Note: This document has been translated from the Japanese original for reference purposes only. In the event of any
discrepancy between this translated document and the Japanese original, the original shall prevail.

Consolidated Financial Results for the 6 Months Ended September 30, 2023

(Based on Japanese GAAP)
October 31, 2023
Socionext Inc.
Stock exchange listing: Tokyo
6526
URL: https://www.socionext.com/en/
Masahiro Koezuka, Representative Director, Chairman, President and CEO
Hiromasa Nakajima, General Manager, Public Relations & Investor
Contact person:
Tel: +81-45-568-1000
Relations Office
Scheduled filing date of statutory quarterly financial report:
November 14, 2023
Scheduled dividend payment date:November 28, 2023
Supplementary material:
Yes
Quarterly financial results presentation:
Yes (for institutional investors and analysts)
Company name:
Code number:
Representative:(Monetary amounts are rounded to the nearest millions of yen)
1. Consolidated financial results for the 6 months ended September 30, 2023 (From April 1, 2023 to September 30, 2023)(1) Consolidated financial results(Percentage represents change from the same period of the previous fiscal year)
Net sales
6 months ended

Operating income

Profit attributable to owners ofparentOrdinary income

millions of yen%

millions of yen%

millions of yen%

millions of yen%

September 30, 2023

116,98841.3

18,67678.6

20,44866.3

15,29352.7

September 30, 2022

82,767-

10,456-

12,295-10.013-Note:
Comprehensive income:6 months ended September 30, 2023:
6 months ended September 30, 2022:

Basic earnings per share
6 months ended

16,322 million yen (50.3%)
10,860 million yen (-%)

Diluted earnings per share

yen

yen

September 30, 2023

439.50424.53September 30, 2022

297.42-

Notes:
1. The Company did not prepare consolidated financial statements for the 6 months ended September 30, 2021, as a result, thechange of the 6 months ended September 30, 2022 from the same period of the previous fiscal year is not presented.
2. Basic earnings per share for the 6 months ended September 30, 2022 is computed based on the assumption that the shareconsolidation and other events in September, 2022 were conducted at the beginning of the year ended March 31, 2023.
3. Diluted earnings per share for 6 months ended September 30, 2022 is not presented because the Company’s shares are unlisted asof September 30, 2022, therefore an average quoted stock price is not available although there are dilutive shares.
(2) Consolidated financial position
Total assets
As of

Net assets

Shareholders’ equity ratio

millions of yen

millions of yen%

September 30, 2023

177,984

123,700

69.5

March 31, 2023

193,945

109,864

56.6

Reference: Shareholder’s equity: As of September 30, 2023:

123,700 million yen

As of March 31, 2023: 109,852 million yen

2. Dividends per share
Annual dividends
1st quarter-end
Year end

2nd quarter-end

3rd quarter-end

Year-end

Total

yen

yen

yen

yen

yen

March 31, 2023

-

0.00

-

210.00210.00March 31, 2024-

115.00-23.00-

March 31, 2024(Forecast)

Note: Revision of the latest dividends forecast: Yes
Based on the resolution of the Board of Directors’ meeting held today (October 31, 2023), the Company will implement a stock
split on January 1, 2024 at a ratio of 1 common stock to 5 shares. The year-end dividend per share forecast is presented
considering the impact of the stock split, meanwhile annual dividend per share forecast is presented as “-”. The year-end
dividend per share forecast for the fiscal year ending March 31, 2024 will be 115 yen and the annual dividend per share forecast
will be 230 yen assuming the stock split was not conducted. For further details, please refer to “Notice Regarding the Revisionof Financial Forecasts and the Dividend Forecast, Distribution of Dividends of Surplus (Interim) and Stock Split and Partial
Amendment of Articles of Incorporation” announced today (October 31, 2023).
3. Consolidated earnings forecast for the fiscal year ending March 31, 2024 (From April 1, 2023 to March 31, 2024)(Percentage represents change from the same period of the previous fiscal year)
Net sales
millions of yen

