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Good day, everyone, and welcome to today's Nidec's conference call hosted by Mitsubishi UFJ Morgan Stanley Securities. Today's call is being recorded. At this time, I'd like to pass this conference to Mr. Abe at Mitsubishi UFJ Morgan Stanley Securities for the opening remarks. Mr. Abe, please go ahead, sir.
Thank you. Ladies and gentlemen, thank you very much for joining this conference call. This is Abe, General Manager, Institutional Sales Department of Mitsubishi UFJ Securities, Tokyo. Before the meeting starts, please make sure all the materials have been distributed. If not, please download the files on Nidec's homepage right now. Now may I introduce Mr. Akira Sato, Executive Vice President and Chief Financial Officer, who will be speaking to you shortly. First, Mr. Sato will make a presentation. After his presentation, we will move to a Q&A session. Mr. Sato will now discuss Nidec's third quarter fiscal year 2017 results, future outlook and management strategy. Mr. Sato, please go ahead.
Thank you very much, Mr. Abe. Good day, ladies and gentlemen, and welcome to today's conference call. My name is Akira Sato, Chief Financial Officer of Nidec, and I will be your main speaker today. And joining me is Mr. Masahiro Nagayasu, General Manager of Nidec's IR team.
For the forward-looking statements, please see Slide #2 of our presentation for details. Now I will review the key figures. Please find our results for the fiscal year 2017 accumulated 9-month on Slide #3.
As also mentioned on Slide #4, we have achieved the highest 9-month net sales, operating profit, profit before income taxes and profit attributable to owners of the parent.
We have also achieved the highest quarterly net sales, operating profit, profit before income taxes and profit attributable to owners of the parent.
On Slide #5 and 6, you have step chart showing our sales and operating profit year-on-year and quarter-on-quarter separately by product groups and exchange rate effect.
As you see on Slide #6, the quarterly operating profit of automotive and appliance, commercial, industrial, or ACI, slightly decreased by JPY 1.2 billion, of which roughly 25% came from automotive and 75% from ACI result. Please turn to Slide #7. We have achieved the highest net sales for 4 consecutive quarters and operating profit for 3 consecutive quarters. As these results show, the net sales and operating profit both are accelerating.
Our midterm strategy Vision 2020's targets, on Slide #9 and #10, remain unchanged from the previous quarter and visibility for JPY 2 trillion sales is increasing as each area is becoming more likely to achieve their organic growth target.
Please see Slide #11. We have revised upward our short-term forecast of hard disk drive shipment to 395 million units and our motor shipment to 335 million units. The upward revision reflects the steady demand for hard disk drive, due to the rising price of nonflash memory. In the automotive area, we have seen electrification of car and interaction of EV and PHEV on a considerable scale, [ caused ] by tightening regulation in many countries.
In robotics, there is a huge demand coming out -- coming not only from manufacturing industries but also from food, logistics and the service industries. And the market is expected grow quite rapidly. In the appliance area, high-efficiency brushless DC motors are being applied to wider areas.
In the new drone area, we have seen acceleration of wider varieties of applications on the back of serious labor shortage in the agricultural field and Industry 4.0 trends. In all these areas, motors and motor-related products are mission-critical components, and the demand for our products is expected to increase very rapidly, as we see more EVs, robots and drones in actual applications and more efficiency required by appliance products.
We are now -- the Slide #12, sorry. We are going to strengthen our manufacturing capabilities in order to contribute to higher efficiency and the performance in these areas with our compact, light-weighted and highly controllable motors.
Please see Slide #13. We estimate that the market size of EVs and the PHEVs in 2025 to be along 11 million unit, of which roughly half is served by OEMs in term of -- in terms of manufacturing Traction motors and the other half, which is 5 million to 6 million unit, outsourced, and this is going to be our total addressable market for TAM. We are aiming to win 40% share of the -- this outsourced market and targeting JPY 100 billion sales of Traction motors for EV and PHEVs in 2025. We have announced an -- a joint venture with PSA last December, cruise sales target in 2025 is along the same JPY 100 billion, but that is not included in the JPY 100 billion target on this slide.
