Entertainment, Technology & Service Segment take aways.
- Next is the ET&S segment.
- Sales for the quarter were 619.8 billion yen, essentially flat year-onyear.
- Operating income increased 15% year-on-year to 70.2 billion yen, mainly due to the favorable impact of foreign exchange rates and cost reduction effects.
- The FY24 forecast remains unchanged from the previous forecast.
- Major markets such as North America, Europe, China and Japan remained generally stable during the quarter, and solid business operations enabled us to achieve operating income that exceeded the same quarter of the previous fiscal year.
- We continue to pay close attention to inventory control, and, while overall segment sales remained essentially the same as in the same period of the previous fiscal year, we were able to reduce inventory by approximately 10% at the end of the quarter.
- On the other hand, the imaging business, which significantly grew year-on-year in the first quarter ended June 30, 2024, mainly in China, was essentially flat year-on-year in the current quarter. As a result, we have incorporated into our forecast a pro-active change to a more cautious production and inventory plan in preparation for the year-end selling season.
Imaging & Sensing Solutions Segment Take Aways
- Next is the I&SS segment.
- Sales for the quarter increased 32% year-on-year to 535.6 billion yen, primarily due to increased sales of image sensors for mobile products and the impact of foreign exchange rates.
- Operating income approximately doubled year-on-year to 92.4 billion yen, primarily due to the benefit of the increased sales and the favorable impact of foreign exchange rates.
- For FY24, we forecast sales to decrease 4% from the previous forecast to 1 trillion 770 billion yen and operating income to decrease 9% to 250 billion yen.
- The global smartphone market continued its gradual recovery trend with positive year-on-year growth continuing in China and Europe, and signs of recovery in the North America market.
- Mobile sensor sales during the quarter significantly increased due to an increase in unit prices resulting from larger die sizes and steady shipments of image sensors for new products to a major customer. This led to the segment overall recording its highest ever second quarter sales.
- On the other hand, with regards to the second half, we have downwardly revised our sales and profit forecasts for mobile sensors to reflect a revision in the production plan of a major customer.
- The introduction of AI functionality and services into smartphones, which is currently underway, may bring short-term volatility to the high-end market depending on the speed of roll-out and initial reactions. However, in the mid- to long-term, we expect that the convenience brought by AI will make smartphone functionality more attractive, revitalizing the market and encouraging a shift to high-end products.
- On the production side, improvements in yields for mobile sensors are progressing as planned since the beginning of the fiscal year, and we expect to achieve a normal run rate in the fourth quarter ending March 31, 2025.
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