2019_1q_omron_e

33/36 Questioner(5)

Thank you for the presentation. My first question is about IAB. My question may be similar to previous questions; I hope you don’t mind. You indicated that you had hired more sales staff and sales engineers. Could you tell us how many people were hired in either absolute or percentage terms in Q1, and what headcount for these roles was before the increase, if possible? I understand that engineers are also being transferred from the Other segment. Such internal transfers would likely represent a permanent and substantial increase to fixed costs for IAB. Could you give me a sense of the magnitude of the increase? Answering the second part of your question first, about 50 people were internally transferred from the domestic Backlight business over the previous 2 fiscal years . A similar number of domestic employees chose to seek opportunities elsewhere during the same period of time. However, outside of Japan, I mentioned the closure of a plant in China earlier. In the case of this plant, all of the employees agreed to terminate their contracts and therefore, there were no internal transfers. With regard to the first part of your question, unfortunately, I do not have the numbers for the IAB new hires. I apologize. (Takeda) I am sorry but we do not have the absolute numbers for the increase in headcount but of the ￥5 billion increase in SG&A, as mentioned earlier by CFO Nitto, roughly half is from IAB. About 40 － 50 % of the IAB portion is from an increase in labor costs. Please note that the increase in labor costs also reflects the impact of new hires from last year. That should give you a rough image. Additionally, 60 － 70% of the increase in labor costs is from the increase in front office functions such as sales or sales engineers. This reflects our continued global focus on hiring for these roles. Thank you. My second question is also about IAB. Earlier in the presentation, you indicated that smart phone-related and FPD-related were weak. However, in your outlook on slide 11, you note that semiconductors remain firm. Although this may overlap somewhat with previous questions, could you talk about the near-term conditions and the outlook for semiconductor-related investments? In particular, given talk of pushouts in investments by Samsung, I would like to know if you have seen signs of a recovery in investments by Samsung more recently. Also, if possible, could you tell me what proportion of SE Asia & Other sales comes from Korea? Is it 30%? 50%? First, on semiconductor-related demand from our customer base, we continue to see strong demand fundamentals driven by IoT and automotive-related areas, such as ADAS or connected cars. As well, data center-related demand for semiconductors remains very strong. OMRON’s Q1 results were supported by such strong demand. Obviously there are concerns for the outlook on the back of US-China trade tensions but at this point in time we have seen no signs of a softening of demand in these areas. (Okumura) With regard to the share of SE Asia & Other sales from Korea, I don’t have the figures for Q1 yet but for your reference, in FY2017, Korea accounted for roughly half of SE Asia & Other. Thank you. Could you hand the mic to the person next to you, please?