Transportation Systems Segment

Support railway transportation that connects people andcities with safety and trust, through manufacturing thatmerges electronics technologies and mechanicaltechnologies in a highly advanced mannerBusiness Overview
Percentage of
total net sales
69.4%

Electrical equipment for rail vehicles manufactured by the Company using its technological capability developed
over about a century covers a wide range of fields, including propulsion systems (drive systems), auxiliary
power supply and door-closing units of trains, and we contribute to the maintenance and development ofrailway infrastructure overseas, not to mention in Japan, by pursuing safety and comfort of trains.

28,199 million yen(Up 5.4% year on year)

Segment Income

3,079 million yen(Up 3.9% year on year)

TOPICSFY 20142015

2016

Development and Delivery of VVVF Inverter Using
SiC Element*1

Hiroshima Electric Railway Co., Ltd. Type 3900 trains

 eduction of 35% in both volume and mass compared with previous VVVF invertersRR eduction of workload of train drivers through setting a new function that enables
constant-velocity drive

11 Industrial Systems segment
12 Information Equipment Systemssegment
13 Expansion of New Businesses
14 Research and Development/
Intellectual Property
9Segment income increased 3.9% compared with the previous fiscal year to3,079 million yen.

Features of the retrofitted VVVF inverters are as follows:

10 Transportation Systems segment

3,079

2,964

3,117

2015

28,199FY 2014Segment Income (Unit: Million yen)

Net sales totaled 2 8,1 9 9 million yen, a
5.4% increase from the previous fiscalyear, due to an increase in Japan.

With regard to the retrofit of main circuit device of Type
3900 trains for Hiroshima Electric Railway Co., Ltd., wedelivered VVVF inverters using silicon carbide (SiC) elements instead of the conventional VVVF inverters using
reverse conducting GTO elements*2.

BUSINESS

26,757

Net Sales

Net Sales (Unit: Million yen)

26,869(Up 8.4% year on year)

29,36629,366 million yen

Orders received increased 8.4% compared with the previous fiscal year to
29,366 million yen, led by upturns in Japan mainly due to demand ahead of theTokyo 2020 Olympic and Paralympic
Games.

24,759Orders Received

27,092

Orders Received (Unit: Million yen)

Results for fiscal 2016

Type 3900 trains for Hiroshima Railway are articulated vehicles of three bodies and four trucks,
which made the debut in 1990, and directly run between inner-city lines (tracks) and the Miyajima Line (ordinary railway). Type 3900 trains equipped with the new VVVF inverters started
commercial operation from the end of February 2017.
The Company will continue to contribute to realizing an energy-saving society by expanding
the use of electrical equipment using SiC element.
*1: An element using silicon carbide (compound of carbon and silicon) as reflux diodes.
*2: An element that incorporates Gate Turn-Off thyristor and reflux diodes into one package.

2016

FY 201420152016

Establishment of a newcompany in Chengdu, China
The Company has
expanded its business in China,
chiefly the deliveryof electrical equipment for railway
A pantographvehicles of urban
transit and high-speed railway, since the late
1990s. The Company established a new production base in Chengdu, a major city in China, to further reinforce its business. The newcompany will mainly assemble and test pantographs for urban transit railway vehicles.
Company name: Chengdu Yonggui Toyo Rolling Stock Equipment Co., Ltd.
Location:

Chengdu, Sichuan Province

Establishment:

August 23, 2017Businessactivities:

Manufacture, sales, etc. of electrical equipment (mainlypantographs) for urban transit railway vehicles

Investment
ratio:

Zhejiang Yonggui Electric Equipment Co., Ltd.: 51%
Toyo Denki Seizo K.K.: 49%

Toyo Denki Seizo Report 201710

Industrial Systems Segment

Information Equipment Systems Segment

Deliver technologies and gratitude to customers withhighly precise, highly responding and highly efficient
power electronics, for realization of an environmentfriendly society

Provision of products that make the execution ofoperations on station premises and trains smoothand convenient and M2M solutions based on mobile
phone networks and cloud servers using remotemonitoring system

Business Overview

2015

2016

FY 2014

2015

2016

FY 2014

2015

2016

Net Sales

1,388 million yen(Up 45.4% year on year)

Segment Income304 million yen

Inverter

TOPICS

Further improvement of convenience and operabilityof testing equipment for automobile development~ Development of measurement control system RunView

The newly developed measurement control system, RunView, enables customers
who perform tests to conduct tests under wide-ranging conditions by freely customizing user interfaces, including intuitive operation, flexible composition andchanges/revisions of monitor displays.
The Company has developed solution systems in which inverters and machines
are combined, with a focus on the development of low-inertia, high-torque motors
as well as dynamos. The addition of this measurement control system to such solutions will enable us to respond to a wider range of requests of customers in automobile development processes.
We will strengthen our proposal capabilities to parts manufacturers, in addition
to automobile manufacturers, by further enhancing these comprehensive solutions.

