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

MAKING THE IMAGE INTELLIGENT

Business Plan and Growth Potential
Digital Media Professionals Inc.
June 25, 2024
The views and forecasts that appear in these materials represent determinations made by the Company at the time the materials were created.
The accuracy of the information therein is not guaranteed.
Please be aware of the possibility that actual performance and results may differ considerably due to a variety of factors.

Agenda◼ Company overview◼ Business model and competitive advantage• Business model / Revenue cycle• Competitive advantage• Revenue / Cost structure◼ Market trend◼ Growth strategy / Business plan
◼ Risk information◼ Handling of this material◼ Supplementary material
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Company overview

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Company Profile
We are a fabless semiconductor vendor with a proven track record as one of the world's leading GPU IP vendors since its founding. In recent years,
in order to become the world's leading "AI Computing Company," we are contributing to solving customer and social issues by providing end-to-end
AI services from algorithm/software to hardware and from the edge to the cloud.
Month / Year

Company name

Digital Media Professionals Inc. (DMP)

Business
content

IP license, SoC / module development & sales, andcontract development services related to GPU and AI

Foundation

History

July 2002

FoundedJuly 2005

Launched ULTRAY® Visual Processor

July 2002

April 2007

PICA® Graphics IP Core received the Excellence in IP Prize of 9th LSI IP Design
Award

Location

Nakano-ku, Tokyo, Japan

April 2009

Launched SMAPH®-F Vector Graphics IP Core

November 2009

Launched SMAPH®-S 3D Graphics IP Core

Representative

Chairman, President and CEO: Tatsuo Yamamoto

June 2011

Listed on the Mothers market of the Tokyo Stock Exchange

Capital1,838 million yen

May 2014

Business and capital alliance with UKC Holdings Corporation (currently Restar
Holdings Corporation)

Number of
consolidated
employees

65 (as of June 1, 2024)

August 2016

Launched the new 3D graphics IP core "M3000" series

November 2016

Launched "ZIA ", an image recognition engine using deep learning

Number ofpatents

35 cases

March 2018

Started mass production and shipment of next-generation graphics processor "RS1"

May 2019

Business and capital alliance with Yamaha Motor Co., Ltd.

Consolidated
subsidiary

Digital Media Professionals Vietnam Company
LimitedMay 2019

ISO 9001: 2015 Certified (Certification body: Intertek Certification Japan Ltd.)

April 2020

Established Digital Media Professionals Vietnam Company Limited

April 2021

Capital and business alliance with Cambrian Inc, USA

April 2022

Shifted to the Growth market of the Tokyo Stock Exchange

November 2023

Additional investment in Cambrian Inc

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Focused businesses / fields and sales (composition) (March 2024)●Business
IP core license●Field¥170M (6%)

Safety・Provision of AI licenses, products, andprofessional services for advanced driverassistance systems and driver monitoring systems
that utilize dashcams, etc.

・AI/GPU IP core license
・AI software license

Product

Robotics¥2,758M (91%)

・Graphic processing LSI for amusement market
・Vision system for collaborative robot
・AI FPGA module

Professional service¥71M (2%)¥168M (6%)

・Provision of AI licenses, products, and professional
services for robotic products (robotic vehicles,
collaborative robots)¥87M (3%)

Amusement

・AI algorithm, computer-vision software contracted development
・FPGA/board contracted development
・Customer product/service development
support in safe driving assistance androbotics fields¥2,642M (88%)

・Provision of products and support for
the amusement market (amusement machines)

Other¥134M (4%)

・Provision of IP core licenses (initial license,
running royalty) for digital devices, etc.
・GPU IP maintenance/support

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Business model and competitive
advantage

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Business model• Integrated development of algorithms, software, and hardware (domain optimization)• Flexible value proposition and monetization model through licenses, products and professional services• Build a well-balanced profit structure of highly profitable "IP core license business", scale-seeking"professional service business", and “Product business"
Hardware Acceleration
Domain Specific Silicon
IP CoreAlgorithm

