 66% 71% 55% 56% 25% 20% 40% 40% 39% 33% 33% 24% 18% 54% 17
Slide 15: 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% 8% 6% 10% 14% 17% 22% 23% 21% 7% 25% 23% 29% 12% 4% 12% 80% 42% 80% 45% 43% 18% 10% 9% 55% 64% 21% 18% 19% 30% 60% 22% 60% 33% 30% 28% 46% 17% 21% 28% 29%
Slide 16: Consolidated Earnings FY2025/3 Full-Year Forecast
Consolidated Earnings FY2025/3 Full-Year Forecast ◼ The full-year forecast for Net Sales and Operating Income has not changed, but substantially (excluding FX impact), both are expected to be approximately 10% below the initial forecast. (Yen in billions) FY2024/3 FY2025/3 FY2025/3 Full-Year Forecas
Slide 17: Net Sales FY2025/3 Full-Year Forecast (vs. April 2024 Forecast)
Net Sales FY2025/3 Full-Year Forecast (vs. April 2024 Forecast) ◼ Net Sales, substantially (excluding the FX impact), are expected to be approximately 10% below April 2024 forecast • By application: decreased mainly in Data Center & Networking • By region: decreased mainly in China, remained almost
Slide 18: Net Sales FY2025/3 Full-Year Forecast (vs. FY2024/3 Results)
Net Sales FY2025/3 Full-Year Forecast (vs. FY2024/3 Results) ◼ Product revenue expected to decrease due to: end of Special Demand, weak demand for Data Center & Networking in China, as well as weak demand in FA and office equipment. Decrease is mainly in China, while other regions remain unchanged ◼
Slide 19: Operating Income FY2025/3 Full-Year Forecast (vs. April 2024 Forecast)
Operating Income FY2025/3 Full-Year Forecast (vs. April 2024 Forecast) ◼ Decrease in gross profit due to lower product sales volume to be offset by cost improvement (yield improvement, product mix change, etc.), indirect FX impact on procurement, etc. Operating Income (vs April 2024 Forecast) (Yen i
Slide 20: Illustrative Image of Growth
Illustrative Image of Growth ◼ Net Sales for FY25/3~26/3, substantially (excluding FX impact), expected to decrease by approximately 10% from FY24/3 results and FY25/3 forecast (as of April 2024), due to factors including end of Special Demand and weak Chinese market. Growth should be accelerated ag
Slide 21: Operating Margin Trend and Outlook for Future
Operating Margin Trend and Outlook for Future ◼ OP margin expected to grow again in FY2027/3 and beyond as product revenue increases though substantial figures (excl. FX impact) are expected to remain flat or decrease in FY25/3~26/3, after the growth since FY22/3 OP margin trend after FY2022/3 As of
Slide 22: Market Trend, Background of FY2025/3 Forecast and Outlook for FY2026/3 & Beyond
Market Trend, Background of FY2025/3 Forecast and Outlook for FY2026/3 & Beyond Market Trend / Design Win Status FY2025/3 Forecast FY2026/3 & beyond Outlook Net Sales to decrease by approx. 10% from FY24/3 Automotive ◼ Product Revenue ◼ Product Revenue - Innovation continues for ADAS (Advanced Drive
Slide 23: Expanding Business in Each Application Market
Expanding Business in Each Application Market Smart Devices Industrial Advanced ◼ Demand for new technologies in smart RF ◼ Demand expanding for Solution SoC devices area continues to be strong due to business model with advanced technologies, expanding use of AI due to expanding use of AI and netwo
Slide 24: Advance Investment for Leading-Edge Technologies
Advance Investment for Leading-Edge Technologies ◼ Will continue strengthening technology capabilities and R&D structure for future growth, in FY25/3 and 26/3 Socionext’s Initiatives Technology Trend Advance investment for leading-edge technologies Into the era of 3D and Chiplets ➢ Promoting develop
Slide 25: Transformation of Global R&D Structure
Transformation of Global R&D Structure Repeated material― Presentation Material For FY24/3 ◼ 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 “
Slide 26: Strong Design Wins
Strong Design Wins ◼ “Design Win Amount1” has more than doubled through transformation since 2018. Amount was approx. 250 billion yen in FY2024/3, the same level as in FY2023/3. ◼ Acquisition of Design Wins in the first half of FY2025/3 has been progressing smoothly “Design Win Amount1” (LTR) acquir
Slide 27: Increase in the ratio of large-scale Design Wins
Increase in the ratio of large-scale Design Wins Repeated material― Presentation Material For FY24/3 ◼ 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
Slide 28: Appendix: Overview
Appendix: Overview ─ Consolidated Financial Statements ─ Breakdown of Net Sales (Quarterly) ─ Detail of Design Win ─ Company Overview and others
Slide 29: FY25/3 Consolidated Statements of Income
FY25/3 Consolidated Statements of Income (Yen in billions) FY21/3 FY22/3 FY23/3 FY24/3 FY25/3 1H FY25/3E Net Sales 99.7 117.0 192.8 221.2 99.2 200.0 % YoY -4% +17% +65% +14.8% -15.2% -9.6% Product Revenue 73.1 84.6 156.8 182.9 80.0 - NRE Revenue 23.0 28.1 34.9 37.6 18.8 - Other Revenue 3.6 4.3 1.1 0
Slide 30: Consolidated Balance Sheets
Consolidated Balance Sheets FY25/3 FY25/3 (Yen in billion) FY21/3 FY22/3 FY23/3 FY24/3 FY21/3 FY22/3 FY23/3 FY24/3 1H 1H Assets Liabilities and Equity Cash on-hand and in banks 42.7 46.3 45.1 69.7 74.0 Accounts Payable-trade 12.0 16.6 23.4 15.7 12.5 Accounts receivable-trade, net 28.6 25.1 40.8 35.3
Slide 31: 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 Industrial Others Others 100% 100% 2% 4% 5% 6% 3% 3% 5% 11% 13% 11% 10% 8% 5% 6% 7% 5% 5% 8% 10% 7% 13% 7% 8% 8% 1
Slide 32: 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% 3% 4% 7% 5% 7% 8% 6% 7% 8% 9% 7% 8% 9% 8% 6% 8% 11% 12% 11% 12% 11% 12% 11% 12% 12% 9% 20% 22% 23% 14% 31% 80% 80% 17% 34% 30% 22% 26% 17% 24% 43% 40% 37% 39% 38% 37% 28% 1
