FY2012 Financial Forecast andManagement Policy
Hiroshi Takenaka, President & CEOMay 13, 2011

CORP IR/May 13, 2011

FY2011 Review

FY2011 Consolidated Financial Results(Billions of Yen)FY2010FY2011YoY Change

418.6

668.7

+59.7%

Operating income

-2.1

97.8

+100.0Operating margin

-0.5%

14.6%

+15.1pts

Income before incometaxes

-7.7

99.5

+107.3

Net income

-9.0

71.9

+80.9

Dividend per share (Yen)12114+102

Net Sales

3
CORP IR/May 13, 2011

FY2011 Results▶ Net sales ¥668.7 billion, up 59.7%▶ Operating income ¥97.8 billion, up ¥100 billion▶ Profitability improved• Gross profit margin: 35.1%• SPE segment pre-tax profit margin: 23.6%▶ R&D expenses: ¥70.5 billion, record level▶ Operating cash flow: ¥83.2 billion generated▶ Executing production facility strategy•

Started construction of new Miyagi Plant•

Decided to construct new plant in Kunshan City, Jiangsu Province, China

4
CORP IR/May 13, 2011

FY2011 New Products
Introduced high performance, high productivity and low power
consumption products•

RLSA plasma etch system “Tactras™ RLSA™ Etch”•Plasma enhanced batch thermal ALD system “TELINDY PLUS™ IRad ™ SA”•

Plasma processing system “Trias™ e+ SPAi ”•

Gas chemical etch system “Certas WING™ ”•

SiC epitaxial system “Probus-SiC™”

Tactras™ RLSA ™ Etch

TELINDY PLUS ™ IRad™ SA

Trias™ e+ SPAiCertas WING™

Probus-SiC ™

5CORP IR/May 13, 2011

Business Environment

CY2011 Business Environment▶ SPE capex
Although 1st first half capex is expected to be slightly below the initial
forecast due to the effects of the Japan earthquake, expecting increase in2nd half. Because investments for NAND, Logic/Foundry are still strong,overall capex for the year is expected to increase 10%.

▶ FPD capex
Although large panel investment in adjustment phase, small and mid-sizedpanel investment for smartphones is strong and overall capex expected tobe about same level as 2010

▶ PV capex
Currently, single crystal silicon and Cd-Te strong, good future potential forthin-film silicon as conversion efficiency improves

FPD: Flat Panel Display

PV: Photovoltaic Cell

7
CORP IR/May 13, 2011

CY2011 WFE CAPEX by Application($B)

34.1B

4030
20

Logic/Foundry
+27%

10

NAND +34%
DRAM -35%02006

2007

2008

20092010

2011E

Investments for NAND & Logic/Foundry are expanding
Source: Gartner Dataquest, TEL
CORP IR/May 13, 20118

Quarterly Orders（Billions of yen）
300

SPE Order
250

FPD/PVE Order

Jan-Mar/2011
SPE155.8（+21%）
FPD/PVE 26.3（+73%）
Total:182.1（+27%）( ): change from Oct-Dec/2010% is calculated using full amounts

200

150

100

000/7-9
10-12
01/1-3
4-6
7-9
10-12
02/1-3
4-6
7-9
10-12
03/1-3
4-6
7-9
10-12
04/1-34-6
7-910-12
05/1-3
4-6
7-9
10-12
06/1-3
4-6
7-9
10-12
07/1-3
4-6
7-9
10-12
08/1-3
4-6
7-9
10-12
09/1-3
4-6
7-9
10-12
10/1-3
4-6
7-9
10-12
11/1-350

9CORP IR/May 13, 2011

SPE Orders by Application(equipment only)
100%

8
39

08/1-3

10-12

10-12

24

32

35

28
24

10192926

24

27

1151

22

23

22
91227

1639

30

26

1815

1823

23

32

15
11/1-3

45

52

4-6

39

7-9

30

55

49

10-12

15
42

152231
44

52

0
3

23

7-921

124-622

58

24

4-6

36

46

2210/1-3334115273506/1-3

05/10-120%

32

21

33

10-12

165520%816197-9637174-6127-940%

26464-660%

1509/1-3

71841181710-12372507/1-380%

3428

7-922

Logic & others (MPU, System LSI, Others）
Logic foundry
FlashDRAM

10CORP IR/May 13, 2011

FY2012 Financial Estimates

The Great East Japan Earthquake Status
Tokyo Electron Tohoku (Iwate)
Thermal Processing System
Already resumed its
operation in late March

Tokyo Electron Miyagi (Miyagi)
Etch System

Tokyo Electron Miyagi (Miyagi)
Office/R&D will open in July
Production will begin in Oct

Already resumed its operation onMay 9th

Tokyo Electron TechnologyDevelopment Institute (Miyagi)
RLSA Etch System
Already resumed its operation inlate March

All TEL group plants and facilities in affected area (Tohoku area)
are now in operations
CORP IR/May 13, 201112

Disaster Response•

Suppliers

Radiation•••

Confirmed the status of around 300 suppliers in the six
prefectures of Tohoku + Ibaraki prefecture
Responding by making operational adjustments and byusing temporarily alternative production, etc.

All equipment and parts shipped overseas are tested
Following IATA regulations(IATA: International Air Transport Association)

ElectricPower••

Summer plans: Reduce 25% from last year’s peakWill utilize solar power generation (2000kW), new turbo
refrigeration units, emergency generators and shift work.

