Semiconductor & Device Business
MITSUBISHI ELECTRIC CORPORATION
May 29, 2024

1

Contents

1.

Executive Summary

P3

2.

Business Overview

P5

3.

Growth Strategy of Key Growth Business- Power Device -P9Growth Strategy

P10

Further Solid Initiatives to Promote Growth Strategy

P11

Strengths of SiC Power Modules

P12

Expansion of SiC Power Modules into Various Markets

P13

4.

Financial Targets for FY2026

P14

5.

Continuous Growth by Leveraging Business Synergies

P16

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1

Executive Summary3

E xe c u t i ve S u m m a r y

1. Executive Summary The FY2026 revenue and operating profit margin targets*1 for Power Device Business, the Key GrowthBusiness, were achieved ahead of schedule in FY2024
Revised FY2026 targets upwards to over 260 billion yen in revenue and over 10% in OPM, aiming for
further growth
Semiconductor &DevicePower Device

Revenue
OPM

RevenueOPM

FY2024 Actual

FY2025 Plan

FY2026 Target￥289.8 billion
10.3%￥290.0 billion
11.0%￥0.3 trillion
12%￥247.6 billion
10.3%￥250.0 billion+
10%+￥240.0 billion+ ➡ ￥260.0 billion+

10%+

 Continue to strengthen profitability and build a business foundation for the next business growth, andaccelerate growth by strengthening SiC power module capability, making the most of market expansion
 To promote growth strategy, we will strengthen vertical collaboration and alliances in the supply chain,along with enhancing production capacity, and steadily implement solid initiatives that cover material
procurement, product development and sales promotion
 SiC power module installation in electric vehicles will drive significant demand growth and expand
market opportunities into various applications

Mitsubishi Electric will contribute to the realization of GX*2 by providing highly competitive SiC power
modules leveraging our strengths across a wide range of applications*1: Announced in May 2023 *2 GX: Green Transformation
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2

Business Overview

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B u s i n e s s Po r t f o l i o

2. Business Overview

Provide key devices to support carbon-neutral, safe, secure and comfortable society for asustainable futurePower Device Business
Pursue technological evolution andcontribute to the realization of GX

Key Growth Business

High-Frequency and Optical Device BusinessResilient Business

Revenue ratio 85%

Contribute to the advancement of DX throughchanges in functions and applications

Revenue ratio 12%

Contribute to the realization of a decarbonized society and comfortable
life by implementing energy-saving power electronics equipment suchas electric vehicles, consumer products (air conditioners, etc.), industrial
equipment, renewable energy and railways

Si Power Device

 IPM
 IGBT module Power MOSFET module
 HVIC, etc.

SiC Power Device

 SBD-embedded SiC-MOSFET
module Full SiC power module
 Full SiC-IPM
 Hybrid SiC power module , etc.

Contribute to the realization of a safe and secure world and acomfortable digital society with compound semiconductor devices,
applied to various applications such as wireless communication, opticalfiber communication and sensing applications

High-Frequency Device

Satellite Communications, 5G Base Stations, Millimeter
Wave Radar, etc.

Optical Device

Optical Fiber Communication, Data Center, etc.

Infrared Sensor Device

Security, Monitoring, People Counting,
Air Conditioning, Vehicle Interior Sensor, etc.
*Revenue ratio: FY2024 actual

6Market Over view - Power Device -2. Business Overview

Power semiconductor market is expanding significantly towards decarbonization, with the SiC power
module market expected to grow rapidly《MarketMarketTrends
Environment 》

 Power semiconductor market is expanding significantly due tothe introduction of renewable energy, the transition to green
mobility, and the progress of energy conservation
 SiC power module market is expanding rapidly due to theirinstallation in electric vehicles
Power semiconductor market trends(Si、SiC)

USM$

60,0006,000

40,00030,00020,0004,000

CAGR13%（Modules）

0

No.2

3,000

FY2022
FY2027 2027
FY20282021 FY2023
2022 FY2024
2023 FY2025
2024 FY2026
2025 2026

モジュール
Modules

ディスクリート
Discretes

No.1

No.1

Our Strength

CAGR46%（Modules）

2,000

0

Consumer IPM Full SiC module
share
share for railways* All shares are actual results for FY2023, according to Mitsubishi Electric estimate

1,000

10,000Focusing on modules that require advanced technicalknow-how amongst power semiconductors, whichenabled us to maintain a top-class position in theindustry for a long period of timePower module
share

5,000

CAGR 8%(Discretes)

No.2 market share in the global power module market

SiC Power module market trends

USM$

50,000

Our Position

FY20222021 FY2023
2022 FY2024
2023 FY2025
2024 FY2026
2025 FY2027
2026 FY2028
2027*Source: OMDIA Combine design and manufacturing technologies to achieve
high performance and quality
 Extensive market achievements in power modules for both Si
and SiC A strong customer base built on a long-standing top-classposition in the industry
Provide high-quality and competitive products, byleveraging our strong comprehensive technical foundationand customer base7

