CMK CORPORATION（Stock code: 6958）

Medium-term
management plan
November 24, 2021
CMK CORPORATION1Contents
 Medium- to long term vision andmanagement Policy
 Review of the previous Mid-Termmanagement plan Current Status Recognition
and Mid-Term Management Plan Policy
 Outline of the Mid-Term Management Plan
 To Achieve the Mid-Term Management Plan
 1st Mid-Term Management Plan

 2nd Mid-Term Management Plan
・Expansion of existing business areas
・Expansion of new business areas
・Optimization of production system foraccelerating growth Numerical Management Targets
 Efforts for a Sustainable Society Supplementary information
・Market trends, technology roadmaps, etc.

・Improved productivity
・Shift to highly-added value
・Capital investment
・Analysis of changes in operating income
・Preparing for growth and acceleration of commercialization
2Medium-term management plan

1. Medium- to long term Vision and Management Policy
Medium- to long term vision:
Achievement of the safe and comfortable society by continuously supplying “the highest level of reliable PCBs” thatare adapted to new societies and values
Management Policy:

Contribution to society
Pursuit of happiness
Provision of safe and reliableproducts▲▲

7.continuation of business5. Improvement of occupancy rates
6. Efficient use of resources (purchased goods)
4. Improvement of yield and enhancement of quality
assurance system

2. A Vibrant Workplace 3. Two-Way communication and cooperation

1. fair manufacturing

To achieve

Aiming to Establish a stable profit structure and growth cycle forsustainable growth3Medium-term management plan

2. Review of the previous Mid-term management plan
In addition to the slowdown in the automotive market due to the effects of the trade friction between theUnited States and China, orders for automotive PCBs declined by the impact of COVID-19; therefore wewithdrew the quantitative target in June 2020.

1200

100Mid-Term 8.0
1000

Sales forecast
Operating income forecast

Sales results
Operating income results(8.0%)( )Operating margin%80

Mid-Term 5.5
800

600

Results 3.7(4.2%)

60(5.7%)

Mid-Term 4.0(4.3%)

40

Results 1.6

Results 1.8(1.9%)(2.3%)

20400
Results ▲1.60200-20
Results
90.2

Mid-Term
94.0

Results
82.6

Mid-Term
97.0

Results
69.9

Mid-Term
100.0

Forecast
77.00-40

FY2018FY2019FY2020

FY2021

4Medium-term management plan

3. Current Status and Medium-Term Management Plan Policy

Current Status■Although sales of products for automotive use temporarily decreased due to the impact of COVID-19,
the profit structure is improving as a result of efforts to the measures at the previous medium-term
management plan and streamlining of business operstions■Creating of the profit structure that can lead to sustainable growth needs further business structurereforms■Prepatration of medium-term growth strategy by investing in development to new businesses.

BusinessEnvironment■The high growth rate of electric vehicles is expected to help realize a sustainable society.
There is significant growth potential in the automotive PCB market over the medium to longterm (CASE demand).
■Competition for general-purpose automotive PCB is intensifying due to the expansion ofproduction capacity of competitors.
■The spread of 5G will lead to technological integration with PCBs for telecommunications

Medium-term
management
plan
policy■By improving production efficiency and further shifting the highly-added value tothe automotive product portfolio, Establish a stable profit base■Based on a stable profit base, we establish a growth cycle by increasing net sales
from CASE demand and new businesses and aim for sustainable growth5Medium-term management plan

4. Outline of the Mid-Term Management Plan
1st Medium-Term Management Plan: Establishment of the profit base through the business structute reformand prepare for the next phase of growth
2nd Medium-Term Management Plan: Accelerated growth by increasing net sales from CASE demand andnew businesses
1st Medium-Term Management Plan
(From FY2022 to FY2024)▲

Establishment of the profit base and preparation▲
for thegrowth・Improving production efficiency through the business▲structure reform
・Highly-added value shift in the automotive productportfolio (improvement of the product mix)
・Preparation for new businesses and acceleration ofcommercialization

2nd Medium-Term Management Plan
(From FY2025 to FY2026)

Accelerated of the growth・Establishment of the growth cycle
by increasing net sales from CASE
demand・Increasing of the net sales fromnew businesses

6Medium-term management plan

5. To Achieve the Mid-Term Management Plan
Roadmap to achieve net sales of 100.0 billion yen and operating income of 8.0 billion yen for FY2026（Billions of yen）
1,150

Increasing of the net
sales from CASE demand

Sales

Operating income

100.0

1,050
950

90.2
82.6

850

69.9

750
650
550
450
350

79.0

5.5

3.7

4.0

4.5

(4.2%)(5.1%)(5.6%)

1.6

150

1.8

(1.9%)-1.6(2.3%)

