Identifying Material Issues
Tokyo Electron identifies important and priority material issues (key issues) to be addressed for the medium- tolong-term enhancement of corporate value by examining both social and business environments, evaluating risks andopportunities and holding active dialogues with stakeholders.

Stakeholder Engagement
We examined the opinions and requests obtained through dialogue and engagement opportunities with stakeholders.
Stakeholders

Main Engagement Opportunities

Shareholders/investors

Issues AwarenessSocial Issues
While society is currently being affected in many ways by the COVID-19 pandemic, humans are also faced with variousissues, such as abnormal climate conditions and natural disasters, human rights issues, conflicts between nations andcyber-attacks. Mitigating climate change and eliminating inequality in human rights in particular are pressing issues forthe global community, and there are strong calls for further action, not just by international organizations, andnational governments, but also by the private sector.
While participating in global initiatives such as the United Nations Global Compact and RBA and keeping an eye onsocietal trends, and considering recommendations from third party organizations, we also examine social issues that
may impact our business activities.
Business Environment
With the spread of IoT, AI, 5G and other technologies, a data-centric age has arrived and the implementation of digitaltransformation and information and communication technology (ICT) is accelerating. This further increases theimportance of the semiconductor industry as a social infrastructure. Along with innovations in semiconductor
technologies to achieve larger capacity, higher speed, higher reliability and lower power consumption, the market forsemiconductor wafer fab equipment (WFE*), in which we conduct our business, is forecast to continue expanding.
New evolutions are also required in Flat Panel Display (FPDs), which act as the interface between people and ICT,and further technical innovations are occurring. In the future, as organic EL displays become widespread, panel size
increases, and design improvements that take advantage of enhanced characteristics such as high resolution, lowpower consumption, thinner profile and flexibility, are expected to further expand the application fields.
Taking actions to preserve the global environment has become an urgent issue, and initiatives toward
decarbonization are accelerating on a global scale under international frameworks such as the SDGs and ParisAgreement. As the transition to a digital and green society progresses, the roles played by semiconductors and FPDs
will increase even further in the future.
At the same time, the importance of corporate governance, which fundamentally supports the medium- to longterm growth of corporations, is also increasing. Further strengthening of measures is essential to ensure safety andquality, as well as compliance and risk management.
Risks and Opportunities
We examined the risks and opportunities closely related to sustainable business development in consideration of social
issues and social/business environments such as the SDGs.
Main Potential Risks
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EnvironmentHuman rights

Supply chain
management

GovernanceCompliance
Evolution oftechnology
Information
security

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If we fail to comply with laws and regulations, industry codes ofconduct, or in-house policy, product competitiveness and social
credibility will decline, and the cost of correcting the problem will
increase business costs.
If we fail to comply with laws and regulations, industry codesof conduct, or in-house policy, social credibility and employee
engagement will decline.
If a natural disaster occurs, or it becomes impossible to continue
business transactions with suppliers, events such as delivery delays
and contractual non-performance will harm business continuity.
If sustainability-related issues such as the environment and humanrights become more serious, operations will stagnate.
If management’s monitoring or supervising function declines,management risk will increase, and business activities will stagnate.
If an ethical or compliance violation occurs, we will lose social
credibility and suffer economic loss.
If the development of leading-edge technologies is delayed, we willlose business opportunities.
If confidential information is leaked, social credibility will decline, andcompensation for damages be required.
If a cyber-attack or natural disaster occurs, our business will stagnate.

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Customer

SuppliersEmployees

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Localcommunities
Governments/associations*WFE: Wafer FabEquipment. The
semiconductor
production process isdivided into front-endproduction, in which
circuits are formed on
wafers and inspected,
and back-endproduction, in which
wafers are cut intochips, assembled andinspected again. WFE
refers to the production
equipment used in
front-end production
and in wafer-levelpackaging production.