State-of-the-art
Techniques
DomainExpertise

SoC
/FPGA

ModuleSoftware &Platform

DomainOptimization
Professional
Service

Open and Agnostic
Software

IP License

Out-of-the-box
Kit Solution

Opportunities &Engagements
Product

Professional (Contracted) Service
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Revenue cycle• Providing added value and maximizing LTV*1 (Lifetime Value) of customers over the entire development life cycle(from planning to mass production) of customer products• By developing and providing standard products and services based on the technology and know-how cultivated incustomer projects, we will strive to respond flexibly and quickly to customer development and improve profitability.
Customerdevelopment
process

DMP
business

IP core licensebusiness

Survey / planning

PoC*2

Full-scale

development

development

Evaluation licenseprovision

Official licenseprovision
New IP creation

Professional
service business

OperationMassproduction

Running royalty
Upgrade /maintenance

Subscription revenue

Consulting

Productbusiness

AI development(learning /evaluation / tuning)

AI implementation /optimization forcustomer HWRe-learning / optimization

Product development (contract /in-house) (SoC / Module)

In-house product sales(SoC / Module)*1 LTV: Abbreviation for Lifetime Value. The profit earned from the beginning to the end of transactions with a customer (customer lifetime value)*2 PoC: Abbreviation for Proof of Concept. Verification and trial about feasibility before introducing a new concept, theory or principle in full scale

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Competitive advantage
DMP can optimize AI processing for the domain, including hardware

AI flow

Data

Learning

Inference

Cloud SAFE

Cloud

Execution
environment

DMP’s Products &Services

DMP’s cloud service

Edge

MOVE
Algorithm
development

Development
process

Softwareoptimization
Hardwareacceleration

DMP’s integrated softwaredevelopment platform

DV700
A3000
DMP’s edge AI inference processor

DMP
Competitions

MAKING THE IMAGE INTELLIG ENTSupport customers' smooth transition from prototype (PoC) to
deployment by understanding the domain and developingwith final implementation in mind
Almost no AI development company understands the execution environment,
resulting in a lot of rework in the process of deployment© Digital Media Professionals Inc.

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Revenue / cost structure⚫ Cost to sales ratio tends to fall with increase in IP core license sales (ratio)⚫ Overall cost ratio also declined due to cost reduction in product business in March 2024
IP core license(Million Yen)

Product

67%

Professional service

64%

Cost to sales ratio

63%

2,322
104

49%

3,016
87
58%

1,667
1,328
394
553
380
Mar-20

2,758

295
1,009
206

1,956
1,199

658
144

173

261

170

Mar-21

Mar-22Mar-23Mar-24

Note: Non-consolidated basis for the fiscal year ended March 31, 2020, and consolidated basis for the fiscal year ended March 31, 2021 and beyond

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Cost structure⚫ SGA (selling, general and administrative expenses) are mainly R&D and personnel expenses.
⚫ R&D expenses are related to the development of technologies and solutions for medium-term growth.
Personnel

R&D

Comission

945(Million Yen)

833
760

588
199

Other

731

346
272

214
320

97
36

54

54
294

43
150

257

195

190

196

205

249

Mar-20Mar-21

Mar-22Mar-23Mar-24300

177

Note: Non-consolidated basis for the fiscal year ended March 31, 2020, and consolidated basis for the fiscal year ended March 31, 2021 and beyond

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Market trend

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Market trend

Amusement⚫ Pachislot market, our main battleground, bottomed out in FY 2018-2020 and has begun rising⚫ Pachislot market will remain strong in FY2024, centered on smart pachislot and type 6.5 machines
Amusement machine unit sales(,000 unit)
3,000

Pachislot

Pachinko

2,500
2,000
1,500
1,000

500
0
2016

2017

2018

2019

2020

2021

2022

2023
2024
(Estimate) (Forecast)

Source: Yano Research Institute; estimate and forecast are averages of those provided in the FY03/2024 financial results presentationmaterials of the three pachinko/pachislot machine manufacturers (SEGA SAMMY HOLDINGS, SANKYO, and Heiwa)

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Market trend

Robot as a solution to social issues (labor shortage)
The most promising industries for robot adoption from a workforce and labor shortage perspective
are manufacturing, followed by construction, transportation, and agriculture, as well as lodging, foodand beverages, and medical and welfare.
Workforce / Labor shortage rate by Industry

労働者過不足判断D.I.
Labor shortage D.I.