11RunView
measurementcontrol system(Up 218.8% year on year)

Low-inertia
motor

TOPICS
Mechanical system
Testing systems for automobiles

Display example of
RunView measurement
control system

Net sales increased 45.4% year on year
to 1,388 million yen for a reason similar
to that for increased orders received.
Segment income increased 218.8%
compared with the previous fiscal year to
304 million yen.

FY 2014

2015

2016

FY 20142015

304

FY 20142016

95(Up 30.6% year on year)

Orders received increased 30.6% compared with the previous fiscal year to
1,788 million yen, due to the receipt of alarge-scale order for railway station operating equipment.

71

1,788 million yen

Segment Income (Unit: Million yen)

1,388

747

1,019

848

11,073

Orders Received

Percentage of
total net sales
3.4%

Net Sales (Unit: Million yen)954

747 million yen(Down 26.7% year on year)

Segment income totaled 747 million yen,a 26.7% decrease compared with theprevious fiscal year, due to a decrease insales and development costs ofmulti-functional testing equipment.

Orders Received (Unit: Million yen)

Results for fiscal 2016

1,127

Segment Income

Segment Income (Unit: Million yen)In the Information Equipment Systems segment, we operate in the two fields of railway station operating
equipment and remote monitoring systems, by merging advanced telecommunication technologies andmechatronics.
With regard to railway station operating equipment systems, we develop and manufacture commuter
pass issuing machines that quickly became IC card compliant and portable terminal devices for conductors,
and provide systems for smooth toll collection and income management system to railway operators.
Our remote monitoring systems greatly contribute to labor saving and maintenance saving of customers through realization of various equipment monitoring and position monitoring, by leveraging cloudcomputing.

1,788(Down 7.9% year on year)

Business Overview

1,369

11,073 million yen

Net sales decreased 7.9% year on year
to 11,073 million yen, due to decreases
in sales of testing equipment and processing equipment.

12,027

Net Sales

Net Sales (Unit: Million yen)

11,613(Up 6.8% year on year)

12,194

12,194 million yen

Orders received increased 6.8% compared with the previous fiscal year to
12,194 million yen, due to increased orders for processing equipment and outside Japan.

13,319Orders Received

11,421

Orders Received (Unit: Million yen)

Results for fiscal 2016

Percentage of
total net sales
27.2%

985

The Company is extensively contributing to customers at home and abroad through general industrial
machinery and equipment, testing equipment for automobile development and social infrastructure
equipment that is indispensable to the daily lives of people. In addition, we address manufacturing that
contributes to the prevention of global warming, while providing products manufactured through highsystem-building technologies that make full use of energy-saving motors, inverters, FA controllers andnetworks.

FY 2014

2015

2016

Order received for IC station terminal devices for the Bureauof Transportation of the Tokyo Metropolitan Government

We have received order for IC station terminal devices from the Bureau of Transportation of theTokyo Metropolitan Government, following the order received for commuter pass issuing machines for the Transportation Bureau of the City of Yokohama last year. The hardware of this product is a composite ticket vending machine that can handle IC card-related business processing
and singlehandedly issue a variety of tickets such as commuter passes, standard tickets, booksof tickets and special tickets. However, the specification of the IC station terminal devices is limited to IC card-related business processing and issuance of special tickets.
The terminal devices conform to the security authorization standards of the Congress of Japan Railway Cybernetics.
We will continue to develop and provide easier-to-use railway station operating equipment.

Composite ticket vending machine (separate type)

Toyo Denki Seizo Report 201712

Expansion of New Businesses

Initiatives in distributed power source (small-scale hydropower, solar, wind power, biomass, wave power, tidal power, etc.)
We have been working to safely make the most of natural energy sources such as small-scale hydropower, solar, wind power, biomass,
wave power and tidal power, by leveraging the know-how of permanent magnet synchronous generators and interconnected systems wehave developed over many years.
Take the small-scale hydropower generation system for instance. The system uses water as renewable energy, and effectively utilizes
water resources which have not been utilized before, such as agricultural waterways and agricultural dams. We will continue working on
effective utilization of various natural energy sources.

 ystem upgrades of distributed power source sysStems of Toyo Denki Seizo K.K.
Bountiful experience with power companies in Japan
Interconnected system protective function
Higher efficiency by combining with permanent magnet synchronous
generators
Islanding detection function is incorporated in inverters that support
interconnected systems
Switchable from interconnected system operation to self-supporting
operationBlack start in the absence of power source systems is possible
System upgrades of overload protection, external signal input, etc.
Output control function
A wide range of lineup with output from 10 to 750 kW, in particular,bountiful experience with output from 10 to 200 kW

R&D to support the development of social
infrastructure and supporting frameworks
Research and Development
The Group’s R&D activities are based on seeking to create products that fully satisfy our customers and challenging the creationand expansion of these products, and we actively promote

development of technologies of our existing businesses and basic
technology developments that support this development as well
as development of new products that expand our businesses.

