Fiscal Year Ended March 31, 2024

Consolidated
Financial Results

April 26, 2024
Socionext Inc.

Disclaimer
This presentation has been prepared solely for the purpose of presenting relevant information regarding Socionext Inc. (“Socionext”). This
presentation and the information contained herein does not constitute or form part of any offer for sale or subscription of or solicitation or
invitation of any offer to buy or subscribe for shares of our common stock (the “securities”) in any jurisdiction in which such offer, solicitation or
invitation would be unlawful. This presentation and the information contained herein is being furnished to you solely for your information andmay not be reproduced, disclosed to or redistributed to any other person, in whole or in part without our prior written consent.
This presentation is based on the economic, regulatory, market and other conditions as in effect on the date hereof, and neither Socionext nor
its advisors or representatives guarantees that the information contained in this presentation is true, accurate or complete. It should beunderstood that subsequent developments may affect the information contained in this presentation, which neither Socionext nor its advisors or
representatives are under an obligation to update, revise or affirm. The information in this presentation is subject to change without prior noticeand such information may change materially. Neither this presentation nor any of its contents may be disclosed to or used by any other person
for any purpose without the prior written consent of Socionext.
This presentation contains statements that constitute forward-looking statements, including estimations, forecasts, targets and plans. Suchforward-looking statements do not represent any guarantee by management of future performance. Any forward-looking statements in thispresentation are based on the current assumptions and beliefs of Socionext in light of the information currently available to it, and involve
known and unknown risks, uncertainties and other factors. Such risks, uncertainties and other factors may cause Socionext’s actual results,
performance, achievements or financial position to be materially different from any future results, performance, achievements or financial
position expressed or implied by such forward-looking information.
Except as otherwise indicated, the views, statements and outlook indicated herein are those of Socionext. The information related to or preparedby companies or third parties other than Socionext is based on publicly available and other information as cited, and Socionext has notindependently verified the accuracy and appropriateness of, nor makes any warranties regarding, such information.
2

Cautionary Note
Regarding “Design Win Amount” and “Design Win Balance”
Cautionary Note Regarding “Design Win Amount” and “Design Win Balance”
The calculation of “Design Win Amount” and “Design Win Balance” involves a considerable degree of future estimation and subjective judgment,
including assumptions regarding development plans, development costs, NRE revenues, per-unit prices and estimated future product sales
volumes as well as the estimated lifespan and likelihood of cancellation of particular products. Product sales volumes are estimated based on
preliminary customer indications of volume as well as our own projections made using historical customer transaction data, third-party market
data and other factors while restrictions on the available manufacturing capacity for our products are not fully taken into account. In connection
with analyzing our net sales and determining our design win balance, we take into account whether any customer demand constitutes “special
demand,” a term we use to refer to short-term customer demand resulting from stockpiling and other activities that do not reflect current
underlying demand. We determine whether any given demand is special demand on a case-by-case basis at our own discretion based on ourassessment of a variety of factors related to the demand in question. As a result, amounts that we identify as special demand may not be
objectively accurate in light of such definition of “special demand.” We believe that it is appropriate to exclude such short-term “special demand”
amounts from our design win balance because the design win balance is intended to serve as an index to evaluate and analyze our long-term
revenue trends. In terms of our net sales, net sales that are attributable to “special demand” should be viewed as short-term inflated demandthat may be front-loading longer-term demand, and thus such sales should be appropriately deemphasized when analyzing historical and future
trends in our results of operations. While “Design Win Balance” is not impacted by the occurrence or the amount of “special demand,” it canfluctuate by reflecting changes in assumptions for forecasts of demands except for “special demand.” We may change our calculation method for“Design Win Amount” and “Design Win Balance” and have done so in the past, and thus a direct period-to-period comparison may not bemeaningful beyond describing general trends over an extended period. Design win information is calculated on a management accounting basis
and is formulated and used internally for management’s assessment of business performance and strategic initiative planning. Due to ourrelatively short operating history under our new business model and the extended period of time before a design win contributes to our productrevenue, we have limited financial data that can be used to evaluate our business and future prospects, and our management believes that ouroperating results in recent fiscal years may not be indicative of our future performance. We present design win information for reference
purposes only. You should not place undue reliance on design win information presented herein. Please refer to page 2 of this presentation
regarding certain risks associated with forward-looking statements.
3Consolidated Financial Results
for the Fiscal Year Ended March 31, 2024
──Actual Consolidated Financial Results FY24/3
Consolidated Earnings Forecast FY25/3

FY24/3 Consolidated Statements of Income(Yen in billions)

FY23/3
Net Sales

FY24/3

YoY

YoY %(Reference)
Disclosure as ofJanuary 2024
217.0
－
－
－

Others

192.8
156.8
34.9
1.1

221.2
182.9
37.6
0.8

28.5
26.1
2.7
-0.4

111.2
60.8%

7.3

Product Cost Ratio

103.9
66.3%

14.8%
16.7%
7.9%
-33.8%
7.0%

67.1

74.5

7.4

11.0%

－

49.3
17.8
21.7
11.3%
19.8
10.3%

53.3
21.2
35.5
16.1%
26.1
11.8%

4.0
3.4
13.8

8.0%
19.1%
63.6%

6.4

32.2%

－
－
31.5
14.5%
22.5
10.4%

135.5

144.6

Product Revenue
NRE Revenue

Cost of Sales
Selling, General and
Administrative Expenses
R&D
SG&A (excluding R&D)

Operating Income
MarginProfitMarginFX Rate (USD/JPY)

－

138.7
5

4Q FY24/3 Consolidated Statements of Income(Yen in billions)
FY23/3
1Q

Net Sales

2Q

FY24/3
3Q

4Q

1Q

2Q

3Q

4Q

YoY

YoY %

39.9

42.8

56.1

53.9

61.4

55.5

52.7

51.6

-2.3

-4.3%

Product Revenue

31.0

35.3

43.9

46.5

52.9

48.5

40.5

40.9

-5.6

-12.0%NRE Revenue

8.7

7.4

11.5

7.3

8.4

6.8

11.9

10.5

3.2

44.8%

Others

0.2

0.2

0.6

0.2

0.1

0.2

0.2

0.2

0.0

13.3%

19.9
64.0%

22.1
62.6%

31.8
72.4%

30.2
64.9%

34.5
65.2%

28.2
58.2%

24.6
60.8%

23.9
58.4%

-6.3

-20.8%

14.5

15.9

18.0

18.8

16.8

18.7

18.8

20.2

1.4

7.3%

R&D

10.6

11.5

13.4

13.8

12.2

12.5

13.6

15.0

1.2

8.7%

SG&A (excluding R&D)

3.9

4.4

4.6

5.0

4.7

6.3

5.1

5.1

0.2

3.2%

5.6

4.9

6.3

5.0

10.1

8.6

9.3

7.6

2.6

52.4%

14.0%

11.4%

11.2%

9.2%

16.5%

15.4%

17.6%

14.7%

5.1

5.0

5.2

4.5

8.0

7.3

5.0

5.8

1.3

29.2%

12.7%

11.6%

9.3%

8.4%

12.9%

13.2%

9.5%

11.3%

129.6

138.4

141.6

132.3

137.4

144.6

147.9

148.6

Cost of Sales
Product Cost Ratio

Selling, General and
Administrative Expenses

Operating Income
MarginProfitMarginFX Rate (USD/JPY)6

Quarterly Net Sales and Operating Income
Net Sales1

Operating Income1（Yen in billions）

Product Revenue
including

61.4

Special Demand

56.1

NRE Revenue

Others

39.9

27.1
6.4

28.3 29.8
6.4 7.7

15.0

31.8 8.7

42.8

53.9 8.4 55.5 52.7

6.8

11.5 7.3

10.0

3Q

FY22/3
1.
2.

11.4%
11.2%

7.4

9.2%

8.9%8.0%8.7%

31.0

35.3

43.9 46.5 52.9 48.5

40.5 40.9

4Q

1Q

2Q

10.1

5.0

3.0%

0.0

2Q

14.7%

14.0%

7.5

23.7
19.2 21.2 20.4

1Q

17.6%

16.5%
15.4%

51.6

11.9 10.5（Yen in billions）

Operating Income
Margin3Q

FY23/3

4Q

1Q

2Q

3Q

FY24/3

4Q

0.8

5.6

4.9

6.3

8.6

9.3

7.6

5.0

2.5 2.4 2.7
0.0%

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q

FY22/3The quarterly figures are highly volatile and may fluctuate significantly from quarter to quarter as they are greatly affected by the development status of individual projects.
Quarterly financial results of FY 22/3 are unaudited and unreviewed by external auditors

FY23/3

FY24/37

FY24/3 Annual Financial Results
Operating Income YoY Analysis

Net Sales & Operating Income
Product Revenue（Yen in billions）

includingSpecial Demand

NRE Revenue

192.8

Operating Income
Margin（Yen in billions）（Yen in billions）

16.1%

221.2
37.6

11.3%

34.9

156.8

-6.1

0.7
182.9

35.5

2.5

16.6

21.7

35.5
21.7

FY23/3

FY24/3

FY23/3

FY24/3<Net sales> YoY +28.5 bn yen (+14.8%)➢ Product revenue +26.1 bn yen (FX impact +9.7 bn yen)
➢ NRE revenue: +2.7 bn yen (FX impact +2.0 bn yen）
➢ Depreciation of Japanese yen +11.7 bn yen (USD/JPY 135.5→144.6)

1.
2.

FY23/3

1

Product Gross NRE Revenue R&D, SG&A
Profitexpenses etc.1

FX impact2

FY24/3<Operating income> YoY +13.8 bn yen (+63.6%)➢ Increase in gross profit from product revenue +16.6 bn yen➢ Increase in NRE revenue +0.7 bn yen➢ Increase in R&D・SG＆A, etc. -6.1 bn yen➢ Depreciation of Japanese yen +2.5 bn yen (USD/JPY 135.5→144.6)

R&D cost connected to NRE revenue is recorded as an expense. Accordingly, NRE does not fully contribute to an increase in operating income for a particular period.
FX impact is an increase or decrease from the previous year or quarter caused by change in USD/JPY exchange rate. The FX impact is excluded from the other factors shown in the operating income analysis.

