PAGETOKYO ELECTRON ANNUAL REPORT 20169CONTENTS

To Our Stakeholders

Business Overview

Medium-term Management PlanInterview with the CEO

Review of Operations
and Business Outlook

Sustainability

Financial Section

Corporate Data

Review of Operations and Business Outlook

Review of Operations and Business Outlook

Semiconductor Production Equipment
Share of Net SalesFPD Production Equipment

Business Environment

Share of Net Sales

Demand for ﬂat panel displays (FPDs) for both TVs and mobile devices each grew more than 10%

In 2015, demand for memory was ﬁrm. Speciﬁcally, demand grew for higher capacity memory as aresult of the ongoing sophistication of smartphones and data center servers, and global server(area basis) year on year in 2015. In these circumstances, capital investment in FPD production

6.7%

equipment for thin-ﬁlm transistor (TFT) array processes grew more than 20% year on year, driven

shipments increased. However, because PC and smartphone shipment volumes were less thanmainly by investment in small- and medium-sized panels. By region, capital investment in China

robust, demand for cutting-edge logic semiconductors was weak.
Net Sales

Net Sales

Given these circumstances, capital investment by foundries and logic chip manufacturers was¥ 613.0

was ﬁrm, and investment in Japan and Taiwan grew.

¥ 44.7more restrained than in the previous year, but capital investment by memory manufacturers grew.

billionBusiness Environment

billionInvestment in DRAM miniaturization grew signiﬁcantly, while the majority of investment in NAND

Business Overview

was aimed at new memory utilizing 3D structure. As a result, 2015 global capital investment in

92.3%

Segment net sales rose 36.6% to ¥44.7 billion.

wafer fab equipment held steady year on year, at US$31.5 billion.

By region, China continues to account for the majority of sales, but sales in Taiwan recovered.
Tokyo Electron’s etch systems, which have a competitive edge among products for highdeﬁnition, large-sized panels, gained market share.

Business Overview
Sales by Segment

Segment net sales grew 6.4% year on year to ¥613.0 billion, reﬂecting growth in sales ofdeposition and cleaning systems, which Tokyo Electron has been focusing on expanding.

(Billions of yen)

In deposition systems, a key part of Tokyo Electron’s growth strategy, sales of ALD* systems
for cutting-edge miniaturization grew by about 50% year on year.

800

Sales by Segment

80

Sales of cleaning systems grew by about 30% year on year, reﬂecting the steady development of business with customers of strategic products.
613.0
576.2

600

Business Outlook
69.9

Total area-basis FPD demand is forecast to continue expanding, reﬂecting rising average screen
sizes of televisions and smartphones. Going forward, OLED TVs and digital signage are also expect60

ed to see growth in usage.

Sales in the ﬁeld solutions business rose approximately 8% year on year, reﬂecting risingdemand for used equipment and parts certiﬁed by highly reputable equipment manufacturers.

478.8

477.9

By region, sales in Japan, China and Taiwan grew, reﬂecting booming investment in memory.

Sales of inkjet printing system for manufacturing OLED panels in customer’s development
lines were recorded.

(Billions of yen)

Under these circumstances, the overall market for FPD production equipment for TFT array pro44.7* ALD (Atomic Layer Deposition): An atomic level ﬁlm deposition technique392.0400rising, and that for small- and medium-sized panels growing considerably.

40Business Outlook

200

For large-sized panels, we will continue to increase sales of technologically superior etch sys-

32.7

tems compatible with metal oxide semiconductors—such as indium gallium zinc oxide (IGZO)—

28.3

With the arrival of the internet of things (IoT), simple semiconductors, such as sensors to collect allkinds of data, will be needed in great quantity, and demand for advanced semiconductors used inthat feature low power consumption and high resolution. In China, capital investment in
20.1

20

production lines for generation 10.5 ultra-large panels is planned. Using our track record in pro-

artiﬁcial intelligence (AI) and big data analytics and information processing is also expected to rise.

viding products for mass production of generation 10 panels, we aim to seize this opportunity toThis expansion of applications of both cutting-edge and older generations of semiconductors will

improve proﬁtability.

create new opportunities in the market for semiconductor production equipment, which is thus
expected to see ongoing growth in demand.

01213141516

cesses is expected to see continued growth of 20%, with capital investment for large-sized panels

In products for cutting-edge semiconductors, Tokyo Electron will continue to effectively combine
its wealth of semiconductor technologies to accelerate the development and release of next gener-

At the same time, in small- and medium-sized panels, as the adoption of low-temperaturepolysilicon (LTPS) for high-deﬁnition panels continues, we aim to increase the market share of01213141516

our new etch system released last year that is energy efficient and signiﬁcantly improves process
uniformity.

ation products. As the miniaturization of circuits continues and we approach such technologicalIn terms of OLED displays, which are gathering attention for offering high contrast andinﬂection points as the adoption of 3D structure devices, we are especially focusing efforts on etch,enabling the adoption of ﬂexible displays, Tokyo Electron’s inkjet printing systems are being

deposition and cleaning systems, for which markets are expected to grow. Tokyo Electron aims toadopted in the organic luminescent layer formation processes of customers’ development lines

ﬁrmly establish a leading position and raise its market share with differentiated, cutting-edge prod-for large-sized panels. Going forward, we will continue to contribute to the panel manufacturingucts, such as etch systems that achieve high precision processing and deposition systems that real-technologies and productivity of our customers, aiming to promote the use of this product forize both exceptional productivity and ﬁlm quality.

mass production.

With regard to simple semiconductors produced with older generations of equipment, Tokyo
Electron will leverage its installed base of over 59,000 units—among the largest in the industry—
to swiftly meet demand for older equipment sales and upgrades. At the same time, we will offer
comprehensive solutions including parts and services to improve customer productivity. By doing
so, we will further increase sales in the ﬁeld solutions business.
By meeting needs related to both cutting-edge and older technologies, Tokyo Electron will contribute to the creation of the IoT while achieving continuous growth in sales and proﬁt.