Transportation Systems Segment

Results for fiscal 2020

31.8%

Deliver technologies and gratitude to customers withhighly precise, highly responding and highly efficient
power electronics, for realization of an environmentfriendly society

Segment Income (Unit: Million yen)Orders Received (Unit: Million yen)

Net Sales (Unit: Million yen)Segment Income (Unit: Million yen)

718

1,008
650

10,541

10,541 million yen (Down 19.1% year on year)

13,023

Net Sales

12,339

2,211

2,474

2,427

21,528Segment Income

2,211 million yen (Down 10.6% year on year)

Orders Received

10,597 million yen (Down 5.4% year on year)
24,26918,81821,528 million yen (Down 11.3% year on year)

Net Sales (Unit: Million yen)

27,23525,712Net Sales

26,080Orders Received (Unit: Million yen)

18,818 million yen (Down 26.8% year on year)

Segment Income
2019

2020

2021

2019

2020

2021

2019

2020

2021

Orders received decreased 26.8% compared with the previous fiscal year to 18,818 million yen, due to a decrease in orders from private
railways, Chinese customers, and overseas customers (excluding those in China), despite an increase in orders from the JR Group. Netsales totaled 21,528 million yen, an 11.3% decrease from the previous fiscal year, due to a decrease in sales for private railways, Chinese
customers, and overseas customers (excluding those in China), offsetting an increase in sales for the JR Group. Segment income decreased 10.6% from the previous fiscal year to 2,211 million yen as a result of lower net sales and profits at subsidiaries, despite the efforts to step up cost and process control.

718 million yen (Down 28.8% year on year)

We will introduce new environmentally friendly products to the market and expand theoverseas maintenance business.

Naoki Okuyama
General Manager ofTransportation Business Unit

2019

2020

2021

2019

2020

2021

2019

2020

2021

Orders received decreased 5.4% compared with the previous fiscal year to 10,597 million yen, due to a decrease in orders for processing
equipment, despite orders for testing equipment maintaining the previous year’s level. Net sales decreased 19.1% compared with the previous
fiscal year to 10,541 million yen mainly as a result of lower sales for testing equipment and power supply. Segment income totaled 718 million yen, a 28.8% decrease compared with the previous fiscal year, mainly due to lower net sales, offsetting efforts to step up cost control.

VOICE

The Transportation Systems segment will naturally continue pursuing safety and reliability of electrical equipment for
railway vehicles, which have to meet strict usage conditions, and at the same time pour our efforts on reducing environmental impact in the form of energy saving, maintenance saving, and noise reduction to provide new environmentallyfriendly products and services.
In the domestic business, there has been a growing number of customers who have chosen our new products, including driving inverters and auxiliary power supply units that realized smaller size and lighter weight as well as
noise-reduced motor and driving gear units. Going forward, we anticipate more customers will choose our new products, together with pantographs and other highly reliable electrical equipment.
As for the overseas business, the maintenance business of electrical equipment for subway trains has been launchedin China, and we will strive to expand the business and provide stable services to meet surging demand.
In North America, we reorganized our local subsidiaries in response to changes in the business environment and set
up a new maintenance business, which has started operations.
We will also continue to work towards improving profitability of the production line at the Yokohama Plant, one of ourproduction bases, by enhancing production capacity and efficiency.

9Percentage of
total net sales

BUSINESSResults for fiscal 2020

Orders Received

VOICE

Industrial Systems Segment

10,59765.0%

Support railway transportation that connects people andcities with safety and trust, through manufacturing thatmerges electronics technologies and mechanicaltechnologies in a highly advanced mannerBusiness Report

11,198Percentage oftotal net sales

BUSINESS

12,833Business Report

We will accelerate our business expansion both in Japan and overseas
to achieve dramatic development in the new era.

While sales activities, local adjustment, and other aspects of the Industrial Systems segment have been affected by theCOVID-19 pandemic that has been devastating the world from the beginning of 2020, efforts for a new era are producing steady results.
At the Shiga Ryuo Plant, we have been embedding thorough cost and process control and improving the quality control
level, raising its maturity as our main plant in three years after it was newly built. In addition, the R&D center attached tothe plant has been accumulating data for the practical application of in-wheel-well dynamo, and local adjustment ofoverseas test equipment now gets remotely completed, which confirm the increasing sophistication of the plant.
Overseas, the two local subsidiaries set up in 2019 are steadily developing their businesses for the future, despiteharsh environments. SIAM TOYO DENKI, a Thai subsidiary, is producing results in expanding its customer base, while
Chalco-Toyo Permanent Magnet Motor Co., Ltd., a Chinese motor production subsidiary, started operations in the fall of2020 and is in full swing to capture the growing demand for high-efficiency motors in China.
In Japan, inquiries for our electrical equipment are growing as corporate capital investment recovers, and demand ofproducts for small hydroelectric power generation, in which the Company has a strength, is also expanding sharply, as
the world shifts towards carbon-neutrality.
We will continue to strive for dramatic development of the Industrial Systems segment, keeping pace with new trends
in a new era.

