Management Strategy and Medium-term Plan
Management Strategy and Medium-term Plan
Management Strategy and Medium-term Plan
Basic Management Policy
While gaining a stable management base by establishing businesses in the “winning field”, DMP aims to become the world’s leading “AI Computing Company” by expanding the business in the IoT*1/AI market, which is expected to grow significantly in the future.
DMP will strive to enhance its corporate value by maintaining a balance between research and development by talents with outstanding knowledge, experience, and passion, and a customer-centric market approach, and by providing optimal and advanced solutions that are required to solve customer and social issues.
Business Environment and Competitive Advantages
The semiconductor industry to which DMP belongs, is currently experiencing a noticeable shortage in the supply of semiconductors due to a shortage of production capacity at 8-inch foundries and strong stay-at-home demand. In the medium term as well, demands for IoT, AI, big data, next-generation high-speed communication standards, and autonomous driving are expected to grow over the medium term.
In the AI field, which is the business area of DMP, the acceleration of innovation and the increasing role of AI in solving social issues, including current difficulties, and in realizing a safe and secure society are expected. There has been a competitive environment where entries from different industries and the movement of existing players to strengthen the business are remarkable against the backdrop of the expansion of the related markets. In the AI industry, there are many players such as consulting companies that provide supports on issues and strategies related to AI introduction, companies that specialize in providing AI algorithms and software, companies that undertake AI development from customers, and major cloud operators that provide development environments for cloud services and machine learning algorithms. Leveraging its consistent development system of AI algorithm, software and hardware, DMP deploys a unique AI business by offering products and services in three forms: IP, product, and professional (contract development) service.
DMP’s focused fields/markets include the robotics area (low-speed autonomous vehicle, collaborative robot, etc.) and safe driving assistance system area (driver monitoring system, near-miss analysis, etc.), where market demands are expected to grow.
As one of its main businesses, DMP develops, manufactures, and sells image processing processors for the amusement (pachinko and pachislot machines) industry. The market is in a mature and declining phase, with sales of pachinko/pachislot machines decreasing year by year due to the decline in the number of players and the COVID-19. However, the absolute size of the market is still large, with the number of machines sold still exceeding one million units per year. In addition, with the complete removal of old regulation machines by the end of January 2022, demand for replacement with new regulation machines is expected. While keeping a close eye on the volatility of the pachinko/pachislot machine market, DMP will aim to expand its market share in market segments where it can demonstrate the superiority of its unique 2D/3D integrated chip.
Basic Management Strategies and Issues to be Prioritized
There is growing momentum in society, politics, and the business world to overcome major global social and environmental issues such as the declining birthrate and the aging population, the COVID-19, and the climate change. DMP’s basic policy for the medium-term direction of its business is to regard these changes in the social environment as opportunities to realize CSV (Creating Shared Value) management, which will enable it to earn profits and increase its corporate value by contributing to the resolution of such issues.
1. Providing added value across the entire development cycle of customer products and services
DMP aims to maximize the LTV (Lifetime Value) of its customers by providing added value across the entire development cycle of customer products and services from planning to mass production through the development of IP core license business, product business, and professional service business with an integrated development system from algorithms and software to hardware, which is its strength.
In addition, DMP aims to respond flexibly and quickly to customer developments and improves its profit margin by developing and providing standard products and services based on technology and know-how cultivated through customer projects.
2. Focused markets
DMP believes that it can differentiate itself from its competitors in the fields of safe driving assistance and robotics, which are expected to grow in market size and contribute to solving social and environmental issues by utilizing graphics technology, which has been one of its strengths since its founding, and AI (artificial intelligence) and deep learning technologies derived and cultivated from the graphics technology. DMP will implement basic strategies that match the life cycle of those markets.
a. Safe driving assistance field
In this field, the enforcement of the revised Road Traffic Law and the expansion of automobile insurance with a dashcam special contract have led to an increase in demand for real-time accident prevention using dashcams and safe driving education using near-miss events, and DMP recognizes that the market is in a growth phase.
In addition to providing initial licenses and professional services, DMP has also started to develop the recurring business by recording running royalty income and subscription income from the fiscal year ended March 31, 2021. With the competitive advantage of being able to provide integrated services from the cloud (ZIA Cloud SAFE) to the edge (ZIA SAFE), DMP aims to become a market leader by further cultivating existing customers’ projects and developing new customers.
b. Robotics field
In this field, the market for robotic vehicles and collaborative robots is expected to expand in response to the decrease in the working population and the trend toward labor saving and productivity improvement in various fields such as manufacturing, logistics, and agriculture. However, many customers are at the PoC (Proof of Concept) stage and the market is still in the introduction phase. Therefore, while applying the business know-how and business model that has been successful in the field of safe driving assistance, DMP aims to acquire PoC projects from customers with high potential, maximizes full-scale development opportunities by enhancing its technology portfolio for robotics including ZIA SLAM (Visual SLAM) and ZIA MOVE, an integrated software platform for automated and autonomous driving of robotic vehicles that includes ZIA SLAM, and expands its share in this vast market.
Regarding the business with Yamaha Motor, the lead customer in this field and business and capital partner, DMP will continue to contribute to the development of AI for a variety of Yamaha Motor’s products in line with the development roadmap and will also work on external sales of the results of the collaboration upon discussion.
3. Securing sustainable competitive advantage and growth
In the field of safe driving assistance, DMP is developing SaaS (Software as a Service) with ZIA Cloud SAFE, a SaaS-type safe driving assistance service using Amazon Web Services (AWS), PaaS (Platform as a Service) with ZIA SAFE, a safe driving assistance system development platform, and IaaS (Infrastructure as a Service) with services that use customers’ dashcams as the infrastructure. DMP will horizontally expand the same initiatives to the robotics field and other growth fields and aim to achieve sustainable and organic growth as a platformer that provides XaaS*2 to a wide range of customers in the focused fields by exerting network effects through close collaboration with various platformers, service providers and other ecosystems. In addition, DMP will proactively consider non-organic growth through M&As and business alliances that contribute to strengthening and complementing the competitiveness of services in its focused business fields.
Through the above initiatives, DMP aims to secure a sustainable competitive advantage and achieve sustainable growth.
Numerical Business Targets
In the fiscal year ending March 31, 2024, DMP is targeting net sales of 2,500 million yen and operating income of 200 million yen, through continued business expansion in the fields of safe driving assistance and robotics, as well as full-scale expansion of adoption in existing customers’ models and acquisition of new customers in the amusement field.
In the fiscal year ending March 31, 2026, DMP is targeting net sales of 1,600 million yen or more, excluding the amusement business, with the expectation of increased recurring revenue in the safe driving assistance field and increased license revenue from full-scale mass production of customers’ products in the robotics field. In addition, DMP will aim to further increase its sales by horizontally developing the XaaS business.
Abbreviation for Internet of Things. A mechanism in which various “things” in society not limited to information communication devices such as personal computers, smartphones / tablets, and game consoles are connected to the Internet and control each other by exchanging information, realizing automatic recognition, automated control, and telemetry.
Abbreviation for X as a Service. Providing a variety of things as a service (through the cloud).