80 70 60 50 40 30 20 10

就業者数（万人）
Workforce(ten thousand)00

100 200 300 400 500 600 700

Manufacturing
Lodging, Food and Beverage
Construction
Medical, Welfare

Transportation, Postal
Wholesale, Retail
Agriculture
Lifestyle Related Services, Entertainment
Academic research, Professional and technical services

Real estate, Renting of goods
Information and Communication

SourceWorkforce: Of the workers by industry and occupation in the March 2024 Labor Force Survey (Statistics Bureau, Ministry of Internal Affairs and Communications), DMP counted the number of workers in the
agriculture, forestry, and fishing industry, production process workers, transportation and machine operators, construction and mining workers, transportation, cleaning, and packaging workers, and care service
workers, which are occupations where the introduction of robots is expected to have higher effects.
Labor shortage D.I.: D.I. (Diffusion Index) of excess/shortage of workers (shortage - excess) for transportation/machine operation, skilled workers, simple workers, and services (Lodging, Food and Beverageand Medical, Welfare) from the May 2024 Survey of Labor and Economic Trends (Ministry of Health, Labor and Welfare), weighted by the number of workers in the above occupational categories.
(For agriculture, the employment situation D.I. from the January 2024 Agricultural Business Conditions Survey (Japan Finance Corporation) was used.)

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Market trend

Autonomous mobile robot
Demand for autonomous mobile robots is expected to increase in various fields such as
manufacturing, logistics, agriculture, and households to save labor and improve productivity.

Autonomous mobile robot global market($Billion)

CAGR 22%

18.9

2.2
2021

2032

Source: "Autonomous Mobile Robot Market" (Allied Market Research), May 2023

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Market trend

Industrial robot⚫ Against a backdrop of labor shortage, introduction and application of industrial robots is advancing at
manufacturing and distribution sites as well as in food, pharmaceuticals, and cosmetics industries.
⚫ The line between conventional industrial robots and collaborative robots has become blurred. The scopeof application of AI vision systems that detect and recognize objects with cameras is also expanding.
Worldwide shipments of industrial robots(,000 unit)

CAGR 6%
593

526

533

42

55

2021

2022

718
662

622

390

Collaborative
26
robot

Conventional
industrial robot

2020

2023

2024

2025

2026

Source: "World Robotics 2023" (International Federation of Robotics (IFR)), September 2023

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Market trend

Infrastructure inspection market
With aging infrastructure and a shortage of inspectors, there is a large TAM*1/SAM*2 for infrastructure
inspections using image processing, cameras, and drones.
Domestic Infrastructure Maintenance and Management Market
Estimated 6.3 trillion yen for FY2038 in "Estimation of Future Maintenance andRenewal Costs of Social Capital in the Fields under the Jurisdiction of the
Ministry of Land, Infrastructure, Transport and Tourism (MLIT)" (November 2018)
Estimate based on the assumption that areas outside the jurisdiction of the MLIT
account for about 30% of the total

Inspection and repair using sensors and robots
The target in the Strategic Headquarters for the Promotion of an Advanced
Information and Telecommunications Network Society “Declaration to be
the World‘s Most Advanced IT Nation” (revised June 2015): Inspections
and repairs of 20 percent of key and aging infrastructure in Japan will be
conducted using sensors and other technologies.

¥9 trillion¥1.8 trillion

Inspection using image processing, cameras, and drones
According to Fuji Keizai's "2023 Edition: Current Status and Future
Outlook of Next Generation Infrastructure Maintenance andManagement Technology and System Related Markets" (February2023), image processing, camera, and drone technology will account for
55% of the total market in 2035.

¥990 billion*1 Total Addressable Market: The size of the total market that the business could acquire.
*2 Serviceable Available Market: The largest market size that the business can capture.

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Growth strategy / Business plan

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DMP’s Purpose

Making the Image Intelligent
Making画像を知能化する
the Image Intelligent"To"Tocreatecreateinnovative
innovativeproducts
productsandandservices
servicesthat
thatharness
harnessthe
thepower
powerofofimage
imageintelligence
intelligencetotosolve
solve
real-world
real-worldproblems
problemsand
anddrive
drivevalue
valueforforourour
stakeholders.“
stakeholders.”
画像インテリジェンスの力で現実世界の問題を解決し、ステークホルダーに価値をもたらす革新的な製品とサービスを創造する

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Basic sustainability policies and initiatives
Sustainability measures from the Purpose"Making the Image Intelligent"PurposeMid- to long-termsustainability
perspective

