Business Environment and Financial Estimates
May 12, 2016
Toshiki Kawai
Representative Director, President & CEO

Business Environment► SPE Capex
CY2016 WFE* capex expected to be similar level to CY2015
 Memory: DRAM investment past its peak, 3D-NAND investment expanding Foundry/logic: Expand investment in advanced nodes from second half of 2016

► FPD Capex
CY2016 demand for TFT Array Process** FPD manufacturing equipment forecast toincrease 20% YoY, primarily for small/medium panels for mobile devices（Outlook as of April 2016）

Despite an unstable macroeconomic environment, the equipment market
is expected to be firm as it rides a wave of technological innovation* WFE (Wafer Fab Equipment): The semiconductor production process can be divided into two sequential sub-processes: front-end (wafer fabrication) and back-end (assembly and test)
production. WFE is used in the front-end production process.
** TFT Array Process: Process for manufacturing substrate that realizes display images

CORP IR / May 12, 2016

2

FY2017 Financial Estimates（Billion Yen）

FY2016(Actual)

FY2017 Estimates
1st half

2nd half

Full year

YoY change

Net sales

663.9

330.0

384.0

714.0

+7.5%

SPE

613.0

304.0

361.0

665.0

+8.5%

FPD

44.6

26.0

23.0

49.0

+9.7%

Operating income

116.7

49.0

75.0

124.0

+7.3

Operating margin

17.6%

14.8%

19.5%

17.4%

-0.2pts

-12.9

-10.0

--10.0

+2.9

106.4

39.0

75.0

114.0

+7.6

77.8

29.0

56.0

85.0

+7.2

461.10176.79341.39518.18+12.4%

Extraordinary
income/loss
Income before
income taxes
Net income attributable toowners of parent

Net income per share(Yen)

SPE: Semiconductor Production Equipment, FPD: Flat Panel Display Production Equipment

Forecasting further YoY increases in sales and profits
CORP IR / May 12, 2016

3FY2017 Financial Estimates
Net Sales(Billion Yen)
800

(Billion Yen)
100663.9
613.1

714.0

85.0
77.8

+7.5%

600

Net Income Attributable toOwners of Parent

75

400

50200

25071.8+9.1%

0FY2015FY2016FY2017(E)FY2015FY2016FY2017(E)Increase in sales to be driven by etching and cleaning systems
CORP IR / May 12, 2016

4

FY2017 Forecasts for Business Results
Influence of Kumamoto earthquakes

 No effect on booking of sales from delays in production and delivery

 We are forecasting an extraordinary loss of approximately 10 bn yen inFY2017 1st half for costs related to various expenses for disaster support andrestoration of machinery, inventories, buildings, etc.
Investment to achieve medium-term plan targets

 R&D expenses 80.0 bn yen: +3.8 bn yen YoY– Increased investment in focus areas (etch, deposition, etc.)

 Capex 18.0 bn yen: +4.7 bn yen YoY– Investment in R&D-related equipment
CORP IR / May 12, 2016

5R&D Expenses, Capex Plans(Billion Yen)
100

(Billion Yen)

60

CapexDepreciation

R&D expenses
78.6
7573.2

76.2

80.0

71.3
4050

26.6

24.8

21.7

20.8

19.2

2012.7

2500
FY13

FY14

FY15

FY16

FY17(E)FY13

FY1413.1

FY15

18.0

20.0

13.3

FY16

FY17(E)

Increase R&D expenses and capex in growth areas
CORP IR / May 12, 2016

6FY2017 Dividend Forecast
Dividend per share(Yen)300

237 yen
200260 yen
TEL shareholder return policy
Year-end
171 yen

143 yenDividend payout ratio:50%Annual DPS of not less than 150 yen
We will review our dividend policy if the company does not generate
net income for two consecutive fiscal years

100

We will flexibly consider share buybacks
Interim89 yen0FY2015

FY2016FY2017(E)Dividend per share expected to be at record highfor the third consecutive year
CORP IR / May 12, 20167 Disclaimer regarding forward-looking statement
Forecast of TEL’s performance and future prospects and other sort of information published are madebased on information available at the time of publication. Actual performance and results may differsignificantly from the forecast described here due to changes in various external and internal factors,
including the economic situation, semiconductor/FPD market conditions, intensification of sales
competition, safety and product quality management, and intellectual property-related risks.

 Processing of numbers
For the amount listed, because fractions are rounded down, there may be the cases where the total for
certain account titles does not correspond to the sum of the respective figures for account titles.
Percentages are calculated using full amounts, before rounding.

 Exchange RiskIn principle, export sales of Tokyo Electron’s mainstay semiconductor and FPD panel production
equipment are denominated in yen. While some settlements are denominated in dollars, exchange risk
is hedged as forward exchange contracts are made individually at the time of booking. Accordingly, theeffect of exchange rates on profits is negligible.
FPD: Flat Panel Display

CORP IR / May 12, 20168