Year ending March 31, 2024

214,000

Operating income% millions of yen
11.0

29,000

Profit attributable toowners of parent

Ordinary income% millions of yen

33.6

29,000% millions of yen
23.7

22,500

Basic earnings per share

%

yen

13.8

127.90Notes: Revision of the latest consolidated earnings forecast: Yes
Basic earnings per share for the fiscal year ending March 31, 2024 (forecast) is presented considering the stock split notes in“2. Dividends per share”. The amount of basic earnings per share for the fiscal year ending March 31, 2024 (forecast) is 639.52
yen assuming the stock split was not implemented.
※ Notes(1) Changes in significant subsidiaries during the current reporting period(Changes in specified subsidiaries resulting from changes in the scope of consolidation):No(2) Application of special accounting methods for quarterly consolidated financial statements:

No(3) Changes in accounting policies, accounting estimates and retrospective restatements for consolidated financial statements
No① Changes in accounting policies due to revisions of the accounting standards and other regulations:No② Changes arising from factors other than ①:No③ Changes in accounting estimates:
No④ Retrospective restatements:(4) Number of issued shares (Common stock)① Number of shares issued at the end of theperiod (including treasury stock)

2nd quarter ended② Number of treasury stock held at the endof the period

2nd quarter ended③ Average number of shares during the period

September 30, 2023
September 30, 2023
2nd quarter ended
September 30, 2023

35,566,766
123
34,796,107

Year ended March
31, 2023

33,666,666

Year ended March-

31, 2023
2nd quarter ended
September 30, 2022

33,666,666

Note: Average number of shares during 2nd quarter ended September 30, 2022 is computed based on the assumption that the shareconsolidation and other events in September, 2022 was conducted at the beginning of the year ended March 31, 2023.
※ These quarterly consolidated financial results are not subject to the review procedure of external auditors’ quarterly review.
※ Explanation of the proper use of earnings forecast and other special notes
These materials may contain forward-looking statements that are based on management’s current information, actual results may
differ materially from these forward-looking statements for various reasons. For information regarding the assumptions used toprepare the forecast and cautionary note of the forecast, please refer to “1. Qualitative information regarding the quarterly
consolidated financial results (3) Consolidated earnings forecast and other forward-looking information” on page 4 for more details.

Attachment contents
1.Qualitative information regarding the quarterly consolidated financial results ………………………………………………

2(1) Description of operating results …………………………………………………………………………………………

2(2) Description of financial position………………………………………………………………………………………….

3(3) Consolidated earnings forecast and other forward-looking information………………………………………………….

4

2. Quarterly consolidated financial statements and principal notes...……………………………………………………………

5(1) Quarterly consolidated balance sheets ……………………………………………………………………………………

5(2) Quarterly consolidated statements of income and comprehensive income ………………………………………………

7

Quarterly consolidated statements of income…………………………………………………………………………

7

Quarterly consolidated statements of comprehensive income ………………………………………………………

8(3) Quarterly consolidated statements of cash flows …………………………………………………………………………

9(4) Notes to consolidated financial statements…………………………………………………………………………….….

10

Assumptions of a going concern…………………………………………………………………………………………

10

Significant changes in shareholders’ equity ………………………………………………………….…………………

10

Segment information………………………………………………….………………………….………………………

10

Subsequent Events………………………………………………….………………………….………………………...

