2nd Quarter ended September 30, 2020

Results Briefing
Digital Media Professionals Inc.
November 13, 2020
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.
Copyright (C) Digital Media Professionals Inc. All Rights Reserved.

1

Explanation of Results, 2nd Quarter
ended September 30, 20202

Progresses of This Fiscal Year’s
Initiatives and Business

3

Fiscal Year Ending March 31, 2021,
Full-Year Business Forecast andBlueprint for Future Growth4

Focus Areas and New Initiatives
Copyright (C) Digital Media Professionals Inc. All Rights Reserved.

2

1

Explanation of Results, 2nd Quarter
ended September 30, 20202

Progresses of This Fiscal Year’s
Initiatives and Business

3

Fiscal Year Ending March 31, 2021,
Full-Year Business Forecast andBlueprint for Future Growth4

Focus Areas and New Initiatives
Copyright (C) Digital Media Professionals Inc. All Rights Reserved.

3

Impacts of New Corona Virus Infection (COVID-19)
Short-term negative impacts, midterm positive impacts due to changes in market structure
Impact on DMP’s businessBusiness/Market
Operation

Factors⚫ All officers and employees can work from home from March⚫ Continue to have no positive people⚫ Current attendance rate is about 50%

Short-term FY2020 Midterm FY2021-

－

＋
－

－

＋

－

＋

⚫ Slight impact on customer approach (Strengthening web approach)Amusement Market⚫ Pachinko parlor occupancy rate is stable (about 80%)
⚫ Removal of old rule machines and replacement with new rulemachines are expected to be carried out toward Dec. 2021
⚫ Test pass rate of new platforms has been low⚫ Parlor’s motivation to purchase game machines is weakAffect product/production plans of game machine manufacturers

AI Solution Business⚫ Demand for robotics in controlling infection is on the rise
including orders of PoC (Proof of Concept)⚫ Temporary restraint on development investment by some customers

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4

2nd Quarter ended September 30, 2020

Results Highlights: P/L
Shifted to a consolidated accounting system due to the start of business at the subsidiary in Vietnam(unable to simply compare figures with those in the same period last year)(However, sales of the subsidiary in Vietnam are currently design service income only to the headquarters with no external sales)(Unit: million yen)

2nd Quarter ended
Sep. 30, 2019(non-consolidated)

2nd Quarter ended
Sep. 30, 2020
(consolidated)

Net sales

293

533

OperatingincomeOrdinary
income

△207

△191

△231

△155

Net income

△231

△156

⚫ Sales of IP license business and professional service business fell below the previous year's results due to a decreasein existing running royalties and a decrease in development investment by some customers, respectively. Shipment ofgraphic processor "RS1" for volume production exceeded the previous year in the headwind of widespread COVID-19.
⚫ Non-operating balance improved due to a fall-off of share issuance cost recorded as non-operating expenses in thesame period of the previous year on one hand and the subsidy income from NEDO recorded as non-operating incomeon the other hand.
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5

2nd Quarter ended September 30, 2020

Results Highlights: Net Sales by Business
IP core license businessSales¥61 million

Same period last year
(non-consolidated)¥82 million●Decrease in running royalties from digital equipment centered on digital still camera●Impacts of temporary restraint and suspension of development investment / project by some customers●Won new licenses for robotics, Started recording running royalty for AI-based safe driving support

LSI product business

Sales¥383 million

Same period last year
¥111 million(non-consolidated)●Recorded sales of “RS1” for volume production and “ZIATM C3” AI FPGA modules

Professional services businessSales¥87 million

Same period last year
(non-consolidated)¥99 million●Recorded commissioned revenue from NEDO’s “AI Edge Contest” and sales of AI-related
contract development service for safe driving support and robotic vehicles●Impacts of temporary restraint and suspension of development investment / project by some customers
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6

2nd Quarter ended September 30, 2020

Results Highlights: B/S

Equity ratio remains high at 92.6%
Capital stock and capital surplus increased ¥34M each as a result of issuance of RS to directors and employees in 2nd Quarter(Unit: million yen)

End of March 2020
(Non-consolidated)

End of Sep. 2020
(Consolidated)

Major breakdown
Cash & deposits 2,050, Securities 443
Accounts receivable - trade 295

Current assets

3,077

2,951

Non-current assets

763

778

3,841

3,730

Current liabilities

279

255

Accounts payable - trade 208

Non-current liabilities

18

18

Asset retirement obligation 17

Total liabilities

297

274

Total net assets

3,543

3,455

Total liabilities andnet assets

3,841

3,730

Total assets

Investment securities 500
Software 131

Capital stock 1,838, Capital surplus 1,858
Retained earnings -232

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7

1

Explanation of Results, 2nd Quarter
ended September 30, 20202

Progresses of This Fiscal Year’s
Initiatives and Business

3

Fiscal Year Ending March 31, 2021,
Full-Year Business Forecast andBlueprint for Future Growth4

Focus Areas and New Initiatives
Copyright (C) Digital Media Professionals Inc. All Rights Reserved.