Please see Slide #14. As the demand for compact collaborative robots is becoming more and more diversified, we are focusing on increasing our production capacity for speed reducers, which are essential components for these robots. Our subsidiary Nidec-Shimpo will be opening new factories in Ueda, Nagano Prefecture Japan and in Subic, the Philippines and together with the existing Kyoto factory, we will be starting production in those 3 sites. The first 2 factories will be utilizing the existing production spaces of our group company, Nidec Seimitsu and Nidec Subic, and the expected monthly production volume as of the end of FY 2020 is 220,000 units, which is 22x higher than the current 10,000 units volume.
On Slide # 15, other smaller motor sales index by application illustrated. As you see, faster growth is expected where higher recreational demand for brushless DC motors exist.
Please turn to Slide #16. Drones are beginning to play a major role in rise of sales, such as infrastructure, inspection, measurement, logistics and agriculture, and demand are anticipated to increase significantly.
We are mainly focusing on around the motors and controllers for industrial loans and are already participating in actual projects.
As shown on Slide #17, we have acquired driveXpert, a German company developing and designing automotive ECU hardware and the software and have established a foothold for R&D for ECUs in Europe. By combining driveXpert's high-precision ECUs and our high-performance automotive products such as electric power steering motor, engine cooling fans, electric oil and water pumps, we'll be able to provide higher performance and highly reliable products.
Please turn to Slide #18. We have announced a joint venture with Groupe PSA for manufacturing Traction motors for EVs, PHEVs and MHEVs, and its establishment is expected in coming March or April. We have been already collaborating with Groupe PSA in this area through our subsidiary, Nidec Leroy-Somer Holding, which we acquired last February. And the Traction motors manufactured by this joint venture are expected to be used for PSA's EV, PHEV and MHEVs throughout 2022.
Lastly, on behalf of the entire management team, I would like to thank our customers, patrons, suppliers for their support and commitment as well as our shareholders. At this time, we would like to open up the call for questions. Thank you very much.
Thank you very much, Mr. Sato. Now we would like turn to the Q&A session. Mr. Sato will be very pleased to answer any questions.
[Operator Instructions] Our first question today comes from James Pulsford from Eikoh Research.
Sato-san, could I start off just asking a question about the [ measly ], not huge but the small decline in profit margins for the AACI area? And you mentioned this, the quarter-on-quarter decline in profit was 1/4 auto and 3/4 ACI, but in the materials it all say -- I think, made a comment, that deterioration in profit mix hit margins. And I just wonder, could you explain that comment, please? And obviously, this isn't a huge change, it's just a quarterly change, but that change in mix, for example, is that something that's going to impact Q4 and ongoing? Or is it just a very short-term thing?
Yes, it is very, I think, short-term effect. That's, kind of, modern exchange. In the ACI area, the sales of the -- in the U.S. area have been -- has slightly decreased and in Europe, it's going to -- it is increased. And operating profit margin for the North America is much, much higher than one in Europe. Those, kind of, mix change, affecting to the profit margin in third quarter.
Okay, and is that...
So it's just going to be back to the original position.
All right. And could I also ask a separate question, please, on -- in your spindle motor business, the -- from when I tried to calculate, it seemed the average selling price, perhaps, went up quite a lot. I wonder, could you give me the figures, please, for the -- what happened to ASP in the -- in spindle motors? And if there is a change, why that happened? Was that mix or underlying pricing change? Could you comment on that, please?