10

- 1 -

1.Qualitative information regarding the quarterly consolidated financial results(1) Description of operating results
Despite the regional divergences, the overall global economic recovery has slowed down during the 6 months ended September 30,
2023. The COVID-19 pandemic led to supply chains disruptions and a surge in demand, resulting in a tight labor market. Additionally,
the prolonged Russian invasion of Ukraine has caused significant disruptions in energy and food supplies, especially in Europe andUK. Besides, factors including tightened monetary policies across the countries, the slow economic recovery in China following theend of the zero-COVID policy and the real estate crisis, and US-China frictions, collectively led to a decline in economic growth rates
worldwide, increasing uncertainties regarding future economic prospects. Furthermore, differences in monetary policies among
countries and regions resulted in volatility of the Japanese yen.
In semiconductor market, the economic slowdown has resulted in weakened demand for products such as smartphones, PCs, andconsumer electronics, which further led to the decline in the demand for semiconductor products, especially memory chips used inthese devices. On the other hand, there is a growing demand for semiconductors using cutting-edge technologies, particularly inAutonomous Driving (AD)/Advanced Driver Assistance Systems (ADAS) and Generative AI platforms like Chat GPT in data centers.
Moreover, while manufacturers are still operating at high utilization, tight semiconductor supply have significantly eased.
Under such circumstances, the Group (“the Group”, “the Company”, “we” and “our” refer to Socionext Inc., and its consolidated
subsidiaries, or Socionext Inc. on a non-consolidated basis, as the context may require) has acquired design wins of custom SoC
projects since 2019 in its focus areas including automotive, data center & networking used advanced process technologies such as 7nm
and 5nm. Some of those design win projects have entered the mass production stage and contributed to increased net sales especiallyin product revenue of advanced technologies.
Moreover, in response to the increasing design wins in US market and the subsequent shortages of design and development resources,
we opened the new branch office in Bangalore, India, in August 2023 to bolster its engineering resources to support the company’s
global business expansion. We also restructured our global design and development resources.
As a result, the consolidated net sales for the 6 months ended September 30, 2023 were 116,988 million yen, an increase of 41.3%
from the 6 months ended September 30, 2022. Product revenue was 101,439 million yen, increased by 52.9% compared to the 6months ended September 30, 2022. The increase was due mainly to an increase in net sales from leading-edge technology projects
which have entered mass production stage, in application markets such as data center & networking, smart devices and automotive.
Short-term special demand from a Chinese customer, as well as the positive impact of the depreciation of the Japanese yen also
contributed to the increase. NRE revenue was 15,215 million yen, resulted from ongoing development projects of products using
advanced process technologies. NRE revenue decreased by 5.4% compared to the 6 months ended September 30, 2022.
[Net sales](millions of yen)
6 months
ended September 30, 2022

6 months
ended September 30, 2023

Semiconductor products (product revenue)

66,325

101,439

Non-recurring engineering (NRE revenue)

16,087

15,215

Others

355

334

Total

82,767

116,988

Cost of sales was 62,737 million yen, an increase of 49.5% from the 6 months ended September 30, 2022 due to increased productrevenue and the depreciation of the Japanese yen. Selling, general and administrative expenses were 35,575 million yen, an increase of
17.2% from the 6 months ended September 30, 2022. Research and development costs of 24,622 million yen (an increase of 11.5%
compared to the 6 months ended September 30, 2022) are included. The increase in selling, general and administrative expenses wasdue to increasing development projects of products using advanced process technologies and the depreciation of the Japanese yen.
Operating income in the 6-month period ended September 30, 2023 increased by 78.6% from the 6 months ended September 30, 2022
to 18,676 million yen. Ordinary income was 20,448 million yen, an increase of 66.3% from the 6 months ended September 30, 2022,
due mainly to foreign exchange gain. Profit attributable to owners of parent increased by 52.7% from the 6 months ended September
30, 2022, to 15,293 million yen. The Japanese yen/U.S. dollar average exchange rate for the 6 months ended September 30, 2023 was¥141.0=U.S. $1, a depreciation of ¥7.0 compared to the 6 months ended September 30, 2022.
The Group has a single segment primarily of SoC developed with the solution SoC business model.