8

4Q FY24/3 Financial Results - YoY Changes
Operating Income YoY Analysis

Net Sales & Operating Income
Product Revenue（Yen in billions）

includingOperating Income
MarginSpecial Demand

NRE Revenue

53.9
7.3

（Yen in billions）（Yen in billions）

14.7%

51.6
10.5

-0.6

2.3

9.2%

0.9

7.6

0.0
46.5

40.9

FY23/3 4Q

FY24/3 4Q

7.6
5.0

5.0

FY23/3 4Q

FY24/3 4Q<Net sales> YoY -2.3 bn yen (-4.3%)➢ Product revenue -5.6 bn yen (FX impact +3.8 bn yen)
➢ NRE revenue +3.2 bn yen (FX impact +1.0 bn yen）
➢ Depreciation of Japanese yen +4.8 bn yen (USD/JPY 132.3→148.6)

1.
2.

FY23/3 4Q

1

Product Gross NRE Revenue R&D, SG&A
Profitexpenses etc.1

FX impact2

FY24/3 4Q<Operating income> YoY +2.6 bn yen (+52.4%)➢ No increase or decrease in gross profit from product revenue➢ Increase in NRE revenue +2.3 bn yen➢ Increase in R&D・SG＆A, etc. -0.6 bn yen➢ Depreciation of Japanese yen +0.9 bn yen (USD/JPY 132.3→148.6)

R&D cost connected to NRE revenue is recorded as an expense. Accordingly, NRE does not fully contribute to an increase in operating income for a particular period.
FX impact is an increase or decrease from the previous year or quarter caused by change in USD/JPY exchange rate. The FX impact is excluded from the other factors shown in the operating income analysis.

9

4Q FY24/3 Financial Results - QoQ Changes
Net Sales & Operating Income
Product Revenue（Yen in billions）

11.9（Yen in billions）

17.6%

1.4

14.7%

-1.4

-1.5

51.6

-0.2

10.5
9.3

40.5

40.9

FY24/3 3Q

FY24/3 4Q

FY24/3 3Q

7.6

FY24/3 4Q<Net sales> QoQ -1.0 bn yen (-2.0%)➢ Product revenue 0.4 bn yen (FX impact +0.2 bn yen)
➢ NRE revenue -1.4 bn yen (FX impact +0.0 bn yen）
➢ Depreciation of Japanese yen +0.2 bn yen (USD/JPY 147.9→148.6)

1.
2.

（Yen in billions）

MarginNRE Revenue

52.7

Operating Income

Operating Income QoQ Analysis

7.6

9.3

FY24/3 3Q

Product Gross NRE Revenue1 R&D, SG&A
Profitexpenses etc.1

FX impact2

FY24/3 4Q<Operating income> QoQ -1.7 bn yen (-18.4%)➢ Increase in gross profit from product revenue +1.4 bn yen➢ Decrease in NRE revenue -1.4 bn yen➢ Increase in R&D・SG＆A, etc. -1.5 bn yen➢ Depreciation of Japanese yen -0.2 bn yen (USD/JPY 147.9→148.6)

R&D cost connected to NRE revenue is recorded as an expense. Accordingly, NRE does not fully contribute to an increase in operating income for a particular period.
FX impact is an increase or decrease from the previous year or quarter caused by change in USD/JPY exchange rate. The FX impact is excluded from the other factors shown in the operating income analysis.

10

(Reference) Mid-Term Financial Targets Announced in Sep. 2022

FY21/3
Net Sales
GrowthOP
Margin1.

2.

FY22/3

99.7
117.0
billion yen billion yen

1.6%(1.6 billion yen)

7.2%

(8.5 billion yen)

Mid-Term
Target1

FY23/3Results

High teen%
CAGR2

192.8
billion yen

Low-to-Mid
teen %

11.3%

FY24/3Results
221.2
billion yen
CAGR2:37%

16.1%(21.7billion yen) (35.5 billion yen)

The mid-term targets presented herein represent our plans and expectations as of September 2022. These mid-term targets are forward-looking statements, are subject to significant business,
economic, regulatory and competitive uncertainties and contingencies, many of which are beyond the control of the Company, and are based upon assumptions with respect to future decisions,which are subject to change. Actual results may vary and those variations may be material due to a number of factors. Nothing in this presentation should be regarded as a representation by any
person that these targets will be achieved, and the Company undertakes no duty to update these targets as circumstances change.
The base year of the calculation of Compound Annual Growth Rate (CAGR) is FY22/3.

11

Consolidated Balance Sheet（As of March 31, 2024）
Cash on Hand and in Banks(Yen in billions)(Yen in billions)

As ofMar.31,2023

Total Assets

193.9

Total Current Assets

Change

186.8

-7.1

156.1

138.9

-17.2

Cash on-hand and in banks

45.1

69.7

+24.6

Accounts receivable-trade

40.8

35.3

-5.6

1

Inventories

47.7

25.5

-22.2

Accounts receivable-other

16.2

2.9

-13.3

Total non-Current Assets

37.9

47.9

+10.1

84.1

55.8

-28.3

82.3

53.1

-29.2

23.4

15.8

-7.7

Total Liabilities
Total Current Liabilities
Accounts payable-trade
Accounts payable-other

24.6

9.3

-15.2

Liabilities related to changeable
subcontracting

18.9

9.3

-9.6

109.9

131.0

+21.2

56.6%

70.1%

Total Net Assets
Shareholders' Equity Ratio
1.
2.

As of
Mar.31,2024

Inventories consist of finished goods and work in process
Regular inventory turnover months = ordinary inventories balance/forecasted cost of sales in next-3-month average

46.3

37.2

53.0

55.9
38.1

45.1

33.9

69.7

47.5

Mar.31 Jun. 30 Sep.30 Dec.31 Mar.31 Jun.30 Sep.30 Dec.31 Mar.31
2022
2022
2022
2022
2023
2023
2023
2023
2024

Inventories
Customer reserved inventory
Regular inventory
2
Regular inventory turnover months 3.9

3.7

3.8

45.7 47.7

43.8

3.6
3.0

3.1

3.1

29.6
16.4 19.3

39.2（Yen in billions）

3.9

31.5

3.6

25.5

Current Trend•

Customer reserved
inventory has
started returning to
the normal level

12Capex-Depreciation & Amortization / Cash Flow
Cash Flow2

Capex1-Depreciation & Amortization2(Yen in billions)(Yen in billions)

Depreciation & Amortization

Factors in operating cash flow change in FY24/3 4Q

Capex

Increase in Profit and decrease in inventories

8

25

40

20

6

20
15
4
10

0

2
5

0
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
FY22/3

1.
2.

-20

0
FY23/3

FY21/3 FY22/3 FY23/3 FY24/3

FY24/3Capex: Purchases of PP&E + purchase of intangible assets
Quarterly financial results of FY 22/3 are unaudited and unreviewed by external auditors

1Q

2Q

3Q

4Q

1Q

FY22/3Operating CF

2Q

3Q

4Q

1Q

2Q

3Q

FY23/3

FY24/3

Investment CFFree CF

4Q

13

Breakdown by Application Market
Net Sales
Automotive
Smart Devices

NRE Revenue

Data Center & Networking
Industrial & Others

Automotive
Smart Devices

100%

Data Center & Networking
Industrial & Others

100%

80%

57%

50%

44%

41%

41%

32%

21%

23%
39%

80%

50%

30%

40%

23%

26%

0%

25%

37%

21%
24%

40%

29%
30%

28%

18%

30%

32%
24%

14%

19%

12%

27%

20%
20%

28%
60%

22%
22%

24%

39%

21%
60%

14%

16%

9%

11%

FY18/3

FY19/321%

9%

FY20/313%

FY21/316%

16%

FY22/3

28%

20%

14%

FY23/3

27%

18%

19%

FY24/3

48%

0%

4%

FY18/321%
8%

5%

FY19/3

FY20/3

FY21/326%

FY22/334%

FY23/3

FY24/314

Breakdown by Application Market
Net Sales

100%

Automotive
Smart Devices
Others29%

27%

NRE Revenue
Data Center & Networking
Industrial

23%

23%

14%

21%
21%
28%

18%

40%

23%

1.

10%

6%

26%

34%

8%

8%
16%
30%

28%

6%
13%

21%
24%

60%

12%

25%

27%
37%

40%

29%
30%

28%

18%

30%

32%
24%

0%

13%

11%
25%

21%

20%

14%

16%

14%

80%

22%
26%

Data Center & Networking
Industrial

100%

27%

23%
22%

20%

6%
17%

80%

60%

11%

Automotive
Smart Devices
Others

16%

9%

11%

FY18/3

FY19/321%

9%

FY20/313%

FY21/316%

16%

FY22/3

28%

20%

14%

FY23/3

Industrial: office equipment, factory automation, industrial equipment, measurement instruments/testers, etc.
Others: sensors, existing consumer equipment (BDR, TV tuners), etc.

