Fiscal Year Ending March 31, 2017 First Half

Results Briefing
Digital Media Professionals Inc.
November 17, 2016

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 YearEnding March 31, 2017 First Half

2

Fiscal Year Ending March 2017,
Full-Year Business Forecast

3

Medium-Term Management Planand Growth Outline

4

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

2

1

Explanation of Results, Fiscal YearEnding March 31, 2017 First Half

2

Fiscal Year Ending March 2017,
Full-Year Business Forecast

3

Medium-Term Management Planand Growth Outline

4

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

3

Semiconductor Industry and Business
Environment
Global•The smartphone field is decelerating, but demand for memory, automotive, and industrial
equipment remains buoyant•

3Q (July - September) global sales at historical high of $88.3 billion (+11.5% compared with theyear-earlier period) *1•

0.6% annual average growth in the 2015 - 2018 period. Market size in 2018 expected at $34.09
billion *2•

While set producers promote in-house manufacture of semiconductors (Apple, Huawei,
Samsung), major semiconductor vendors are rapidly shifting to IoT and the automotive field•

China-based set producers and fabless semiconductor vendors are coming to the fore
Domestic•

After falling into negative growth in 2016, the outlook is for a moderate recovery
until 2018, with a market size of ¥3,629.8 billion in 2018(*1) Semiconductor Industry Association (SIA), release of October 3, 2016(*2) World Semiconductor Trade Statistics (WSTS), Japan Chapter, release of June 7, 2016

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

4

Fiscal Year Ending March 31, 2017 First Half

Results Highlights
EffortResultFocus on order acquisition activities
for IP licenses
Development of next-generation
3D graphics IP core (*1)
Selected as one of the members of
IoT promoting project publicly
offered by NEDO (*2)
Promotion of VF3 (successor chip)development

Sales: +30% (approx.) comparedwith the year-earlier period
 Solid performance of runningroyalties from existing customers
 Income from maintenancesupport also contributing
 Income recognized from apublicly offered projectcommissioned by NEDO

Earnings: Operating loss
recognized Emergence of R&D costs fornext-generation SoC*1 Details on pages 6*2 New Energy and Industrial Technology Development Organization
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5

Fiscal Year Ending March 31, 2017 First Half

Efforts in the period under review
1

Started offering “M3000 series” new 3D graphics IP core(announced August 9, 2016)

Realized small size combined with high performance- Roughly 6-fold gain in performance compared with priorgeneration “SMAPH-S”- Achieved same performance as ARM GPU core using onethird of the surface area

2

Received commission for “Lateral technology development
project for the promotion of IoT” of NEDO
(announced July 8, 2016)

Started development of artificial intelligence platform basedon power saving AI engine and cloud able to integratedissimilar engines (*)

3

Promotion of strategic partnerships
Joint marketing activities with UKC Holdings in the SoC/module business andin the professional services field(*) Details on pages 16 and 17
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6

Fiscal Year Ending March 31, 2017 First Half

Results Summary (P/L) - YoY Change(Unit: million yen)

1H FY ended 1H FY ending
March 2016
March 2017
(Actual)(Actual)YoY change(Amount)(Increasedecrease rate)

Net sales

147

192

45

31.0%

Operating loss

-179

-364

-185

－

Ordinary loss

-176

-376

-200

－

Quarterly net loss

-47

-366

-319

－

 Operating loss: ¥200 million in up-front R&D expenses from progress in the development of next-generation
LSI to succeed VF2
 Ordinary loss: ¥11 million exchange rate loss due to sudden yen appreciation
 Net loss for the quarter: Received ¥9 million in partial internal reserves from sales proceeds from CogniVue
Corporation shares divested in the previous 1H
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Fiscal Year Ending March 31, 2017 First Half

Results Summary (B/S) - YoY Change(Unit: million yen)