To create innovative products and services that harness the powerof image intelligence to solve real-world problems and drive value
for our stakeholders

Social issues
・Labor shortage
・Safe and secure society
・Low carbon society

Our issues
Expanding revenues and profits
from safety and robotics fields,
and IP core license business

KPI
Identification ofAchieving a sustainable society through business activities
sustainability materiality

Sales from safety androbotics fields, and IP
core license business

Human capital
perspective

Employee engagement
index

Alignment and fulfillment of human capital

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Social & environmental changes/issues and DMP initiatives
Mega topic

Declining birthrate
and aging
population

Climate change

DMP’s Initiatives

Social & environmental changes / issues• Declining working population• Key workers’ overwork• Skill transfer issue• Increase in elderly car accidents• Existence of vulnerable road users• Infrastructure aging• Rise in average temperature due to thegreenhouse effect• Increase in natural disasters• Decrease in agricultural production and food• Contributing to productivity improvement, work efficiency
improvement, labor saving to complement and mitigate thedecrease in the working population and hard work by making
efforts for automation and autonomy in the field of robotics• Contributing to real-time accident prevention and safe driving
education based on near-miss events by providing safe driving
assistance services• Contributing to MaaS promotion through autonomous driving
technology• Contributing to a global low-carbon society by reducing the power
consumption of hardware (IP)
• Contributing to infrastructure inspection by utilizing AI image
recognition technology

Contribution to SDGs

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Focused field
Focusing on fields where we can leverage ourcommon technology bases, as our strength

SafetyRobotics

Amusement

Safe driving assistance system
DMS/ADAS
Cloud service
Amusement SoC RS1Graphics module
AI inference processor IP
Camera IP (ISP＆Stereo)
GPU IP
Camera module

Common technology bases

GPU

MAKING THE IMAGE INTELLIG ENT

Autonomous driving
technologies
Visual SLAM
Picking system

Low-power IP© Digital Media Professionals Inc.

Computer
VisionEdge & Cloud
Computing22
22

Revenue structure and key activities for revenue growth
Maximize revenue through technology innovation, customer / ecosystem management,
and operations management
Key activities to revenue growth

Key measures to revenue growth

Maximize customer
LTV
Revenue by
customer
Revenue×

Increase walletshare
Acquire newcustomers

Number ofcustomers

1. Technology innovation
Maximize customer LTV, increase wallet share,retain and acquire customers by improving
technology / products / services and expanding
lineup

2. Customer / ecosystem management
Retain and acquire customers and complement
technologies by improving relationships withvarious ecosystems including customers andrevitalizing collaboration

3. Operations management
Retain existingcustomers

MAKING THE IMAGE INTELLIG ENTStrengthen development competitiveness, improvecustomer satisfaction, and improve revenue by
strengthening
development
personnel
andcontrolling quality, cost, and delivery© Digital Media Professionals Inc.

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Key activities for revenue growthTechnology innovation
Continue to develop and provide cutting-edge hardware and software IP, software, products and services based on
the outstanding technologies accumulated in the fields of AI and visual computing as an embedded GPU pioneer

Technology Width⚫ Founded in 2002 as a university-launched venture company to show the world thehigh level of Japan's CG processor technology. As one of the world's leading graphics
IP vendors, DMP has developed and provided power-saving, compact, and highgraphics performance IP.
⚫ DMP has developed high performance graphics LSI incorporating its proprietarygraphics IP technology.
⚫ In 2016, based on GPU technologies accumulated since its founding, DMP developed
ZIA , a platform consisting of software, hardware, and services that integrates
knowledge of AI and deep learning and entered the AI field.
Now expanding AI portfolio.

2016

SW

2010

ZIA
SAFE

2014

2020

2021

ZIA
Cloud
SAFE

2022

2023

2024

ZIA
SV

ZIA
ZIA
A3000 A3000V2

ZIA
SLAM/
MOVE

ZIA
C3

Artificial Intelligence2017 RS1Graphics LSI

ModuleAdopted forNintendo 3DS

2019

ZIA
ISP

ZIA
Classifier

2015 VF2

2009

2018

ZIA
DV700

IP

2008 NV7

2006

2017

2016
M3000

Graphics IP

2007
PICA® Graphics IP Core received the Excellencein IP Prize of 9th LSI IP Design Award

2002
MAKING THE IMAGE INTELLIG ENT

2010© Digital Media Professionals Inc.

