Value Creation Model
We will make the most of the capital we own and continue to provide new value that contributes to the resolution of issues anddevelopment of industry and society through our business activities in research and development, procurement and manufacturing,sales and installation and maintenance services in our value chain.

INPUT (investment capital)

OUTPUT (value created through business activities)

fiscal year 2021

Financial capital
Net assets
Equity ratio

1,399.1 billion yen
22.9%
242.9 billion yen
26.5%
121.9 billion yen (payout ratio: 50%)

Net sales

1,024.5 billion yen
71.1 ％

Corporate Philosophy

Operating margin
Net income
ROE

Manufactured capital

9

Management Policies

Manufacturing sites total(6 in Japan and 3 overseas)
Manufacturing-related capital investment, such as
new plant buildings and manufacturing equipment

Total annual dividend

Cumulative number of equipment installations Approximately(annual shipment volume of approximately 4,000 units)

Many years of know-how and proven performance inmanufacturing operations

Safety-first operation (TCIR*)

Financial capital■ Returning generated profit to stakeholders■ Building a solid financial foundation■ Continuing proactive investment for growth

Manufactured capital■ Contributing to customers’ product manufacturing and theContributing to customers’ productivity enhancement

Production capacity and capabilities that can respond toincreases in demand

OUTCOME (value provided to industry and society)

76,000 units

High-quality and high-reliability products incorporating leading-edge technologies

TEL Values

Vertical transfer system, from development tomass production

fiscal year 2021

growth of semiconductor and FPD markets through the BestProducts■ Contributing to customers’ fab utilization rate and yield
improvement through the Best Technical Service0.27* TCIR: Total Case Incident Rate. The number of workplace incidents per 200,000 work hours.

Observing equipment delivery and installation schedules

Intellectual capital

12 total (6 in Japan and 6 overseas)
R&D investment 136.6 billion yen
R&D sites

Broad-ranging knowledge and technological capabilities
in semiconductor and flat panel display (FPD)
manufacturing processes

Installation andMaintenance Services
Support the stable operationof equipment and provide
prompt and accurate
high-value-added service

Customer needs and equipment-related dataobtained from installed equipment baseContinuously strengthening
research and development tocreate innovative and unique
technologies in a timely manner

Sales
Propose optimal solutions
as the sole strategic partner

Human capital

14,479Proportion of engineers 66.9%
Number of employees

Intellectual capital
Innovative and unique technologies■ Providing leading-edge technologies to contribute to technologicalinnovation and manufacturing in semiconductors and FPDs

Building a product portfolio with technical superiority
Number of patents owned

18,692

Semiconductor production equipment

Product lineup with No. or■ Operating a fair and sound business that respects intellectual

1 2 market share

Value Chain

Infrastructure for promoting digital transformation(enterprise system/database/talents and skills)

Research andDevelopment

Procurement andManufacturing
Efficiently manufacturinghigh-quality products
backed by a sustainablesupply chain

2.5%
17 years and 4 months (Japan)
Average service years
Improvement in engagement score 12 points (compared to fiscal year 2016)
Turnover rate

Improvement in desire for growth and demonstration of the challenging spirit inemployees, who both create and fulfill company values

property rights■ Providing new value to industry and society throughtechnological innovation

Human capital■ Creating fulfilling workplace environments that motivate

employees■ Improving value provided to stakeholders by cultivatingemployees with a high level of engagement■ Building a sustainable operation

Personnel able to perform globally
Employee skill upgrade programs and humanresource development

Social and relationship capitalThe driving forces behind
our company

Solid cooperative working relationships withsuppliers

Energy consumption
Water consumption

13

Abundant technological capabilities

94,640 kL
1,397 kmTOKYO ELECTRON SUSTAINABILITY REPORT 202 1396.7％
23.1%
136

Creating employment opportunities in and paying taxes to local municipalities andnations where we carry out business activities

Social and relationship capital■ Maintaining soundness and strengthening

competitiveness throughout the entire supply chain■ Contributing to customer value creation by providing

the Best Products and Best Technical Service■ Contributing to the revitalization of and sustainable

development in local communities

cultivated as an industry leader

Trust from customers
based on our reliable technical services

Natural capital

Rate of improvement after supply chain CSR assessment
Number of TEL FOR GOOD programs

Foundation for business activities in local communities
Relationship of mutual trust with customers built
through many years of performance records

Percentage of respondents who selected “Very Satisfied”
or “Satisfied” in the customer satisfaction survey

Challenging spirit of our employees,
who are capable of flexibly and rapidly adapting to changes in the environment

Per-wafer CO2 emissions
Renewable energy consumption
Energy consumption at plants andoffices per net sales
Waste material recycling rate

16% reduction (compared to fiscal year 2014)
7,763 MWh10％ reduction (compared to fiscal year 2020)
98.8%

Natural capital■ Implementing products and business activities that have a low

environmental impact and help to preserve the globalenvironment■ Providing technologies that help customers manufacture
semiconductors and FPDs that have a low environmental impact

TOKYO ELECTRON SUSTAINABILITY REPORT 202 114