Market Over view - Optical Device for Data Centers -2. Business Overview

Demand for high-speed optical devices, where Mitsubishi Electric is a market leader, is expected to
expand reflecting trends toward ultra high-speed optical networks
Market Trends《MarketEnvironment》

Our Position

 With the proliferation of cloud services and artificial intelligence(AI), the transmission speed of optical networks for data centersis advancing towards further high-speed
 Demand for optical devices capable of operating in ultra-highspeed range is expanding in the market for data centers
Optical network market trends for data centers
USM$

Ultra high-speed range(800G-1.6T)
High-speed range(400G)
Low to mid speed range(40G-200G)

14,00012,000

Our company
focus areas

10,000Satisfy the needs for high-speedtransmission required by thehyperscale data centers of major
U.S. IT companies

OthersOur
company

Our Strength Cutting edge product performance cultivated through longstanding achievements in the optical device market
 Close connections with leading companies in the industry
 Advanced manufacturing technology and know-how incompound semiconductors

8,000
6,000
4,000
2,000
0

Optical device global share for data centers: No.1*

2021

2022

2023

2024

2025

2026

2027

Sales of Ethernet transceivers for deployments in Cloud data centers

2028

2029

(Source: LightCounting High-Speed Ethernet Optics: Cloud, Enterprise And Telecom - published March 2024)

Provide innovative optical devices that lead technology
trends in a timely manner* Shares is actual results of EML to data centers for FY2023, according to Mitsubishi Electric estimate

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3Growth Strategy of Key Growth Business- Power Device -9Growth Strategy

3. Growth Strategy of Key Growth Business - Power Device -Focus on enhancing business in the rapidly growing automotive, renewable energy and consumer applications
where we are strong, while maintaining industrial and railway applications as solid business baseStrengthen the growth capability based on our long-term experience and expertise in SiC power modules, thenaccelerate business growth by making the most of market expansion
Basic Strategy
 Concentrate resources on applications where our strengths align market needs

 Expand revenue by further strengthening the automotive, renewable energy and consumer applications as growth
drivers
FY2026 target* for the mid-term plan was achieved aheadof schedule in revenue⇒Revised FY2026 target upwards to over 260 billion yen
in revenue(Revenue, OPM)

￥247.6 billion￥179.0 billion

10.3%
OPM

30%+

￥260.0 billion＋￥240 billion＋

SiC
Si

SiC sales ratio

Expand revenue by focusing onstrong SiC power module

Strengthen profitability and build a businessfoundation for the next growth

6.5%

FY202210%+

FY2024FY2026（Previous) (Updated）

FY2031* Announced in May, 2023

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Further Solid Initiatives to Promote Growth Strategy

3. Growth Strategy of Key Growth Business - Power Device -Solid initiatives to strengthen procurement, product, and sales capabilities, in addition to investing
approximately 260.0 billion yen to enhance production capacity announced in 2023
Strengthen vertical collaboration with Coherent in the US and alliance with Nexperia in Netherland to ensure
execution of the growth strategy

SiC

Stable procurement of SiC substrate
through vertical collaboration

Stabilize 200mm substrate procurement throughapprox. 75.0 billion yen investment in a new SiC
business being carved out from Coherent
SiC

Expand SiC production capacity
Construct a new 200mm SiC wafer plant in the
Shisui area of Kumamoto Prefecture
Expedite completion of the building to Sep 2025,
and start operation accordingly

SiC

Expand share through alliance

Wafer substrate
Our business

Chip processing
Our business

Discrete

ModuleReach sales channels to SiC discrete market
through strategic partnership with Nexperia

Si

Increase Si wafer
diameter to 300mm
Establish 300mm Si line at
Fukuyama Factory

SiC

Introduce innovative
new productsSi
Introduce new automotive products(J3 series) to drive growth towards
FY2031J3 series to extend driving range of xEVand simplify customer design procedures

Customers

Announced in IR Day on May 29, 2023
Initiatives announced since the above11

St r e n g t h s of S i C Po w e r M o d u l e

3. Growth Strategy of Key Growth Business - Power Device - Compound semiconductor technology cultivatedby High-Frequency and Optical Device Business
Ensured high reliability andproductivity with highly precise
screening technology

Quality
improvement

Improveproductivity

3.3kV Full SiC Module

Extensive achievements for SiC acrossa wide range of markets
1990s

World's first (Released in October 2010)

Hybrid SiC DIPIPMTM installed in room air
conditioner "Kirigamine"

2012

World's first (Released in December 2012)2015

World's first (Press released in June 2015)2019

Compoundsemiconductor
technology

Rich market
achievement

World‘s highest output (Development
announced in February 2019)
For xEV full SiC power module installed in ultracompact power unit

Low loss

Conventional Trench

Industry-leading technology forcompact designs and reduced weight

Moduletechnology

Provide module solutions,
optimized for various applications*World‘s first and world’s highest： According to Mitsubishi Electric research at the time of press releaseapprox. 50% lower resistancecompared to conventional SiC*2.
Contribute to xEV’s longer
cruising range and reduced
system costs