2020
24
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Key activities for revenue growth

Customer/Ecosystem management
Retain and acquire customers and complement technologies by improving relationships with various
ecosystems including customers and revitalizing collaboration
Ecosystem

ExampleDevelopment

Manufacturing

Sales

・Requirement definition
・Selection of・Focus on growth fields
・Collaboration withbased on customer
manufacturing
sales partners
・Collaboration withneeds
contractors
platformers / sales partners ・QCD optimization
・Technology complement ・Manufacturing process to create markets andwith Tech Companies as management
maximize customer reachneededDMP

Customer・Yamaha Motor

Technology

・Cambrian・Prophesee

Platformer

・NVIDIA
・AWS

Needs

After-sale/Operation
・Product improvement
and new productplanning based on VOC・ Improvement ofcustomer satisfaction

VOC (Voice of Customer)

Technology
complement
Customer base

Sales Marketing/ ・RESTAR ・Ryosan
・PALTEK
SIer
Manufacturing

Marketing・Renesas

MAKING THE IMAGE INTELLIG ENT

Cloud Operation

Market info/Customer
base/Distribution
Development/
Manufacturingoutsource© Digital Media Professionals Inc.

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25

Medium-term business plan reviews (FY03/2022-03/2024)⚫ In FY03/2024, the final year of the medium-term plan, net sales were record-high, and all the income items were the highest since the IPO.
⚫ Safety: OTA*1 projects and product sales recorded in FY03/2023 fell off. Unmet the medium-term plan, which anticipated an increase inrecurring revenue⚫ Robotics: Sales of Cambrian vision systems expanded, but unmet the medium-term plan, which anticipated an increase in IP licenses andprofessional services.
⚫ Amusement: Achieved significantly higher results than the medium-term plan due to increased demand for type 6.5 pachislot and smart
pachislot machines.
⚫ Market conditions, business performance, and findings during this medium-term period are reflected in the future business strategy.

(Million yen)

FY03/2021

FY03/2022
Midterm plan*3

ActualFY03/2023

ActualForecast*4

FY03/2024
Midterm plan*4

ActualActualSafety

49

183

163

263

170

302

71

Robotics

166

374

236

290

185

415

168

Amusement

646

840

1,155

1,719

1,821

1,716

2,642

Net sales*2

1,009

1,500

1,667

2,370

2,322

2,540

3,016

Operating income

-425

-250

-126

25

27

200

328

Ordinary income

-361

-250

-122

25

28

200

330

*1 Over the Air, Wireless installation of our software on dashcams with communication function installed in end-user vehicles*2 Net sales include sales in areas other than the three main fields (safety, robotics, amusement), such as AI/GPU IP core licenses for digital equipment.
*3 Medium-tern plan in "Notice of Medium-term Business Plan" disclosed on May 14, 2021
*4 Business forecast and medium-term plan in "Business Plan and Growth Potential" disclosed on June 14, 2022

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Implications during the medium-term period
Reflect the findings of the medium-term period (FY03/2022-03/2024) in the mid-term business strategy
SafetyMarket/Businessassumption

Results/Findings
during the mediumterm period

Implications for
future businessstrategies

Robotics

Amusement• High growth continues in the dashcam
market with AI/communication functions• Recurring revenue grows due to new
customer acquisition and increase inexisting customer projects• With the social implementation of robots,
With the introduction of type 6.5 pachislot andlicense revenue of autonomous driving
smart pachislot/pachinko machines,
software for mass production and professional amusement market is expected to beservice revenue increasestimulated by the expanding game features• Vision system business for picking robots grows• Growth rate of the domestic dashcam
market is slowing down with a CAGR ofless than 2% from 2023 to 2028*1• Weak customer willingness to invest,
resulting in failure to acquire continuous
customer projects• Need to change strategy based on market
expansion assumption• Social implementation of robots has notprogressed than expected*2• Uncertainty is strong in the expansion of fullscale mass-production license revenue
based on the assumption that customers'
products will be adopted, and in sales
dependence on professional services forcustomers' R&D projects• Inquiries for vision systems are strong• Continue activities to win license business• Capture the construction and agriculturalfor autonomous mobile robotics
machinery market in addition to theautomotive market through model-based• For Cambrian vision systems, accelerate
development
the introduction of multiple systems tocustomers' assembly lines• Capture a wide range of safety markets
such as smart cities/buildings by utilizing• Enter the FA inspection market where
highly accurate AI recognition technology
technology/product/customer synergies
are expected• Utilization/light-weighting of generative AI
Actively pursue growing market of the fields of video inspection and semiconductor
manufacturing equipment through the integration of safety and robotics technologies,
together with major business partners