End of March2016

End of
September 2016

IncreasedecreaseamountCurrent assets

1,984

1,685

-299

Non-current assets

260

253

-7

2,244

1,938

-306

Current liabilities

226

276

50

Non-current liabilities

18

18

0

Total liabilities

245

294

50

Total net assets

1,999

1,643

-356

Total Liabilities and Net
Assets

2,244

1,938

-306

Total assets

 Equity ratio of 84.6% remains at a high level
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1

Explanation of Results, Fiscal YearEnding March 31, 2017 First Half

2

Fiscal Year Ending March 2017,
Full-Year Business Forecast

3

Medium-Term Management Planand Growth Outline

4

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

9

Fiscal Year Ending March 2017,

Full-Year Business Forecast(Unit: million yen)

FY ended
March 31,2016

FY endingMarch 31,2017

(Actual)(Forecast)(Amount)(Increasedecrease rate)

Net sales

733

1,000

267

36.3%

Operating loss

-176

-161

15

－

Ordinary loss

-193

-161

32

－

Current net loss

-64

-161

-97

－

YoY change

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10

1

Explanation of Results, Fiscal YearEnding March 31, 2017 First Half

2

Fiscal Year Ending March 2017,
Full-Year Business Forecast

3

Medium-Term Management Planand Growth Outline

4

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

11

Key points of the medium-term
management plan
SoC/Module Business Field

Build and expand business by developing andincreasing sales of SoC
Initiation of shipments of graphics LSI “VF2”
Steady progress in client-commissioned development of
successor chip “VF3”
VF3 (provisional name)

Under development
VF2- Reinforce the industry specifications
through joint development with customers- Gain significant performance- Enhance added value through modulization

Scheduled start of shipments

Began shipping

FY ended
March 31, 2016

FY endingMarch 31, 2017

FY endingMarch 31, 2018

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12

Artificial intelligence technology destined to
become infrastructure in every industry
The environment surrounding artificial intelligence (AI)Manufacture(Industrie 4.0)

Mobility

Medical IT

Energy/InfrastructureHome andFamily/IT Infrastructure

Agriculture,
forestry, andfisheries

Financialservices

Crime
prevention/
Supervision

Managementadministration

Catering/
restaurants
Retailing

Construction

Successful application ina wide range of fields
Cloud-based
processing
Concentrated
operations-type
AI

Robots+Big Data

AI

Machine learning: Technique for extracting certain types of patterns
called models based on Big Data analysis
Data gathering

Reflection oflearning

Processing
by edge
Distributed
processingtype AI

IoT (M2M)

Data gathering
Data gathering
Reflection ofReflection oflearning
learning

Edge
AI

Edge
AI

Automobile

Medicalequipment

Data gathering
Data gathering
Reflection oflearning

Edge
AI

Edge
AI

SurveillancecamerasIndustrial
machinery

Reflection oflearning

Edge
AI
Smartphones

Data gathering
Reflection oflearning

Edge
AI
Home electric
appliance

Source: SMBC Nikko Securities Inc.; Development Trends in Artificial Intelligence (AI) and their Impact

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Edge AI based on low power consumption
GPU

Rise in distributed-type AI with AI processing on the edge
• Network zone
• Real time properties• Privacy

Cloud AIDMP GPU coreLow power
consumption

Fast
processing

Small size
Low cost

A field DMP can make most of its
development technology
as one out of four companies providing GPU in the world

Edge AI
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DMP AI platform ZIA
Z Intelligent Accelerator
DMP starts offering AI driven platform ZIA™ (November 7, 2016)- As the first stage, sales launch of Deep Learning-type DMP image classification engine (see pictures below)-Going forward, DMP plans to successively release hardware products with integrated AI related software andpower saving AI engines
Score

Self
Study

Take a Car

Improve
Accuracy

Stop

Input

Walk

Open anumbrella

Deep Learning
Classify

Result:Walking under an umbrella

Video Data

DMP Unique Algorithm

DMP ZIATM improves accuracy by using
deep learning.
For example, DMP ZIATM makes a flexible
detection for human in a crowd,
determining its gender and the action
he/she is doing.

