2020_1q_omron_e

34/38 Questioner(5)

(Questioner 5) Thank you. How should we interpret domestic market conditions during Q1? First, there was the 10 consecutive days of national holidays during the quarter. Also, many device manufacturers were adjusting inventory in April and May although, some have suggested that conditions are gradually improving now. In light of these factors, how should we think about Q2? Is it possible that the weakness in Q1 was overdone and that we might see confirmation of this in Q2? (Nitto) We look at many different metrics but…it is true that the lower number of business days in May was a factor in the weakness but we did not see much of a recovery from the May levels in June. In terms of subsequent trends, we only have data for the first half of July at this point. The key question for me is how July and August will play out. We are tracking trends very closely, but if you look at the overall situation at this point, we have seen nothing that suggests a recovery in a particular industry or hints of when such a recovery might happen. As noted by Mr. Oue, the automotive industry has become very cautious in considering capex. We have seen some of our customers delay all of their capex plans slated for 1H into 2H. These were projects that had been factored into our own plans. In particular, capex plans related to gasoline-fueled vehicles were pushed out. Automotive manufacturers continue to make ADAS and EV-related investments. However, investments for gasoline-powered vehicles still continue to account for the majority of investments. At a high level, global auto sales have been very weak. China, in particular, is very weak, and the US is also down. There are some slight signs that Japan may actually see growth in auto unit sales. If this proves to be true, we might see a recovery. We would hope this is the case, but, frankly, at this stage, there is nothing that suggests such a recovery. Sorry to disappoint you but this is our view at the moment. (Questioner 5) Thank you. My second question relates to the anti-trust approvals process. Would it be possible for you to update us on where you are in the process? (Nitto) We have completed all of the filings for the relevant jurisdictions. The process is now in the hands of the regulators. We have had no negative feedback or comments at this point. Thank you. Are there more questions? Next the person in the middle section.