Fiscal Year Ended March 31, 2018

Results Briefing
Digital Media Professionals Inc.
May 21, 2018

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, 20182

Fiscal Year Ending March 31,
2019, Business Forecast

3

Measures in the Time Ahead andProposition for Future Growth

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

2

1

Explanation of Results, Fiscal
Year Ended March 31, 20182

Fiscal Year Ending March 31,
2019, Business Forecast

3

Measures in the Time Ahead andProposition for Future Growth

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

3

Operating Environment of the Company
Semiconductor Industry
 The semiconductor market in 2017 surged 21.7% from the year earlier to US$412.2 billion,
surpassing US$400 billion for the first time ever owing to expanded application in servers
and data mining despite facing headwinds from a slump in iPhoneX sales and falling flash
memory prices (WSTS)
 Decreased demand resulting from reduced Chinese smartphone production, acceleration ofChinese semiconductor development and other factors arising from trade regulations aimed
at Chinese companies due to worsening relations between the US and China could bringabout seismic changes in industrial power relationships
 The model wherein set vendors and IT vendors engage directly in the development ofsemiconductors is accelerating as semiconductors come with increasingly high added value

AI / Visual Computing Field
 AI chip market forecast: 6-year CAGR from 2017 of 50%, with AI chip sales surpassing
US$11 billion in 2023 (Allied Market Research 2018)

 Use of AI in graphics processing is accelerating. In particular, more than 60% of security
camera and automotive products use AI (Embedded Vision Alliance Survey Dec. 2017)
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4

Fiscal Year Ended March 31, 2018

Results Highlights

Successful return to black figures due to significantly
higher sales in all operations
 LSI operations (sales increased ¥149 million compared with the previous fiscal year)• Significant contribution from initiation of volume production of next-generationgraphics processing LSI "RS1" IP core licensing operations(sales increased ¥72 million compared with the previous fiscal year)• Increased running royalties from existing customers in game machines anddigital cameras, etc.
• Licensing of the new GPU IP core "K3000" to new and existing customers

 Professional services operations(sales increased ¥57 million compared with the previous fiscal year)• Increased sales of AI-related software and commissioned projects fromautomotive equipment manufacturers• Additional new order receipts relating to commissions for the acceleration of
NEDO "Development commissions for power-saving AI engines"
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5

Fiscal Year Ended March 31, 2018

Results Summary (P/L)(Unit: million yen)

YoY change
FY 03/2017

FY 03/2018(Amount)(Increasedecrease rate)

Net sales

694

973

279

40.3%

Operatingincome

-263

69

333

—

Ordinary
income

-262

66

328

—

Net income

-365

109

474

—

 Return to black figures for operating income due to increase in net sales and decrease in SG&A Impact on net income from recognition of extraordinary gain from cancellation of distributor agreement
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6

Fiscal Year Ended March 31, 2018

Results Summary (B/S)(Unit: million yen)

Increase-decreaseamountEnd of March 2017

End of March 2018

Current assets

1,668

1,774

106

Non-current assets

112

346

233

1,780

2,121

340

Current liabilities

91

228

137

Non-current liabilities

18

18

0

Total liabilities

110

247

137

Total net assets

1,670

1,873

203

Total liabilities and net
assets

1,780

2,121

340

Total assets

 Equity ratio of 88% remains at a high level
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7

Fiscal Year Ended March 31, 2018

Topics
Initiation of Volume Production and Shipments of RS1
Next-generation Graphics Processor*Decisions made for adoption atseveral major leading customers*Initiation of volume production and shipments
in fiscal year ended March 31, 2018

High added-value module with SoC and DDR
memory in same package

Industry Trends and Forecast for RS1• February 2018 revision of "Entertainment and Amusement Trade and the Implementation Rules for theEntertainment and Amusement Trades Rationalizing Act" took effect• Fiscal year ending March 31, 2019 is off-season for transition to new standard machines, and market
environment is expected to be harsh for industry as a whole• Switch to new standard machines will progress in fiscal year ending March 31, 2020, and RS1
shipments will be in stride, so it is expected to be leading graphics chip in industry by mid-2020

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8

Fiscal Year Ended March 31, 2018

TopicsLicensing start of "ZIA DV700" AI processor IP▶ Processor with ultra-low power consumption specialized for
Deep Learning inference process"ZIA Classifier" adopted for the drive recorder AI service provided
by Sumitomo Mitsui Auto Service Company, Limited, the top auto
leasing company in Japan
In the auto leasing industry the first
application of AI technology to video analysis
Performs automatic drive-recorder video
analysis to identify the specific driving
behavior (causative behavior) that leads todangerous driving, combined with an
external camera video (behavior result)analysis and report×