DMP Image Classification Engine
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15

Lateral technology development project
for the promotion of IoTStarted development of artificial intelligence platform basedon power saving AI engine and cloud able to integratedissimilar engines
Amount awarded DMP under the contract (total amount):¥475 million
Duration of the commission: June 2016 - March 2019
Project outline•

Development of a power saving AI engine which enables AI
algorithms to process 10 times more efficient thanpredecessors did•

Development of an AI platform for integrating dissimilar
engines on the cloud side

Accelerate DMP AI Business
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16

Structure of the NEDO project
Lateral technology development project for the promotion of IoT(Fiscal year 2016 to fiscal year 2020)

Development of AI platform based on a power saving AI engine and a cloud integrating dissimilar
enginesCommission
Development of an edge-based AI
platform

Development of a cloud-based AI platform
National Institute ofAdvanced Industrial
Science and Technology (AIST)a
Development of apower saving AI
processor

Development of design
and mounting tools

Subcontracting

Packagemounting
technology

Cloud integrating dissimilar engines
System software

Architecture for the
integration of dissimilar
engines

Advisory companies
and more

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17

Business policies of the time ahead
Entry into the next added-value
and growth market
Expansion into phase 2 and thegrowing AI field
Establishment of a SoC business platform in
the amusement market where we can win

Expansion of the SoC/module business
Development of software and hardware
products for AI applications centered on
the ZIA platform

SoC/modules
VF2 / next-generation SoC

Professional services

IP licensing

Phase 1of SoC: Develop products in fields■ Development
where we can “win”■ Expand IP portfolio: Enter image processing field■ Launch professional services

Phase 2Phase3 3
Phase

added value through the■ Increased■ LSI products for AI applications
provision of modules■ Expansion of the IP portfolio: Power saving
AI processor IP■ AI related professional services / software products
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18

1

Explanation of Results, Fiscal YearEnding March 31, 2017 First Half

2

Fiscal Year Ending March 2017,
Full-Year Business Forecast

3

Medium-Term Management Planand Growth Outline

4

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

19

(Medium-Term Management Plan)

PolicyBecome a one-stop solutions provider in thevisual computing* field*Visual computing:General term for computer processing via graphics and images

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(Medium-Term Management Plan)

Our Company’s Strengths
Core technologies and business experience insemiconductors that produce high added value for DMP

DMP’s strengths

IP businessexperience

World-leading

Global-level
customers

GPU IP

SoC technology
Sophisticated, built-in

low power
consumption
technology

including system IP

Image
recognition IP

Superlative
supportaimed atexpanding fields

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21

(Medium-Term Management Plan)

Business Structure:
Management Resources and Business Domains

Offering unique products, licenses, and services with adistinctive IP portfolio
Three pillars
SoC modules

Globalalliances

Productbusiness

DMP’s IP
 Fabless Semiconductor
IP vendor
 Saleschannels

Visual computing
field
Customers
 OEM

•GPU
•System IP
IP

Alliance IP

IP licensing Semiconductor
vendorbusiness

 System integrator
 Software house• Image recognition• Others

Solutions

Professional
servicesbusiness(R&D, software products)
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(Medium-Term Management Plan)

DMP’s Strategy
Build foundation for growth with “three pillars” that canmake the most of DMP’s strengths
Productbusiness

Provide competitive SoC and solutions that the make most of DMP IP
 Make the most of strengths to start business in “fields we can win”
 Expand size of business by providing SoC/modules

Create new business in growth fields
IP licensing
business

Professional
servicesbusiness

 Focus on visual computing field Expand portfolio, strengthen proposal-making ability

Offer superior technological capabilities and make essential todeveloping new fields
 Build up high value-added services using GPU/vision technologies (inhouse/external) as base Strengthen R&D