Market expansion/increased demand forpachislot machines, especially type 6.5 andsmart pachislot machines, has been stronger
than expected• Expand customer base
• Capture amusement machine peripheralbusiness

Source:*1 "Global Demand Trends for AV&IT Equipment: Outlook to 2028" (JEITA (Japan Electronics and Information Technology Industries Association)), February 2024
*2 "Comprehensive Action Plan for R&D and Social Implementation in the Field of Robotics" (NEDO (New Energy and Industrial Technology Development Organization)), April 2023

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Focus area strategy

Safety field⚫ Tap automotive industry as well as construction/agricultural machinery fields with model-based development*1 (RTMaps)compliant ZIA SAFE
⚫ Expand business to broader safety fields such as public transportation hazard detection and prediction and smart cityrelated areas⚫ Research and productization of advanced safety system leveraging generative AI technology

Car exterior and interior (driver) monitoring

Local Government
Public Transportation
EnergyBuilding/Construction
Public Safety

Smart City

BEMS*2*1 A method of proceeding with design and development while performing verification by modeling and simulating the controls and control objects to build the system. This enables verification during the design
process and reduces rework in the verification process, thereby significantly reducing development time and improving quality.
*2 Building Energy Management System, An energy management system that measures and visualizes the amount of electricity used within a building, and also controls air conditioning and lighting equipment

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Focus area strategy

Robotics field⚫ Realize a full pipeline of autonomous driving based on low-cost Visual SLAM that is robust against environmental changes(ZIA MOVE)⚫ Collaborate with AMR/AGV vendors in the development of service robots for manufacturing, transportation and logistics,
construction, building facility management, etc.
⚫ For Cambrian vision system, which acts as the eyes of a picking robot, accelerate the introduction of multiple systems tocustomers' assembly lines by leveraging its ability to work with various robot arms and pick difficult objects such as glossy
and transparent objects⚫ Enter the FA inspection market where technology/product/customer synergies are expected
Recognition

Operation

Judgment

ZIA MOVE

Manufacturing

Transportation/
Logistics

Construction

Agriculture

Advanced AMR
Cambrian Vision System

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Focus area strategy

Amusement field⚫ Real-time 3D engine and high-performance, high-compression video engine on a single chip (industry's first), enabling
both beautiful video expression and reduction of machine chassis cost
⚫ Expand market share due to the booming pachislot market and the penetration of ZEEG's standard chassis equippedwith RS1 into the pachislot and pachinko machine industry⚫ Aim to expand market share and enter new customers in market segments where we can demonstrate the superiority of
our unique 2D/3D integrated chip
⚫ Capture the amusement machine peripheral business

×

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Focus area strategy

Other field (IP for digital equipment)⚫ Provide small size, low power consumption, and high-performance IPs optimized for customers' digitalequipment applications and embedded SoCs
⚫ Earn stable running royalties from broad customers/applications such as digital still cameras, OA equipment,
TVs, and surveillance cameras⚫ Development and market launch of next-generation AI IP/semiconductor

GPU IPAI IP
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Focus area strategy

Video inspection area (integration of safety and robotics)⚫ Promote infrastructure video inspection business leveraging Visual SLAM, Autonomous driving control, andAI analysis with major partners, and horizontally develop the results⚫ Offer high-value added video analysis services as a recurring model【Data Center Inspection】【Steel Tower Inspection】

Data center operating companies

Telecommunications infrastructure
management companies
Joint R&D with Tsukuba University

MAKING THE IMAGE INTELLIG ENT【In-building Inspection】 【Transport in Semiconductor Factory】

General contractors© Digital Media Professionals Inc.