FY2018FY2019FY2020

FY2021Results

Results

Results

Forecast50

84.0

Preparation for new businesses andacceleration of commercialization

Lowered our break even point by the measuresat the previous medium-term management planand streamlining of business operstions

250-50

77.0

81.0

90.0
8.0
6.5

(8.0%)

92(7.2%)(6.5%)

Establishment of
the stable profit base

FY2022

FY2023

1st Medium-Term
Management Plan

FY2024FY2025

FY2026

2nd Medium-Term
Management Plan-871st Medium-term management plan

6. Improved productivity

Reorganization ofdomestic production sites
・Improved efficiency through consolidation and▲ of production systemreorganization
・Cost reduction by promoting internal manufacturing▲
・Appropriate number of personnel by bringing up amulti-skilled workers(Reduction of Fixed Expensesof Domestic Businesses)▲

Capital investment

Improvedproductivity

・ Improved productivity and quality byautomated and replacement investment
・Model change of production system
・Maintance and improvement of the stable supply

Internal innovation activities
・Promotion of the quality improvement and cost reduction activities
・cost reduction
・Motivation to work in a new way of life8

1st Medium-term management plan

7. Shift to highly-added value
Highly-added value shift in the automotive product portfolio /Increase of the profitability by improvementof the product mix ⇒Focus on Powertrain/Driving control and Safety and increase HDI production ratio
FY2018 Results

Power train/Drivingcontrol andSafety ratio(Car electronicssales)

HDI
ratio
(Sales)44%

30.4

FY2024 Mid-term

65%

45.6

FY2026 Mid-term

70%

54.3

Billion yen

Billion yen

Billion yen

29%

37%

45%

26.2
Billion yen

30.9
Billion yen

45.4
Billion yen

Model change of production system
・Increasing of HDI production ratio at the Thailand factory andproducing Multilayered Fine at the China factory・Outsourced manufacturing of general-purpose automotive PCBs.

9

1st Medium-term management plan

8. Capital Investment
24.0 billion yen capital investment< Details>< Amount >▲Production
facilities

21.0▲billion yen▲✓ Automated investment✓ Replacement investment(quality improvement, etc.)✓ Consolidation and reorganization ofdomestic production sites✓ Model change of production system

R&D andothers

3.0billion yen✓ R&D investment✓ System and others< Purpose >Improved productivity

Shift to highly-added value-10

1st Medium-term management plan

9. Analysis of changes in operating income
From FY2021 to FY2024
Operating income: 1.8 billion yen ⇒ 5.5 billion yen
Operating margin: 2.3% ⇒ 6.5%

（Billions of yen）

0.5

▲1.20.8

1.0▲▲5.52.6(6.5%)▲

1.8(2.3%)
FY2021
Increased inBusiness
Improved
Operating income profit due to the structure reform productivity（Forecast）
sales increase

FY2024
Decreasedsales prices Operating income(Mid-term)andincreased
procurement cost etc.

Exchange rate
fluctuation11

1st Medium-term management plan

10. Preparing for growth and Acceleration of commercialization
Preparation for new businesses and acceleration of commercialization【R&D site】
Name: CMK Innovation CenterSite: Niigata factory
Objective: Communication-related fields associated with technological▲innovationsuch as 5G communications, and establishment of▲component technologies required
for next-generation automotivePCBs.
Action : Establishmentof small quantity and high variety production.
▲(Reference)
General structureStructure

6 layers/1-layer HDI
TH 0.30 mm/Plate thickness 1.6 mm

22 layers/3 Layers HDI
TH 0.15 mm/Plate thickness 2.5 mm/Back Drill

22 layers (3-16-3) High aspect ratio PCB

12

2nd Medium-term management plan

11. Expansion of existing business areas
Establishment of the growth cycle by increasing net sales from CASE demand

CConnected

Autonomous

Integration with 5G communicationsAutomated operation through information gathering

By connecting to the network,
collaboration between the automobile and the IoT society begins.

With the advent of a self-driving society,increase security, safety and convenience▶ Collaboration with technology of newBusiness areas▶ Supply of the next-generation automotive
PCBs for integrated ECU< Target Item >Communication Module (Cellular), Satellite positioning system andNarrow area communication Module, DCM (Data Communication▲Module), Antenna modules, etc.

< Target Item >Integrated ECU, Camera Module and image sensor, millimeter wave
radar and LiDAR, automatic brake, Driver support systems, etc.

Electric▲S

Shared & Service
Changes in automobile utilization

Measures of Energy conservation and environmental
By moving from HEV to EV to FCV,
automobiles play a role in the energy ecosystem

From ownership to use, automobiles form the basis of various services.

< Target Item >Smart keys, Non-contact chargers, etc.