Yoshifumi Otsubo
General Manager of Industry
Business Unit

Toyo Denki Seizo Report 2021

10Business Report

Information Equipment Systems Segment

Percentage oftotal net sales

3.2%

BUSINESS

Provision of products that make the execution of operations
on station premises and trains smooth and convenient andM2M solutions based on mobile phone networks and cloudservers using remote monitoring system

Results for fiscal 202020192020

2021

20192020

 evelopment of electrical equipment for rail vehicles with green credenDtials such as energy saving
The Company delivered VVVF inverter, totally enclosed motor, and other products forKeikyu Corporation’s new 1000 series 20th-batch rolling stock. VVVF inverter uses SiC
elements to achieve smaller size and lighter weight in comparison to the previousproduct (for Keikyu Corporation’s 2100 series), with a mass reduction of approximately
37% and a volume reduction of approximately 44%. In addition, totally enclosed motor
realizes maintenance saving, high efficiency, and noise reduction thanks to the totallyenclosed structure. The Company will continue to develop products with green credentials such as energy saving with an aim to realize a sustainable society.

2019

267

2021

2020

VVVF inverter

Totally enclosed motor romotion of the development of test equipment that contributes to thePelectrification of automobiles and autonomous driving

460
290

267 million yen (Down 41.9% year on year)

1,067

Segment IncomeTOPICS

TopicsSegment Income (Unit: Million yen)

633

1,067 million yen (Down 39.8% year on year)

Net Sales (Unit: Million yen)

1,583

Net Sales

1,611

633 million yen (Down 60.7% year on year)

1,756

Orders Received (Unit: Million yen)

1,772

Orders Received

Business Report

2021

The Company is developing in-wheel-well dynamo, a new type of test equipment for automobile development, for the purposes of evaluating self-driving vehicles, which are predicted to become widespread in the future, and replacing chassis dynamos. This equipment can beattached to the tires of an actual vehicle to simulate an actual driving test. The Company has received the first order for test equipment using in-wheel-well dynamo. Going forward, development efforts
will be carried out with a view to the applicability to self-driving
vehicle tests inside a testing room. The Company will continue
to contribute to the realization of a sustainable society, including decarbonization, by supporting automobile development.

Orders received decreased 60.7% compared with the previous fiscal year to 633 million yen, due to the impact of COVID-19 as well as anegative rebound from demand for software improvement projects associated with the consumption tax amendment seen in the previous
fiscal year. Net sales decreased 39.8% from the previous fiscal year to 1,067 million yen for the same reason as orders received. Segment income totaled 267 million yen, a 41.9% decrease from the previous fiscal year, as a result of lower net sales.
Actual vehicle test with in-wheel-well dynamo

IORemoter II, IoT terminal for remote monitoring and control systems,
enables connection with major clouds
VOICE

We will work towards expanding the Information Equipment Systems segment throughproduct development and solutions that meet customer needs, with a focus on railway
station operating equipment.

Capitalizing on the strengths in fare calculation and IC card processing technologies, the Information Equipment Systemssegment provides products ranging from railway station operating equipment such as commuter pass issuing machines
to portable terminal devices for conductors. In response to the spring timetable revision in March 2021, we modified theequipment we had already delivered and were able to complete the work without any major problems. In addition, more
railway lines and zones started using on-board IC ticket checking machines that enable the processing of IC card entry
and exit on trains. These machines are smoothly operating without disruption.
The prolonged COVID-19 pandemic has caused a slew of postponements and scalebacks in railway operators’ plansfor new and renewal projects as well as functional refurbishments, dragging out an extremely difficult situation. However, we will engage in product development with an eye on changes in the times and the post-COVID world and continue
to provide products that satisfy our customers, with the keywords of non-contact, cashless, thin client, and competitive
price.

Toshiaki Asakura
General Manager of ITBusiness Unit

11IORemoter II is a high-speed IoT terminal with a built-in 4G/LTE module. IoT remote monitoring and control of various facilities, controllers,devices, and mobile entities can be conducted faster and at a larger capacity.
IORemoter II is compatible with multi-carrier and dual SIM operation, enabling proposals for communication lines that are suitable foreach customer’s applications.
Our new initiative is to develop IORemoter II’s connectivity with major cloud computing services. It now connects with Microsoft Azure,AWS, and Alibaba Cloud IoT Platform. We are also developing connectivity with Google Cloud Platform.
Enabling connection with each cloud computing service reduces the time required for connection verification and makes system provision quicker. In addition, moresecure and high-quality systems
System configuration (e.g. Alibaba Cloud IoT Platform)
can be built. The Company willCollection
Storage
Processing (ETL)
Analysis
Use
respond to diverse needs of ourcustomers and contribute to acVisualization of simple datacelerating digital transformation.

