Investor Presentation_ Mid Small Cap_Manufacturer_ Mid Small Cap _ Manufacturer_ Tech MonthlySeptember 2024

Summary of Conference Call Notes Company and Industry Overview - Company: Shinko Electric Industries Co., Ltd. (a subsidiary of Fujitsu Limited) - Industry: Semiconductor manufacturing and related products - Context: Discussion on the proposed acquisition of Shinko Electric by JICC-04, Ltd. through a tender offer as announced on December 12, 2023 [2][3] Key Points and Arguments Industry Trends - Small-Cap Perspective: Focus on tech-related subindustries, particularly semiconductor materials and equipment [4] - Capex Risks: Decline in capital expenditures for front-end processing semiconductor materials due to weaker demand in China and decreasing memory prices [5][5] - Demand Dynamics: Strong demand for middle/back-end processing semiconductor materials, particularly for cutting-edge packages and high-bandwidth memory (HBM) [5][5] - Inventory Corrections: Inventory corrections for semiconductor materials are largely completed, with increasing demand for materials aligned with semiconductor production volume [5][5] Sales and Orders - Sales Trends: Sales by region indicate a focus on China, with an estimated average weighting of 20% ± 5% depending on product type [5][5] - DRAM Demand: Significant growth in demand for materials related to DRAM as production increases, driven by growth in smartphones, servers, and PCs [5][5] - NAND Technology: Monitoring timelines for customer innovations in NAND technology, including ultra-low temperature etching and hybrid bonding [5][5] Financial Performance - Shinko Electric Sales: Plastic packaging sales for Shinko Electric showed fluctuations, with a notable decline of 34% in one quarter, followed by a recovery of 19% and 3% in subsequent quarters [14][15] - Comparative Sales Data: Various companies in the semiconductor sector showed diverse sales performance, with some experiencing significant growth while others faced declines [13][15] Market Challenges - Regulatory Environment: Need to monitor trends in anti-China regulations that could impact demand for consumer electronics [5][5] - Automotive Demand: Mixed signals in automotive demand by region and customer, indicating a complex market landscape [5][5] Additional Important Insights - Stock Price Trends: The report includes stock price trends for semiconductor equipment-related companies, indicating volatility and market reactions to industry changes [7][8][11] - Future Outlook: The overall sentiment in the semiconductor industry remains cautious, with a focus on adapting to changing market conditions and regulatory environments [5][5] This summary encapsulates the critical insights from the conference call, highlighting the current state and future outlook of Shinko Electric and the semiconductor industry.