27%

18%

19%
FY24/3

48%

0%

4%

FY18/321%
8%

5%

FY19/3

FY20/3

FY21/326%

FY22/334%

FY23/3

FY24/315

Breakdown by Geographic Region
Net Sales
US

China

NRE Revenue

Japan

Others

100%

12%

12%

10%

11%

12%

7%

US
8%

80%

Japan

100%

11%

19%

18%

10%

80%

44%
60%

66%

63%

59%

51%

38%

52%

56%

33%
20%

15%
7%
FY18/314%
11%
FY19/314%
FY20/3

FY21/331%

26%

FY22/316%
FY23/3

20%

21%

18%

45%

48%

FY23/3

FY24/3

25%

39%

18%

18%

14%

20%

20%

14%

8%

55%

40%

24%

7%

36%

71%

17%

Others

60%

40%

0%

China

12%

15%
FY24/3

0%

19%

6%

6%

FY18/3

FY19/3

16%

34%

37%

FY21/3

FY22/311%
FY20/316

Breakdown by Process Node
Net Sales
3-7nm

10-16nm

20-28nm

NRE Revenue
3-7nm

40nm & above / Others

100%

80%

45%

64%

43%

22%

25%

28%

40%

29%

37%
36%

40nm & above / Others

15%
9%
FY19/3

3%
FY20/317%

20%
FY21/3

16%

33%

10%

FY23/3

8%
12%
9%

19%

30%
28%

46%

30%

40%

40%

44%

20%

71%
59%
40%

43%

FY21/3

FY22/328%

13%
FY22/3

10%
12%

34%
9%

31%

33%

60%

16%

14%

18%

21%

17%

FY18/3

21%

55%
22%

5%

23%

80%

42%

60%

0%

20-28nm

100%

29%

20%

10-16nm

FY24/30%15%

1%
FY18/3

FY19/3

FY20/3

FY23/3

FY24/317

Strong Design Wins
◼ “Design Win Amount1” has more than doubled through transformation since 2018

The amount was at level of 250 billion yen in FY24/3 following FY23/3“Design Win Amount” (LTR) acquired in each fiscal year
Approx.

250 billion yen

Approx.

200 billion yen
Approx.

100 billion yen

FY18/3

FY19/3

FY20/3

FY21/3

FY22/3

FY23/3

FY24/3We do not update the “design win amount” for any changes in circumstances that we become aware of after such period-end date. Those changes include: (1) recognition of revenue relating to such projects
or any other subsequent changes in the development process, estimated sales volumes, unit prices, available manufacturing capacity or other factors that occur, and (2) any subsequent cancellation ofprojects. For example, certain projects in primary areas reflected in the “design win amount” for FY20/3, FY21/3 and FY22/3 suffered from subsequent cancellations that accounted for around 20%,
respectively, of the relevant “design win amount” shown in the graph above. However, the “design win amount” corresponding to subsequent project cancellations for FY20/3, FY21/3, FY22/3, FY23/3 andFY24/3 were more than offset by the effects of increases in actual or newly estimated unit prices or volumes with respect to some of the projects compared to our original expectations, and thus theretrospective “design win” amounts for such years after taking these subsequent effects into consideration would show a mostly same level to our original expectations. There have been no significant
subsequent cancellations regarding the design win amount for the fiscal year ended March 31, 2023, and ended March 31, 2024,although there can be no assurance that cancellations will not occur in the
future with respect to design win amounts for such fiscal year or any prior fiscal year. A foreign exchange assumption of 1USD=100JPY has been used with respect to all seven periods set forth in the abovegraph.
1.

The life-time revenue (or LTR) of the ”design win amount” for a particular period reflects our expectations as of the end of such period, based on various estimations and assumptions that we believe to be reasonable at such time, regarding
the total future revenue from the design win projects that were acquired during such period, many of which involve a considerable degree of subjective judgment. Actual revenues could differ, and our expectations regarding future
revenues could change after such period-end date, due to various factors such as subsequent cancellations, changes in the development process and costs, actual revenues earned, changes regarding sales volumes and product durations,price changes, changes in our manufacturing capacity and the impact of foreign exchange fluctuations, among others. In addition, we continue to refine our estimation methods without retroactively updating past-period amounts. As aresult of the foregoing, a direct period-to-period comparison may not be meaningful beyond describing general trends over extended periods. Refer to pages 3.

18

Large-Scale Design Wins Increasing
Large-scale Design Wins have been increasing both in numbers and total amounts
Significant portion of future product shipments is expected to come from large-scale projects, which will improve our business efficiency◼

1“Design Win Amount ” (LTR) acquired in each fiscal year
Size : ≥¥30bn
Size : ≥¥10bn, <¥30bn
Size : <¥10bn
Approx.
200 billion yen
Number of projects

Approx.

250 billion yen
3

Approx.

100 billion yen

FY19/3

5
8

2

2

3
FY18/3

2

FY20/3

FY21/34

4

2
FY22/3

FY23/3

FY24/3We do not update the “design win amount” for any changes in circumstances that we become aware of after such period-end date. Those changes include: (1) recognition of revenue relating to such projects
or any other subsequent changes in the development process, estimated sales volumes, unit prices, available manufacturing capacity or other factors that occur, and (2) any subsequent cancellation ofprojects. For example, certain projects in primary areas reflected in the “design win amount” for FY20/3, FY21/3 and FY22/3 suffered from subsequent cancellations that accounted for around 20%,
respectively, of the relevant “design win amount” shown in the graph above. However, the “design win amount” corresponding to subsequent project cancellations for FY20/3, FY21/3, FY22/3, FY23/3 andFY24/3 were more than offset by the effects of increases in actual or newly estimated unit prices or volumes with respect to some of the projects compared to our original expectations, and thus theretrospective “design win” amounts for such years after taking these subsequent effects into consideration would show a mostly same level to our original expectations. There have been no significant
subsequent cancellations regarding the design win amount for the fiscal year ended March 31, 2023, and ended March 31, 2024,although there can be no assurance that cancellations will not occur in the
future with respect to design win amounts for such fiscal year or any prior fiscal year. A foreign exchange assumption of 1USD=100JPY has been used with respect to all seven periods set forth in the abovegraph.
1.

The life-time revenue (or LTR) of the ”design win amount” for a particular period reflects our expectations as of the end of such period, based on various estimations and assumptions that we believe to be reasonable at such time, regarding
the total future revenue from the design win projects that were acquired during such period, many of which involve a considerable degree of subjective judgment. Actual revenues could differ, and our expectations regarding future
revenues could change after such period-end date, due to various factors such as subsequent cancellations, changes in the development process and costs, actual revenues earned, changes regarding sales volumes and product durations,price changes, changes in our manufacturing capacity and the impact of foreign exchange fluctuations, among others. In addition, we continue to refine our estimation methods without retroactively updating past-period amounts. As aresult of the foregoing, a direct period-to-period comparison may not be meaningful beyond describing general trends over extended periods. Refer to pages 3.

19

Design Win Balance: Breakdown of Changes◼

Although new Design Wins expanded, Design Win Balance increased only slightly, due to revision of sales forecasts for existing projects
in response to customers’ business environment and the cancellation of mass production for a few projects mainly in Japan◼

Approximately 60% of the current Design Win balance will be recognized as net sales between FY26/3 and FY29/3(Yen in billions)

Design Win Balance (Approx.) FY22/3 - FY24/3

1,400

1,200

250

1,000

20 60
40

250

150
1,000

50
10

60

170

1,020

840
800

Main factors in changes (approximate figures)
1. New design wins: 250

600• Automotive: 50%• US: 40%400

2. Changes in balance from existing design wins: -60

200

3. Sales recognition: -170

• Decrease sales in FY24/3: -10• Decrease in and after FY25/3: -50

0
Design Win Balance
as of March 2022
1.

New Design Wins

Review and update of Revenue recognition Design Win Balance
estimates,
as of March 2023
cancellation, etc.

New Design Wins

Review and update of Revenue recognition Design Win Balance
estimates,
as of March 2024
cancellation, etc.

“Design win balance” represents our estimates of remaining accumulated “design win amount” that is associated with projects that are active as of a particular date. “Design win balance” thus reflects certain subsequent developments after the endof the period in which such design win was acquired up until the relevant balance date, including (1) recognition of revenue relating to such projects or any other subsequent changes in the development process, estimated sales volumes, unit prices,available manufacturing capacity or other factors that occur, which could either increase or decrease “design win balance” and (2) any subsequent cancellation of projects. For example, certain projects in primary areas reflected in the “design win
amount” for FY20/3, FY21/3 and FY22/3 suffered from subsequent cancellations that accounted for around 20%, respectively, of the relevant “design win amount” shown in the graph above. However, the “design win amount” corresponding tosubsequent project cancellations for FY20/3, FY21/3, FY22/3, FY23/3 and FY24/3 were more than offset by the effects of increases in actual or newly estimated unit prices or volumes with respect to some of the projects compared to our original
expectations, and thus the retrospective “design win” amounts for such years after taking these subsequent effects into consideration would show a mostly same level to our original expectations. There have been no significant subsequentcancellations regarding the design win amount for the fiscal year ended March 31, 2023, and ended March 31, 2024,although there can be no assurance that cancellations will not occur in the future with respect to design win amounts for such fiscal
year or any prior fiscal year. A foreign exchange assumption of $1=¥100 has been used.
2.Design Win Balance as of June 2022 was 880 billion yen

20Design Win Balance by Application Market and Region

Automotive

Byapplication

Japan

By
region1

DC&NW

US

Industrial

EU

SD

China

Others

As of FY24/3

Aisa excluding China

As of FY24/3◼ “Automotive” and “US” increased respectively following the recent strong design wins
◼ Design Win Balance in “Data Center & Networking” expected to increase, as new business in US is in progress◼ Sales in each category expected to grow in a balanced manner in the mid-term, aligned with the composition of

Design Win Balance◼ Demand for Solution SoC business in “Industrial” is increasing from previously expected level;

Ratio of “Industrial” in the Design Win Balance remains at previous level＊ “Industrial” has been separated from “Others” as an independent category
1 “Geographic region” is calculated based on the regional companies of Socionext

21

Abundant Global “Design Win Balance”
In FY2024/3, Design Win Balance1 from “Automotive” and “Smart Devices” increased.
◼ Design Win Balance in “Data Center & Networking” expected to increase, as new business in US is in progress◼

Automotive
Application
HP
Computing
AD/ADASnm

Customers2

Application

3-7nm

Global OEMs
Tier-1 Suppliers /Emerging
companies

Data
Centers3

LiDAR
CameraRader
HMI

Data Center & Networking

5G
Base Station
CU/DU/RU

7-22nmnm

Customers2

3-12nmGlobal Major
Telecom
Equipment
Players

Smart Devices

Industrial
Applicationnm

Customers2
Major
Players

FA
Test &
Measurement
Printer

5-28nmApplication

Major
Players

DSLR/Action
CameraNetwork
camera7-12nmCustomers2

nm

5-12nm“Design win balance1” (LTR) as of March 31, 2023 & March 31, 2024 (excl. special demand2)
JPY
300bn
JPY
150bn

Mar-23Mar-24Mar-23Mar-24Mar-23Mar-24Mar-23Mar-24

1.