Okay, so the volume of spindle motor shift during the December quarter was 86.3 million, which was down from 89.2 million, so the volume came down. But ASP, average selling price, is coming up from $4.95 the previous quarter to $5.21. So thereby, ASP rise up 5.3%, and that's going to offset and reported the higher data revenue for the quarter. Then this high ASP comes mainly from the mix improvement. In terms of the server, the server ASP is $12.57 and thus server motor comprising 38.8%, up from 34.3% in the previous quarter. Recurring in terms of the sales, then we do have a high-ASP, high-margin motor occupies more percentage of total sales, thereby we could improve the ASP from $4.95 to $5.21.
And can I just ask, in terms of ASP, were the -- were there any changes to over the quarter 2, for example, your overall near line? You gave a figure of $12.5, I think, but within that air-filled and helium and also enterprise, is there any -- is it much change on the quarter? As helium pricing started to slip down a bit more because it's become mainstream, could you comment on that, please?
So helium for this quarter, we say the near line shipment volume was 10.5 million, and where the helium is something like 5.7 million. So thereby around 54% of near line has been already became helium. So helium price is already higher than average, then usually the margin is higher, so that's going to contribute to a higher ASP and maybe the -- a covered -- a so-called flat margin.
Okay. And did the enterprise ASP, is that quite stable?
Okay, enterprise number for the current quarter, this quarter is 3.4 million, the previous quarter, 3.3 million, so clearly it increased from September quarter to December quarter. So that is also a good sign that all the total server motor, 3.4 million, 2.5-inch higher and 10.5 million near line, then total is 13.9%, which is 39% of 86.3 million, which is up from 34.3%
And the enterprise ASP, is that stable?
Enterprise ASP is coming down a little bit from $7.98 down to $7.61. But overall, total average is $12.57 for the server, which is up from 12 [indiscernible] the previous quarter. Okay?
It is up from how much previous quarter, 12 point?
14.
Could you say that one more time?
[indiscernible] 5 7.
Sorry, the line keeps breaking up, I apologize. Could you repeat that $12.57 compared to 12 point?
1-4, 14.
1-4. Okay, got you.
The next question comes from Mehdi Hosseini from Susquehanna Financial Group.
This is David Ryzhik for Mehdi. You provided the near line number for December quarter, but would you be able to provide all the segments, the 2.5-inch, 3.5-inch, all the segments?
Okay. I already mentioned, the 2.5-inch higher, near line. So what you need is a 3.5-inch ATA, 33.4 million, ASP $3.87; 2.5-inch mobile 39.0 million, ASP $3.74. Okay?
Great. And near line 10.5 million and server 3.4 million and...
Yes.
Great. And what are your -- yes. And...
Okay. So 10.5 million near line volume with 14.15, $0.1415 ASP which is up from 13.65.
Got it. And what are your expectations for the March quarter by segment?
March quarter, as you see on our slide, we were forecasting 78 million, where we say 2.5-inch higher, 3.2 million; near line, 10.8 million; 3.5-inch, 30.0 million; and 2.5-inch, 34.0 million.
And how about for the overall HDD market?
Market, we say around a 92 million as you can see on the slide. Slide #11, right, we say 92 million and 78 million, okay?
Great. And by...
[indiscernible] 92 million. Enterprise 5.5 million; near line 12.5 million; 3.5, 30.0 million; and 2.5-inch 44.0 million.
Great. And just to clarify the 10.5 million near line for December quarter, was that a Nidec Motors shipment? Or was that a market number?
It's a market number, which I said, near line is 12.3 million. Then our motor shipment number, 10.5 million.
Okay. Great. And when do you believe that your -- that the 14-terabyte helium capacity is going to begin ramping? I assume there was a very small percentage of your shipments in December, but when do you believe it'll begin ramping?
So with -- from which maker? Seagate or Toshiba?
From both.
Both. Okay, for Toshiba, still the volume is very small. Then Seagate is trying to ramp up a 14 terabyte, but at this moment, the demand line is mainly in 12 terabyte. So they will degrade or downgrade 14 terabyte down to 12 terabyte and selling as a total terabyte. That's Seagate client. But still, the number on that 14-terabyte drive itself is very small.
Understood. And how about your -- how about WD?
