Earnings Forecast

July 26, 2023 (¥B)
  FY22 FY23   Change vs. Prior Full-Year Forecast
  Results     1H Forecast 2H Forecast Full-year Forecast vs. FY22   FY23 Forecast as of April (Δ)
1Q Results 2Q Forecast (Δ) (%)
Sales(*1) 560.2 101.3 112.7 214.0 266.0 480.0 -80.2 -14.3%   480.0
Operating Income 167.7 14.3 22.3 36.6 68.4 105.0 -62.7 -37.4%   105.0
Operating Margin 29.9% 14.1% 19.8% 17.1% 25.7% 21.9% -8.0pts     21.9%
Income Before Tax 171.3 13.0 22.2 35.2 68.3 103.5 -67.8 -39.6%   103.5
Net Income 130.4 9.2 16.8 26.0 52.0 78.0 -52.4 -40.2%   78.0
Net Income Margin 23.3% 9.1% 14.9% 12.1% 19.5% 16.3% -7.0pts     16.3%
R&D Expenses 60.1 14.9 16.1 31.0 32.0 63.0 +2.9 +4.8%   63.0
CapEx 25.0 5.6 5.2 10.8 10.2 21.0 -4.0 -16.0%   21.0
D&A 21.4 6.0 5.8 11.8 12.2 24.0 +2.6 +12.1%   23.0 +1.0
Exchange Rate(*2) 1 US$ ¥134 ¥135 ¥135 ¥135 ¥135 ¥135 ¥1 Depreciation   ¥130 ¥5 Depreciation
1 Euro ¥140 ¥146 ¥150 ¥148 ¥150 ¥149 ¥9 Depreciation   ¥140 ¥9 Depreciation

(*1): Intersegment transactions have been eliminated from totals
(*2): Our latest forecast for the impact of exchange rate fluctuations on FY23 operating income is plus ¥1.1 billion per 1 yen of JPY depreciation vs USD, and minus ¥0.3 billion per 1 yen of JPY depreciation vs the Euro

Looking at Advantest's market environment going forward, Advantest anticipates that in the mid/long-term, semiconductors will need to have even better functionality and reliability as they rise to the challenge of providing infrastructural support for the worldwide digital transformation and green transformation. Our expectations of mid/long-term growth remain unchanged. Indeed, the emergence of new AI-based applications has accelerated the digital transformation, while growing demand for Net Zero initiatives has increased the importance of semiconductor technology for better energy efficiency. Customers are also aggressively continuing to develop next-generation devices, including advances in miniaturization. Advantest expects demand for semiconductor test equipment, which ensures that semiconductors support our "safe, secure, and comfortable" environment and society, to grow in step with the growth of the semiconductor market.

In the short term, however, the outlook for our business environment remains highly uncertain due to global recessionary concerns exacerbated by rising inflation and higher interest rates, as well as risks around geopolitical factors and pronounced exchange rate fluctuations. As recessionary concerns intensify, semiconductor manufacturers are expected to continue their production adjustments for the time being, albeit with varying degrees of intensity from application to application. Therefore, Advantest expects the semiconductor tester market to contract year-on-year in CY2023. Although demand remains weak for applications such as smartphones, there are potential signs of an upturn in investment in our products for high-end semiconductors, driven by applications such as generative AI. Regarding the tightening of restrictions on the export of semiconductor production equipment to China by the United States and its allies, the direct impact on our FY2023 earnings is currently expected to be limited, but we will continue to closely monitor the situation.

Based on this outlook and on the progress made for the three-month period ended June 30, 2023, Advantest maintains full-year consolidated earnings forecast for FY2023 as announced in April 2023, with net sales of (Y) 480.0 billion, operating income of (Y) 105.0 billion, income before income taxes of (Y) 103.5 billion, and net income of (Y) 78.0 billion. This forecast is based on exchange rate assumptions of 1 USD to 135 JPY and 1 EUR to 150 JPY for the nine months from the second quarter of the current consolidated fiscal year.

As mentioned above, our business environment remains uncertain, not least due to uncertainty in the global economy. Advantest will pay close attention to changes in the external environment and respond quickly with measures that may include cost controls as necessary.