Management Policies
Katsuya Sase
Representative Director, President and CEO
May 8, 2024

What TAIYO YUDEN Group aims for2

Medium-term Management Plan 2025
（From FY2021 to FY2025）

Materiality
Category

Materiality

EconomicValue• Strengthen core technologies to makeour core business growSocial Value• Strengthen measures to address
climate changeE• Use resources effectively andcontribute to creating a recycling
society

Environmental

Social ValueS
SocialSocial ValueG
Governance

SDGs Targets• Create solutions to solve social issues• Achieve health-oriented management
and work style reforms at safety firstworkplace• Train and develop human resources
based on the diversity policy• Improve management quality tosupport business growth• Establish and evolve BCM inpreparation for disasters or infectious
diseases4

Priority Measures in Medium-term Management Plan 2025
Aim to enhance corporate value through the combination of economic and social value

Product Strategy
1Further grow the MLCC business and strengthen inductor and communication
device products to turn them into core businesses- Create high value-added electronic components centered on high-end and high-reliability productsMarket Strategy
2

Increase the proportion of sales in focus markets, primarily automotive and IT
infrastructure/industrial equipment, to 50%

Financial Strategy
3

1. Continuously expand production capacity to meet increase in demand forelectronic components
2. Aim to increase returns to shareholders and realize a stable dividend payout
ratio of 30%

ESG Initiatives
4

Accelerate our efforts with numerical targets to improve our social value- (E) Response to climate change, (S) Achieve health-oriented management and work style reforms atsafety first workplace, (G) Improve management quality

5KPIs in Medium-term Management Plan 2025
Corporate Value（Economic Value＋Social Value）
Economic Value
Net sales

Operatingmargin

ROEROIC

Social Value
480billion yen

15%or higher

15%or higher

10%or higher※Exchange rate assumption：1US$=¥105

E

GHG emissions

Absolute amount
FY203042% reduction※compared with FY2020

EWasteWater usage

Basic unit (production volume)
FY202510% reduction※compared with FY2020

SSafe & secure
workplace
Optimization of groupbase functions• Creating safe, comfortable andenvironmentally friendly workplaces• Incidence rate ofinjuries and illness＜0.016• Accident frequency rate ＜0.08S• Work engagement
2.5 or higher• Rate of newly recruited
female graduates
30% or higher

Work style reforms
Diversity• Female manager ratio
FY2030 10% or higher

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Improving Economic ValueA Future Society Imagined by TAIYO YUDEN ～Towards 2025 - 2030～
The arrival of a connected world- The Social Impact of Web 3.0, Generative AI, and Digital Twins –Revolutionizing the way we live and work. As a result, there has
been an explosive growth in electronic devices and systems.

Smartagriculture

Optical / quantum
computingConstruction
site×IoT

CloudSystemsDigital twin

5G 6G
Green energy
Generative AI

FintechBase station

Smartmaintenance
Detection andprediction ofabnormality

Interconnecting
the senses
XR Working

Smart logistics
Base station

Connected Autonomous
Car-to-person
wireless communication

Electric
SharedManagementwith AI

Material/production/transport/warehouse/sales/delivery/customer inventory control• Electronic components of semiconductors are indispensable
for all electric devices.
• Fast-growing AI technology, IoT communications, and CASE.

ADAS• Sensing solutions are explosively increasing.
8Product development using material and multilayer technologies
Leverage outstanding technological expertise to supply high-end electronic
components that underpin technological evolution in such areas as 5G andelectrification of automobiles
High-capacitanceNielectrodeHighfrequency
circuitdesignMultilayer
ceramic filters

High-frequency

Multilayer ceramic
capacitors＋

Material
technology＋Cuelectrode＋

Metalmaterial

Multilayer
technology＋＋＋

Piezoelectricmaterial

Solidelectrolytematerial

Sensing devices
Actuators

Multilayer metalpower inductors

Power generation/power
storage devices
9Sales Composition by Market Sector
Consumerproducts• Game console• Smart watch• Wireless earphones

Informationequipment• Tablet device• PC• HDD, SSD

Communicationequipment• Smartphone

Targets
Focus Market

50%
Automotive

25%

IT infrastructure/
Industrial equipment
25%

Sales ratio ofgrowth market
was expanded

Automotive• ADAS• Meter cluster• ECU

IT infrastructure/
Industrialequipment• Base station
communicationdevice• Server• Security camera

Focus
Market48%*Estimated by the Company

10Product Strategy: Capacitors
Focus on high-value-added zones by drawing on industry-leading
technological expertiseStrengthen the product appeal of highreliability products and large-sized
products• Product development to meet the needs of automobiles
and IT infrastructure/ Industrial equipment
Demand forecast for MLCC (volume based)
For Automotive
Approx.
1.9 times