Results and topics from fiscal 2016

Segment

Power Conditioner

Information
Equipment
Systems

We contribute to improvements of efficiency in operations through IoT/M2M solutions using mobile phone networks and cloud servers formonitoring and control.

Joint development of data acquisition and analysis systems for fuel cell lift trucks
In cooperation with TOYOTA INDUSTRIES CORPORATION, we have developed data acquisition andanalysis systems for fuel cell lift trucks. With this system, operation data is collected, stored in cloudservers using mobile phone communication systems, and analyzed. For the remote data management system owned by Toyo Denki Seizo K.K., we developed a data logger capable of on-board use,which enables real-time analysis of cloud servers and is equipped with information transmissionfunction. This system analyses and visualizes data on location information and operation states,
thereby contributing to optimization of maintenance services and improvement of merchantability.

Description
Developed our first VVVF inverter for commercial vehicles, to which silicon carbide (SiC) semiconductor is applied, for replacement of streetcars.
Developed super small-diameter induction motor and drive unit, which enable the application of theparallel cardan drive method to super low floor type trains.

Development of high-torque, superlow-inertia motor

With regard to high-torque motors used as alternative loads on the wheel side at automobile testing
facilities, developed a high-torque, super low-inertia motor, whose inertia is lowered to as low as
45% of that of conventional motors.

Development of dual bench

Developed a dual bench that can conduct evaluation tests both on torque converters and clutch
packs, both of which are automotive parts, by using our proprietary transfer mechanism. This bench
can singlehandedly conduct the two kinds of evaluation tests that previously required individual test
devices for each test.

Development of software module forrailway station operating equipment

Developed a common software module for various types of railway station operating equipment for the purpose of quality improvement. This module is also effective in reducing development costs at the time of repair.

Improvement of various ticket issuingmachines

With regard to composite ticket issuing machines and small ticket vending machines, realized addition of functions to hardware and standardization of control boards.

Basic development of control system forindustrial use, compliant with IoT

To expand overseas development of industrial equipment, developed a system with basic IoT functions
in consideration of IoT standards for plants, including “Industrie 4.0” of Germany and “Industrial Internet Consortium (IIC)” of the U.S., and built a prototype system modeled on a system in a small plant.

Research on wireless power transmission

Succeeded for the first time in the world in power supplying from coils laid in roads to in-wheel motors during the actual vehicle run. With regard to this system, our research laboratory was responsible
for the development of a converter and its controller that wirelessly transmits power via coils between
the vehicle body and wheels and between the ground and wheels as well as an in-wheel motor
mounted on wheels, and an inverter that controls the in-wheel motor. A joint paper on this research,which was mainly written by an employee of our research laboratory, won the 2017 IEEE Power Electronics Transactions First Paper Award of the Institute of Electrical and Electronics Engineers (IEEE).

IndustrialSystems

EDG Permanent magnet
synchronous generator(supports 10 - 750kW)

ResearchLaboratory

Data logger unit

Intellectual Property
Fuel cell lift trucks

Joint development of communication power generator mounted with remote monitoring system

In cooperation with Denyo Co., Ltd., we developed a communication power generator mounted witha remote monitoring system, and commenced its services. The communication power generator wasdeveloped by mounting “IORemotor,” Toyo Denki Seizo K.K.’s remote monitoring terminal, to Denyo
Co., Ltd.’s engine power generator. It enables sending email alerts in case of failure and remotemonitoring through cloud services utilizing mobile phone lines. Customers can use various functions
through ASP services. We will continue to contribute to operational efficiency through provision ofeasy-to-install and affordable IoT/M2M solutions.

Project

Development of VVVF inverter unit toTransportation which SiC semiconductor is applied
Systems
Development of parallel cardan electricalequipment for super low floor type trains

Initiatives in remote monitoring(IoT/M2M solutions)13

Research and Development/Intellectual Property

IORemoter
Communication
power generator

Our intellectual property is placed as a key corporate resource.
Our intellectual property department is responsible for themanagement of intellectual property and our research laboratory
and the development divisions in each business unit actively apply
for patents and utility models.
In the overseas markets which we expect to further expand ourbusinesses, we have started to actively engage in activities
concerning our intellectual property in order to protect ourtechnologies and brand.

Patent applications granted
Patent applications:
Granted cases:(Applications)

80
60

2554

40

52 222022203533

2013

1030
300FY622014057
16 0162015

JapanJapanOverseasOverseas

6645

4565 27
14
14

2016

01262017

Toyo Denki Seizo Report 201714