Semiconductor manufacturingsystem companies

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KPI (Key performance indicator)⚫ Change in KPI[Previous]
Sales (% of sales) from IP core licensebusiness in the safety and robotics fields[From now on]
Sales from safety, robotics, and the fusion of these
two fields, as well as in other field⚫ Background• More customers in the safety and robotics fields are looking for solution packages that combine products and professional
services, rather than just providing IP licenses and software.
• This KPI is in line with our direction to pursue higher value-added products.

• Aligning with the KPI of "Achieving a sustainable society through business activities" identified as a materiality of sustainability⚫ KPI results(Million yen)

FY03/2021

FY03/2022

FY/03/2023

FY03/2024

Safety

49

163

170

71

Robotics

166

236

185

168

Other field

148

111

144

134

363

512

500

374

Sales

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Medium- to long-term growth image
Based on a stable revenue base in the amusement field, ensure growth in other fields⚫ Amusement field
Secure stable growth in the medium term and a stable revenue base in the long term by expanding the customer base and capturing
amusement machine peripheral businesses, etc.
⚫ Other than amusement field• In the video inspection business for social infrastructure, expand revenues and profits through sales of inspection robots as well as recurring
revenues from the combination of services• In addition to Cambrian vision systems, introduce synergistic technologies and products for the FA inspection market. Pursue rapid businessdevelopment in the medium term
• Make cutting-edge investments in developments of AI IP/semiconductors and generative AI, etc., for market introduction• Actively pursue M&A and capital/business alliance* opportunities to complement resources/products and deepen market/industry knowledge
Medium- to long-term growth image(Million yen)

3,200

3,016
2,322
Sales from otherthan Amusement 500

374

Operating 2,642328
Sales from
1,821 income
Amusement

350

27

Mar-23Mar-24Mar-25* No M&A or capital/business alliances have been decided at this stage.

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Risk information

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Risk information
Item

Major risks

Probability/
Timing ofactualization

ImpactCountermeasures

Technology
obsolescence andR&D failures

Graphics processing and AI technologies are
evolving at a very fast pace, and there is a riskthat we would fall behind. There is also a riskthat our research and development may bedelayed or aborted.

Medium/Uncertain

Large

We will keep a close eye on technological trends and proactively
promote technology development. In addition, we will strive tosecure excellent engineers necessary for technology development.

Customers’ market
trendsSince the Company's revenue is partly linked to
the number of shipments of amusement
machines, in-vehicle products, and otherproducts in which our products are embedded
by customers, there is a risk that revenue would
decrease in the event of sluggish sales ofcustomers’ products or a decrease in thenumber of shipments due to changes in laws
and regulations.

Low-High/
Uncertain

Large

We will aggressively develop new markets and new products bygathering information from customers and external organizations.
Although we are unable to deal with laws and regulations on ourown, we will work closely with our channels and end customers todetermine the degree of impact on our business performance andtake actions such as making disclosures as necessary.

Securing anddeveloping humanresources

Securing excellent human resources is aprerequisite for our future growth. However,securing those for AI and other advanced
technologies is becoming increasingly difficult. If
we are unable to secure talents, there is a riskthat our business growth would be restricted.

Medium/Medium-Long
term

Large

We are making efforts to attract human resources by providing
flexible work systems such as the introduction of a discretionary
work system and attractive compensation systems such as thestock compensation system.

Note) For other risks, please refer to "Risk Factors" on our website.

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Handling of this material• Forward-looking statements contained within this document are based on
currently available information and involve risks and uncertainties, including
macroeconomic conditions and trends in the industries in which we areengaged. As such, actual results may differ materially from those anticipated.
• The purpose of this document is to provide information for the purpose ofunderstanding our company and is not to solicit investment in securities issued
by our company. Please refrain from making any investment decisions based
entirely on this document.
• The latest status including the progress of "Business Plan and Growth
Potential" is disclosed in June each year after the announcement of full-year
financial results. The next disclosure is scheduled to be made in June 2025.

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Supplementary material

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Group Business Description
Business

Description

Major Customers

IP Core*1 License
Business

Development and license offer of hardware IP (logic design data etc.) and software IP (mainly hardware control
drivers and supporting tools for contents creation) necessary for drawing detailed images and artificial
intelligence*2 (AI) such as deep learning*3a) License fee: Compensation through offering IP core license in the process of developing products such ashome appliances by customersb) Recurring revenue
・Running royalty: Compensation received according to the number of products incorporating IP core shipped bycustomers
・Subscription fee: Compensation received from customers based on the actual use of our cloud services (PV:number of page views)c) Maintenance and service fee: Revenue from maintenance of IP based on maintenance contract, etc.