Categories of dangerous
behavior• Smoking• Talking on and operating• Operating computers ormobile phones/smartphones
other such devices• Looking away or driving• Operating GPS/audiowith one handsystems

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9

Fiscal Year Ended March 31, 2018

TopicsCollaboration with Altima and Morpho on AI/Deep Learning technology
using Intel® FPGA (November 2017)

ZIA DV series AI processor

Neural network••• Model designing• Model optimization technology

Advanced processor technology
Hardware optimization technology

Provision of programmablesolutions using Intel FPGA

Provision of FPGA platform with DV700
Accelerate introduction of edge AI
Development/evaluation made possible based on Morpho’s object recognition DNN* learned model
Fast application to development/evaluation of inference environments andembedded devices in volume production* Deep Neural Networks
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10

NEDO (Crosscutting technology development
project to promote IoT)

Development of AI platform based on a power saving AI
engine and a cloud integrating dissimilar engines
Amount awarded DMP under
the contract (total amount)¥475 million (existing portion)¥108 million(additional portion in the current FY)

Duration of the commission

June 2016 - March 2019

Project outline• Development of a power saving AI engine whichenables AI algorithms to process 10 times more
efficient than predecessors did• Development of an AI platform for integrating
dissimilar engines on the cloud side

Accelerate DMP AI Business
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11

1

Explanation of Results, Fiscal
Year Ended March 31, 20182

Fiscal Year Ending March 31,
2019, Business Forecast

3

Measures in the Time Ahead andProposition for Future Growth

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

12

Fiscal Year Ending March 31, 2019

Business Forecast
Expectations for 23% year-on-year growth in sales revenue due to focus on
expanding sales volume of next-generation graphics processing semiconductor"RS1," for which volume production and shipping began in the previous fiscal year

Net sales (Unit: million yen)

1,200

1,500

(Forecast)

973

1,000

500

733

694

FY 03/2016

FY 03/2017

464

0
FY 03/2015

FY 03/2018

FY 03/2019

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13

Fiscal Year Ending March 31, 2019

Business Forecast
Net sales, operating income and ordinary income all to increase due toincreased RS1 sales volume and expansion of AI products and services(Unit: million yen)

FY 03/2018(Actual)

FY 03/2019(Forecast)

Net sales

973

OperatingincomeYoY change(Amount)(Increasedecrease rate)

1,200

227

23.2%

69

100

31

43.3%

Ordinary
income

66

100

34

50.6%

Net income

109

90

-19

-17.6％

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14

1

Explanation of Results, Fiscal
Year Ended March 31, 20182

Fiscal Year Ending March 31,
2019, Business Forecast

3

Measures in the Time Ahead andProposition for Future Growth

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

15

Measures in the time ahead
 Full-scale launch of SoC business through launch of RS1 volume production• Aim to develop industry standard platform by having it adopted by several major leading
customers and focus on support for customer product launches Expansion of ZIA platform product sales and portfolio• Cultivation of new ZIA Classifier customers• Promotion of DV700/DV500 IP licensing and FPGA model business Promotion of alliances• Provision of AI solutions through collaboration with partner companies

 Promotion of development commissions from NEDO for power-saving AI
engines Promotion of AI-related professional services for automotive equipment
manufacturers
Promotion of strategic partnerships
In regard to our work with business and capital alliance partner UKC
Holdings, we will collaborate as a channel partner in LSI operations
and, in the future, jointly develop solutions for AI.
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16

Trends in Artificial Intelligence
As learning processes handling big data are processed on the cloud,it will become mainstream for inference processes to utilize edge AI
 Superior in terms of real-time properties
 Protection of privacy
 Reduction of network bandwidth and power
Conventional:
Cloud-focused

Cloud

Edge

Internet

Learning data

Devices

Traffic: Large

Data processing

Interception: Possible

Learning process

Latency: Yes

Edge
Devices

Near future:
Combination of edge and cloudInternet
Traffic: Small

AI accelerator

Privacy is protected

Learned data
Inference process

Learning data
Data processing

Latency: Little

Learning process

Sending data
Sending inference results

Cloud

Learned data

Inference process
One download

75% of inference processes handled on edge or combination of edge and cloud(Embedded Vision Alliance Survey Dec. 2017)
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Trends in Artificial Intelligence
Use of FPGA (rewritable logic circuit LSI) as AI accelerator is increasing
 Higher power performance than general-purpose GPU
 Superior to ASIC in terms of rewritability and flexibility, making low cost development possible
 Follows latest AI algorithms, making quick commercialization possible
 Supports long-term parts supply
CPU