AE▶ To a pillar of the automotive productportfolio as our key business sector withcompetitive advantage< Target Item >inverter and DC-DC converter, Power Control Unit (PCU), HEV/EV ECU,
Secondary driving battery (battery), etc.
132nd Medium-term management plan

12. Expansion of new business areas
Target items and required spec in the new business areas

New business sales structure

Communication
Telecommunication

TargetItems(Sales)Computer▲FA
Car electronics▲

FY2022

FY2023

FY2024FY2025

FY2026

promotion of finalization
Impedance control of high precision circuit forming technology

RequiredSpec

0.5 mm Pitch BGA (L/S:50/50μm)

0.4 mm Pitch BGA (L/S:30/30μm)

More than 10 layers ~ 2.4 mm thick (aspect 10)

More than 16 layers ~ 3.0 mm thick (aspect 15)

Macro cell
Server SSD
Communication modules, etc.

Small Cell Local -5G (Low dielectric material)
Communication module (smartphone technology + high-frequency technology)
Power Module, Substitution of Ceramics , High Heat Resistance, Low elasticity andSpecial Structure

14

2nd Medium-term management plan

13. Optimization of production system for accelerating growth
Image of sales by region

Japan・Production of High HDI for
mainly new businesses

FY2021

China

・Production of HDI for
automotive PCB andMultilayered Fine
・Strengthening cooperation
with alliance partners

FY2021

FY2026

Thailand・Production of HDI for
automotive PCB to foreignand other customers

FY2021

FY2026FY2026▲+ Acceleration of growth through M&A and alliance15

14. Numerical Management Targets
Net sales 100.0 billion yen, Operating income 8.0 billion yen, Operating margin 8.0%, ROE 9.0%
2nd Medium-Term Management Plan

1st Medium-Term Management Plan

(Billions of yen)

FY2022

FY2023

FY2024FY2025

FY2026*Exchange rate (USD/JPY) 108.00

79.0

81.0

84.0

90.0

100.0

Operating income

4.0

4.5

5.5

6.5

8.0

operating maegin

5.1%

5.6%

6.5%

7.2%

8.0%Profit attributableto owners of parent

2.8

3.1

3.8

4.5

5.6

5.6%

6.0%

7.0%

7.7%

9.0%

4.5

5.0

5.4

5.9

6.3

Net sales

ROE
Depreciation cost

■Continue to pay stable dividends with a payout ration of around 30% in light of our financial results and performance,
while securing sufficient internal reserves we need to reinforce our management structure and expand our business further

1615. Numerical Management Targets ~Breakdown of sales~
FY2024

Breakdown(Billions of yen)

FY2026%(Billions of yen)

Change%(Billions of yen)%

Car Electronics

68.7

82%

78.5

79%

+9.8-3%

Power train/Driving control and Safety

45.6

65%

54.3

70%

+8.7+3%

Body Electronics/Climate Contorol

19.3

28%

20.4

26%

+1.1-2%

Information and Communication

3.75%

3.8

5%

+0.0-1%

Mobile communications

1.72%

1.7

2%

+0.1

-

New businesses

2.7

3%

7.0

7%

+4.3

+4%

Others

11.0

13%

12.8

13%

+1.9-

Total

84.0 100%

100.0 100%+16.0

1724. Efforts for a Sustainable Society
We are implementing the following 5 initiatives in our Medium- to Long-Term Environmental Action Plan "Smarte-changes 30," to play a role in solving global environmental issues
Smart e-changes 30
TasksActivities

Climate change mitigation

・Promotion of energy conservation activities to reduce
CO2 emissions

Waste reduction
Resource recycling

・Separation and collection to reduce waste
・Maintain zaro emission rate of 100%・Promotion of water recycling

Biodiversity conservation

・Implementation of community-based biodiversity
conservation activities

environmentally hazardous substancesmanagement

・Compliancewith laws and regulations and customer▲
requests
・Continuation of EHS management activities

Environmental pollution control

・Implement environmental risk management activities▲▲

Step 1:
Strengthening
EnvironmentalActivities toward
the Goals of theSDGs in 2030

2050

21% reduction in domestic CO2
emissions

2030

Step 2:
Reducing drastic
CO2 emissions tocontribute toclimate change
mitigation
80% reduction in CO2emissions

October 29, 2021 We submitted the application for the selection of the new market segments “Prime Market ”
to the Tokyo stock ExchangeWith regard to various ESG initiatives “Smart e-changes 30” for a sustainable society, We will review andenhance the initiatives in accordance with the Corporate Governance Code revised in June 2021 in the following
schedule
Main items

Schedule

Formulation of key sustainability issues and policies

December 2021

Disclosure of the TCFD framework for responding to climate change

June 2022

Brush-up for TCFD

After July 2022

*The details of various ESG initiatives for a sustainable society are described in the CMK Report.