8

Progress of Major Initiatives for the Fiscal Year Ending March 2021

⚫ Approaches to Robotic Vehicle Domain• Expanded focus area to Robotics, whose market is expected to grow, and implemented AI image
recognition function in collaborative robots, etc.
• Continued collaboration with Yamaha Motor of developments such as labor saving and automation(autonomous driving / autonomous driving) technologies in the low-speed vehicle area
• Developed high-precision SLAM*1⚫ Approaches to Safety / DMS*2 Domain• Started providing the industry's first one-stop solution for edge-side real-time processing and cloud
processing through the development of SaaS*3 type cloud service (ZIATM Cloud SAFE) utilizing
Amazon Web Services• Realized recurring business with running royalties and subscription licenses⚫ Strengthening of Amusement Field• Strengthened efforts to develop new customers• Strengthened quality control system※1 Simultaneous Localization and Mapping※2 Driver Monitoring System※3 Software as a Service

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9

Fiscal Year Ended March 31, 2021: Progress of Other Initiative

Expanding Portfolio and Sales of AI Products
Expanding product lineup and customer adoptions of ZIA AI processor IP, module, and software
IP Core ProductsCompact and highperformance AI
inference processor
IP that uses deeplearning

Module Products

Flexible and low
power consumption AI
inference processing
module, mounting
DMP DV720 to FPGA

Software Products and Services• Self-developed and advanced image
recognition engine based on AI andimage-processing technology• Provision of professional services
optimized for each domain

Application• AI-integrated camera SoC• Autonomous driving SoC

Application• Industrial machinery• Robotics• Medical equipment

Application• Driver monitoring• Analysis of near misses• Medical diagnosis

Update• Announcement of ZIA DV740• Announcement of ZIA ISP

Update• Started new mass production

Update• Announcement of ZIA Cloud SAFE

Initiatives• Improvement of performance• Enhancement of line-up

Initiativ
es

Initiatives• Optimization aimed at growthdomains

Results• Adopted for robotics,
consumer equipment andindustrial equipment

Results• Adopted by drive recorder-related
customers• Started recurring businessResults• Co-development of AI evaluation
kit for vehicles• Adopted for peripheral monitoringof commercial vehicles

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10

1

Explanation of Results, 2nd Quarter
ended September 30, 20202

Progresses of This Fiscal Year’s
Initiatives and Business

3

Fiscal Year Ending March 31, 2021,
Full-Year Business Forecast andBlueprint for Future Growth4

Focus Areas and New Initiatives
Copyright (C) Digital Media Professionals Inc. All Rights Reserved.

11

Fiscal Year Ending March 31, 2021

Full-year Business Forecast
Short-term negative impacts by COVID-19, Strengthening efforts to achieve mid-term growth
FY 03/2020(Actual)(Non-consolidated)

2nd Quarter FY
03/2021 (Actual)(Consolidated)

FY 03/2021(Forecast)(Consolidated)

1,328

533

1,500

Operating income

82

△192

△ 150

Ordinary income

85

△155

△ 100

Net income

65

△156

△ 100

(Unit: million yen)

Net sales⚫ Growth in LSI product business falls short of expectation because low test pass rate of new platforms and the weak motivation topurchase game machines by pachinko parlors are affecting product and production plans of game machine manufacturers.
⚫ Development investment by some AI-related customers tends to be temporarily restrained or suspended, affecting IP core licensebusiness and professional services business. Since there are no major changes in the customers’ development roadmaps, this
impact is assumed to be time-limited.
⚫ Expanding mid-term corporate value by diversifying revenue sources and expanding sales through accelerating new initiatives infocusing areas with market growth such as robotics and safe driving support fields, as well as by generating stable revenue in theamusement market through demand for replacement with new rule machines toward December 2021 and market share expansion
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12

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
•
•
•
•
•

AI

Processor IP
SoftwareModulesStrengthening of ecosystem with partners
Overseas expansion

AI solutions for Mobility / Industry

Stable management foundation in theamusement market where we can win
Muti-platform
Aiming for top share in amusement SoC

Phase 1

• Autonomous driving• Robotics, Robotic vehicle• Safety / DMS

Expansion of the SoC / Module Business• High value-added modules• High-volume AI products

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

13

1

Explanation of Results, 2nd Quarter
ended September 30, 20202

Progresses of This Fiscal Year’s
Initiatives and Business

3

Fiscal Year Ending March 31, 2021,
Full-Year Business Forecast andBlueprint for Future Growth4

Focus Areas and New Initiatives
Copyright (C) Digital Media Professionals Inc. All Rights Reserved.

