■Performance Trends
2. Trends by business segment
(1) LSI development and sales related
Sales in the LSI development and sales related segment increased 22.3% from the previous fiscal year to 16,937 million yen, and segment profit increased 32.4% to 3,688 million yen. When sales by product were calculated from the sales composition ratio disclosed by accelerator ＜6730＞, G-LSI increased 39% to 5.6 billion yen, and peripheral LSI including memory modules increased 14% to 11.2 billion yen. G-LSI is expected to have increased by about 25% in sales volume and about 11% in unit sales price. As for sales volume, in addition to the recovery in the game machine market, the decline in the reuse rate from 30% in the previous fiscal year to 20% was also a factor in the increase. The increase in unit sales prices is due to the fact that in addition to changes in product mix (shift from “AG5” to “AG6”), some price adjustments for purchase cost increases due to depreciation of the yen were promoted. As for memory modules, since the reuse rate rose from 10% in the previous fiscal year to 20%, sales volume decreased by 4% to 0.99 million units, but sales increased due to an increase in sales of high-unit price products with large memory capacity.
(2) New business-related
Sales in the new business-related segment increased 1.6% from the previous fiscal year to 632 million yen, and segment loss was 381 million yen (loss of 405 million yen in the previous fiscal year). The initial plan anticipated a 30% increase in sales of 800 million yen, and a segment loss of 200 million yen, but the failure factor was that large-scale metaverse-related projects incorporated into the plan ended at the end of the first quarter due to customer reasons.
Looking at the breakdown of sales, although products and products centered on G-LSI for embedded devices increased 89.8% from the previous fiscal year to 224 million yen, it seems that contract development projects in the machine learning/AI area were sluggish, with royalty revenue falling 34.1% to 91 million yen, and contract production software, etc. falling 13.7% to 315 million yen. In terms of profit, losses were reduced by 24 million yen, but since expenses related to the autonomous driving joint development project adopted by NEDO were included in the previous fiscal year 114 million yen (the same amount was recorded as non-operating income), the actual loss amount increased by 90 million yen from the previous fiscal year.
The company actively worked on joint development and business alliances for the 2024/3 fiscal year to expand new businesses. Looking at the main cases, a strategic partnership was concluded with &DC3, which develops content distribution infrastructure solutions incorporating elemental technologies related to Web3.0, and its parent company Celsys in 2023/5. By jointly developing a license management solution using application encryption technology owned by the company and incorporating it into the &DC3 content distribution platform, it is a strategy to increase the security of the same platform and increase value as a Web 3.0 based distribution platform by making it possible to distribute a wide range of content. Furthermore, in September of the same year, in order for AX to further strengthen its strategic partnership with Celsys, a third-party allotment of shares was implemented with Celsis, and in 2024/2, the company and Celsis concluded a capital and business alliance agreement, and a total of 916 million yen worth of mutual shares were acquired (Axel was acquired by the end of 2024/5). Through this capital and business alliance, it is planned to support functional and service improvements of the “CLIP STUDIO PAINT” production application “CLIP STUDIO PAINT” provided by Celsys, and will continue to carry out joint development etc. of next-generation AI technology to support creators' creative activities in the future.
In July of the same year, it was announced that it had accepted J-KISS type stock acquisition rights for Sustainable Pavilion 2025 Co., Ltd., which was established with the aim of continuously utilizing the contents of the Osaka-Kansai Expo signature pavilion “Null2” (producer Yoichi Ochiai) even after the exhibition period. It will be raised funds to develop and verify the digital human-type ID platform “Mirrored BodyTM,” which is one of the contents of the same pavilion. “Mirrored BodyTM” is a digital human-type ID platform using cutting-edge blockchain and AI technology, and it is a platform that creates a digital human that can be said to be one's alter ego using AI technology while firmly securing security with an NFT mechanism, and operates by linking various information to it. The company is implementing AI in the “Mirrored BodyTM” edge area and providing technical cooperation related to blockchain. Sustainable Pavilion 2025 is planned to continue expanding business co-creation partners and fund raising activities in order to provide “Mirrored BodyTM” applications, platforms, etc. to lifestyle service providers from 2025 onwards, and it is expected that if “Mirrored BodyTM” becomes popular, it will also contribute to the company's profits. With the Osaka-Kansai Expo as an opportunity, awareness of the company's AI technology will further improve, and it is expected that it will be an opportunity for business expansion.
In July of the same year, it was announced that the “ailia SDK” was adopted as an AI inference platform for industrial PCs provided by the Japanese subsidiary of VIA Technologies Inc., which is a major IT company in Taiwan. More than 10 companies have installed the “ailia SDK” in industrial PCs, and it is gradually spreading.
In 2024/3, AX agreed with the game development company Dimps Co., Ltd. to work on game development tools utilizing AI and joint development aimed at using AI and AI within games with the aim of drastically improving efficiency in the game development area and creating new value for games, and also implemented a third-party allotment of shares to Dimps. In the use of AI in games, it is possible to achieve high-speed processing by implementing an “ailia SDK” on an edge device. First, we will aim for innovative efficiency improvements in the voice development field and aim to evolve the game development environment.
(Author: FISCO Visiting Analyst Joe Sato)