“Design win balance” represents our estimates of remaining accumulated “design win amount” that is associated with projects that are active as of a particular date. “Design win balance” thus reflects certain subsequent developments after the endof the period in which such design win was acquired up until the relevant balance date, including (1) recognition of revenue relating to such projects or any other subsequent changes in the development process, estimated sales volumes, unit prices,available manufacturing capacity or other factors that occur, which could either increase or decrease “design win balance” and (2) any subsequent cancellation of projects. For example, certain projects in primary areas reflected in the “design win
amount” for FY20/3, FY21/3 and FY22/3 suffered from subsequent cancellations that accounted for around 20%, respectively, of the relevant “design win amount” shown in the graph above. However, the “design win amount” corresponding tosubsequent project cancellations for FY20/3, FY21/3, FY22/3, FY23/3 and FY24/3 were more than offset by the effects of increases in actual or newly estimated unit prices or volumes with respect to some of the projects compared to our original
expectations, and thus the retrospective “design win” amounts for such years after taking these subsequent effects into consideration would show a mostly same level to our original expectations. There have been no significant subsequentcancellations regarding the design win amount for the fiscal year ended March 31, 2023, and ended March 31, 2024,although there can be no assurance that cancellations will not occur in the future with respect to design win amounts for such fiscal
year or any prior fiscal year. A foreign exchange assumption of $1=¥100 has been used.

2.

Major non-Japanese customers are listed.

3.

Projects include development of test chips commissioned by external parties.

22

Consolidated Earnings Forecast

Full Year Results

Full Year Forecast

YoY

YoY %

221.2

200.0

-21.2

-9.6%

Operating Income

35.5

27.0

-8.5

-24.0%

16.1%

13.5%

-2.6%pt

26.1

19.5

-6.6

11.8%

9.8%

-2.0%pt

Basic Earnings per Share1,3

148.39yen

109.13yen

Dividends per Share2,3

48.00yen

50.00yen

FX Rate (USD/JPY)

144.6yen

130.0yen

ProfitMargin1.
2.
3.

FY2025/3

Net Sales
Margin➢(Yen in billions)

FY2024/3-25.4%The FX rate sensitivity for the FY25/3 forecast is assumed to be approx.1.2 billion yen for net sales, and approx. 325 million yen for operating income to a 1 yen change against US dollar.
The impact on other currencies is assumed to be negligible.
Actual basic earnings per share for FY2024/3 and forecasted basic earnings per share for FY2025/3 was calculated based on 176,119,044 shares.
Estimated dividends per share for FY2024/3 was 42.00yen as of the end of April, 2023 and 46.00yen as of the end of October, 2023.
Actual and forecasted basic earnings per share and dividends per share were calculated based on the number of shares after the five-for-one stock split. Socionext conducted a five-for-one stock split of common stock owned byshareholders listed or recorded in the final shareholder register as of December 31, 2023.

23

Consolidated Earnings Forecast (vs Previous Results)
Net Sales

Operating Profit（Yen in billions）（Yen in billions）

Product revenue decreased

Product gross profit decreased• Slight decrease in real terms+) New mass production increased- ) Special demand decreased+) Other products slightly increased• Slight decrease in real terms• Cost rate almost unchanged• Decrease due to FX rate

• Decrease due to FX rate

“NRE etc. slightly increased• Slight increase in real terms• Decrease due to FX

NRE etc. slightly increased• Slight increase in real terms• Decrease due to FX

R&D etc. almost unchanged• R&D: slight increase• SG&A: slight decrease• Decrease due to FX(FX rate)➢(144.6)(130.0)(FX rate) (144.6)(130.0)The FX rate sensitivity for the FY25/3 forecast is assumed to be approx.1.2 billion yen for net sales, and approx. 325 million yen for operating income to a 1 yen change against US dollar.
The impact on other currencies is assumed to be negligible.
24Illustrative Image of Growth
While expansion of new mass production continues, Net Sales will possibly be flat or slightly decrease in FY25/3 and FY26/3, due to end of Special Demand andweakening of Chinese and consumer markets → Another growth acceleration will follow driven by new mass production in automotive and other areas◼

Net sales achievement and forecast2

Sales growth mechanism

Effect of FX (Upward revision due toyen depreciation from USD 1 = JPY 130)

Design win grew stepwise

Effect of Special Demand

Sales growth line
assuming FX at JPY130

Upward Deviation beyond forecast
FY21/3

FY22/3

FY24/3
JPY 221.2bn
FY18/3

FY19/3

FY20/3

FY21/3

FY22/3

FY23/3

FY24/3

FY23/3

FY24/3

FY25/3e

FY26/3e

FY27/3e -FX rate (yen)

130.0

130.0

130.0

Net Sales(billion yen)

200.0+) More new mass
production

•
•

1.
2.
3.

Actual net sales increased due to the special
demand and other upward deviation
Without these temporary factor, new mass
production sales are expected to grow steadily
with design win balance-) End of Special
DemandFY22/3
JPY 117.0bn

FY21/3
JPY 99.7bn

Factors

Initial Estimate in the
Mid-term Planassuming FX at JPY 115-) Weakening
Chinese andconsumer market-) Difference in FX
rate assumption+) Design Win Balance
contribution to sales(by Transformation
Phase 2)+) Mass production of
automotive, etc.

OP Margin:
Mid-to-High teen

Refer to page 3
Net sales for FY21/3 and FY22/3 was based on the actual FX rate the time. The upper line chart assumes FX rate of USD 1 = JPY 130 in and after FY23/3 for the purpose of comparison between the current and long-term growth trend.
The lower line chart was net sales estimate in the mid-term plan recalculated with an assumption of USD 1 = JPY 115. Upward deviation is calculated using this recalculated net sales estimate. Please note that the actual mid-term planassumed FX rate of JPY 115 except for FY23/3 with an assumption of JPY 125.
This slide is from the Q2 FY24/3 financial results presentation, with updated FY24/3 results and revised exchange rates for FY25/3 and beyond.

25

OP Margin Trend and Outlook for Future◼

OP margin has shown improvement in recent years, and while it may temporarily remain flat, it is expected to growagain due to the increase in product revenue

Long-term OP margin trend after FY2022/3
FY24/3 Level
Forecast under the same exchange
rate assumption
Actual and company plan value
assuming FX at JPY 130~FY24/3
Product
Gross
Margin
R&D
ratio
SG&A
ratio
FX rate(USD/JPY)◼ ~FY23/3

FY25/3-FY26/3

FY27/3~◼ Baseline trend is mostly flat
◼ Advanced R&D and cost related tostrengthening R&D structure would be on
the rise◼ R&D and SG&A ratio will slightly improve
due to the increase in net sales while thetotal amount of R&D and SG&A would beon the rise

◼ FY24/3◼ R&D ratio improved due to the increase inproduct revenue◼ R&D efficiency improved while total expense
increased◼ SG&A ratio improved due to the increase in net
sales

112.4

135.5

*Arrows indicate direction of impact on OP margin

143

130.0

26

Market Trend, Background of FY25/3 Forecast and Outlook for FY26/3 & Beyond
Market trend and Design win
Automotive

FY25/3 forecast

FY26/3 & beyond outlook◼ Product Revenue◼ Product Revenue◼

- Sales from new mass production will increase significantly compared to
FY24/3 (accounting for 10% of total product sales)- Innovation continues for ADAS (Advanced Driver
Assistance System) and AD (Autonomous Driving)◼

- Total product revenue in real terms will be flat or slightly lower than FY24/3,
due to end of “special demand” in China and decline in office and FA
equipment due to changes in the market environment- Demand is strongly active for HPC, in addition to zonearchitecture and sensing SoCs
- Business opportunities continue to be active

Overview◼

- Sales from China network business (“special demand”
ended / some contributed to revenues ahead ofschedule) will decrease, returning to initially projectedlevelApplication market- Automotive business will remain steady- Slight decrease in office and FA equipment due to inventory adjustment- Demand growing for DC＆NW and cloud service SoCs,
due in part to increasing demand for generative AI- New business opportunities for data center active in
the US

Smart Devices- Demand for new technologies in smart devices area
continues to be strong due to expanding use of AI- Business opportunities active with advanced
customers, in applications including computer vision,
AR etc.

