Regarding the FY2024 results and the future market environment：
The System Service business and Semiconductor Design-related business were solid. As for the Test Solution business, we expect that the market will recover in the future.
In FY2024, IT Access and GAIO Technology under the System Service business unit have achieved the record high profit and gave a solid base to the overall INNOTECH results. On the other hand, as for the Test Solution Business, the recovery of demand for testers is slow and INNOTECH consolidated results did not achieve the original estimate made in the beginning of the year, which made the FY2024 a tough year financially.
The market outlook remains still unclear due to the impact from the US trade policy trend and exchange rate fluctuations; however, INNOTECH expects that the System Service business and the Semiconductor Design-related business will remain solid. Also, the semiconductor market is expected to recover as governments of many countries strongly assist the semiconductor industry these days to promote wide adoption and innovation of generative AI and to achieve economic security. Along with such trend, INNOTECH believes that the Test Solution business will gradually come back.
Achievement of the mid-term management plan (FY2024-FY2026) from its first year and outlook for FY2025 and beyond:
We have made some achievements for our sustainable growth, such as improving the efficiency and profitability of our businesses.
In FY2024, which was the first year of our mid-term management plan, we have pursued following activities as our Group-wide strategy as well as our segment-specific business strategies and made some achievements, which give us confidence for our sustainable growth toward FY2025 and beyond.
As for our Group-wide strategy, we have made some progress in the area of “Optimizing the business portfolio by redistributing management resources”. The ROIC, which is one of the numerical targets of our mid-range management plan, is calculated individually by the business unit and by the subsidiary and such numbers are set as the monitoring indicators for each of them. Then, INNOTECH has decided to withdraw from the business areas where we have determined as non-promising from our profitability and future growth point of view, and to focus and to redistribute our management resources to the growing business areas. STAr Technologies, whose ROIC was declining, sold its function probe card business in FY2024, and its profitability is improving. INNOTECH continues to move forward with this strategy beyond FY2025.
As for “Expanding operating profit”, we recognize that improving our competitiveness and adding values are indispensable while the increase of human personnel costs and inflation are affecting our profitability. Therefore, INNOTECH is striving for innovation to develop products with our unique added values and services as an entire Group. Innovation is not achieved overnight, and but we are expecting the that we will see some concrete results from our continued efforts in certain business areas in FY2025 and beyond.
In order for the “Achieving performance stability”, INNOTECH leverages web marketing and so on to expand the customer base and to part from dependence on specific customers. Also, in order to enrich our product line-up, each business unit has completed development of new products and services and we expect to see some progress in FY2025.
As for our segment-specific business strategies, with regard to the Semiconductor Design-related business, we focused on development of new customers and enhancement of services to existing customers, which led to expansion and stabilization of sales. In the System Service business, engineering service business for automobile manufacturers provided by GAIO Technology is stable and it is estimated that the demands will keep expanding for the software quality improvement service and the service to assist model-based design. Thus, INNOTECH will further invest in development of such services. IT Access is increasing its competitiveness for its sustainable growth by securing the revenue base by the recurring revenue business models of the cloud settlement system and capturing needs to support automotive applications.
For INNOTECH Sustainable Growth:
Collaborating with its stakeholders, INNOTECH will keep contributing to the society, and enhancing its corporate value.
From November 2024 to April 2025, INNOTECH has acquired 365,100 treasury shares as part of the shareholder return measures. INNOTECH would like to collaborate with all the stakeholders, contribute to the society, and enhance its corporate value in a sustainable manner by a fair and equitable allocation of value.
As it was mentioned earlier in the context of regarding generative AI earlier, the semiconductor and electronics industries are expected to expand mid-term and long-term. With such trend, INNOTECH believes that its business environment will improve. Taking advantage of such momentum, INNOTECH will aims to deepen its Group-wide collaboration and co-creation, provide INNOTECH-original solutions and highly value-added products, and achieve sustainable growth.
We appreciate our shareholders’ continued support and cooperation. Thank you very much.
June, 2025
President and Representative DirectorNobuyuki Otsuka