- 2 -(2) Description of financial position①Assets, liabilities and net assets(Assets)
Current assets as of September 30, 2023 decreased by 18,954 million yen from the end of the previous fiscal year to 137,113 million
yen. This is mainly due to the decrease in inventories and accounts receivables-other in accordance with increased product revenue
and decreased customer-requested upfront procurement. Cash on hand and in banks increased due to the proceeds from the exercise ofstock options and the accounts receivable collection despite the payment of income taxes and dividends. Non-current assets as of
September 30, 2023 increased by 2,993 million yen from the end of the previous fiscal year to 40,871 million yen. The main capital
expenditures in the period include the acquisition of reticles, IP, etc. in connection with product development of acquired design wins,
and the expansion of data centers in accordance with increasing development scale.
As a result, total assets as of September 30, 2023 decreased by 15,961 million yen from the end of the previous fiscal year to 177,984
million yen.
(Liabilities)
Current liabilities as of September 30, 2023 decreased by 29,844 million yen from the end of the previous fiscal year to 52,494 million
yen. This is due mainly to the decrease in accounts payables-trade and accounts payable-other related to upfront procurement on
customer-requested wafer inventories.
As a result, total liabilities as of September 30, 2023 decreased by 29,797 million yen from the end of the previous fiscal year to54,284 million yen.
(Net assets)
Net assets as of September 30, 2023 increased by 13,836 million yen from the end of the previous fiscal year to 123,700 million yen.
This is due mainly to 15,293 million yen in profit attributable to owners of parent for 6 months ended September 30, 2023 and theproceeds from the exercise of stock options, which offset the impact of distribution of surplus.
As a result, the shareholders’ equity ratio has been 69.5%, increased by 12.9 percent points from the end of the previous fiscal year.
This is due mainly to the decrease in upfront procurement on customer-requested wafer inventories.
② Cash flows
Cash and cash equivalents as of September 30, 2023 increased by 2,321 million yen from the end of the previous fiscal year to 47,457
million yen.
Net cash provided by operating activities was 14,648 million yen for the 6 months ended September 30, 2023. This is due mainly to
profit before income taxes of 20,448 million yen, depreciation and amortization of 6,006 million yen, a decrease in accounts
receivable of 6,362 million yen in accordance with accounts receivable collection despite the decrease in accounts payables of 9,959
million yen related with customer-requested upfront procurement, and payment of income taxes of 6,122 million yen.
Net cash used in investing activities was 10,934 million yen for the 6 months ended September 30, 2023. This is due mainly to thepurchases of 6,029 million yen of property, plant and equipment including reticles and test boards using for products development
related to acquired design wins, and those for improving the environment of design and development, and the purchases of 4,900
million yen of intangible assets including IP.
Net cash used in financing activities was 2,665 million yen and this is due to payment of the dividends of 7,070 million yen despite theproceeds from exercise of stock options of 4,364 million yen and deposits for subscriptions of shares of 88 million yen.
The Company entered into an additional half-year commitment line agreement of 10 billion yen as of July 31, 2023, effective from thesame date, in response to sales volatility risk related with global economic slowdown and geopolitical risks. In additional to theexisting commitment line agreement of 20 billion yen, the maximum amount of borrowing capacity under our commitment lines totals
30 billion yen. As of September 30, there was no outstanding balance under our commitment lines.

- 3 -(3) Consolidated earnings forecast and other forward-looking information
Despite the recent weakness in the Chinese and consumer markets, the Company has revised its net sales upward from the previous
forecast due to steady progress in the development and mass production of new products and the yen's depreciation (137.4 yen in Q1,
144.6 yen in Q2) against the expected exchange rate of 115 yen per dollar in the first half of the fiscal year. The Company also revised
up its respective earnings.
The exchange rate for the second half of the fiscal year is assumed to be 125 yen per dollar.
For further details, please refer to “Notice Regarding the Revision of Financial Forecasts and the Dividend Forecast, Distribution of
Dividends of Surplus (Interim) and Stock Split and Partial Amendment of Articles of Incorporation” announced today (October 31,2023).
Revision of consolidated financial result forecast for the fiscal year ending March 31 2024 (From April 1, 2023 to March 31, 2024)

Full YearNet sales

Operating income

Ordinary income

Profit attributable toowners of parent

Dividends per
sharemillions of yen

millions of yen

millions of yen

millions of yen

yen

Previous forecast (A)200,000

22,50022,50017,500210.00

Revised forecast (B)214,000

29,00029,00022,500230.00Change (B-A)

14,000

6,500

6,500

5,000

20.00

The Company plans to pay an interim dividend of 115 yen per share for the fiscal year ending March 31, 2024, an increase of 10 yen
from the previous forecast. The year-end dividend per share is also expected to increase by 10 yen from the previous forecast to 115
yen. As the result, the annual dividend forecast is expected to total 230 yen per share.
Furthermore, based on the resolution of the Board of Directors’ meeting held on October 31, 2023, the Company will implement a
stock split effective as of January 1, 2024 at a ratio of 1 common stock to 5 shares, thereby expanding the investor base.
The amount of dividends per share above is computed based on the number of shares prior to the stock split.