Industrial- Demand expanding for Solution SoC with advanced
technologies in industrial applications, due toexpanding use of AI and networking- Business opportunities increasing, for FA, andmeasurement equipment, as well as for custom SoCs
using RF-CMOS technologies- Demand for consumer electronics is expected to weakenin the near term

- Demand for existing Smart Device business will increase

Data Center & Networking- Demand for large-scale SoCs will drive demand for testers◼

- “Special demand” for the China network business will decrease by about
15bn yen from FY24/3 (back to initially projected level)◼

Geographic region- China: “Special Demand” will decrease
New mass production for Automotive will increase- US:- Japan：Industrial (office, FA) will decrease- Industrial:- Demand will expand as inventory adjustment level off- Demand for large-scale SoCs will drive demand fortesters- Mass production will start for IoT equipment utilizing RF
technology◼ NRE revenue- Moderate increase in line with increase in Design Wins
- Steady design wins expected from Automotive and Industrial for AI
functionality, as well as from Data Center business opportunities◼ Operating Income◼ FX Assumptions- Data Center & Networking:- Business expansion expected

◼ NRE
◼

1USD=130JPY

FY27/3 & beyond:- With design wins acquired in FY20/3~23/3 at 200 billion
yen and current level of design wins at 250 billion yen,sales growth expected as the mass production ofprojects from these design wins start (“Design Win
Balance” calculated based on 1USD = 100JPY)- Automotive:
Mass production will start for ADAS/AD SoC

Smart Devices and Industrial will increase- Operating Income will decrease from FY24/3, Due to decrease in productGP due to lower product sales while maintaining the manufacturing cost
rate and Increase in R&D for active investment for leading-edge
technologies

FY26/3: Same level as FY25/3 or slightly lower- Sales increase from new mass production is expected tocontinue (same level as FY25/3)

Continue to be in increasing trend- FX sensitivity (Sales): approx. 1.2 billion yen- FX sensitivity (OP):approx. 325 million yen

27

Growth strategy
─
─
─
─

─

─
─
─

─

Further Growth through “Phase 2 Transformation”
Solution SoC Business Model
Growing Demand for Custom (Bespoke) SoCs
Positioning of Socionext in Custom SoC Market
Socionext’s Development Platform for “Entire Design” for Diverse Fields and Products
Investing in Leading-Edge Technologies
Advanced SoC Developments on Computer Architecture Basis in Diverse Fields
Design Wins Expanding in Each Application Market
Expanding Business in Each Application Market
Transformation of Global R&D StructureFurther Growth through “Phase 2 Transformation”◼

Aim for further growth and development through new and distinctive Solution SoC business model and“Phase 2 Transformation”, while maintaining top line growth and solid profitability achieved by“Phase 1 Transformation”“Phase 1 Transformation”

Further Growth and Development
through “Phase 2 Transformation”

More design wins by “outside-in change”◼ Transformation of business model and focus business area

→ Expand “Design Win Amount” → Expand “Design Win Balance”→ Expand product revenue→ Expand profit by operating leverage◼ Build and strengthen competitive R&D structure, both in quantity andquality / Invest actively in leading-edge technologies◼ Strengthen partnership with global SoC ecosystem players◼ Continue high level of design win amount

FY21/3

FY22/3

FY23/3

FY24/3

Net Sales(billion yen)

99.7

117.0

192.8

221.2

Net Sales(billion yen)

200.0

FX Rate (yen)

106.1

112.4

135.5

144.6

FX Rate (yen)130.0

OP Margin

1.6%

7.2%

11.3%

16.1%

FY25/3e

FY26/3e

FY27/3e -

130.0

130.0
OP Margin
Mid-to-High teen %Achieve high growth and OP margin improvement29Socionext’s Mission“Together with our global partners, we bring innovation to everyone everywhere”
Socionext will help to bring about a prosperous society by delivering new value to our customers and topeople around the world beyond them. We will do this as a valued partner of customers seeking uniqueand cutting-edge SoCs to differentiate their services and products. We will also do this as a partner ofour suppliers providing the latest technologies in the evolving semiconductor ecosystem, including
foundries, outsourced semiconductor assembly & tests (OSATs) and providers of intellectual property (IP),electronic design automation (EDA) and software.

Socionext

Evolution of SoC
ecosystem“Solution SoC”

Foundry, OSAT, Software, IP, EDA, etc.

Entire Design &Complete Service

Innovative customers
seeking“bespoke” SoCs
Automotive, Hyperscalers, etc.

Connecting leading-edge SoC technologies to innovative businesses of customers in diverse fields
30

Transformation into Global Custom SoC Vendor in Advanced Technology Areas◼

Through a transformation of our business and company culture, Socionext has turned into a global leading custom SoC
vendor with a new and distinctive business model that we refer to as “Solution SoC”
Business Model

Focus onASSP and ASIC

Expansion ofOverseas BusinessTechnology

CultureMainlyDomestic Focus

Follower

HierarchicalOrganization

LeaderQuick Decision-Making

Blu-ray/DVD

DTV

Past
2018

Primary Applications

DSC

Mature Market

Automotive

Data Center& Networking

Smart Devices

Industrial

Present
Focus onSolution SoC

in custom SoC mkt.

Growth Market

Global Market(2nm, 3nm, 5nm)with a Flat Team
Structure31

Solution SoC Business Model◼ Socionext has established new and distinctive “Solution SoC1” business model to provide optimal custom

SoCs to customers who require advanced and innovative chips“Solution SoC”◼

Architecture(Service/Application)

Customer

Architecture (SoC)➢ … has diverse engineers with wide range of technology,
expertise (SoC architecture,・・・ thermal and quality)

SW

Physical
ThermalMass Production
Quality Control

This slide is an image based on the company’s recognition.

➢ … collaborates with customers who seek unique SoCs
(including heterogeneous) to differentiate their products andservices in advanced technology areas,

DFT

HW

PCB
PKG

SoC Design

Manufacturing
1.

Socionext

Specification (SoC)

IP

Entire Design & Complete Service

Architecture (System)

Collaborating with customer to design optimal SoC
architecture to meet customer requirements and for design
efficiency / Identify best IPs and design methodologies
from across the entire semiconductor ecosystem / Offer
ideal custom SoCs to all types of customers

Socionext➢ … designs optimal SoCs and chiplets by utilizing variety ofCPU, AI, Interface and application IPs on its flexible design &development platform based on computer architecture,➢ …

ensures quality (including automotive grade), and➢ … operates with global production and delivery system(including for automotive market)
32

Features of Solution SoC Business Model
The primary difference between “traditional ASIC2” and “Solution SoC1“ is how to interface with customers◼ The primary difference between “Solution SoC” and “ASIC designed by ASSP vendors2“ is the breadth of optionalcustomization
2◼

Custom SoC (ASIC)

ASSP

Traditional
ASIC2“Solution SoC”

ASIC designed
by ASSP vendors2

Customer

Customer

Customer

Architecture(Service/Application)

Architecture (System)

Customer

Architecture (SoC)
Specification (SoC)

HW

SW

Use SoC vendor’s
IP and design
methodology

IP
PCB
PKG
DFT

SoC

SoC Design

Physical

SoC
VendorSoC
VendorSoC
VendorSoC
VendorMass Production /Quality Control
Manufacturing
1.
2.

This slide is an image based on the company’s recognition.
This graphic provides an illustrative framework of the types of industry players based on the company’s classifications.

33

Competitive Advantages of Solution SoC Business Model◼

Socionext features “Entire Design” (from SoC architecture to thermal design and quality) and “Complete Service” (full turnkey and production)and deliver unique (“Bespoke”) SoCs for all types of customers in diverse industries and products

Competitive advantages of bespoke SoC developed under Solution SoC business model
Compared to Traditional ASIC1◼

◼

◼

Available to provide for bespoke SoC, heterogeneous SoC/chiplets andcomplex leading-edge SoC design
Valuable support of software development in early stages and upstream
designAvailable for companies with limited in-house resources

Compared to ASIC designed by ASSP vendors1◼

Flexibly draw on ecosystem resources in order to design optimal custom SoCs
(as opposed to limited modifications restricted to their own IP and design
methodologies)

Key Foundations of our Solution SoC Model with our Strong R&D Team
1.

2.

3.

Understanding Customers◼

Deep understanding of architecture of customer’s systems◼

Experience of ASSP business which enables our teams to understand the customer’s system, applications and IPs

Understanding SoCs◼

Deep understanding of SoCs architecture and technologies including IP, EDA tools, packaging, quality control and manufacturing◼

Years of experience and expertise in custom SoC business for wide range of applications and multiple products◼

Entire design capability from SoC architecture to thermal design and quality, and complete service capability including support for full tern-key and mass productionin advanced technology areas

Scale
◼

4.

Experience◼

1.

Abundant engineering resources and flexible R&D organization for large scale development including upstream design with architects, system and software engineers,
front-end and back-end engineers, and packaging engineers

Years of experience developing highly reliable products for automotive applications

Classifications are based on our own assessment

34

Growing Demand for Custom (Bespoke) SoCs
Background of Growing Demand for
Custom (Bespoke) SoCs and Solution SoC partner$Bn

15
OthersIndustrial &SD

SAM
CAGR 5.2%

10

Automotive

DC/NW
Primary area

5

CAGR 8.4%

1
2

3

SAM

primary
areas

0

2023
ASIC CAGR 2.9%
ASSP CAGR 11.7%
1.
2.

2027E

4
5

Emergence of new services and applications

New services and applications emerge through evolution of technologies;
Demand expands for SoCs optimized for such services and applications

Bespoke vs ASSP

(1) In “More-than-Moore” era, demand is expanding from leading
companies for unique SoCs with optimal design to achieve PPA
requirement (2) Concerns on lock-in by ASSP vendors : More companies
are not satisfied with ASSPs

Evolution of semiconductor ecosystem

Leading-edge technologies become more accessible as global
semiconductor ecosystem evolve (Foundry, OSAT, EDA, IP, OSS, etc.)“Entire Design” and “ Complete Service”

Significance of “Entire design” (from SoC architecture to thermal and quality) and“Complete Service” (from development to production control and delivery) arefurther increasing, as design of leading-edge SoCs becoming more
complex and needs for “bespoke” SoCs / chiplets / heterogeneous
integration expanding

New needs in many application markets

Even in areas that have been served by traditional ASICs, more customers
turn to Solution SoC type of development to achieve advanced
functionalities, which require integration of various IPs

Calculated by Socionext based on Omdia ”Application Market Forecast Tool-1Q 2024”. " Figures for the market for "logic ASICs" are used for the “Custom SoC(ASIC)"
Market CAGR(2023-2027E) are calculated by (figure of 2027E / figure of 2023)^(1/4)-1.

35

Positioning of Socionext in Custom SoC (ASIC) Market◼

With the exception of Apple, Socionext has the 2nd largest market share of 12% within the Custom SoC(ASIC)1 market,
where some players can design 5nm/3nm SoCs.

Custom SoC(ASIC) 1 Market Share2 (2022-2023)

ASSP1 Market Share2 (2022-2023)

Market Share Excluding Apple

Market Share

Market Size

$12 billion

Apple Others
48%
52%

Market Share
Market Size

Market CAGR3(2023-2027E)$139 billion

5.2%

Market CAGR3(2023-2027E)

11.7%

OthersMarket Size

$25 billion

NvidiaOthersBroadcomMarket CAGR3(2023-2027E)

Intel

2.9%

These Market Data
are estimated by
Socionext based on
Omdia data
1.
2.
3.

