Fiscal Year Ended March 31, 2019

Results Briefing
Digital Media Professionals Inc.
Tuesday, May 14, 2019

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.
Copyright (C) Digital Media Professionals Inc. All Rights Reserved.
Please be aware of the possibility that actual performance and results may differ considerably due to a variety of factors.

11

Explanation of Results, Fiscal
Year Ended March 31, 20192

Business Forecast, Fiscal YearEnding March 31, 2020

3Priority Measures and Blueprintfor Future Growth

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2

1Explanation of Results, Fiscal
Year Ended March 31, 20192Business Forecast, Fiscal YearEnding March 31, 2020

3Priority Measures and Blueprintfor Future Growth

Copyright (C) Digital Media Professionals Inc. All Rights Reserved.

3

Operating Environment of the Company
Semiconductor Industry Trends
 The semiconductor market, which slumped in the second half of 2018 due to various
temporary factors, such as US-China frictions, slumps in sales of new models ofiPhone, Intel 10n line start up delays, and the backlash to excessive investment in data
centers due to Trump tax cuts, is expected to bottom out in mid-2019 and recover.
 The market growth of data centers, cars, and industrial equipment along with thespread and expansion of AI, IoT, and 5G, are driving demand for semiconductors.
 Volume of data generated by manufacturing industry, etc., has rapidly increased andthus edge computing, which can efficiently process data, has accelerated. Low power
consumption, short delays, and cost efficiency are the key.
 Self-development by large IT vendors and set vendors of domain specificsemiconductors optimized for their apps is active. FPGAs and ASICs are used a lot.
 Demand for FPGAs for cloud and data centers is on the rise. Xilinx leads the market.

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4

Fiscal Year Ended March 31, 2019

Key Points of Results●Sales increase in LSI business made up for decrease in royalties income
Sales ¥364 million

LSI business

YoY+¥214 million
change●Contribution of increase in shipping volume of graphics processing LSI “RS1” andcommencement of shipping FPGA with on-board ZIA

IP core license business

Sales ¥230 million

YoYchange-¥96 million●Decrease in running royalties from game console customers●Multiple execution of new license contracts of ZIA edge AI IP "DV series"

Professional services business Sales ¥491 million

YoYchange-¥6 million●Increase in sales from AI-related projects (software, algorithms development, etc.)●Stripping of previous fiscal year’s additional revenue from NEDO* for accelerating
power-saving AI engines project
NEDO: New Energy and Industrial Technology Development Organization
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5Fiscal Year Ended March 31, 2019

Key Points of Results
Though the initial plan was not achieved,

revenue increased due to steady shipment of LSI and growth of the AI businessTransformation of business portfolio aimed at growth has greatly progressed(Unit: million yen)

Net sales
Operatingincome
Ordinary
incomeNet income

FY 03/2018

Increase-decreaseamount

FY 03/2019

973

1,086

113

69

28-41

66

33-33

109

35-74

Decrease in income due to decrease in sales from IP licensing business,
which is relatively profitable
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6

Fiscal Year Ended March 31, 2019

Balance SheetSound financial condition has been maintained(Unit: million yen)

End of March2018

Current assets

1,774

2,063

289

346

320

-26

2,121

2,383

262

Current liabilities

228

366

138

Non-current liabilities

1818

0

Total liabilities

247

385

138

Total net assets

1,873

1,998

125

Total liabilities and netassets

2,121

2,383

262

Non-current assets
Total assets

End of March2019

Increase-decreaseamountCopyright (C) Digital Media Professionals Inc. All Rights Reserved.

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Fiscal Year Ended March 31, 2019

Topics - Expansion of ZIA Platform
Full set of ZIA software, IP, and module products
Launch of ZIA DV500 AI Processor IP sales (announced on April 25, 2018)
Launch of ZIA C2/C3 edge AI module sales (announced on September 18, 2018)
Software Product
Image classification engine

Hardware IP Products
AI processor for edge computing

Small size AI processor for edgecomputing

Module Products
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8

Fiscal Year Ended March 31, 2019

Topics - Launch of IP New Product SalesZIA DV500 AI Processor IP
Ultra-small AI processor specializing in object recognition
Optimized for scene understanding and object recognition for industrial equipment andautomobile driving assistance systems→ Size reduction achieved while maintaining high processing performance
Adoption example: UKC smart mirror (CMS)
Watch out
for bicycle