WD, at this moment, they do not have 14 terabyte helium for a -- the very near-term.
Okay, understood. This is just very helpful. And can you comment on just your inventories, at your customers and for your March quarter expectations? What type of assumptions do you have for your HDD customer inventories?
So as we say, okay, the shipment number of the third quarter in our Slide 11 is 103 million, right?
Yes.
As you see it, right? But the -- a production number is much smaller than that. For example, we say production for this quarter is something like 100 million, or a little less than 100 million. So shipment was 103 million, and production as a little bit less than 100 million for the third quarter, meaning inventory has been used for that gap of 3 million. Did you get it?
Right.
So at this point, we don't see any so-called inventory overbuild, rather the inventory has been used to fill the gap between the sales and production. Then the next quarter, in the -- in March quarter, the production number is very similar to the shipment number. So by March quarter, we say that the shipment number and the production number will be equal. So that's -- it will be a neutral to the inventory. So at this moment, we don't see any total excess inventory in the area at this point, okay?
Our next question comes from [ Dion Chanier ] from [ Indus West. ]
I have several questions. The first is one of the key metric there is to reach your medium-term plan is the improvements in margin at -- in ACIs and especially Emerson's and I think Nagamori-san is personally involved in this improvement. Is it possible to update us on the situation and the improvements of margins at Emerson's?
All right. Currently the Emerson European operation, so-called LS and CD that operating profit margin around the 4.3% after PPA, and our target is 8% in Q4 and 10% in FY '18. And it is a big opportunity for us to improve their profitability, such as deducing their purchasing price and also there's some streamlining the overhead and also increasing the sales in electric power generation and the servo motors. So that it's a likely scenario to achieve the 8% in Q4, 10% in FY '18. That's current situation.
Okay, so you're on track to reach target of 8% in Q4 and 12% next year?
No, 10%. 10% in '18.
Yes, okay. But on track, okay. And the second question is regarding the 2020 target. You target JPY 2 trillion, but as you said in the presentation, it doesn't include the JV with PSA. Can we assume, you can reach this JPY 2 trillion organically without M&A and then M&A can come on top?
So you can see, Slide #10. We are showing the -- a breakdown of sales, which is JPY 2 trillion in 2020 and JPY 600 billion from the small precision motor and automotive and ACI. So JPY 600 billion times 3, now JPY 1.8 trillion, and on top of that, we are expecting growth a machinery segment, which would be over JPY 200 billion. So I strongly believe that we are going to achieve JPY 2 trillion in 2020 of sales without further M&A. It answer to your question?
Yes. I mean, consensus doesn't seem to grant you -- to give you credit from achieving these targets, that's why I asked if you can reach it without M&A. But yes, you answered my question. The last question is also the robotic segment. You have very high ambitions for the -- for this initiative, and I think with the robotics. So I think, [ Katayama-san ] leads the initiative, is it possible to update us on the progress of the different initiatives you have, please?
Will you just say again the final part of your question?
Is it possible -- I think we have very high ambitions for to benefit from the robotics trend, is it possible to update us on where you are and...
The last financial announcement, we show that -- that is the -- what we are saying is, we are not just talking about so-called the industrial robot. Industrial robot itself is -- maybe, most of the research suggest that a 15% per year growth but that's going to be only in the robot used in the factory. Then if you're looking at the robot demand outside the factory, that's going to be much higher than the industrial.
So overall, in the previous -- at the previous financial presentation that we did in October, Akira mentioned the volume is coming up from 300,000 in the robot 2016, up to over 1 million by 2025 -- oh, no, 2020. Okay, if you just come back to our website and check our slide, what we made at the October 25, you can get that number. So clearly that is very different than market perspective. If we are just looking at the industrial, those robots used in the factory, maybe 15% per year. But if you're looking at the outside the factory, clearly more and more so-called call up for working robot is increasing, so that those robots could be used outside of factory. So that trend is clearly creating a huge demand for a -- so-called reducers, which currently needed to support all those robot. That's what we say here, okay?