MediaTek

Marvell

Socionext

Inner circle: 2022
Outer circle: 2023

The market data above does not include certain traditional ASIC vendors in Taiwan
such as GUC, Alchip and Faraday due to the lack of third-party statistical data.

Broadcom

Qualcomm
Inner circle: 2022
Outer circle: 2023

We define “ASSP” as the “Logic ASSP” segment based on Omdia ”Application Market Forecast Tool-4Q 2023” classification and “Custom SoC(AS)C)” as “Logic ASIC” based on Omdia "Application Market Forecast Tool-4Q 2023". Omdia’sclassifications of the markets may differ in certain respects from our target markets. Classification are based on the company’s recognition
These market data are estimated by Socionext based on Omdia data ”Competitive Landscaping Tool CLT, Annual- 4Q 2023”. All market sizes are calculated in terms of USD-based revenue
Calculated by Socionext based on Socionext internal information and Omdia ”Application Market Forecast Tool-1Q 2024”. Market CAGR(2023-2027E) is calculated (figure of 2027E / figure of 2023)^(1/4)-1

36

Strengthening Investments in R&D and Leading-Edge Technologies
◼
◼
◼
◼
◼

Computer architecture-based design & development◼

In major markets in the advanced technology field, common computer architecture-based
concepts are becoming the basis for design and development“Software-Defined SoC” as part of software-oriented system
Common challenges for PPA optimization
SoC technology in More-than-Moore era (chiplet, heterogeneous integration)
Design becoming more complex（process technology, software, heterogeneous, thermal
design, reliability, …)◼

System, subsystem configurations and bus architectures are becoming similar acrossmajor applications and closer to computer architecture
Common design and development platform improves efficiency and profitability

Building design & development platform
optimized for “Solution SoC” business model

◼
◼
◼

◼

◼

Investing further inleading-edge technologies

Socionext’s “Solution SoC” design & development platform

Investing in most advanced process technologies• 2nm and 1.4nm• Chiplets (die-to-die interconnect, 2.5D/3D, etc.)• AI to support design and development, IPs
Meet customer expectations for technology evolution by tight collaboration with SoC
ecosystem players (EDA, IP and other vendors)

Computer Architecture Based Platform◆ Drive innovation with tighter collaboration with SoC ecosystem

Application

Software◼

Building and strengthening computer architecture-based design and development platformthat covers not only hardware but also “Entire Design” for “Solution SoC”, including systemlevel software, thermal design, etc.
Leveraging experiences in multiple applications and products
Keeping pace with technology evolution while maintaining existing design assets at eachfunctional layer
Robust platform that also covers software development
Offering “Entire Design” and “Complete Service” for complex SoC designs

Hardware◼

Specific API

Framework
AI API

Linux API

Specific Libraries

AI Libraries

Standard Libraries

Linux

Device Driver

Specific Firmware

Machine Learning

Firmware (Boot/System)

AI Engine / GPUStandard H/WSpecific H/WSecurity & System
Management
Firmware (Boot/System)
Peripherals

Memory / System Interconnect

ROM/RAM

Application Processor

Micro Processor

Application Block

System Controller

37

Advanced SOC Developments on Computer Architecture Basis in Diverse Fields
Common development platform established as system configurations across major applications become similar towards computer architecture-based
Addresses PPA optimization challenges due to design complexity such as chiplets, heterogeneous integration, thermal and reliability
Filter

LVDS

DSP
ADC

Die 2 Die Interface

System Interconnect

DSP
OCM

Die 2 Die Interface

DAC

SerDesProcessor
Processor
Processor
Processor
Processor
Processor
Processor
Element

DDR4

Codec
DSP

Die 2 Die Interface(UCIe)
Peri

ROM

DISP

SCP

Cmp/Dcmp

ISP

Processor
Processor
Processor
Processor
Processor
Processor
DSP

SerDes

SCP
Peri
ROM

DDR4

OCM

MIPI

NPU
GPU
GPU

PCI Gen4

SerDesLPDDR5

PCI gen5

System Controller

MIPI

NPU

SystemInterconnect

Chiplet / Heterogeneous

DAC

ADC

MemoryAdvancedRF

PCI gen5

GPU
GPU

ISP

USB

Test & Measurement

AI Block

SerDesCameraIndustrial

Application Block(Processor, Standard IF)
Application Specific,
User Logic

System Interconnect

Codec

CPU
CPU
CPU
CPU

USB

SystemInterconnect

DSP

Cmp/Dcmp

Die 2 Die Interface(UCIe)

Peri

Peri

CPU
CPU
CPU
CPU

OCM

ROM

DISP

SCP

Peri

LPDDR5

Peri

Network Camera

5G-RF TRX Unit
CipherSmart Devices

CPU
CPU
CPU
CPU

◼

SCP
Peri
ROM

◼

EDA Tool

Chiplet / Homogeneous

System Interconnect
SCP
Peri
ROM

Computer Architecture Based Platform

SerDesSecurity & System
Management

Firmware (Boot/System)

Firmware (Boot/System)

AI Engine / GPUStandard H/W

Peripherals

Memory / System Interconnect

ROM/RAM

Application Processor

Micro Processor

Application Block

System Controller

Data Center & Networking
Server Processor
DDR5

HBM

OCM

GPU
GPU
CPU
CPU
CPU
CPU

PCI gen5
USB
SCP
ROM
Peri

PCI gen5

Network Switch

USB

Ethernet

SCP
ROM
Peri

Secure

OCM
OCM

Die 2 Die Interface (UCIe)

Die 2 Die Interface (UCIe)

OCM

System Interconnect

NPU
NPU
NPU
GPU
GPU
CPU
CPU
CPU
CPU

Peri

HBM

Peri

NPU
NPU
NPU

SCP
ROM

PCI gen5

GPU
GPU

OCM

Peri

USB

CPU
CPU
CPU
CPU

System Interconnect

DDR5

Die 2 Die Interface (UCIe)

Server Processor

System Interconnect

Specific H/W

Device Driver

Machine Learning

NPU
NPU
NPU

HardwareSpecific Firmware

Die 2 Die Interface (UCIe)

Linux API
Standard Libraries

Linux

Peri

AI APIAI Libraries

SCP
ROM
Peri

Automotive/ADAS

Framework

Specific Libraries

DDR5

Automotive

SoftwareApplication

Specific API

Chiplet / Homogeneous

DDR5

1.Development cases in this page are mainly those in mass production or under development, but some are still in business negotiation stage.

Chiplet / Heterogeneous38

Design Wins Expanding in Each Application Market
Smart Devices

Industrial
Advanced
RF

5/7nm
Test & Measurement

5/7/12nm
DSLR/Action

5/7nm
Network cameras
AR

28nm
Printer

EDA ToolComputer Architecture Based Platform

16/22nm
LiDAR / Radar / Camera

Framework

AI API

Linux API

Specific Libraries

AI Libraries

Standard Libraries

Specific Firmware

HardwareAutomotive

SoftwareApplication

Specific API

Specific H/W

Linux

Device Driver

Security & System
Management

Machine Learning

Firmware (Boot/System)

Firmware (Boot/System)

AI Engine / GPUStandard H/W

Peripherals

Memory / System Interconnect

Data Center & Networking
Data Center

ROM/RAM

Application Processor

Micro Processor

Application Block

System Controller

12nm

5nm
3nm

7/16/22nm
Zone Computing

7nm
7nm

7nm

7nm

7nm

3/5nm
HP Computing
Base Station

39

Design Wins Expanding in Each Application Market
Smart Devices
Application
Network cameras
DSLR/Action

Industrial

Customers1

nm

Application

Advanced
RF

Major
Players

5-12

FA
Test & Measurement
Printer

Customers1

nm

Major
Players

5-28

Design win balance

Design win balance
EDA ToolComputer Architecture Based Platform

Mar-24

SoftwareAutomotive

Framework

Specific API

AI API

Linux API

Specific Libraries

AI Libraries

Standard Libraries

Specific Firmware

nm

Customers1

HP Computing
AD/ADAS

3-7

Global OEMs
Tier-1 Suppliers /Emerging
companies

LiDAR, Camera,
Rader, HMI

7-22

Application

Mar-23

Application

HardwareMar-23Specific H/W

Linux

Device Driver

Security & System
Management

Machine Learning

Firmware (Boot/System)

Firmware (Boot/System)

AI Engine / GPUStandard H/W

Peripherals
ROM/RAM

Memory / System Interconnect
Application Processor

Micro Processor

Application Block

System Controller

Mar-24

Data Center & Networking
nm

Customers1

Data Center

3-12

Global Major
Telecom
Equipment
Players

Base Station
CU/DU/RU

7-12

Application

Design win balance

Design win balance✓ Business active in the US

Mar-23Mar-24

1.

Major non-Japanese customers are listed.

2.

Projects include development of test chips commissioned by external parties.

Mar-23Mar-2440

Expanding Business in Each Application Market
Smart Devices➢

Leverage Solution SoC business modeland strengthen advanced low-power
technologies required by innovative
markets

Automotive
◼
◼
◼
➢
➢

Innovation continues for ADAS (Advanced
Driver Assistance System) and AD(Autonomous Driving)
Demand is strongly active for HPC, in addition
to zone architecture and sensing SoCs
Business opportunities continue to be active
Leverage Solution SoC business modeland establish solid position in theindustry
Pursue most advanced process nodes• Use of 3nm process for automotive(October 2023)◼

◼
EDA ToolComputer Architecture Based Platform➢

Application

Software◼

AdvancedRF

Demand for new technologies in smart devices
area continues to be strong due to expanding
use of AI
Business opportunities active with advanced
customers, in applications including computer
vision, AR etc.