A car isapproaching

Automatic recognition and warning of humans,bicycles, cars, etc.
• No restriction of field of vision by luggage in vehicle
or vehicle body
• Not affected by weather and provides greater
visibility than regular mirrors

International Automotive Electronics Technology Expo
UKC Holdings Booth (January 2019)

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9

Fiscal Year Ended March 31, 2019

Topics - Launch of Module Products SalesZIA C2/C3 edge AI module
AI processors for edge computing utilizing
FPGA with on-board DV700- Compact, low power consumption andhigh performance AI inference processing
module, mounting DMP DV700 to FPGA
- Mount Intel FPGA and Xilinx FPGA to coverindustry-leading FPGAs DMP DV700 AI processor IP
 FPGA: Intel Arria (C2), Xilinx Zynq (C3) Dual core ARM processor
 2GB main memory / 16GB flash memory Dimensions: 90 mm x 90 mm

High usability

Main features

Supports Caffe and Keras AI development
frameworks

Flexibility
Hardware can be updated

Power-conserving and fanless

Advanced AI inference processing

No need for cooling fans, which tend to fail andrestrict structural design

High performance and accuracy with "ZIA™
DV700"

Long-term supply
Module utilizes FPGAs with sold track records oflong-term supply for industrial equipment

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10Fiscal Year Ended March 31, 2019

Topics - Partner Collaboration

Collaboration with PALTEKCollaboration on edge AI solution utilizing Xilinx FPGA (August 2018)
Distributorship agreement signed for ZIA C3 (November 2018)•

Support development of FA cameras, robots, construction machinery, agriculturalmachinery, inspection equipment, medical equipment, etc., with integrated ZIA C3 AI

Technical collaboration with Macnica andCross Compass (September 2018)
Provision of integrated solutions for manufacturing industry
from AI generation to edge AI implementation••

Support "Manufacturing-IX", integrated AI environment for manufacturing industry
designed by Cross Compass, with ZIA C2/C3
Establish edge AI systems in a short period of time in a wide range of fields, such as
factory automation, autonomous robots in distribution, and healthcare

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11

Fiscal Year Ended March 31, 2019

Topics - Establishing AI Ecosystems
System development partner

Restar (formerly UKC)
IP Core Product

Module Product

Module sales partners

AI solution partners
Software ProductObject Recognition / Classification
Deep learning inference engine

Learned model-Computer vision
Optimized library

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12

1Explanation of Results, Fiscal
Year Ended March 31, 20192

Business Forecast, Fiscal YearEnding March 31, 2020

3

Priority Measures and Blueprintfor Future Growth

Copyright (C) Digital Media Professionals Inc. All Rights Reserved.

13

Fiscal Year Ending March 31, 2020

Business Forecast
・Net sales will increase with increase in RS1 sales volume and expansion ofAI products and services
・Profits will level off due to increase in personnel for strengthening
development system
YoY change(Unit: million yen)

Net sales
OperatingincomeOrdinary
incomeNet income

FY 03/2019(Actual)

FY 03/2020(Forecast)

1,086

1,300

214

19.6

2830

23.6

33

30

-3-9.935

20-15-43.1IncreasedecreaseamountIncreasedecrease rate(%)

Sales of ¥172 million from development commissioned by NEDO are included in net
sales for fiscal year ended March 31, 2019
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14

1Explanation of Results, Fiscal
Year Ended March 31, 20192

Business Forecast, Fiscal YearEnding March 31, 2020

3

Priority Measures and Blueprintfor Future Growth

Copyright (C) Digital Media Professionals Inc. All Rights Reserved.

15

Fiscal Year Ending March 31, 2020

Priority Measures
Expanding RS1 Business•••

Supporting launch of customers' products shipped to pachinko parlors from this fiscal year
Promoting multi-platform strategy, including for arcade games
Expanding sales aimed to become industry-standard platform through collaboration withchannel partners

Expanding Portfolio and Sales of AI Products•

Strengthening line-up of ZIA hardware IP and software products•

Developing high value-added module products•

Expanding ecosystem with partner companies and strengthening capacity to provide
solutions

Strengthening Collaboration with Customers and Cultivating Specific Fields•

Developing autonomous driving and automation systems in the mobility field•

Developing labor-saving and automation systems in the industrial equipment and robotics
fieldsCopyright (C) Digital Media Professionals Inc. All Rights Reserved.