- 4 -2. Quarterly consolidated financial statements and principal notes(1) Quarterly consolidated balance sheets(Millions of yen)
As of March 31, 2023
AssetsCurrent assets
Cash on hand and in banks
Accounts receivable-trade, net
Finished goods
Work in process
Accounts receivable-other
Other current assets
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures, net
Machinery and equipment, net
Tools, furniture and fixtures, net
LandConstruction in progress
Total property, plant and equipment, net
Intangible assets
Technology assets
Other
Total intangible assets
Investments and other assets
Investment securities
Deferred tax assets
Other assets
Total investments and other assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Accounts payable-trade
Accounts payable-otherAccrued expenses
Income taxes payable
Liabilities related to chargeable subcontracting
Other current liabilities
Total current liabilities
Long-term liabilities
Asset retirement obligations
Other long-term liabilities
Total long-term liabilities
Total liabilities- 5 -As of September 30, 2023

45,13640,8098,187
39,528
16,2096,198
156,067

47,45736,974
10,59028,592
5,814
7,686
137,1132,583
8
13,438800
351
17,1802,527
815,687800
634
19,656

11,494
1,468
12,962

13,191
1,810
15,001

0
6,897
839
7,736
37,878
193,945

0
5,366
848
6,214
40,871
177,984

23,421
24,551
5,755
6,942
18,8692,800
82,33816,037
3,961
6,932
4,114
18,206
3,244
52,494

343
1,400
1,743
84,081

349
1,441
1,790
54,284

(Millions of yen)
As of March 31, 2023
Net assets
Shareholders' equity
Common stock
Deposits for subscriptions of shares
Capital surplus
Retained earnings
Treasury stock
Total shareholders' equity
Accumulated other comprehensive income
Foreign currency translation adjustments
Total accumulated other comprehensive income
Share subscription rights
Total net assets
Total liabilities and net assets- 6 -As of September 30, 2023

30,20030,20048,630109,030

32,45588
32,45556,853(2)
121,849822
822
12
109,864
193,945

1,851
1,851
123,700
177,984

(2) Quarterly consolidated statements of income and comprehensive income
Quarterly consolidated statements of income(For 6 months)(Millions of yen)
6 months ended
September 30, 2022
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Foreign exchange gain
Other income
Total non-operating income
Non-operating expenses
Other expenses
Total non-operating expenses
Ordinary income
Profit before income taxes
Income taxes-current
Income taxes-deferred
Total income taxes
ProfitProfit attributable to non-controlling interests- 7 -6 months ended
September 30, 2023

82,767
41,95940,80830,352
10,456116,988
62,73754,25135,575
18,676

1,823
30
1,853

1,628
174
1,802

14
14
12,295
12,295
2,739
(457)
2,282
10,013
10,01330
30
20,44820,448
3,496
1,659
5,155
15,293
15,293

Quarterly consolidated statements of comprehensive income(For 6 months)(Millions of yen)
6 months ended
September 30, 2022
ProfitOther comprehensive income
Foreign currency translation adjustments
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to:
Owners of parent- 8 -6 months ended
September 30, 2023

10,013

15,293847
847
10,8601,029
1,029
16,322

10,86016,322

(3) Quarterly consolidated statements of cash flows(Millions of yen)
6 months ended
September 30, 2022
Operating activities
Profit before income taxes
Depreciation and amortization
Interest and dividend income
Foreign exchange (gain) loss
Loss on retirement of non-current assets
Loss (gain) on sale of non-current assets
Decrease (increase) in accounts receivable
Decrease (increase) in inventories
Increase (decrease) in accounts payable
Decrease (increase) in other assets
Increase (decrease) in other liabilities
Other
SubtotalInterest and dividends received
Income taxes paid
Net cash provided by (used in) operating activities
Investing activities
Purchases of property, plant and equipment
Purchases of intangible assets
Proceeds from sales of non-current assets
Other
Net cash used in investing activities
Financing activities
Repayments of lease obligations
Proceeds from exercise of stock options
Deposits for subscriptions of shares
Proceeds from exercise of share award rights
Purchase of treasury stock
Dividends paid
Net cash used in financing activities
Effect of exchange rate changes on cash and cash
equivalents
Increase (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the fiscal
year
Cash and cash equivalents at the end of the period- 9 -6 months ended
September 30, 2023