[Operator Instructions] We'll take our next question from Jon Greenhill from Baring.
I'm -- I just wondered on Slide 13, where you show your addressable market and, sort of, new engines. Could you give us some idea for how you see the breakdown between EV, pure EV, and plug-in hybrid? What's your -- you expect roughly your different, sort of, dollar content to be between an EV unit and a plug-in hybrid unit, please?
Okay, so we say the overall market, okay -- overall market today, maybe, in a typical EV, we say $35,000. The same, maybe, size and same type of a performance car will be, maybe, $25,000 for a ICE, internal combustion engine, okay? So the difference, it is around $10,000. Then this $10,000, if you look into it, then those are merely occupied by the battery. So the key assumption here is, as Elon Musk of Tesla clearly mentioned that the EV price is coming down, somewhere right 8% a year. They are assuming that from '16, '17 down to 2025. We say a budget cost, somewhere at 2025, will be half of today's $10,000, thus $5,000. Then today the borrowing of EV is very small. Thereby a motor system, which is clearly much cheaper as the whole comes up, but maybe that's going to be similar to a so-called the powertrain cost of ICE. Internal combustion engine, the powertrain consist of the engine and transmission. We say the cost of that will be -- or that type of a Nissan Leaf hybrid car is something like $8,000 to $9,000 including engine and transmission. Then for the motor and inverter and some gear, we say roughly that could be down to $20,000, okay? So from $8,000 ICE, internal combustion engine car, engine and transmission will be replaced by only $20,000 -- no, only $2,000 -- sorry, $2,000 motor and inverter and some other, a Traction motor system. So thereby the saving is over $6,000. Then that $2,000 system is -- based on the volume is something car maker right at $200,000 per year, if the volume goes up to 2 million per year, the volume becomes 10x then our rule of the thumb suggest any electric product, the volume becomes 10x, the cost is becoming hard. So thereby $20,000 becoming $10,000. So those are the savings, then thereby we say 2025, we assume EV cost is coming down to somewhere around near $25,000 and equal to the ICE cost, that's our assumptions. Did you get it?
Yes. And so for you the revenue opportunity per unit, just so I'm clear?
So our unit, as I say, is currently when we are talking to some Chinese local carmaker, which [ Nishimora ] mentioned. That's going to be -- we are going to be making contract with -- by the end of March, then we might be starting the mass production of Traction motor with Chinese local carmaker somewhere within the -- a fiscal year '19. Then those are based on the volume of 100,000 to 200,000 per year. Then so based on those delivery time, 2019, '20 and the volume 100,000, 200,000 per year, we are pricing something like $2,000 for a total system, including the motor and the inverter and gear. That's our price. Is that fine?
[Operator Instructions] We'll take our next question from [ Zach Inrie ] from MUFG Securities.
All right. Specifically on a CapEx, I know you provided some color on the production capacity increase, but can you remind us what's the announced CapEx plan for the next few years? And also if you can give us a bit more clarity on how much production capacity we can expect, especially for the EV-related motors? And also the compact robot speed reducers, the one you mentioned on Slide 13 and 14 in like 2020 and Cap for a longer term.
For the 2 products?
Yes, for both product, that'd be great. Yes.
The 2 product, reduction gear was speed reducers and the EV. Those are the 2 products that you needed some party plan for -- by Nidec.
Yes. And also CapEx, product CapEx, yes.
Okay. Okay, CapEx -- I mean, the CapEx volume in the [indiscernible]. That's what you want?
Yes, yes, for our next year -- our next few years cracked up.