IORemoter II

IoT Platform

RDS

DataV

Toyo Denki Seizo Report 2021

12

Business Report

Research and Development/Intellectual Property

BUSINESS

R&D to support the development of social infrastructureand supporting frameworks
Research and Development
The Group’s R&D activities are based on seeking to create products that fully satisfy our customers and challenging the creation andexpansion of these products, and we actively promote development of technologies of our existing businesses and basic technology
developments that support this development as well as development of new products that expand our businesses.
Description
To explain the effect of bogie dynamics on the adhesion and wheel slip phenomena of railway vehicles, by building a three-dimensional model,
we recreated the phenomena of false detection of slip due to torque reduction during slip and re-adhesion as well as re-adhesion failure due torepeated slips caused by insufficient torque reduction.

Development of VVVF inverter
for vehicles with high-functioning control unit

We increased the performance of control unit to almost triple the processing speed compared to before and installed a large-capacity memory. The improvements enabled high-speed re-adhesion control during slipping and sliding, high-precision monitoring data recording, and long-term dynamic recording.

Development of current
collector with ADD for overseas
markets

Building on pantographs for the Japanese market, we developed air-operated type pantograph fitted with ADD (Automatic Dropping Device).

Information
Equipment Industrial Systems
Systems

Segment

Development of in-wheel-welldynamoWe are studying the application of in-wheel-well dynamo, which can fit inside the automobile’s wheel well, to chassis dynamo. We conducted in-houseproduction of parts and a review to improve the potential of assembly operation, with mass production in mind.

Development of slender-typehigh-speed motor for EV/HEV
system tests

We are developing a motor for testing the multi-axle drive systems of EV/HEV. Using the developed motor for dynamos with a 20,000 rpm speed, thedevelopment process involves reducing the diameter of the frame and changing a part of the frame to cutout construction. Once developed, the motor
will enable tests to create the same layout as if it is installed in an actual vehicle.

Development of 690V large
capacity motor / inverter

We are developing motor and inverter for 690V power supply that can accommodate larger capacities of processing machine systems. A motor for 690V
was developed based on the existing induction motor for 400V power supply. Inverter and converter are undergoing evaluation tests on prototypes.

Development of standardized
data and programs for railway
station operating equipment

Standardized data and programs, which unified fare data (stations, fare, etc.) and fare calculation programs necessary for fare calculation to be processed by various railway station operating equipment, were completed. Standardization is expected to reduce renewal costs associated with fare revision and to improve the processing quality.

Development of IoT terminaland expansion of functions

In addition to the Company’s own existing cloud, it is now possible to connect to major cloud services such as Amazon Web Service, Microsoft Azure,and Alibaba Cloud. We started developing a next-generation IoT terminal that supports 5G, evolving IORemoter II to a next-generation terminal.

Distributed power source

In collaboration with the Industrial Systems segment, we developed software for grid interconnection inverter VF66G that has already been commercialized, to comply with the grid interconnection regulations for distributed power sources.

Support for overseas EDM
production

With the research laboratory and the Industrial Systems segment, we are assisting production to develop a range of permanent-magnet synchronous
motors CTEDM that are mass-produced by Chalco-Toyo Permanent Magnet Motor Co., Ltd., a joint venture set up in China. Three models with IP55
protection and 1,500 rpm specifications, which meet Chinese standards, were released ahead of others.

Development of automatic
deburring system for cast gearboxes

Cast gear boxes that house gear devices for railway vehicles come in a variety of types, each of which is produced in small quantity, so deburring is performed manually. This development project involved deploying a 3D sensor that acts as a human eye and automating deburring with a robotic arm.

Development of synchronous
operation system withhigh-speed Ethernet
communication

In a system that operates multiple motors in synchronization without mechanically connecting them, communication between each inverter that drives
motors was realized by a high-speed open network using Ethernet. Conventional optical fiber and other types of wiring can be replaced with one LANcable, which is expected to save wiring, reduce man-hours, and lower costs.

ResearchLaboratory

Transportation Systems

Project
Development of anti-slip
re-adhesion control
considering three-dimensionalbogie motions

Expansion of NewBusinesses

Results and topics from fiscal 2020

Intellectual Property
Our intellectual property is placed as a key corporate resource. Our intellectual property department is responsible
for the management of intellectual property and our researchlaboratory and the development divisions in each business
unit actively apply for patents and utility models.
In the overseas markets which we expect to further expand our businesses, we have started to actively engage inactivities concerning our intellectual property in order to protect our technologies and brand.

13Patent applications granted
Patent applications:
Granted cases:(Applications)

80

160
40 0
200465 27
1414

2016

0Overseas
Overseas

66

45

45

Japan
Japan

51
33

147

26242017

2018

54236

31

9937

236

27

29 34

2019

2020

20

15 16 015 162021