Questions about the business
Q-27. Is there any discrepancy with the following understanding regarding the competitive environment?
There is a certain strength in the know-how regarding the combination of coating agents to meet customer performance requirements, as well as in coating heads and application technologies. Additionally, the stability of quality and yield rates, which are directly linked to the yield of device assembly manufacturers, and the ability to meet diverse optical performance requirements for each model of automotive and smartphone devices are important. Furthermore, Japanese companies have an advantage in PET base material manufacturers and suppliers of materials such as chemicals. Due to the small market size, there is little incentive for Chinese and Taiwanese companies to enter the film processing market.。
A-27. There is generally no discrepancy, but there are some cases where Chinese and Taiwanese companies have entered the film processing market.。
Q-28. Company T openedMie Plantin 2017, do you have any customers in the region?。
A-28. With the opening ofMie Plantin 2017, Company T has not lost any customers in the region.
Q-29. T Company's website lists its major customers. Can we assume the same applies to Kimoto?。
A-29. We consider the major customers for diffusion films to be the LCD industry as a whole.。
Q-30. H Company is developing films for foldable smartphones. Is Kimoto unable to produce such films?。
A-30. Regarding foldable smartphones, we were unable to progress beyond the research stage because the required performance specifications from each company had not been established.。
Q-31. Films for foldable smartphones, which are said to be in a rapidly expanding market, are expected to see a significant increase in surface area. Could this not represent a major opportunity?。
A-31. Due to confidentiality agreements with our customers, we cannot provide details, but films for foldable smartphones are a field we are also working on, and we have a certain level of expectations for it.。
Q-32. D Company holds a dominant share in anti-reflective films for automotive displays. Is it possible to catch up in this field? Also, what are the differences between your company and theirs?。
A-32. We assume that D Company's anti-reflective films are produced using dry coating rather than wet coating. Generally, anti-reflective films made with dry coating have higher optical performance.Unfortunately, we do not currently have the equipment for that, so we are promoting the sale of anti-reflective films made with wet coating.。
Q-33. Do you plan to invest in equipment to achieve optical performance equivalent to D Company's anti-reflective films for automotive use? Or are you anticipating a market contraction due to the shift to OLEDs?。
A-33. At this point, we do not plan to invest in equipment, but we believe there is still room for growth in this field with our technology, and we will continue to focus on it.。
Q-34. Company D's anti-reflection film has both hard coating and shatterproof functions, but is it possible to coexist withLight Diffusion Film?。
A-34. D Company's anti-reflective films contribute to surface protection and image clarity, so we believe they can coexist with diffusion films, which enhance screen brightness.。
Q-35. Is it correct to understand that most products for smartphones are light-shielding films, with some including Pressure Sensitive Adhesive Film for Industrial Use ?。
A-35. For smartphones, the main products are light-shielding films and Pressure Sensitive Adhesive Film for Industrial Use . We also have a significant amount Pressure Sensitive Adhesive Film for Industrial Use shipped.。
Q-36. Regarding products for smartphones, could you tell us the difference in unit prices between high-end and low-end products, as well as the proportion of high-end products?。
A-36. Since each company has different design philosophies, we refrain from providing specific details about the difference in unit prices and the proportion of high-end products.。
Q-37. Does the light-blocking film for competitive camera lenses hold the top market share?。
A-37. Our light-blocking films are used in various applications, including smartphones. While it is difficult to definitively state that we hold the 'top share,' we recognize that our products are widely adopted.。
Q-38. Competitors' light-blocking films have also been recovering rapidly this term. Could this be attributed to customary multi-sourcing practices by North American manufacturers, given that there are no significant differences in product performance?。
A-38. We cannot comment on the situation of other companies.We recognize that our light-blocking films have advantages in terms of performance, stable production, and sales capabilities.。
Q-39. With the advancement of camera performance, periscope lenses are increasingly being installed in high-end smartphones in North America, China, and South Korea. Are light-blocking films used in these lenses?。
A-39. We presume that our light-blocking films are also being used in periscope lenses.。
Q-40. Is it correct to recognize thatLight Diffusion Filmaccounts for the largest proportion of sales for automotive applications, followed by hard coat films, followed by light-shielding films and adhesive films。
A-40. We do not disclose detailed sales composition ratios by product. However, for transportation equipment, diffusion films and hard-coated films tend to account for a larger proportion.。
Q-41. Do you have direct transactions with finished product set manufacturers for communication devices and automotive applications?。
A-41. We do not have direct transactions for either communication devices or transportation equipment, but we do maintain relationships.。
Q-42. Do you have direct transactions with lens manufacturers? Also, could you tell us the proportions for each company?。
A-42. We do not have direct transactions, but we do have indirect dealings. We also maintain relationships through information sharing, but we do not disclose sales proportions.。