Systems andcorporate

Strengthen management resources through alliances(Partners for commercial distribution, semiconductor development and outside IP adoption)
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(Medium-Term Management Plan)

Regarding the IP Business
Offer IP on industry’s cutting edge with demonstrable low
power consumption and high performance
Next-generation image recognition processor IP under development
Image
recognition
technology
Bus technology

Graphics
technology

・High-performance, low-power consumption processor for Computer Vision use
・Preparing algorithm library that includes ability to detect persons, face recognition,and gesture recognition

Loputo System Series
SoC Interconnect IP

DDR Memory Controller IP

・Supported bus protocols: AMBA AXI,
OCP, ACE I/F support

・DDR 1/2/3/4, LPDDR 1/2/3 support

・Support for low latency, QoS thanks tomultilayered configuration

ant Series
UI Drawing Engine IP Core・World’s smallest core at 0.5 x 0.5 mm
・Low power consumption, highrendering performance, distortion
correction

SMAPH Series
3D Graphics IP Core・Latest Khronos standard: OpenGL ES 3.0
compatible
・DMP’s unique advanced feature MAESTRO

・SoC interfaces: AXI, OCP/・DDR PHY
interface (DFI)

2D Graphics IP Core・Latest Khronos standard: OpenVG1.1
compatible
・High-speed rendering of such vector graphic
content as fonts, maps, and incons withindustry’s smallest IP core size

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(Medium-Term Management Plan)

Regarding the IP Business
Focus on visual computing market bound for growth

Connected home

Security

Image recognition
Mobile vision
Robots/FA

Games

User interfaces

Automobile driving
assistance

Wearable computing
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25

(Medium-Term Management Plan)

Semiconductor Market Prospects
IoT(*)(Conventional)

Cars / home electronics / industry / home / medical / security

VolumeMobile / PC / TV

Growth in fields where Japanesecompanies are strong

Device types*IoT (Internet of Things):
The idea of being able to provide connectivity to a variety of devices and the like used in daily life—going beyond suchinformation technology devices as PCs, smartphones, tablets, and game equipment—and then connect them to the internet
as well as perform tasks such as automatic recognition, automatic control, remote monitoring, etc. by communicating withthem interactively.
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(Medium-Term Management Plan)

Semiconductor Market Prospects
Arrival of IoT (Source: Cisco IBSG.2011)
Consumer devices

Industry

6.8 billion
peopleSocial infrastructure

World population

6.3 billion
peopleNumber of devices
that are connected

0.5 billion

Number of devices
per person

0.08

1.84

3.47

6.58

2003

2010

2015

2020

12.5 billion

7.2 billion
people7.6 billion
people25 billion

50 billion

The number of devices connected to the internet exceeds the world population
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27

(Medium-Term Management Plan)

DMP’s Strategic One-stop Solutions
Visual Computing Field
 High value-added IP core

ModuleBus technology

 Advanced processor IP (GPGPU/image
recognition) that enables heterogeneous
processing environment

Software

SoC system technology

Image recognition technology

 System IP that achieves top-rank system
performance in terms of low power
consumption

 Collection of software tools optimized fordrawing out IP performance

Graphics technology

 SoC/modules differentiated by
DMP IP Professional services
 Algorithms
 Benchmarking, optimization
 Application development
1. Very distinctive technological 2. Ability to respond to 3. Lean capacity for productcapabilities
development
customers

 Inspection

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28

(Medium-Term Management Plan)

Future prospects that make the most of ourstrengths and competitive advantages

Phase 2Phase 1■Development of SoC:
Develop products in fields where we can “win”■

Expand IP portfolio:Enter image processing field■

Launch professional services■ Provide one-stop solutions■ Expand IP portfolio:■ IoT-related service business

Phase 2
SoC/modules
Scale ofbusiness

Phase 1

Professional
services
IP licensing

FY ended
March 31, 2014

FY endingMarch 31, 2017

FY endingMarch 31, 2019

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