TDK CSR REPORT 2018

TDK Group Outline
The TDK Group is active in over 30 countries and regions all over the globe, selecting suitable bases for plants,

Third-Party Opinion

research facilities, and sales offices from the viewpoints of marketability, product range, distribution, etc. The TDKGroup consists of 142 consolidated subsidiaries—15 in Japan and 127 overseas (60 in Asia, 45 in Europe, and 22in the Americas). The Group’s total work force is 102,883 persons.

Net sales

1,271,747 million
yen

Operating income

Americas（External）

Net sales

112,929 million
yen（External）（8.9%）（Internal）

Consolidated net sales (external)（5.0%）

1,271,747million yen

EuropeConsolidated employees (internal)

Net sales

166,192 million
yen（External）（13.1%）（Internal）（Internal）

5,123

Number of
employees

Number ofemployees

85,633 million
yen102,883

8,045

Net income

63,463 million
yen

Japan
Net sales

113,743 million
yen（External）（8.9%）

Number of
employees

9,590（Internal）（9.3%）

Asia and others
Net sales

878,883 million
yen（External）（69.1%）

Number of
employees

80,125（Internal）（7.8%）（77.9%）Net sales by product segment ( fis c a l ye a r e n d e d M a rc h 2 018 )OtherCapacitors

52,342million yen

156,990 million yen

Film Application
Products

370,953
million yen

333,235

95,370 million yen

million yen

237,865

Inductive Devices

157,529 million yen

437,639
million yen

Magnetic
Application Products

Other Magnetic
Application Products

Recording devices

PassiveComponents

Other Passive Components

123,120 million yen

Sensor Application Products

77,578 million yen

To start, I would like to highlight two of the statements madeby President Shigenao Ishiguro. The first is the aim to connect electronic components to solutions and the other is hisvision of a society in which no one is left behind. The former
is the core of his management philosophy and latter lays
the foundation of TDK’s ideals. In other words, the vision ofa truly inclusive society directly informs the solutions which
TDK is producing. This fiscal year’s report foregrounds theconnections that TDK has made between the technicalstrength of its electronic components and the realization of
integrated solutions which promote a society with "no one
left behind." These connections operate on all levels of theproduction chain and exemplify TDK's corporate socialresponsibility. I would like to share my observations on how
CSR connects to such a grand aspiration. First, TDK actively looks externally for necessary assets which link technologies to solutions rather than relying solely on in-house
expertise. M&A play a critical role in this process, and one
which mandates that TDK develops its social awareness.
The investment made into these social considerations will
equip TDK to rise to any CSR challenges.
Next is the supply chain. As of this year, TDK has effectively embarked upon the Plan-Do-Check-Act (PDCA)
cycle of improvement actions. This is a commendable newdevelopment. Among the topics reviewed, supply chain
management in fiscal year 2017 was unique in that it did notmeet the set goals. With any M&A, the acquired company’s
supply chain becomes part of the supply chain of thepurchaser - suddenly expanding the scope and scale ofwhat must be managed. Though the managers responsible
for making such acquisitions a success face numerous
challenges, it is critical that all involved prioritize this goal.
In this way, each individual will be included in the effort toconnect electronics components and solutions.
And then there is the human factor. The key to TDK group’s
growth rests on shared corporate values and how they arepracticed. TDK will need leaders, more than ever before,
who can contribute to an environment with shared commonvalues and a commitment to work together toward the realization of those values. For this reason, one of the articles
in this year’s CSR Report I found particularly engaging
concerns the development of the company’s workforce. I
congratulate the company on its development of ‘trustedenablers’ (those who are trusted by others and are able toactualize the ideals). These trusted enablers personify thetype of people who can transcend national and cultural
boundaries to help create an inclusive society with ‘no one
left behind’.

I was also very interested in the interviews with engineers inthe section titled “Contribute to the World through Technology”. Each engineer’s heightened awareness and passion
for their work is palpable, and their desire to generate
high-quality solutions unites a truly global engineering
team.
Next, I would like to comment on some steps TDK can taketo add to this strong momentum. Increasing transparency,
by sharing the information that guides decision-making,will support the company’s goal of building Social Value.
In supply chain matters, though the ratio of current suppliers who meet the CSR criteria is noted, neither priorcompliance status of these suppliers nor the standards
applied appear. In next year’s report, I hope to see thesecriteria clearly identified. Ideally, the report would specify
the areas that did not meet the criteria and resulting actions taken with non-compliant suppliers.
On the environmental front, the application of the life
cycle perspective obliges TDK to investigate and report
the quantity of CO2 emissions in each production stage
including product use and disposal. Effective methodsof reduction are specific to each stage, making this information essential for the formulation and prioritization ofcountermeasures.
Finally, I believe TDK should foreground the concept of ‘noone left behind’ in its CSR policy. Management decisions
informed by a solid CSR policy link growth with values.
As such, TDK stands to benefit by clarifying the inclusive
and inter-connected future which it seeks to create; doing
so allows discernment of the decisions that facilitate therealization of such a society. By advocating measures thecompany is taking to move toward an ideal society, TDK’s
CSR and the company’s management will step forward
together as one.
Thank you for allowing me to share my opinions with you
regarding this year’s CSR report. I sincerely believe thisyear’s report does an excellent job illustrating the waysthat TDK is contributing to the future of our society - inJapan and throughout the world.

Toshihiko Fujii
Visiting Professor
Rule Making Strategy Reserch CenterTama University

million yen* Following organizational changes conducted in the first quarter of the fiscal year ended March 2018, we have newly established the report segment Sensor Application Products.
In addition, some products belonging to Other have been reassigned to Other Passive Components in the Passive Components segment, and some products belonging to Recording
Devices in the Magnetic Application Products segment have been transferred to Other.

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