Hardware◼

Industrial

Framework

Specific API

AI API

Linux API

Specific Libraries

AI Libraries

Standard Libraries

Linux

Device Driver

Security & System
Management

Specific Firmware

Machine Learning

Firmware (Boot/System)

Firmware (Boot/System)

Specific H/W

AI Engine / GPUStandard H/W

Peripherals

Memory / System Interconnect

ROM/RAM

Application Processor

Micro Processor

Application Block

System Controller

Demand expanding for Solution SoC withadvanced technologies in industrial
applications, due to expanding use of AI andnetworking
Business opportunities increasing, for FA andmeasurement equipment, as well as for custom
SoCs using RF-CMOS technologies
Leverage Solution SoC business modeland deliver custom SoCs with advanced
process nodes and RF-CMOS technology

Data Center & Networking
◼

◼
➢
➢

➢
➢
➢
➢
➢

Demand growing for DC＆NW and cloudservice SoCs, due in part to increasing demand
for generative AI
New business opportunities active in the US
Leverage Solution SoC business model andaim for further business expansion
Continue to invest in leading-edge
technologies
Fully utilize entire design capability
Strengthen partnership with IP vendors
Strengthen R&D capability in the US /Resource shift to the US
Pursue most advanced process nodes• Collaboration with Arm on 2nm etc.
New business in the US is in progress41

Transformation of Global R&D Structure
Rebuilding global R&D structure in line with the change of primary business areas and the business model◼ Reinforcing flexible and scalable “Solution SoC” development platform◼

2022 - March 2018

- 2021

Leading Global R&D Team

Sales

Sales

System Architecture
Software, IPs,
Chiplets, Packaging
Advanced Technology

Business Group
Business
Unit

Business Unit

SystemArchitecture
SW

Production Technology/Quality

Consolidation of BUs led to shift of businessareas from TV, and Cameras to Automotive,
Data Center & Networking and Smart Devices• Reinforce the team as global organization, and build-up a strong
global R&D structure
•

•
•
•
•

Integrate wide range of function including SoC architecture,
software, package, thermal consisting of high-level engineering
teams
Integrate Japanese team with teams from other regions, mainly US,
and strengthen activities in US.
Shift Japanese engineering resources to US
Acquiring talented engineers globally
Increase engineers for advanced development• Focus on design methodology, thermal design, quality, advancetechnology and other technologies to strengthen “Entire Design”
capability In addition to current SoC design platform.

PKG

DFT

Core
IPs

DesignCommon Technology

R

Measurement
Reinforce “Entire Design” capability

Project Management
R&D Resources
Building a global and competitive R&D structure
in line with new and distinctive business model
for future growth

Reinforce PM in line with the status of global design wins

Reinforce resources including outsourcing to non-Japan-based
design companies

Ex. Open new office in India, and operate and strengthen internal andexternal resources under the leadership of U.S. subsidiary42

Appendix:

Overview────Consolidated Financial Statements
Breakdown of Net Sales (Quarterly)
Detail of Design Win
Company Overview and others

FY24/3 Consolidated Statements of Income(Yen in billions)

FY21/3

FY22/3

FY23/3

FY24/3

FY25/3E

Net Sales

99.7

117.0

192.8

221.2

200.0

% YoY

-3.7%

+17.3%+64.7%+14.8%-9.6%

Product Revenue

73.1

84.6

156.8

182.9

-

NRE Revenue

23.0

28.1

34.9

37.6

-

Other Revenue

3.6

4.3

1.1

0.8

-

Cost of Goods Sold

(43.2)(49.8)(103.9)(111.2)

-

56.5

67.3

88.8

110.0

-

% Margin

56.7%

57.5%

46.1%

49.7%

-

% Product Gross Margin

40.1%

41.1%

33.7%

39.2%

R&D

(39.2)(43.2)(49.3)(53.3)-

Selling, General and Administrative Expenses (excl. R&D)

(15.8)(15.6)(17.8)(21.2)-

Operating Income

1.6

8.5

21.7

35.5

27.0

% Margin

1.6%

7.2%

11.3%

16.1%

13.5%

Non-Operating Income

0.4

0.6

1.8

1.6

0

Profit before Income Taxes

2.0

9.1

23.4

37.1

27.0

(0.5)

(1.6)

(3.7)

(11.0)

(7.5)

1.5

7.5

19.8

26.1

19.5

% Margin

1.5%

6.4%

10.3%

11.8%

9.8%

FX Rate (USD/JPY)

106.1

112.4

138.7

144.6

130.0

Gross Profit

Income Taxes
Profit44

Consolidated Balance Sheets(Yen in billion)

FY21/3

FY22/3

FY23/3

FY24/3

Assets

FY21/3

FY22/3

FY23/3

FY24/3Liabilities and Equity

Cash on-hand and in banks

42.7

46.3

45.1

69.7

Accounts Payable-trade

12.0

16.6

23.4

15.7

Accounts receivable-trade, net

28.6

25.1

40.8

35.3

Accrued Expenses

7.4

6.9

30.3

18.2

Inventories1

6.7

16.4

47.7

25.5

Others

1.9

3.9

28.6

19.1

Others

2.6

2.9

22.4

8.6

80.6

90.6

156.1

138.9

Total Current Liabilities

21.3

27.4

82.3

53.1

8.9

11.6

17.2

21.8

Total Non-current Liabilities

1.3

1.4

1.7

2.7

Reticle

3.7

4.7

5.6

8.1

22.6

28.8

84.1

55.8

Others PP&E

5.2

6.9

11.6

13.0

Common Stock

30.2

30.2

30.2

32.7

Intangible Assets

11.6

12.2

13.0

18.5

Capital Surplus

30.2

30.2

30.2

32.7

Deferred Tax Assets

2.3

3.1

6.9

6.7

Retained Earnings

21.4

28.9

48.6

63.6

Others

0.9

0.8

0.8

0.9

Others

(0.1)

0.3

0.8

2.0

23.7

27.8

37.9

47.9

Total Equity

81.7

89.6

109.9

131.0

104.2

118.4

193.9

186.8

Total Liabilities and Equity

104.2

118.4

193.9

186.8

Total Current Assets
Property, Plant and Equipment

Total Non-current Assets
Total Assets

Total Liabilities

Strong Balance Sheet
Cash on-hand and in banks¥69.7bn(FY24/3 )1.
2.

Inventories is calculated as the sum of “Finished goods” and “Work in progress”
Equity Ratio is calculated as (Total Equity / Total Liabilities and Equity)

Debt

No Debt(FY24/3 )Equity Ratio2

70.1%(FY24/3 )45

Breakdown by Application Market (Quarterly Ratios)
Net Sales1

100%

NRE Revenue1

Automotive

Data Center & Networking

Smart Devices

Industrial & Others

Automotive
Smart Devices
100%

10%

80%

46%

40% 40% 40%

33% 35%

33% 30%23% 23% 23% 24%
80%

17%
16%

60%

24%

40%

23%

27%

31%

20%

0%

1.

15%

25% 23% 20%

19%

41%

45%

35%

23%

24%

60%

33% 34%

20%

23/3
2Q

23/3
1Q

23/3
3Q

23/3
4Q

24/3
1Q

24/3
2Q

24/3
4Q

0%

35%

33%

21%
33%

27%

10%

22%

22/3
1Q

31%

22/3
2Q

22/3
4Q

The quarterly ratios are highly volatile and may fluctuate significantly from quarter to quarter as they are greatly affected by the development status of individual projects.

11%

52%
32%
26% 29%22% 22%
22/3
3Q

12%

10%
49%

29%

23/3
1Q

22%

23% 12% 13%

29%

29% 31%

21% 22%
24/3
3Q

28%

13%

24% 7%

14%

40%

17%

25%

27% 40%29% 30%

22/3
1Q

22/3
4Q

12%

33% 28%17%
12% 13% 13% 15%

22/3
3Q

9%

24%

17% 17% 14% 14% 19%
22/3
2Q

28%

14%

24%

27%

24%
14% 16%24%

Data Center & Networking
Industrial & Others

23/3
2Q

23/3
3Q

23/3
4Q

59%

38% 38%

24/3
1Q

24/3
2Q

24/3
3Q

24/3
4Q

46

Breakdown by Application Market (Quarterly Ratios)
Net Sales1
Automotive
Smart Devices
Others100%

25%

17% 20%60%

Data Center & Networking
Industrial

11% 13% 11% 10%
15%

80%

22%
23% 20%

25%

22%

23%

19%

4%

16%

27%

31%

14% 16%

15%

24%

5%

6%

8%

19% 18% 17%
16%

17%

25% 23% 20%

100%

80%

Automotive
Smart Devices
Others
7% 5% 5% 8%
3% 8% 4%

1.

22/3
1Q

22/3
2Q

22/3
3Q

28%

27%

40%

60%

41%

35%

33% 34%

20%

23/3
1Q

23/3
2Q

23/3
3Q

23/3
4Q

24/3
1Q

24/3
2Q

24/3
3Q

24/3
4Q

0%

8%

10%

10%

22%

22/3
1Q

31%

22/3
2Q

22/3
3Q

22/3
4Q

The quarterly ratios are highly volatile and may fluctuate significantly from quarter to quarter as they are greatly affected by the development status of individual projects.

14%

11%

52%
32%
26% 29%

23/3
1Q

23/3
2Q

7%
12%

10%

22% 22%

8%

23% 12% 13%

29%

49%
29%

11%

24%

33%
33%

2%

19%

21%

29% 31%

29% 30%

13%

7%

22%

14%

40%

7%

26%

24%

45%

10%

14% 21%

33% 28%

19%

22/3
4Q

3%
8%

15%

21% 22%
17% 17% 14% 14% 19%
17%
12% 13% 13% 15%0%Data Center & Networking
Industrial2

24%

27%

24%
20%

22%

21%
24%

40%

NRE Revenue1

23/3
3Q

23/3
4Q

59%

38% 38%

24/3
1Q

24/3
2Q

24/3
3Q

24/3
4Q

47

Breakdown by Geographic Region (Quarterly Ratios)
Net Sales1
US

China

100%

12% 11% 12% 11%7%

NRE Revenue1

Japan
8%

6%

7%

Others
8%

9%

US
7%

8%

80%

60%

100%

80%

55%

49%

48% 48%

3%

31%

12%

43% 40% 37% 39% 38% 37%

51% 55%

40%

20%

20%

13%
0%

1.

