Date and Time: 5:30-6:30 p.m. Monday, October 28, 2024
When we announced the full-year forecasts in July, there were many uncertainties about the second half demand. We assumed that pulled forward demand in the first half will be adjusted in the second half, given that the full-year production for almost all end-products remain unchanged. In our latest forecasts, the production outlook for the North American smartphone customer remained the same assumption but revised upwards for CIS for HDDs and optical films for tablet devices. In addition, we expect the full-year production volumes for our materials used in Chinese high-end smartphones to increase due to launch of new models in the second half.
From Q1 to Q2, demand for notebook PCs was sluggish in Q1 but exceeded our forecast in Q2. Demand for tablet devices increased due to higher LCD models production, while demand for Chinese smartphones slowed down. Additionally, demand for transparent conductive films (ITO) showed reactional decrease due to strong demand in Q1. Demand for automotive displays and information tapes remained at the same level. From Q2 to Q3, revenue for TVs is expected to decrease due to absence of loyalty income. Demand for notebook PCs, tablet devices, automotive displays and information tapes is expected to decrease after their peak in Q2 as the production was concentrated in the first half, while demand for Chinese smartphones is expected to increase due to the launch of new models.
Although investments in storages have shown improvements, we were unable to predict demand trends in the second half at the beginning of fiscal year, thus we made a conservative forecast. However, we revised upwards for the second half forecast as demand for CIS increased. We expect CIS growth to continue for some time and do not assume that there will be excess inventory in the market during fiscal year 2024.
In high-precision circuits, production of high-end smartphones remained strong. Regarding the risk of inventory adjustment due to production being ahead of schedule in comparison with Q2 of the previous fiscal year, we do not expect an extreme overstocking will occur as old models continue to be produced.
In CDMO business, orders tend to be behind schedule, but we expect that projects being delayed will be gradually return with an improvement of funding for start-up companies due to lowering interest rates in the United States. We assume a full-fledged recovery will be in fiscal year 2025 and beyond.
From Q1 to Q2, revenue of Life Science increased as production has started at a new plant in CDMO business. In Membrane, demand increase for drainage treatment in India and high margin oil & gas applications contributed. In Personal Care Materials, demand increase for new products in hygiene materials for diapers and biodegradable nonwoven fabric contributed. In the second half, we expect a significant improvement in profitability mainly in CDMO business due to revenue contribution from large clinical projects that have been delayed in the first half.
In electronics, although we expect a reactionary demand decrease in the second half due to pulled forward demand of materials used in smartphones in the first half, we expect full-year production volume increase due to expansion of models adopting our materials. In process materials for semiconductor, while the demand for advanced semiconductors is expected to increase, the demand for semiconductor memories will take time to fully recover due to its slow recovery in production. In automotive materials, demand was below our forecast in Europe and South Asia in the first half but is expected to recover slightly in the second half. However, we expect revenue to decrease for the full year due to a decrease in automotive production volume. Thus, the reason behind the downward revision for the second half is mainly due to deteriorating market conditions for process materials used in semiconductor memories and automotive materials.
Electric releasing tape for smartphones contributed to revenue in the first half and we will work to expand its further adoption of models.
영업시간 (한국시간) 09:00-17:00(토∙일 공휴일 제외)