GPU

FPGA

ASIC

Real time
properties

×

○

○

◎

Low power
consumption

×

×

○

◎

Flexibility

○

○

○

×

Long-term
supply△×◎○

40% of customers use FPGA as graphics processor/AI
semiconductor(Embedded Vision Alliance Survey Mar. 2018)FPGA
DMP AI
processor

Products equipped with edge
AI can be developed quickly

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18

Expansion of ZIA Platform
Deep Learning / AI / ZIA™

 Based on the technologies accumulated since the founding as Japan's only GPU vendor,
the AI platforms of DMP form novel software/hardware products fusing AI/Deep Learningknowledge.

Software ProductOn saleImage classification engine(November 2016)

Hardware ProductOn saleThe first AI processor foredge computing (April 2017)

New sales
launchThe second AI processor foredge computing (April 2018)

Underdevelopment

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ZIA DV700 Edge AI Processor IP
Processor IP core with ultra-low power consumption specialized for
Deep Learning inference processing applicable to all data categories

 The second product of the "ZIA" product platform using AI technology of DMP
 Processor IP with ultra-low power consumption suited for edge-computing AI
processing, capable of inference processing applicable to all data categories
including images, videos, and voice data, etc.
 Combines low power consumption and high performance with flexible
response capability regarding functions and performances required for adiversity of applications including security cameras

Size
Small size
2.3 mm 2
TSMC28HPC+(Operating
frequency 750 MHz)

Performance (FPS)Power (W)High
performancePower
conservation

GoogLeNet processing:
116 FPS

GoogLeNet processing:
670 mWGPU ofCompanyA

DSP ofCompanyB

DSP ofCompanyC

DSP ofCompanyD

GPU ofCompanyA

DSP ofCompanyB

DSP ofCompanyC

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DSP ofCompany
D

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ZIA DV500 Edge AI Processor IP (April 2018)
Edge AI processor supporting low-cost FPGA
Accelerate edge AI implementation in industrial and automotive
equipment
Optimized for scene understanding andobject recognition (SSD/SegNET) often
used in industrial equipment andautomated driving systems

Can be used with low-end FPGA such asIntel Cyclone V and Xilinx Zynq7000(Note: Photograph is of Cyclone® V SX SoC
development board)◆ Example of object detection by ZIA™ DV500 (SSD Multibox detection)
Detects car, motorcycle and human on bicycle
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21

Partnership with ACCESS (April 2018)
Collaboration with ACCESS, a one-stop provider of IoT solutions, onconverting IoT and edge computing technology for use with AI (April 2018)
Edge

Cloud

NetFront EdgeAI
Learning

Learned model
Download/Upload

Additional
learning

Real time
Notification of
detection results

Learning model
generation/modification

ImagesavingOn demand
Data/image downloads

AI engine

Notification of
accumulation

Utilization of
accumulated data

Notification of
detection results

Edge-learned model updates, life/death monitoring and firmware updates can be performed remotely
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22

DMP - Automated Driving Technology
Development of automated driving algorithms, CPU/GPU implementationand development of hardware accelerator(3) Judgment
Prediction, path planning,obstacle avoidanceAI
X
Automated
driving(1) Environment sensing
Camera, GPS, LiDAR(2) Recognition
Self-localization, object detection, recognition
and tracking, object segmentation
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23

New Establishment of Cyber AI Division(March 2018)
Engineers from various countries specializing in AI, GPU and computerscience are working on R&D utilizing AI and development of innovative
products and services at DMP.
The DMP Cyber AI Divisionwebsite will introduce DMP’s AI
initiatives.
https://www.cyberailab.com/

Computer
VisionFPGA

MachineLearning

Self-driving Car

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24

Proposition for Future GrowthEstablishment of new growth domains
Expansion into the growing IoT/AI field
Integrated development of AI algorithms, software and hardware
Development of ZIA platform
•
•
•
•
•

Establishment of a SoC businessplatform in the amusement market
where we can win••

Volume production of new product "RS1"
Aim to make it an industry standard
platform

AI processors for edge computing
SoftwareModules
Provision of solutions with partners
Overseas development

Expansion of professional services
centered on automotive industry• Automated driving algorithms

Expansion of the SoC / Module Business• Top share in amusement SoC

Current
position
Phase 1• High-volume AI products

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

25

Thank you for listening.
<Inquiries>
Digital Media Professionals Inc. Administrative 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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