16Expanding RS1 Business
Now Producing in Volume and Shipping RS1
Next-Generation Graphics Processor･ Large customers start shipping products to pachinko parlors from this fiscal year
・ Aiming to be the market leader by the industry's first integrated pachinko/pachislot chip・ Supporting multi-platform including for arcade games
Industry Trends
 The "Entertainment and Amusement Trade and the Implementation Rules for the Entertainment andAmusement Trades Rationalizing Act" took effect in February 2018, and 2019 is a transition period tonew regulation (type 6) machines.

 Replacement demand to new regulation machines is expected along with the removal of previous
regulation (type 5) machines by expiration of certification in January 2021. However, introduction topachinko parlors of game machines is expected to temporarily stagnate due to the Olympics andParalympic Games being held in summer of 2020.
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17

Expanding AI Products Portfolio
Strengthening of ZIA AI processor IP, module, and software product
IP Core Product

Module Product

Software ProductObject Recognition / Classification
Deep learning inference engine

Learned model
Computer vision
Optimized libraryCompact and high performance
AI inference processor IP thatuses deep learning

Flexible and low power
consumption AI inference
processing module, mounting
DMP DV700 to FPGA

Application• AI-integrated camera SoC• Autonomous driving SoC

Application• Industrial machinery• Robotics• Medical equipment

Initiatives
Improve functions andperformance, enhance line-up

Develop products with highadded value, such as
products with integratedcameras

Self-developed and advanced
image recognition /classification engine basedon AI and image-processing
technology
Application• Driver monitor system• Analysis of near misses• Medical diagnosis

Expand applications bystrengthening AI functions

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Software Product:Broadening Application of ZIA Classifier

Driver Monitoring System

Deep learning inferenceengineLearned model

Medical System
Company B: Anonymization ofpersonal information

Computer vision
Optimized library(OpenCV OpenVX
Photography Vision)

Smartly recognize and classify images by making
full use of deep learning and computer vision

Outside-Car Surveillance System

Construction Machinery /Agricultural Machinery

Company A: Analysis ofnear-miss images

Automatic running and picking ontrails

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19

Strengthening Capacity to Provide Solutions ThroughCollaboration with Partner Companies

AI EXPOTOKYO 2019

7 partner companies
exhibited various applications
that use ZIA C3

April 3-5, 2019 at Tokyo Big Sight

PALTEKNTT COMWARE

MorphoCross Compass

Rist

Visualinspection

Cloudlinked
learning

Travel-routeassessment

Predictive
maintenance

Clothing
inspection

Jointlyexhibited

Crystal-Method

Computermind

Humandetection

Visualinspection

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20Business and Capital Tie-Up with
Yamaha Motor
Collaborating in the final commercialization processfrom developing algorithms by applying AI technology
through to mounting on products•

Development of automatic / self-controlled
driving systems in low speed areas•

Development of labor-saving and automation
systems in agricultural areas, etc., that use
robotics technology•

Development of advanced safe driving support
systems for all mobility products

Algorithms

Optimization foreach productdomainDevelopment of systems optimized for each productdomain of Yamaha Motor by using DMP's AI
algorithms, software, and hardware technology

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21

Blueprint for Future Growth
Evolve into the world's leading "AI Computing Company"
Integrated development of AI algorithms, software and hardware

Expansion into the growing IoT/AI field
Development of ZIA platform• Processor IP• Software• Modules• Strengthening of ecosystem with partners• Overseas expansion
AI solutions for Mobility / Industry• Autonomous driving• Robotics
Expansion of the SoC / Module Business• High value-added modules• High-volume AI productsAI

Stable management foundation in theamusement market where we can winExpand sales of RS1
Aiming for top share in amusement SoC

Phase 1

Current position

Phase 2Phase 3Copyright (C) Digital Media Professionals Inc. All Rights Reserved.

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<Inquiries>

Digital Media Professionals Inc. Corporate Planning Department
Tel. +81-3-6454-0450
URL: https://www.dmprof.com/en/ir/

Forward-looking statements contained within this document are based on currently available
information and involve risks and uncertainties, including macroeconomic conditions andtrends in the industries in which we are engaged. As such, actual results may differ
materially from those anticipated.

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