12,295
5,032
(24)
(1)
125
(15)
(4,802)(13,156)
11,214(18,351)
24,813(6)
17,12424(2,195)
14,953

20,448
6,006
(139)
673
6,362
8,534
(9,959)8,839(19,920)(213)
20,631
139(6,122)
14,648(7,094)(2,661)15
12(9,728)(6,029)(4,900)(5)(10,934)

(151)
(151)

(191)
4,364
88
146
(2)
(7,070)(2,665)

1,627

1,272

6,701

2,321

46,27145,13652,97247,457

(4) Notes to consolidated financial statements
Assumptions of a going concern
None.
Significant changes in shareholders’ equity
None.
Segment information
1. 6 months ended September 30, 2022
(From April 1, 2022 to September 30, 2022)
The Group has a single segment primarily of SoC developed with the solution SoC business model.
2. 6 months ended September 30, 2023
(From April 1, 2023 to September 30, 2023)
The Group has a single segment primarily of SoC developed with the solution SoC business model.
Subsequent Events(Stock Split and Partial Amendment of Articles of Incorporation)
The Company resolved to implement the stock split and partially amend the Articles of Incorporation at the Board of Directors’
meeting held on October 31, 2023.
1.

Purpose of stock split

The stock split will be undertaken with the aim of expanding the investor base and increasing the liquidity of the Company’s stockbase through a reduction in the price of share-trading units.
2.

Outline of stock split(1) Method of stock split
The record date of the stock split will be Sunday, December 31, 2023; and it will consist of a split at the ratio of 5 for 1 of allcommon shares held by shareholders whose names appear or are recorded in the Registry of Shareholders as of the end of therecord date. Since this day falls on a non-business day of the shareholder registry administrator, the substantial record date will be
Friday, December 29, 2023.
(2) Increase in the number of shares resulting from stock split
Total issued shares before the stock split

35,566,766 shares

Increase in issued shares resulting from the stock split

142,267,064 shares

Total issued shares after the stock split

177,833,830 shares

Total authorized shares after the stock split

673,000,000 shares

Note: “Total issued shares” and “Increase in issued shares” above are based on the total number of issued shares as of September
30, 2023. The stock split may change due to the exercise of stock acquisition rights, etc. up to the record date.
(3) Schedule
Public notice date of the record date (plan)

Friday, December 15, 2023

Record date

Sunday, December 31, 2023

Effective date

Monday, January 1, 2024

- 10 -

3. Effect on per share information
The basic profit attributable to owners of parent per share is listed thereunder based on the assumption that the stock split was
conducted at the beginning of the year ended March 31, 2023.
6 months ended

6 months ended

September 30, 2022

September 30, 2023

Profit attributable to owners of parent:
Basic

yen
59.48

yen
87.90

-

84.91

DilutedNote: Diluted earnings per share for 6 months ended September 30, 2022 is not presented because the Company’s shares areunlisted as of September 30, 2022, therefore an average quoted stock price is not available although there are dilutive shares.
4. Partial Amendment to the Articles of Incorporation(1) Reason for amendment
In conjunction with the stock split described above, the Company will amend the total number of shares authorized to be issued
described in Article 6 of its Articles of Incorporation in accordance with the split ratio with an effective date of January 1, 2024,
pursuant to the provisions of Article 184, Paragraph 2 of the Companies Act of Japan.
(2) Details of amendment
The details of the amendment are as follows.
(Amended portions are underlined.)
Current Articles of Incorporation

Articles of Incorporation After Amendment

Article 6. (Total Number of Shares Authorized to Be Issued)

Article 6. (Total Number of Shares Authorized to Be Issued)

The total number of shares authorized to be issued by

The total number of shares authorized to be issued by thethe Company shall be 134,600,000.

Company shall be 673,000,000.

(3) Schedule
Date of Board of Directors’ resolution

Tuesday, October 31, 2023

Effective date

Monday, January 1, 2024

5.

Others(1) Change in the amount of common stock
No change(2) Interim dividends for the fiscal year ending March 31, 2024
Interim dividends for the fiscal year ending March 31, 2024 on the record date of September 30, 2023 is based on the number ofshares prior to the stock split.

- 11 -