2025
forecast

For Server

Expand production capacity in response
to medium-term demand• In FY2023, completed the construction of new plants
and started operation in China and Malaysia• Expansion of supply capacity, focusing on high-reliability
products and large-sized products
China

2030
forecast

Approx.
2.2 times

TAIYO YUDEN (CHANGZHOU)
Malaysia

2025
2030
forecast
forecast*Estimated by the company

TAIYO YUDEN (SARAWAK)

11Product Strategy: Inductors
Increase competitive advantage in power inductors
and improve profitability by improving item mix
An extensive lineup of power inductors
built on advanced elemental technologies
Diversify our markets and customer base by expanding into thefields of smartphones, IoT, automotive, and IT
infrastructure/industrial equipment.
Structure
Material

Metal(MCOILTM)

FerriteMultilayer

Wire-wound

Smartphone
Smart watch
PC・Tablets

Smartphone
PC・Tablets
HDD・SSD

Smaller products by ouroriginal metal andmultilayer technology
Expand into ADAS↑
（Shift to metal）

Improve product mix and shift to amore profitable structure■ Metal products■ Ferrite products■ Withdrawn items

Expand sales due toincreased demand formemory module/DDR5

Automotive
IT infrastructure/
Industrial equipment
Expand sales in highreliability market

Demand forecast for
Memory Module(volume based)■ DDR5■ ~DDR4*Estimated by thecompany* “MCOIL” is a registered trademark or a trademark ofTAIYO YUDEN CO., LTD. in Japan and other countries.

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Product Strategy: Communication devices (FBAR/SAW, multilayer ceramic filters)
Pursue high-value-added businesses by making the best use of original technologies

New technology; TLSAW , HPDP
Meet the high-level technical requirements essential for theevolution of mobile devices.

*product classification: Integrated modules & devices
Upper row: size (mm), Lower row: height (mm)For discrete・TLSAW(Element technology)… Low loss, wide band, and high suppression―Under mass production, lineup expansion

Increase ratio of new products due todevelopment of new technologies
Ratio of new products
in Communication devices(monetary basis)Providing high value-added products
and development in new markets

Integration

・HPDP (Packaging technology) … Ultra-thin and high reliability―Unique metal sealing for high power resistance and highintegration

４Quad(sample)
For high-density
modules
For module

TLSAWTMTLSAWTM

2016
0.35

1814
0.15
HPDP

TLSAWTMTLSAWTM

1612
0.35

1612
0.25

TLSAWTMTLSAWTM

0907
0.35

0806
0.25

2520
0.8

２
Dual

1814
0.5

１Single1109
0.5

Smaller, thinner
Previous Package

HPDP

Expand the business in telematics, M2M, the IoT, and basestation based on smartphone market to meet the requirements ofminiaturization, thinning and high integration.
* “TLSAW” is a registered trademark or a trademark of TAIYO YUDEN CO., LTD.
in Japan and other countries.

13Product Strategy: Conductive Polymer Hybrid Aluminum Electrolytic Capacitors

Expand sales in high-value-added markets, especially automobiles*product classification : Others

Focus on high-performance conductive
Increase production capacity to meetpolymer hybrid aluminum electrolytic
growing demand in automotive market
capacitors, thereby improving profitability • Demand for automobiles is growing rapidly due toNet sales of conductive polymer hybrid aluminum electrolytic
capacitors (monetary basis)■ Hybrid■ Non-hybrid

the adoption of xEVs, electrification of powertrains,
and advancement of ADAS
• Build an efficient integrated domestic system fromproduct development to production to increase
production capacity
Demand forecast for conductive polymer hybrid aluminumelectrolytic capacitors (volume basis)

Approx.
3.3 times

forecast

forecast*Estimated by the company

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Product Strategy: Solution Development/New Business

Develop solutions to social issues by combining our original technology
and outside technical resources
Towards a carbon-freesociety through smart
mobility

Protect people with disasterprevention/mitigation

Regenerative electric
assist system forelectric assisted bicycle

River water levelmonitoring system

Travel up to 1000 km*
on a single charge

Create a Safe, Secure,
Comfortable and Convenient
Society with IoT

IoT engine “soliotTM”
Example:One-coin flood sensor
Build efficient societal
infrastructure

Cellular LPWA modules
Example: Smart meters

Note: Measurement pattern according to JIS (JIS D9115:2018) for prototype bicycles (Eco Mode 1000 km, Middle Mode 200 km, High Mode 100 km)* ”FEREMO” and “”, “soliot” are registered trademarks or trademarks of TAIYO YUDEN CO., LTD. in Japan

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KPIs (Economic Value)
Net sales(¥ in billion)

Operating margin

Target349.6
480.0 billion yen

Target15% or higher
319.5 322.6

300.9
274.3
230.7

282.3

244.1

ROE

ROIC

Target15% or higher

Target
10% or higher*Estimated cost of shareholder's equity
is 7.7%-11.2%(FYE Mar 2024)*Estimated weighted average costof capital (WACC) is 5.9%-7.8%(FYE Mar 2024)16

Improving Social ValueESG Initiatives ～E：Environmental～
GHG emissions
Conversion to 100% renewable energy
at three bases in Japan.
Installed solar power generation facilities on site.
Conversion to 100% renewable energy through energy
creation and use of renewableenergy.