Semiconductor manufacturer/
Manufacturer of final product withembedded semiconductor

・Development, manufacturing (outsourced) and sales of graphics LSI*4 (SoC*5) mainly for amusement equipment
・Sales of vision system (object detection by camera) for collaborative robot* 6・Development, manufacturing (outsourced) and sales of AI LSI (FPGA*7) for AI equipment, otherTrading company/SIer
Manufacturer of final product withembedded Semiconductor

Provision of design service of studying and optimizing the entire SoC system by integrating various IP cores of theCompany, software service of developing and optimizing algorithm based on GPU* 8/vision /AI technology
cultivated through development of in-house products, etc.

Manufacturer of final product withembedded semiconductor

Product Business

Professional
Service Business*1: Partial circuit modules within an LSI, designed for a specific function (e.g. graphics IP core). IP stands for Intellectual Property.
*2: Software and system that enable computers to make human-like perceptions and judgments such as computer programs that understand and judge sentences, images, conversations,sounds, etc.
*3: A type of machine learning method that realizes artificial intelligence by utilizing human brain imitated neural network mechanism, which is being commercialized in the field of image
recognition*4: Large-scale integrated circuits composed of silicon wafers (materials with properties intermediate between conductors and insulators used in the manufacture of semiconductor
products). LSI stands for Large Scale Integration and is also called "semiconductor".
*5: Integrated circuit (design method) that integrates a series of functions (systems) required on one semiconductor chip. SoC stands for System on a Chip.
*6: Robot that can works together with people without safety fences*7: Integrated circuit that allows buyers or designers to set and change the configuration after manufacturing. FPGA stands for Field Programmable Gate Array*8: Arithmetic unit or processor specialized in real-time image processing represented by computer games. GPU stands for Graphics Processing Unit. By utilizing its better performance inparallel computing performance than CPU, technologies called GPGPU (General-Purpose computing on GPU) that apply its computing resources to purposes other than image
processing are applied to the AI​​/deep learning field.

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Performance review• From GPU IP business mainly for game consoles at the time of listing, through LSI development for amusement, focusing on AI businessin recent years• Net sales reached a record high mainly due to growth in the amusement field and product business. Operating income, ordinary income,and net income attributable to owners of the parent grew significantly and reached new records since the listing.

Business performance*
Net sales

(¥M)

3,016

Ordinary income
2,322

1,667
1,044
355

302

973

733

714

1,086

-365

-265

1,009

694

464

66
-36

1,328

-193

33

-262

330

85

28

-361

-122

Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Mar-24

GPU IP businesscentered on game Recorded up-front development Despite the impact of the Corona disaster, next-gen
cost for next-generation
consolesamusement LSI business contributed to earnings;
amusement LSI
focus on AI business* Actual results on a non-consolidated basis for the fiscal year ended March 31, 2020, and full-year consolidated results for the fiscal year ended March 31, 2021 and beyond

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Fiscal Year Ending March 31, 2025

Business Forecast (extracted from the material of the Result Briefing on May 14, 2024)
6% increase in net sales and growth in operating/ordinary incomes for the fiscal year
ending March 31, 2025
Under the Purpose "Making the Image Intelligent," create and offer products/services contributing to "realization of a safe
and secure society" and "solution of social issues," while aiming for stable growth in image processing semiconductors
FY 03/2025

FY 03/2024(Actual)Forecast% Change

3,016

3,200

+6.1%

Operating income

328

350

+6.5%

Ordinary income

330

350

+5.9%

Net income attributableto owners of the parent

331

290

-12.5%(Unit: million yen)

Net sales⚫ Amusement: Stable growth for RS1 image processing semiconductors⚫ Safety/Robotics• Combine technologies and products including edge/cloud-enabled AI image recognition technology, SLAM/autonomous driving technology, andCambrian vision system• Create and offer new businesses that solve social issues by integrating proprietary technologies, business expertise, customer bases, andecosystems cultivated in these fields⚫ Other (IP): Acquire new IP business in addition to stable business bases such as GPU IP running royalties

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