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Technology conference
Customer satisfaction survey
Joint development

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Promote environmental management, improve the environmental
performance of our company’s manufacturing equipment, createbusiness opportunities and provide technologies that will help reducethe power consumption of semiconductors
Create a workplace environment that respects employee diversity
and enables all employees to demonstrate their full capabilities,
improve employee turnover rate and promote health management
Establish a sustainable production system, further increase business
operations efficiency, improve business continuity through enhanced
business continuity plans, strengthen competitiveness in the supply
chain and build trusted relationships with customers and suppliers

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Community contribution activities
Tours of plants and offices
Environmental debriefingIndustry group activities
Collaboration with various initiativesMedium- to long-term growth scenario and associated measures
Further initiatives for governanceCapital policy, including shareholder return
Understand diverse application needs and suggest solutions to satisfy them
Maximize equipment performance and productivity
Comprehensive and optimal solutions

1
IR roadshows: IRactivities presented
directly to shareholders
and investors
2
STQA: Supplier Total
Quality Assessment

Share high-quality information related to production and technology
trends in a timely manner
Improve our company’s operation by complying with the expected quality
standards
Share the management policy further
Provide medium- to long-term career development opportunities foremployees
Create work environment in which diverse human resources can thrive
Coexistence of the company with communities
Promotion of environment conservation
Human resource development and innovation
Create new values through innovation
Initiatives targeted at climate change, human rights, etc.
Building of sounder supply chains

Identifying Material Issues
We have ascertained the social issues and business environment, considered the risks and opportunities andexamined the opinions and requests of all stakeholders. We have reassessed material issues from the perspectivesof developing a sustainable society and enhancing medium- to long-term corporate value.
As a result, we decided to leave Product Competitiveness, Customer Responsiveness, and Higher Productivity
unchanged, which are items already identified for enhancement in the Medium-term Management Plan as materialissues. We also reexamined the significance and activities related to People and Workplaces, which had previously
been defined as a material issue through fiscal year 2021, and decided to integrate it into Management Foundation.
The material issues were decided at the CSR Management Council, attended by Chairman of the Board,
Representative Director, and President & CEO, and corporate directors involved in CSR.

Material Issues

Identified Material Issues
Material issues

Medium-term Goals

Productcompetitiveness

Create strong next-generation products

Customerresponsiveness

Be the sole strategic partner

Priority Themes
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Higherproductivity

Continually improve operational
efficiency

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Importance to business

Managementfoundation

Build a strong managementfoundation for underpinning ourbusiness activities

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Operate healthy corporate activities by complying with laws andregulations, industry codes of conduct, corporate ethics, and other rules

Build a rock-solid information infrastructure by strengthening
information security, and improve information literacyEnhance corporate value on a medium- to long-term basis, gain
stakeholders’ trust and increase social credibility

Create ground-breaking innovations, strengthen competitive
superiority and contribute to industry and societal issue resolution
and growthEmployee meeting
Global engagement surveyCareer interest survey (Japan)

Opportunities
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Production update briefing
TEL Partners Day
STQA2 audit

Importance to society

Social Trends

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Key Opinions and Requests

Earnings release conference, Medium-term Management Planbriefing, non-financial briefing (IR Day)
IR conference, IR road show¹, individual IR interview
Shareholders' Meeting

Tackling technological innovation
Solutions that create value forcustomers
Improvement of customer satisfaction
Continuous improvement of business
operations
Quality management
Improvement of customer
productivity/yield
Diversity and inclusion
Career development
Work-life balance
Health and safety
GovernanceRisk management
Compliance
Environmental contribution ofproducts
Environmental management
Supply chain management

Annual Goals for Each Material Issue
Reflecting on the priority themes in each material issue, we verified the results against the goals for fiscal year 2021
and set annual goals for fiscal year 2022. In setting each goal, we have clearly identified the corporate director
responsible for achieving it, and we are working on various activities aimed at further enhancing our corporate value
and contributing to the achievement of SDGs.

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