2023.7.5
FAQs and Answers after the Announcement of FY22 Q4 Financial Results
OverallQ What is the impact of generative AI on the Company's business performance?
A We think the following two businesses will be affected by the development of generative AI.
Blanks: Demand for GPUs will increase, and blanks, including those for EUV, will berequired for their production. Currently, only a few are used for manufacturing GPUs for AI,
but we expect this to grow in the future.
HDD substrates: The development of generative AI will also increase the amount of datastored in data centers, which may increase demand for HDD and disk substrates. Currently,
most generative AI is text-based and the amount of reference data does not appear to belarge, but the amount of data may increase in the future as reference data expands andapplications expand to include images/video, etc.
Q You mentioned that you are going to reorganize your business portfolio. What businesses
do you expect to target?
A We are starting with smaller-scale businesses to reorganize businesses that have little
relevance to our strengths, businesses that will not be future growth drivers, andbusinesses that do not belong to our three focus areas of "support for the vision, health,and information society.
BlanksQ What is the background behind the higher-than-expected Blanks sales in Q4 FY22?
(Forecast -15% YoY, Actual -6% YoY) Will this trend continue in FY23 Q1?
A Sales were higher than expected due to several factors, including a better-than-expected
product/customer mix, but we have not changed our outlook for FY23 Q1 because it wastemporary.
Q What is the background behind your forecast of 15% sales decline YoY in the next quarter(FY23 Q1)? Is there any difference in the degree of adjustment by customers andEUV/DUV?
A The adjustment is mainly due to inventory adjustments in the supply chain. Over the past
few years, inventory levels have been rising throughout the supply chain in preparation for
supply disruptions caused by COVID-19. But the end of COVID-19 has caused inventory
levels, which was piled up for Business Continuity Plan, to decline. Customers' R&D
activities remained active, and sample work for 2-nanometer, the advanced node, is being
conducted with all customers.
By EUV/DUV, the degree of adjustment in EUV has been larger than that in DUV. Inventory
adjustments are occurring at almost all customers, but the degree of adjustment varies.

Q What is the background behind the lowering of the CAGR forecast for EUV blanks sales from
20% to 10%? Does it have any impact on your future capital expenditure plans?
A We think that demand for EUV blanks has been growing over the past few years due toinventory holdings, so it is necessary to discount this in our CAGR forecast for the future.
However, demand for EUV blanks will continue to grow over the long term, and we havenot changed our medium- to long-term capex plan, including placing an order for newequipment in FY22 Q4.
Q What will be the impact on profit when sales decline 15% in FY23Q1?
A We expect the operating profit margin of the Information Technology segment in Q1 to beslightly lower than in Q4, because in Q4 there was a reactionary increase from inventory
adjustments in the HDD substrate and a one-time factor in sales in the blanks, and thesefactors will be eliminated in Q1.
FPD Masks
Q Please tell us about the objective of the joint venture with BOE. When do you expect thejoint venture to be financially accretive?
A We have established a joint venture company to gain a foothold in the Chinese market,
where demand is expected to continue to grow, and to realize closer development andsales activities with customers. We are currently building a factory in Chongqing, China,
and plan to start local production in early 2024.

HDD Substrates
Q FY22 Q4 sales improved significantly from Q3, but what is the background for anotheradjustment in FY23 Q1?
A FY23 H1 is expected to be -20%+ YoY, FY23Q1 -30% due to strong demand in Q1 of theprevious year. In FY22 Q4, inventory adjustment of glass substrates was largely over, but
we expect another adjustment because data centers, our end customers, are curbing
capital investment due to economic stagnation.
There is no change in the outlook for growth in the HDD market due to the continuing
progress of the information society.
Q Multiple HDD manufacturers have mentioned the launch of HAMR (Heat Assisted MemoryRecording) HDDs in the market; what will be the impact on this business if sales of HAMR
HDDs go into full swing?
A We believe that glass will increase its share of the HDD disk substrate market.
In the manufacturing process for the magnetic film of the disks used in HAMR HDDs, heatat higher temperatures than conventional HDDs are generated, requiring glass substrates
with higher heat resistance than aluminum alloys (heat resistance temperature: aluminumalloy is 290°C, glass is 691°C).
When HAMR HDDs are realized, the recording capacity will increase by approximately 50%
at once compared to existing near-line HDDs, and we believe that other HDD
manufacturers will also adopt HAMR HDDs, resulting in accelerated replacement ofaluminum disk substrates with glass substrates.

Q After the inventory adjustment, will the nearline HDD/substrate market grow at the samepace as before?
A We believe that the current situation is a temporary adjustment and that the market willcontinue to grow over the long term, driven by factors such as the progress of theinformation society.
Imaging
Q Please tell us about your financial results and future prospects by application.
A Sales for interchangeable lenses were strong, but sales for surveillance cameras werenegative due to the impact of the zero-Covid policy in China. Although demand forsurveillance cameras is expected to remain stagnant for the time being, we expect thebusiness as a whole to perform well, compensated by demand for interchangeable lenses
and automotive cameras.
Eyeglass Lenses
Q The 4Q growth was double-digit; do you expect it to continue?
A Since 4Q saw double-digit growth thanks to temporary factors such as the rebound fromthe pandemic, we expect growth to slow down somewhat in FY23. However, we expect
growth to exceed the market growth rate driven by the acquisition of new contracts withindependent/chain customers in the U.S. and sales expansion of MiYOSMART in China.
Q What is the sales status of MiYOSMART (lenses to curb myopia progression)? Also, could
you tell us about launch schedules in other regions?
A It already accounts for around 7% of sales of eyeglass lenses and is expected to growrapidly in the future. Currently, we are launching this product in more than 30 countries,
and we will expand our sales area once we receive approvals from regulatory authorities ineach country. Moreover, we will expand our product lineup to include sunglass-typeproducts.
Contact lenses
Q Please tell us the percentage of sales accounted for by private brand (PB) sales in thebusiness division as a whole. Also, what are your medium-term targets for PB ratio?
A Currently, in the category of daily lenses, PB accounts for nearly 20% of sales, and weexpect a ratio of more than 40% in the medium term.

Endoscopes
Q What is the background behind the weak sales in the U.S.?
A Although sales in the U.S. are on a recovery trend, they have been negative in YoY. Since
the market is firm, we consider this to be an internal factor. We aim to return to a growth
path by strengthening our sales organization and reviewing our sales policies.

Q Compared to HOYA's other businesses, the sales growth rate and profit margin are low.
What are your thoughts on the future?
A Sales growth and profitability have been stagnant due to a temporary increase in costs
associated with compliance with laws and regulations in various countries and a shortage ofparts due to the impact of COVID-19. Going forward, we intend to return to a growth pathby expanding sales of new products and strengthening our US business.
IOLs
Q Please tell us the status of sales expansion of the new tri-focal intraocular lenses.
A We have started to sell tri-focal IOLs in major European countries. We expect that the trifocal IOLs will drive earnings growth in the business.
End
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activities and outcomes, effects of pandemics or other widespread health problems such as
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forward-looking statements as a result of new information, future events or otherwise.

Contact: h-ir@hoya.com