So the CapEx. Capital expenditure. Total capital expenditure in fiscal year '18 and the '19 and '20, we announced the -- investing JPY 100 billion current year but it's going to be slightly increase, because, as you said, that we have to increase the capacity -- production capacity in the both, the automotive area and reduction gears area. So that I expect JPY 100 billion to JPY 150 billion of the capital expenditure each year, but, of course, it depends on the M&A. Because we don't need the invest money for capital expenditure if we acquire the company, where we have production capacity in the company. So that at this point, capital expenditure will be JPY 100 billion to JPY 150 billion per year. That's answer to your question in terms of capital expenditure.
You need the cost -- I mean, the yen amount for R&D or the CapEx?
No, maybe a capacity increase for these 2 products basically. I know you mentioned about the Ueda plant and also Philippine plant. But if you can give a little more color on these 2 stick products, that will be great.
Yes. So as I said, the key is -- what we are talking about is twofold, the PSA joint venture and the other one is, as I mentioned, maybe we're going to be starting the mass production of Traction motor for EV for Chinese carmakers somewhere around '19, '20. Then the volume is, as I say, carmaker 100,000 to 200,000 per year. So if we're going to be serving 2 Chinese local maker in 2019, 2020, then the total volume is something -- somewhere at 300,000 to 400,000. Then at this moment, we have not yet calculated how much CapEx or capacity we need to do it, but eventually that's going to be, as Mr. Sato mentioned, a part of the JPY 150 billion, but it won't be so big at this point, because the volume is also large. Only 300,000 to 400,000 per year. Did you get it?
Okay, understood.
That's the capacity size. So in terms of the auto billions, we receive the order first. Maybe by the March of this year, we may get the concrete volume of how many Traction motors we have to make for that maker. Then we are looking at the -- where we're going to be making. And we can do that with the current facility, or we can also make a new factory. Depending on those, clearly, the total CapEx volume or CapEx cost will be different. You understand that, right?
Understood.
So at this moment, after we made a contract, we are going to starting to decide where we're going to be making those Traction motor for the customer. So thereby, the total amount has not been fixed. But roughly, as Mr. Sato and Mr. Abe mentioned, including all that, we are -- again, the total CapEx number will be coming up from current JPY 100 billion up to JPY 150 billion, okay?
Our next question comes from Yon Chong from Baring Asset Management.
I got 2 or so question. So first one is with -- to do with the traction motor. So who do you see as your key competitors? So it is very much growing market, so who do you see as your key competitors?
Okay. So in the long run, the EV will be produced everywhere in the world, but wherever the customer is in margin economies or whatever the country, the key point is, the carmaker has to make those cars inside the market. So thereby a Traction motor also has to be produced within the market. So if you try to become the global supplier of those Traction motor, you should have a global production network. So thinking about those requirement, we don't see so many of our competitors, maybe one big government could be a boss. Already the boss has plan concerning how their motor business do to their Chinese partner. So at this moment, we do not know when and who is going to be there. So the key question is, which market will be the biggest market of these EV in 2025, 2030, 2035? Our idea is where the very -- emerging economy is a very large population such as India or Indonesia has their income per capita will be growing and the EV cost is coming down, then they do have the great potential to become a large market. Then that's the reason why we already have the factories in India, in Mexico, Brazil. So these are the requirement to become a global supplier of the Traction motor. Then thinking about the requirement, we don't see so much. But in China, everybody says that the China will become a large market, maybe could be around a half of the EV market 2025, 2030. There we say, there will be some competitor. But the largest competitor, as we mentioned, is a in-house production. If carmaker is going to be keeping their motor in-house, then those are not our addressable market. So the key thing is, if the volume goes up, then the motor -- Traction motor becomes commodity, then each supplier is going to be competing with the cost and price. Then the large global remain could be a major competitor and a major supplier in this market. Then we could be fitted in that. That's what we say.
Just one follow-up question is, in terms of technology, traction motor, is it very difficult -- in terms of technology, it's a high-end technology? Or as you said, it's more bound to producing the motor in a very cost-effective way?