16%

22/3
1Q

24% 21%
22/3
2Q

22/3
3Q

33%
29%

37%
43% 46%

35%

22/3
4Q

23/3
1Q

15% 18%
23/3
2Q

23/3
3Q

10%

9%

23/3
4Q

24/3
1Q

15%
24/3
2Q

24/3
3Q

6%

8%
20% 22%23%11%

26% 17%
28% 13%
10% 21%

26%
15%

34%

23%
20%

45% 45% 44%

39%

33%

51%

36%

22%

16%
22/3
1Q

56%

55%

29%

0%

12%

29%

39%

24/3
4Q

22%

10%

57%

20%

11%

Others

22%

23%

20%

21%

5%

30%

14%

40%

19%

15%

7%

Japan

42%
60%

24%

4%

17% 34%

37%

16%

China

22/3
2Q

22/3
3Q

22/3
4Q

The quarterly ratios are highly volatile and may fluctuate significantly from quarter to quarter as they are greatly affected by the development status of individual projects.

23/3
1Q

23/3
2Q

23/3
3Q

23/3
4Q

24/3
1Q

24/3
2Q

24/3
3Q

24/3
4Q

48

Breakdown by Process Node (Quarterly Ratios)
Net Sales1
3-7nm

10-16nm

20-28nm

NRE Revenue1
3-7nm

40nm & above / Others

100%

100%

23%
80%

40% 41%
46% 44%

37% 35%

60%

27%
40%

30%

29%

21%

23%
20% 12%

30%

23% 21% 21% 22%

7%

20%

22% 25%

16%

30%

20%

14%

20%

9%
15%

0%

1.

22/3
1Q

19%

17%
10%
22/3
2Q

16%
22/3
3Q

36%

40%

45%

44%
34%

25% 24%

39%

27%

21%

15%

11%

24% 13%

8%

21%

13%

11%
16%

15%

1%
6%
4%

12%
8%

15%
23%
89%

34%

20%

40nm & above / Others

10%
11%

24%

40%

66%

58%

55%

17%

31%

30%

19%

15% 18%
20%

7%

60%

11%

10%

12%

18%

20-28nm

11%

80%

21%

23%

27%

8%

10-16nm

72%

67%

63%

57%

46% 45%

36%
23%

10%
22/3
4Q

23/3
1Q

23/3
2Q

23/3
3Q

23/3
4Q

24/3
1Q

24/3
2Q

24/3
3Q

24/3
4Q

0%

22/3
1Q

22/3
2Q

22/3
3Q

22/3
4Q

The quarterly ratios are highly volatile and may fluctuate significantly from quarter to quarter as they are greatly affected by the development status of individual projects.

23/3
1Q

23/3
2Q

23/3
3Q

23/3
4Q

24/3
1Q

24/3
2Q

24/3
3Q

24/3
4Q

49

Detail of “Design Win Amount” to Revenue
Illustrative Description of “Design Win Balance”“Design Win Balance1” ・・・“Design win balance” (LTR; Life Time Revenue) represents our estimates of remaining accumulated “design win amount” that is associated with projects thatare active as of a particular date. Design win balance thus reflects certain subsequent developments after the end of the period in which such design win was
acquired “Design Win Balance” is regularly managed in accordance with prudent procedures to account for future risks.

Image of Change in “Design Win Balance 2”“Design Win
Balance”±“Design Win Amount” calculated from
“Design Win Balance” 1“Design Win
Amount”“Design Win
Balance”

Cancellation+
Additional
Design Win“Amount”

Review and update
estimates of
product volumes
and unit price formass production
stage and otherfactors.

Product Revenue

NRE Revenue

Revenuerecognition“Design Win Balance”(As of March 31, 202)
Approx.

JPY±+

End of Year N-1
1.

Additional
Design Win“Amount”

Review and update
estimates ofdesign anddevelopment costs
and other factors.

Cancellation

1.02trillion

Revenuerecognition

Year N
Revenue

Ratio of Primary Areas
End of Year N“Design win balance” represents our estimates of remaining accumulated “design win amount” that is associated with projects that are active as of a particular date. “Design win balance” thus reflects certain subsequent developments after the end of
the period in which such design win was acquired up until the relevant balance date, including (1) recognition of revenue relating to such projects or any other subsequent changes in the development process, estimated sales volumes, unit prices,available manufacturing capacity or other factors that occur, which could either increase or decrease “design win balance” and (2) any subsequent cancellation of projects. For example, certain projects in primary areas reflected in the “design win
amount” for FY20/3, FY21/3 and FY22/3 suffered from subsequent cancellations that accounted for around 20%, respectively, of the relevant “design win amount” shown in the graph above. However, the “design win amount” corresponding tosubsequent project cancellations for FY20/3, FY21/3, FY22/3, FY23/3 and FY24/3 were more than offset by the effects of increases in actual or newly estimated unit prices or volumes with respect to some of the projects compared to our original
expectations, and thus the retrospective “design win” amounts for such years after taking these subsequent effects into consideration would show a mostly same level to our original expectations. There have been no significant subsequentcancellations regarding the design win amount for the fiscal year ended March 31, 2023, and ended March 31, 2024,although there can be no assurance that cancellations will not occur in the future with respect to design win amounts for such fiscal
year or any prior fiscal year. A foreign exchange assumption of $1=¥100 has been used. Also refer to page 3 2.
For illustrative purposes only

50

Socionext at a Glance◼

Socionext has developed a new and distinctive “Solution SoC” business model
to provide optimal custom SoCs to customers who need advanced and innovative chips
Company Overview

Business Overview (Ratio is NRE revenue breakdown for FY24/3)

History
ASSP/ASIC

Primary Areas

Business model
Solution SoC

Process Node10-16nm

Solution SoC

9%(Optimal Custom SoC)

Started business in 2015

Business Description

Fabless
Custom SoCs

As of March 31, 2024

32.6

billion yen“Automotive” “Data Center & Networking”“Smart Devices” ”Industrial”

Employees1

As of March 31, 2024
GlobalEmployees
Engineers2

2,534
Approx.

1,900

221.2

billion yen
1.
2.
3.
4.

~Socionext’s Positioning in Semiconductor Market~
Types of Custom SoC(ASIC) Business Models3

Logic
GeneralPurposeApplication
Specific

Key Financials FY24/3
Net Sales

71%

94%

2018

Capital

3-7nm

Net Sales Growth(YoY)

OP Margin

14.8%

16.1%

ASSP

➢ Strength within the Automotive, Data
Center & Networking and Smart Devices
applications➢ New and distinctive business model➢ Provides cutting-edge custom chips forinnovative customers

Three business models

Custom SoC(ASIC)◼ Traditional ASIC

◼ Solution SoC

New and distinctive
business model◼ ASIC designed by ASSP vendor

Market Size $25bn4 in 2023

Numbers of employees and engineers are on a consolidated basis
Number of staff working in divisions relating to technical development and analysis in and outside JapanClassifications of these business models are based on our own assessment
Market Size estimated by Socionext based on Omdia data ”Competitive Landscaping Tool CLT, Annual- 4Q 2023”. All market sizes are calculated in terms of USD-based revenue

51

Detail of Custom SoC and ASSP◼

Socionext operates mainly within Custom SoC market, where products are designed for a specific customer(Although ASSPs are designed also for specific applications, they are not designed for a specific customer )Logic IC

Logic Application
Specific IC

Socionext mainly operates within this market

Total Semiconductor

Memory IC

Microcomponent
IC

Custom SoC

Socionext provides cutting-edge custom chips
for innovative customers

Custom SoCs are integrated circuits that are equipped with functions designed for a specificcustomer. Custom SoCs are optimally designed in accordance with customers' request

ASSP
Analog IC

Discretes etc.

ASSPs (Application Specific Standard Product) are integrated circuits for a specific function generally
needed in a certain application/domain. Since ASSPs are not designed for a specific customer,
they can be components for multiple customers in certain application markets.
General Purpose
Logic

52

The Image of Timeline from Design Win to Mass Production
Illustrative Description of “Design Win Amount”“Design Win Amount１” ・・・“Design Win Amount” represents estimate of the lifetime demand from design projects. “Design Win Amount” is divided into NRE-based and product-based
amounts. “Design Win Amounts” are expected to contribute to product revenue once projects progress to the mass production stage of the project lifecycle.
“Design Win Amount” is calculated in accordance with prudent procedures as below• Each “Design Win Amount” is estimated based on assumptions such as per-unit prices and estimated future product sales volumes, not on sales forecasts provided by customers1• A foreign exchange assumption of 1USD=100JPY has been used

“Design Win
Amount”

Illustrative Timeline from Design Win to Mass Production2
Year0

Year1

Acquisition of
Design Win

Year2

Design &Development

Year3

Year4

Year5

Year6

Year7~

Mass Production
Product Revenue

Main source of Operating Income

NRE Revenue

Limited contribution to Operating Income

Revenue

Cost

R&D
COGS

1.
2.

Refer to slide 3
For illustrative purposes only. The actual timeline of product development to mass production may differ materially based on the product and actual customer demand53

Transforming into a Global SoC Company
with Cutting-edge Technologies◼

Shift in NRE revenue1 composition illustrates the steady progress of our business transformation

FY18/3

FY21/3

FY22/3

FY23/35-7nm

1%Advanced
Process Nodes

28%(NRE Revenue1)

Revenuefrom
Outside Japan(NRE Revenue1)

FY24/3

40%

43%
30%

28%

3-5nm
19%

59%

10-16nm

9%
71%

7nm

29%
64%

69%

74%

80%
Outside Japan
54