https://www.cmk-corp.com/csr/report/18

17. Supplementary information

▲

▲

19

Supplementary information①Market forecast of global vehicle production（ 10,000 units ）Global vehicle production forecast
12,00010,000
8,000
6,000
4,000
2,00002019

2020

2021

2022

2023

2024

2025

2030

（Year）（Results） （Prospect） (After 2021:Forecast)xEV

Gasoline▶ Electric vehicles grow at a compound annual growth rate (CAGR) of 18.8%
from 2019 to 2030
※Source: Comprehensive Study of In-Vehicle Electronics Devices and components 2021 by Fuji Chimera Research

14Supplementary information② Trends in the PCBs for automotive use （Sales forecast by Powertrain）
sales volume（1,000㎡）
Classification

2019
Results2030
Forecast

CAGR（2030/2019）

CommentsEngine

39,60030,570HV

4,760

25,360・The PCBs used per vehicle isapproximately 0.5 ㎡ for gasoline vehicles, nearly
1㎡ for HV, and more than 1㎡ for PHV/EV/FCV
16.4％

PHV

880

11,340

26.2％

EV

1,960

14,620

FCVfew

1,000

47,20082,890

Total

▲2.3％

・The spread of electric vehicles with lower pricing,
the PCBs used per vehicle will be decreased,
however, the total number of PCBs will be
20.0％
increased at the high growth rate.
5.3％▶ PCBs for HV,PHV, EV will be increased significantly.
※Source: Comprehensive Study of In-Vehicle Electronics Devices and components 2021 by Fuji Chimera Research15

Supplementary information③Trends of Automotive PCB market（Sales forecast by type of PCBs）（1,000㎡）

PCBs for automotive use/ Sales forecast by type of PCBs
90,00080,000CAGR（2030/2019）70,00060,000■HDI
20.5％

50,00040,000■Multilayered
4.3％

30,00020,000■Double-sided
4.7％

10,000
02019

2020

2021

2022

2023

2024

2025

2030

（Year）（Results） （Prospect）（After 2021: Forecast）
Double-sided

Multilayered

HDI▶ There is a high demand for HDI PCBs.
※Source: Comprehensive Study of In-Vehicle Electronics Devices and components 2021 by Fuji Chimera Research16

Supplementary information④ Technology roadmap
Application forautomotive useProducts

HEV/EV ECU
PCU/IPM
Braking ECUBattery Control
InverterElectricmotorization

Market needs

・Downsized unit（HDI：PPBU)・High heat resistance (More than 1.5x conductive
reliabilities of consumer products)
・ High withstand voltage and High current PCB for
PHV/EV, inverter, and coil etc.
・Heat radiation（Heat radiation through PCB）
・ High withstand voltage(800 V battery voltage for EV)▲
Millimeter wave
radar sensor
ADASAutonomous↓↓↓Connected(Integration with5G)

▲2022

HDI

Mass-produced

HDI Next
Generation

Trial

Heavy copper

Trial

Heavy copper

Development

Mass-production
Massproduction

Trial

Mass-produced

MSAP

Trial

MSAP Next
Generation

Development

Mass-production
Massproduction

Trial

Mass-produced

Sensing camera

Thick RF

Trial

Mass-production

Communicationmodule(DCM・V2X)

・Multi-pin processors(Fine and high HDI)High HDI

Trial

Mass-production

・Multipin processor module(High Reliability, Fine, High HDI)High HDI

Development

・Multifunctional module (High Reliability and Fine)

Multilayered
FINE

Development

・Modules for communication equipment（5G Infrastructure and Local-5G included）

Low loss
Heat radiation

Trial

Antenna module

After 2025

Mass-production

HDIHDI2024

2023

・Downsized unit（HDI：PPBU)・High functionality (Thick RF for in-vehicle camera)＊RF：Rigid Flex

Integrated ECU
Zone ECU

5G

・Downsized unit（HDI：PPBU）
・Improvement▲
and stabilization Antenna accuracy（Improvement of circuit accuracy）
・Low loss（Application of low loss materials）
・High functionality for next generation models

PCB
requirement

Massproduction

Trial

Massproduction

Trial
Mass-production▶ In response to CASE, including 5G communications：Meeting the demand to high functionality and high reliability
for fine and high HDI

1923

Supplementary information⑤ 22 layers (3 -16 -3) High aspect ratio PCB
22 Layers (3-16-3) , Plate thickness 2.5mm Hole diameter φ 0.15 , Aspect 16
Pulse plating
Plate thickness 2.5 mm/φ 0.15

TH

BVH

Back Drill/φ 0.40

BH▲▲
Back Drill▲

24

Future-related information and descriptions in this material are justforward-looking statements and not guarantees for future achievements(Amounts are rounded, and % is rounded to one decimal place.)

END25