Q-43. Do you supply automotive panels to other manufacturers with the top global market share besides your main customers? Also, could you rank your relationships with panel manufacturers in Taiwan, China, South Korea, and Japan in order of closeness?。
A-43. We have some supply achievements. As for relationships, we have built good relationships with manufacturers in all countries.。
Q-44. It is said that you have a close relationship with specific customers in Europe and the U.S. for automotive applications. Do you depend on the sales volume of these finished product manufacturers?。
A-44. For specific customers in Europe and the U.S., we reduce dependence on the sales volume of finished product manufacturers by maintaining strong communication and providing high-quality products manufactured under the automotive industry quality management system standard IATF16949 and the German automotive industry standard VDA6.3 process management criteria.。
Q-45. If the sales volume of European and U.S. manufacturers' customers decreases, is it not possible to flexibly shift shipments to other manufacturers or panel makers?。
A-45. Since the optical performance requirements differ for each manufacturer, it is not possible to flexibly shift shipments.。
Q-46. A major Chinese display manufacturer is prototyping micro-LED displays. Is it possible to supply Kimoto's products to these companies?。
A-46. It is possible to supply。
Q-47. It is said that you can supply films for micro-LEDs to display manufacturers. Are you conducting joint research and development with these manufacturers?。
A-47. We refrain from commenting on specific business partners, but we have been working on micro-LEDs for several years and have received inquiries from many manufacturers. We are currently working to meet this demand.。
Q-48. It is said that OLEDs (organic light-emitting diode displays) will advance rapidly in automotive displays, but is there a risk that sales ofLight Diffusion Filmand hard coats, which are currently mainstays, will decline sharply? Also, please tell us about the films that are expected to be in new demand as OLEDs progress, and the films that may continue to be used。
A-48. As you pointed out, there is a risk of an impact on the demand for our main products. However, we are also advancing the development of applications for OLED (organic EL display) films.。
Q-49. What kind of films are being developed for OLED (organic EL display), and when will they be launched in the market?。
A-49. Based on confidentiality agreements with our customers, we refrain from providing specific details or the market launch timing. Thank you for your understanding.。
Q-50. 1) Pressure Sensitive Adhesive Film for Industrial Use for Micro LEDs, 2) Process Film for Advanced Semiconductor Packages, 3) High Heat Resistant Adhesive Film for EV Batteries. Are there any competitors that can provide these three products? Also, please tell us your technical advantages.。
A-50.
Amid the presence of competitors, we consider our technical advantages to be as follows:
① Quality of adhesive strength and stable production capability
② Adhesion to substrates, quality, and stable production capability
③ Adhesion to substrates, quality, and stable production capability
Q-51. The film manufacturer T Company, one of our suppliers, plans to increase the price of film products by 10% starting in June. If there are no plans to pass on the price increase, won't the cost ratio for the second half of the year rise?。
A-51. In addition to T Company, we conduct business with many other suppliers, and discussions about price increases have been occurring for some time. Each time, we have sincerely engaged with our business partners and customers, advancing negotiations and appropriately reflecting the changes in prices. Moving forward, we will continue price negotiations and measures to minimize the impact on the cost ratio.。
Q-52. Company O offers a lineup of BIM, CIM, and GIS software for the manufacturing, construction, and equipment industries, and extends its services to solutions and engineering services. While it is unclear how the company positions itself to succeed in the digital twin business, could you please explain its strengths, both qualitatively and quantitatively?。
A-52. While Company O focuses on the sale of software and systems, our company adopts a business model that provides an integrated service from measurement to visualization, particularly developing a "Data Kitchen" business centered on data processing. The business models and value propositions of both companies are complementary, and we believe there is potential to build a relationship as business partners or collaborators rather than competitors.Furthermore, due to differences in business domains and value propositions, quantitative comparisons are challenging. However, our strength lies in leveraging the expertise we have cultivated over many years to provide high-quality, high-value-added data through a one-stop service that integrates measurement, data processing, and viewing.。
Q-53. It is said that Company O focuses on software and system development, while Kimoto focuses on data processing. Amid decreasing demand for data processing due to in-house development, how will you grow the digital twin business?
A-53. In Japan, the utilization of three-dimensional data is still lagging behind compared to overseas. There are cases where the large volume of data makes operation difficult, or where low-precision three-dimensional data is handled in two dimensions. Since our founding, we have been committed to image accuracy, using it as a foundation to develop film and precision-focused technologies. In the realm of three-dimensional and digital twin technologies, we provide not just "images" but high-precision data, offering integrated services from measurement to data processing and operational management. We believe this approach will drive the growth of our digital twin business.。