Reduce GHG emissions by 42%（absolute amount）

In the business-as-usual (BAU) scenario, nearly
triples due to production increases• FY2024-: R&D Center
Sun Vertex Co., Ltd.
FY2025-: Takasaki Global Center
R&D Center(Takasaki-City, Gunma Prefecture)

Selected for inclusion in CDP’s “Climate
Change A List” and “Supplier
Engagement Rating” for 2 years in a Row
Highly rated by CDP, an international environmental NPO in
recognition for our efforts forenergy efficiency &conservation,energy creation, and the utilizationof renewable energy, climate change
countermeasures based on TCFD, and collaboration
with suppliers.

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ESG Initiatives ～S：Social～
Safe & secure workplace

One of the safest work environment
in manufacturing industry

Work style reforms/Diversity
Keep proper BMI weight
PromoteDiet
health-oriented
NonStresssmokingmanagement
No smoking
No “High”
habitsthroughstress“Focus5”

SleepExercise

Get rest by Having exercise
sleeping
habits

Newly established the diversity
development department
Number of the victims of occupational injury(at least one workday lost)
AFR =×1,000,000
Total actual number of hours worked by registered workers

Build a safer workplace through 5Ms
ManMachine
MethodMaterial

Implementation of basic educationand creation of a “safe workplace” culture
Raise the level of equipment safety
design among designers
Standardization of procedures for safe
work
Minimization of toxicity and danger ofchemical substances

Measurement Strengthening of checking system

Gender
Set fostering awareness period until
FY2025 for promotion of women’s participation andadvancement in the workplace. Held diversity training, social
gatherings, and other events. Continue to improve a
workplace environment where diverse human resource fulfill
their potential, encourage to obtain childcare leave, andsupport for career development.
Employment of people
with disabilities
Opened a café and bakery in the office

to hire people with disabilities and enhance employee
benefits..

Improvement of work engagement
Aim to be a company where employees
work with vitality in good health19KPIs (Social Value)
GHG emissions
Target for FY2030
Reduce absoluteamount by 42%*As of April 1

Waste, Water usage

Incidence rate of injuries and illness
Accident frequency rate
Targets
Incident rate (A) <0.016
Accident frequency rate (B) <0.08

Target for FY2025 (on a single-year
Reduce by 10% basis(2.0)% equivalent)(basic unit)(on a single-yearbasis(4.2)% equivalent)(B)

Waste(A)
Waterusage

Work engagement

Rate of newly recruited female graduates*

Female manager ratio*

Target2.5 or higherTarget30% or higher

Target for FY2030
10% or higher

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Capital Allocation Policy

Capital Allocation PolicyPlan to implement capital investments of ¥300 billion in total over five
years to meet increase in demand of electronic components
Medium-term management plan 2025(¥ in billion)

IN(FY2021～FY2025)

OUT

IN

OUT

FinancingIssuance of convertible bonds with shareacquisition rights to raise ¥50 billion (October,2023)

Capital investments plan
Focused investments in MLCCs. Plans forstrengthening capacity by 10-15% annually(equipment load base)
Expand production capacity of metal power
inductors and conductive polymer hybrid
aluminum electrolytic capacitors.
Investment for the environment, IT, andbuilding safe and comfortable workplaces.
(approx. 10% of the capital investments plan)

Shareholder return policy
Realize a stable dividend payout ratio of 30%
As of May 2021

As of May 2024

Implement share buybacks as necessary

22

Shareholder Return Policy
Aim to realize a stable dividend payout ratio of 30% as a medium-termtarget. Implement share buybacks as necessary

Annual cash dividends pershare (yen)Basic earnings per share (yen)

2020

2126

40

80

90

9090

46.08

138.80189.93143.04227.99433.46186.32

66.75

88.26

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Forward-looking statements
This document contains information about the plans, business results, andstrategies of TAIYO YUDEN CO., LTD. and the TAIYO YUDEN Group.
These forward-looking statements other than historical facts represent
judgments made by the Company based on information available atpresent and are inherently subject to a variety of uncertainties. TAIYOYUDEN cannot provide any guarantee as to the attainment of certain
figures in the future. The Company’s actual activities and business results
could differ significantly due to changes including, but not limited to,changes in the electronics market in which the Company’s businessactivities are centered. Readers should not overly rely on the information
contained in this document.

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