14

Features of DMP’s Development Model

Unrivaled integrated development model that allows domain optimization• Integrated development of algorithm, software, and hardware• Flexible value proposition and monetization model by offering licenses, products, andprofessional services
Hardware Acceleration
Domain Specific Silicon

IP CoreSoC/FPGA

Algorithm

State-of-the-art
Techniques
DomainExpertise

DomainOptimization

ModuleSoftware &Platform

Professional
Service

Open and Agnostic
Software

IP License

Out-of-the-box
Kit Solution

Opportunities &Engagements

Product
Contracted Service
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15

Focusing Market (Verticals)
Amusement"• 2D&3D integrated SoC• High value-added modules

Robotics• Automatic and autonomous driving technologies
for robotic vehicles• Low cost, high-precision SLAM
• Industrial equipment, Robot arm control

Safety / DMS• Know-how accumulation of safe
driving support domain• State-of-art algorithms• Edge and cloud computing

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16

Approaches to Robotic Vehicle
Creating new value leveraging DMP’s
unique technologies
Develop “DMP 3D Perception”, an advanced 3D
recognition technology for the eyes of the nextgeneration robotic vehicles, by combining DMP's
GPU, AI, and SLAM technologies“DMP 3D Perception”
SLAM

Localization
Mapping

RenderingComputer Vision
Simulation

GPU

AR/VR

SLAM
Low Power
High PerformanceAI

Robotics
Perception

Detection
3D reconstruction of scenes,
Tracking
Segmentation Localization and Visualization

SLAM: Simultaneous Localization and Mapping• Developing recognition and control technologies for development of intelligent robots (UGV, PPM, AGV, etc.)• Developing low-cost, high-precision SLAM technology
using a monocular camera• Integrating into autonomous driving standard open platform (Autoware)• Developing robot arm control technologies using AI image recognition• Application to the safety and security field
Collaborative robot peripheral monitoring edge AI image
recognition software (Ryosan, TSUTAYA ELECTRICS)
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17

Approaches to Safety / DMS Domain

ZIATM Cloud SAFE – Launch of SaaS-type Cloud Service (November 2020)

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18

Approaches to Safety / DMS Domain⚫ DMP’s first SaaS-type cloud AI service
•
•
•
•
•

Offering various API for safe driving support system
Seamless collaboration with edge AI (ZIA SAFE)
Improvements of accuracy and functions by continuous learning
Amazon Web Services baseMonetization by subscription model

SaaS
Software as a Service

Subscription Model⚫ Common technology foundation with ZIATM SAFE
• Total system optimization considering immediacy, recognition
accuracy, and load
• Securing scalability and upgradability

Amazon Web Services

Professional service for safe driving assistance system
Image analysis using AI and deep learning
Recognition of people,
vehicles and objects
Detection

Tracking

Recognition of road andsurrounding conditions
Analysis

Prediction

Face andeyelinedetectionPose
estimation

Direction
estimation

Distanceestimation

Privacyprotection

Building blocks of "ZIA™ SAFE"

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19

<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.

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

20

Appendix

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21

Business Description
Business

IP Core*1 License
Business

LSI Product Business

Description

Major Customers

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 as home appliancesby customersb) Running royalty
Compensation received according to the number of products incorporating IP core shipped by customersc) 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
Development, manufacturing (outsourced) and sales of AI LSI (FPGA*6) for AI equipment

Professional Service
Business

Provision of design service of studying and optimizing the entire SoC system by integrating various IP cores of
the Company, software service of developing and optimizing algorithm based on GPU*7/vision /AI technology
cultivated through development of in-house products, etc.

Semiconductor trading
company/Manufacturer of final
product with embedded
semiconductor
Manufacturer of final product withembedded semiconductor*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: Integrated circuit that allows buyers or designers to set and change the configuration after manufacturing. FPGA stands for Field Programmable Gate Array.
*7: 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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22

Major Activities (Fiscal Year Ending March 31, 2021)
Each item is linked to PR/IR news (in Japanese or English) of DMP’s website.
Date ofAnnouncement/Event

Details

April 1, 2020

Establishment and business start of subsidiary in Vietnam

May 11, 2020

Hold 3rd AI Edge Contest with METI, NEDO, and SIGNATE

May 14, 2020
June 8, 2020

Prophesee, DMP partner to accelerate development of embedded machine vision and artificial intelligence (AI) applications using EventBased Vision approach
DMP, Silex Technology, and PALTEK jointly developed vehicle AI evaluation kit to support development of safe, remote, and automated AI
solutions

July 1, 2020

Hold 4th AI Edge Contest with METI, NEDO, and SIGNATE

July 1, 2020

Basemark and DMP Partner to Develop Smart Mirrors for commercial vehicles

July 13, 2020

DMP releases IP Core "ZIA™ ISP"

July 13, 2020

DMP releases IP Core "ZIA™ DV740"

July 15, 2020

Website renewal

September 7, 2020

DMP's edge AI image recognition software supports Ryosan's demonstration of collaborative robot at TSUTAYA ELECTRICS + (PLUS)

October 28, 2020

DMP's edge AI processor IP core "ZIA™ DV720" has been adopted for amnimo's industrial IoT devices

November 10, 2020

DMP launches Amazon Web Services based safe driving support cloud service "ZIA™ Cloud SAFE"

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23