3652.T

• Corporate Overview & Strategic Focus

  • Founded in 2002 as a university spin-out, core strengths in end-to-end development from algorithms/software to hardware, covering edge to cloud solutions; historical GPU IP adopted in Nintendo game consoles, with amusement graphics LSI as current core revenue.
  • Strategic resource reallocation: Closed DMP Vietnam software development business at end-September 2025 to focus resources on high-growth semiconductor technology areas.
  • Adopted a "Trinity Growth Strategy": 1) Strengthen profit of core amusement business via cost cutting and adjacent business expansion; 2) Accelerate expansion of new growth areas: edge AI semiconductor business led by Di1; 3) Develop FA (factory automation) business leveraging external products; targets 5 billion yen revenue in FY2028 March and 8 billion yen revenue in FY2030 March.

• Next-generation Edge AI Semiconductor Di1 Updates

  • Di1 is scheduled to start mass production in Q4 FY2026 March; features world-first FP4 4-bit floating-point inference implementation, reducing AI model size by ~70%, memory usage by over 40%, and increasing processing speed by over 20% vs traditional FP16; it is Blackwell Ready (compatible with NVIDIA Blackwell architecture for seamless cloud training to edge inference).
  • Supports 8-camera 360-degree quad-channel stereo vision obstacle detection, low power consumption that eliminates need for fans/heat sinks, reducing total system cost; compliant with ONNX standard for high portability, with built-in security engine and blockchain for tamper prevention.
  • Won the Edge Technology Excellence Award at EdgeTech+ AWARD 2025; starter kits launched September 2025, matching camera modules launched November 2025.
  • GTM (Go-To-Market) strategy: Focus on high-growth markets; domestic promotion in Japan; sales via Taiwan's iCatch Technology (branded V9) for Taiwan/South Korea; full-scale channel building started November 2025 in India, where demand for Japanese alternatives to Chinese components is high driven by geopolitical trends.

• New Business Launches

  • Launched "Vision-LLM Insight" software platform in September 2025, combining generative AI and vision AI to detect latent risk precursors for applications like driver monitoring, facility management, and remote monitoring; already deployed a skateboarder detection system with Nishio Rent All in Osaka.
  • Signed sales agency agreement with Taiwan's Aetina (NVIDIA Elite Partner) in November 2025 to sell NVIDIA edge AI products in Japan; this enables DMP to provide turn-key hybrid edge AI solutions that combine Di1 inference with NVIDIA hardware for on-edge learning and retraining, supporting off-peak model tuning for factory use cases.

• Full-year FY2026 March guidance maintained unchanged from the May 2025 announcement: full-year revenue target is 3.25 billion yen, representing 5.6% year-over-year growth; operating profit target is 20 million yen, with continued strategic investment for future growth.
  • Management expects the amusement market to recover in the second half, as major new pachisloto models from manufacturers including Sammy are scheduled to launch after passing regulatory testing, driving a recovery in RS1 shipments.
  • Di1 development investment will enter the final stage in the second half, building a solid foundation for revenue contribution starting from the next fiscal year.
  • The edge AI chip market is expected to grow at a CAGR of over 30% through 2030, driven by IoT growth, 5G/6G deployment, data privacy demand, and acceleration from physical AI and hybrid computing trends, and DMP is well-positioned to capture this growth.

1. Amusement Product Segment (core product RS1): Revenue decreased year-over-year, with RS1 mass production shipments nearly halved YoY due to temporary low conformity rates in regulator testing; absolute revenue figures were not fully broken out in the provided transcript. This segment is currently DMP's core revenue contributor. 2. Robotics & Safety Segment: Revenue reached 118 million yen, a 42% increase year-over-year, contributed 13.1% of total first half revenue. 3. IP Core Licensing Business: Revenue grew 14% year-over-year, with steady performance. 4. Professional Services Business: Profit decreased year-over-year, driven by low revenue from driving safety support projects. 5. Total first half (H1) revenue: 902 million yen, a 41.2% decrease year-over-year.

• Temporary industry risk: Amusement segment is facing temporary low shipment volume due to low regulatory conformity rates for new pachisloto models, though this is expected to be transitory.
  • Geopolitical risk: Di1 is designed and developed in Japan, but mass manufacturing is conducted in Taiwan, so it carries inherent geopolitical supply chain risk similar to other semiconductor products.
  • Competitive risk: While DMP holds technological advantages in FP4 implementation and stereo vision processing, Di1 faces competition from other domestic and international semiconductor manufacturers in the edge AI chip market.

Q: Why is full-year guidance maintained despite first half revenue only reaching 28% of target and a 300 million yen operating loss? What is the basis for expecting a second half recovery? / A: Management notes the low first half shipment is entirely due to temporary low regulatory conformity rates for new pachisloto models. Major new models from leading manufacturers including Sammy are expected to pass regulatory testing by December 2025 and launch by March 2026, which will improve conformity rates and allow DMP to supply RS1 at full volume. Based on this expected recovery, the full-year forecast is maintained.

Q: What is the competitive advantage of Di1 that is hard for other vendors to replicate? / A: DMP's key advantage is its decades of GPU development experience that enabled the FP4 floating-point implementation, which most competitors use integer arithmetic instead. Long-term investment in stereo vision processing and integrated ISP (image signal processor) co-developed with iCatch also creates sustainable advantages. Beyond individual technical features, DMP achieved a well-balanced design across power consumption, performance, and cost that delivers low total system cost (including elimination of cooling components), which is hard to replicate quickly.

Q: What is Di1's current sales expansion progress? / A: Management cannot disclose specific customer details at this stage, but notes projects are progressing with security camera and drone customers in both domestic and international markets. Customer evaluation of Di1 development kits is ongoing. iCatch Technology is promoting the product (branded V9) in Taiwan and other regional markets, and DMP is actively building distribution channels in high-potential India, with efforts to deliver early commercial results.

Q: What is the current market share of RS1 in the amusement sector, and how has the competitive landscape changed? / A: Exact share varies year-over-year based on which models launch and their sales performance, so an exact precise figure cannot be provided. But DMP confirms RS1 holds the largest market share in the Japanese pachisloto semiconductor market. The industry has consolidated to a near-duopoly from 4 competitors a few years ago, currently DMP and Accel are the two major remaining players.