Strengths ofMitsubishi
Electric SiC

Hybrid SiC-IPM installed in numerical controller(CNC) drive unit
High-capacity full SiC power module installed inmain converter for high-speed railway

Chiptechnology

 Unique trench MOSFET structure,
reduces electric field, achieves

Resistance (mΩ・㎠)

Combining diverse elemental technologies (compound semiconductor technology, chip technology, andmodule technology) and our extensive achievements in the market
Advanced epitaxial growth andwafer processing technology
World's highest level of low loss*1

 J3 Series is approx. 60％ smaller
than conventional product*3
Contribute to compact
design and cost
reduction of inverters

Conventional

Smaller &lighter

J3 Series*1: For devices withstand voltage of 1500V or more. According to Mitsubishi Electric research
as of Sep 30, 2019, press release *2: Our planar MOSFET *3: J Series T-PM

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Use of SiC Power Modules Expanding to Various Markets 3. Growth Strategy of Key Growth Business - Power Device -Extensive SiC power module installation in electric vehicles will drive significant demand growth and expand
market opportunities into various applications

Contribute to the realization of GX in a wide range of applications by providing highly competitive SiC power modules
leveraging strengths cultivated from the market start-up phase
General Trend of SiC Application Field
Application
fieldsMarket start-up
phase

Cost reduction progresses
due to scale expansion

Use of SiC Power Modules
Expanding

Offshore wind power,
HVDC *

xEV
High-speed trains/
Conventional railway lines

RobotsCharging station

Current

Air conditioner（Mid to high-end）Time* HVDC: High Voltage Direct Current

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4

Financial Targets for FY2026

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F i n a n c i a l Ta r g e t s

4. Financial Targets for FY2026

Revenue
Factors Leading to Changes in Revenue and Operating Profit （Semiconductor& Device Business）
Revenue
2830億円¥289.8¥0.3

trillionbillionFY24

Exchangerate
fluctuation

LCD
Business

Power
DeviceBusiness

High-Frequency
and Optical
Device Business

FY24

12%

Exchangerate
fluctuation

Revenue
expansion

Portfolio
strategy
promotion

Productivity
improvement,
etc.

High-Frequency and Optical Device Business
Expand sales mainly on optical devices fordata centers

FY26

OPM

10.3%

Power Device Business
Expand sales mainly in the automotive,
renewable energy and consumer applications

FY26

Promoting portfolio strategy
Shift to products with matched customer value
through price improvement, product mix
improvement, etc.
Further improvements in productivity
Standardization and sharing, increase wafer
diameter to 200mm for SiC and 300mm for Si,
expand production of Si 200mm wafers at thehighly productive Fukuyama factory15

5Continuous Growth by Leveraging Business Synergies

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Continuous Growth by Leveraging Business Synergies

5. Continuous Growth by Leveraging Business Synergies

Strengthen Mitsubishi Electric Group's integrated solutions by providing key devices
Develop high-value devices from the customer's perspective, incorporating insights from internal application
business departments
 Infrastructure BA• DC power transmission• Railways• Defense/Space• Renewable energy• Uninterruptible powersystem (UPS)• Optical network

 Industry and Mobility BA• Industrial robot• Inverter, servo• xEV

Semiconductor &Device Business
Development of devices with highmarket competitivenessHighqualityHigh
Advancedperformance technology’Leading social change throughthe "evolution" and "innovation"of semiconductors'
 Provide high-value devices fromthe customer's perspective to awide range of markets
 Continuous growth of the
Semiconductor & Device business Life BA• Elevator• Air conditioner• Home appliances

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Cautionary Statement

While the statements herein, including the forecasts regarding the Mitsubishi Electric Group, are based on assumptions considered to be reasonable
under the circumstances on the date of announcement, actual results may differ significantly from forecasts. The main factors materially affecting
the expectations expressed herein include but are not limited to the following:
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Changes in worldwide economic and social conditions, as well as regulations, taxation and other legislation
Changes in foreign currency exchange rates
Changes in stock markets
Changes in the fund-raising environment
Changes in the supply and demand of products, as well as the material procurement environment
Establishment of important patents, status of significant licenses and disputes related to key patents
Litigation and other legal proceedings
Issues related to quality and defects in products or services

Laws, regulations and issues related to the global environment, especially responses to climate change
Laws, regulations and issues related to human rights
Radical technological innovation, as well as the development, manufacturing and time-to-market of products using new technology
Business restructuring
Information security incidents
Large-scale disasters, including earthquakes, tsunamis, typhoons, volcanic eruptions and fires
Social, economic and political upheaval due to heightened geopolitical risks, war, conflict, terrorism or other factors
Social, economic and political upheaval due to pandemics or other factors
Important matters related to Mitsubishi Electric Corporation’s directors and executive officers, major shareholders, affiliated companies andother stakeholders* This document has been translated from Japanese original for reference purpose only.
In the event of any discrepancy between this document and the Japanese original, the original shall prevail.