Okay. The #1, we say is, it's going to be more and more commoditized. So the similar design, similar technology will be used for any EV in this book. So if anybody is going to make a super motor, then that's possible. But even if anyone could have that super motor then they'll not be able to get a return on that. So what we say is, if you're looking at that history of PC, okay. So Apple was really making a superb PC. But today, how much share the Apple has? So we are saying, if you're looking at the future of the auto market, auto market will repeat the history of PC from 1980 to today, from here to 2030, 2040. Then, as you see, very few large global name would occupy a larger share of each component or even a part of OEM. Okay?
We have another question from Mehdi Hosseini from Susquehanna Financial Group.
This is Dave Ryzhik for Mehdi, again. You mentioned the mix of helium for the December quarter of total near line of 54%, which is very strong. What are your expectation for the March quarter percentage?
Okay. So we say near line number is 54% in December quarter. We say around 60% in March quarter.
And are you seeing any kind of end market pricing changes in the near line market? And would that impact your HDD motor pricing?
Usually we do subprime lose HDD motors on the LTA, long-term agreement. So the short-term quarter-by-quarter cost fluctuation that rise would not affect our motor price.
Got it. And when do you believe all 3 vendors would be shipping the 14 terabyte helium? I just wanted to clarify.
Already they were doing a so-called sampling, right? So 14 terabyte by Toshiba, for example, we say still is not the mass production-ish. But that's going to be something like a -- around 10,000 this quarter and 20,000 next quarter. That's how we see it, okay? Then the Seagate, as I said, it's a little bit difficult, because they were making a 14 terabyte one, but the 12 terabyte one, they are planning to downgrade from 14 to 12 then they were starting at the 12 terabyte. But for those 12 and 14 terabyte volume by Seagate, we are looking at somewhere over JPY 160 billion -- no, JPY 300 billion this quarter and JPY 700 billion next quarter, somewhere there.
Got it. And HGST? And -- got it. And WD?
HGST, as I say, 14 terabyte is not on our list at this point. Maybe they got it coming up. So 12 terabyte is the highest one that they have, right? So 12 terabyte one, the volume is something like 400 -- maybe 350,000 this quarter, 1 million next quarter. Okay?
Great. So essentially at this point, maybe Toshiba is slightly ahead on the 14 TB development, it sounds. Is that fair?
Yes. But they didn't have any record in the previous quarters or previous years of 12, 10, anything, right? They just came in and then 14. So it might be a little bit difficult getting approved by the major customer like a CSP, Cloud Solution Providers, okay?
We have a follow-up question from Yon Chong from Baring Asset Management.
Just -- I'd like sort of just more -- one more question on your page 14 of your slide. So if I translate this -- your volume growth into revenue potential, so by 2021, what will be your revenue expectation from this increased in capacity?
If we can make the whole capacity, we say 200-around-forty million -- no, 240,000 is our number, because 22,000 per month, I'm sure, is the yearly capacity. Then times 80% or 90% a year, then clearly the biggest point is how much will be the ASP? So today it is very high. The volume goes up and then it's coming down. So somewhere -- at this point, we are a bit difficult but maybe somewhere between JPY 20,000 to JPY 30,000 will be ASP. And during the month's radar that's going to beat ourselves of this type of year in 2021, okay?
So as JPY 20,000 to JPY 40,000, you told somebody, yes, as is...
JPY 20,000 to JPY 30,000.
JPY 30,000?
And by gear, okay? So JPY 20,000 ASP. 22,000 per month times 12, and then you have to consider it 80% to 90%. And that's how we are making it. It can sell or we can make then that revenue you can expect, okay?
Mr. Abe, there are no further questions today. So at this time, I'd like to turn the conference back over to you for any additional or closing remarks.
Thank you. We'd like to conclude this conference call. Thank you very much for your participation today. Should you have any questions, please do not hesitate to contact Nidec Corporation or U.S. sales representatives at Mitsubishi UFJ Securities. Thank you very much. Have a good day.
Thank you. That concludes today's conference. Thank you for your participation, and you may now disconnect.