Slide 33: 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% 4% 8% 11% 10% 11% 6% 8% 10% 15% 15% 4% 6% 23% 23% 21% 21% 22% 23% 23% 7% 20% 21% 3% 27% 7% 31% 27% 8% 35% 10% 80% 40% 41% 37% 80%
Slide 34: Detail of Design Win Amount to Revenue
Detail of “Design Win Amount” to Revenue Repeated material― Illustrative Description of “Design Win Balance” Presentation Material For FY24/3 “Design Win Balance1” ・・・ “Design win balance” (LTR; Life Time Revenue) represents our estimates of remaining accumulated “design win amount” that is associat
Slide 35: Design Win Balance by Application Market and Region
Design Win Balance by Application Market and Region Repeated material― Presentation Material For FY24/3 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
Slide 36: Abundant Global Design Win Balance
Abundant Global “Design Win Balance” Repeated material― Presentation Material For FY24/3 (Partially Updated) ◼ 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 progre
Slide 37: Socionext at a Glance
Socionext at a Glance Repeated material― Presentation Material For FY24/3 ◼ 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 breakdow
Slide 38: Detail of Custom SoC and ASSP
Detail of Custom SoC and ASSP Repeated material― Presentation Material For FY24/3 ◼ 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 ) Log
Slide 39: The Image of Timeline from Design Win to Mass Production
The Image of Timeline from Design Win to Mass Production Repeated material― Illustrative Description of “Design Win Amount” Presentation Material For FY24/3 “Design Win Amount１” ・・・ “Design Win Amount” represents estimate of the lifetime demand from design projects. “Design Win Amount” is divided in
Slide 40: Transforming into a Global SoC Company with Cutting-edge Technologies
Transforming into a Global SoC Company Repeated material― with Cutting-edge Technologies Presentation Material For FY24/3 ◼ 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
Slide 41: 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 42: Further Growth through Phase Transformation
Further Growth through “Phase 2 Transformation” Repeated material― Presentation Material For FY24/3 (Partially Updated) ◼ 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 profitabi
Slide 43: Socionext's Mission
Socionext’s Mission Repeated material― Presentation Material For FY24/3 “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
Slide 44: Transformation into Global Custom SoC Vendor in Advanced Technology Areas
Transformation into Global Custom SoC Vendor Repeated material― in Advanced Technology Areas Presentation Material For FY24/3 ◼ 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
Slide 45: Solution SoC Business Model
Solution SoC Business Model Repeated material― Presentation Material For FY24/3 ◼ 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
Slide 46: Features of Solution SoC Business Model
Features of Solution SoC Business Model Repeated material― Presentation Material For FY24/3 ◼ 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
Slide 47: Competitive Advantages of Solution SoC Business Model
Competitive Advantages of Solution SoC Business Model Repeated material― Presentation Material For FY24/3 (Partially Updated) ◼ Socionext features “Entire Design” (from SoC architecture to thermal design and quality) and “Complete Service” (full turnkey and production) and deliver unique (“Bespoke”)
Slide 48: Growing Demand for Custom (Bespoke) SoCs
Growing Demand for Custom (Bespoke) SoCs Repeated material― Presentation Material For FY24/3 Background of Growing Demand for $Bn Custom (Bespoke) SoCs and Solution SoC partner 15 1 Emergence of new services and applications Others New services and applications emerge through evolution of technologi
Slide 49: Positioning of Socionext in Custom SoC (ASIC) Market
Positioning of Socionext in Custom SoC (ASIC) Market Repeated material― Presentation Material For FY24/3 ◼ 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
Slide 50: Strengthening Investments in R&D and Leading-Edge Technologies
Strengthening Investments in R&D and Leading-Edge TechnologiesRepeated material― Presentation Material For FY24/3 System, subsystem configurations and bus architectures are becoming similar across Computer architecture-based design & development ◼ major applications and closer to computer architectu
Slide 51: Advanced SoC Developments on Computer Architecture Basis in Diverse Fields
Advanced SOC Developments on Computer Architecture Basis Repeated material― in Diverse Fields Presentation Material For FY24/3 ◼ Common development platform established as system configurations across major applications become similar towards computer architecture-based ◼ Addresses PPA optimization
Slide 52: Design Wins Expanding in Each Application Market
Design Wins Expanding in Each Application Market Repeated material― Presentation Material For FY24/3 (Partially Updated) Smart Devices Industrial Advanced RF 5/7nm 5/7/12nm Test & Measurement 28nm DSLR/Action Printer P, RF, Codec, Secu Ps (IS re … cific I ), U e 5/7nm n-sp se rL o Network cameras og
Slide 53: Design Wins Expanding in Each Application Market
Design Wins Expanding in Each Application Market Repeated material― Presentation Material For FY24/3 (Partially Updated) 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 P,
Slide 54: Socionexlt’
Socionexlt’