13
CORP IR/May 13, 2011

FY2012 Financial Estimates(Billions of Yen)FY2011

1st half

FY2012 (E)2nd half
Full year

YoY change

668.7

335.0

395.0

730.0

511.3
66.7
90.2
0.4

253.0
38.0
44.0
-

306.0
38.0
51.0
-

559.0
76.0
95.0
-

97.8

35.0

65.0

100.0

+9%+9%+14%+5%+2.1

14.6%

10.4%

16.5%

13.7%

-0.9pts

Income before incometaxes
Net income

99.5

36.0

66.0

102.0

+2.4

71.9

23.0

43.0

66.0

-5.9

EPS (Yen)

401.7

128.5

240.1

368.6

-33.1

Net Sales
SPEFPD/PVE
EC/CNOthersOperating income

1. SPE: Semiconductor Production Equipment, FPD/PVE: Flat Panel Display and Photovoltaic Cell Production Equipment,
EC/CN: Electronic Components and Computer Networks
2 YoY changes and profit ratios are calculated using full amounts, before rounding.

Although there are some earthquake effects in the 1st half,
overall sales and operating profit increase YoY
CORP IR/May 13, 201114R&D Expenses and CAPEX
CAPEX

R&D Expenses（Billions of Yen）

（Billions of Yen）

10050

R&D expenses
79.0
75

66.0

4045.0

CAPEX
Depreciation expense

39.1

70.5
60.9

30

54.0
50

18.1

2025.023.0

22.7 21.4

20.0

14.9

17.7

25
1000

FY08

FY09

FY10

FY11

FY12(E)

FY12（E） R&D details
 Existing business: around 60%
 New business field: around 40%(RLSA application expansion, 3DI, OLED, Test, PV, etc)

FY08

FY09

FY10FY11FY12(E)FY12（E） CAPEX details
 New Miyagi plant New Kunshan (China) plant Process Technology Center (Korea)
 TEL Technology Center Tsukuba
 Equipment and measurement tools¥12 billion out of total investments are for new plants andnew business expansion
CORP IR/May 13, 201115

FY12 Dividend Forecast
Dividend per share (E)InterimYear-end¥45

Year total¥85¥130(Yen)

150

130

125
10050

114

10345

3855
248810

FY02

FY03

FY04

120
FY01

FY05

FY06

FY07

FY08

FY09

FY10

FY11

FY12(Forecast)

Dividend payout ratio 35.3%, expecting dividend per share increase16*Changed dividend payout ratio from 20% to 35% from FY11 year end dividend.
CORP IR/May 13, 2011

Consolidated Financial Outlook(Billions of Yen)

Net Sales

Operating income

R&D expenses

Operating margin

1,000

50%
906.0
851.9

800

730.0
673.6

40%

668.7

600

30%
508.0

16.9%

400

418.6

18.6%

20%

14.6%

13.7%

11.2%
200

143.9
75.7

49.1

56.9

168.4
66.0

10%

2.9%

97.8

60.9

14.7

54.0

100.0
79.0

70.5

-0.5%

00%
-2.1

FY06

FY07

FY08

FY09FY10

FY11

FY12(E)-200-10%

While keeping proactive investments in R&D,
improving profitability at the same time
CORP IR/May 13, 201117

Management Policy

Changes in Markets and Technology: SPEMarket changes• Customers becoming oligopolies• As mobile market expands, NAND and foundry demand
increasing• Increasing lifespan of equipment

Technology changes• Increasing complexity of technology - Double patterning, EUV,
3D memory• New Solutions— 3DI technology
19
CORP IR/May 13, 2011

SPE Business Strategy
1.
2.
3.
4.
5.
6.

Unify development and manufacturing in high growth etcher businessat new Miyagi plant
Enhance our position in the wafer cleaning market
Enhance technology differentiation of our SPE products
Pursue new technologies (3DI, test systems)
Expand field solutions business
Enhance upstream collaboration with customers

New Miyagi Plant

TEL Technology Center,Taiwan

Process Technology Center（Korea）

CORP IR/May 13, 201120

Etcher($M）

6,000
5,000
4,000

Etch market

3,000
2,000

28%

29%

2008

2009

TEL share26%

1,00002010

2011E
Market: Gartner Dataquest
TEL share: TEL estimate••••

Share slightly declined from CY2009 (due to increase in proportion of memory capex)
Oxide etcher：Expanded share in HARC for DRAMs and BEOL
Silicon etcher: Won new POR orders from several customers (including RLSA etcher)
POR net increase: Over 20 processes
21
CORP IR/May 13, 2011

Cleaning System($M)

3,000
2,500
2,000
1,500

18%

12%

1,000

Cleaning system
market14%

TEL share

50002008

2009

2010

2011E
Market: Gartner Dataquest
TEL share: TEL estimate•••

Share slightly increased from CY2009
Single wafer cleaning: succeeded in placing evaluation tools in several customers
Scrubbers share 40%, dry cleaning share 60%

22
CORP IR/May 13, 2011

Global R&D Bases

Imec (EU)TEKS (Korea)

TTCA (US)Process Technology
Center (Korea)

TEL Epion
TimbreTechnologies

TTCT (Taiwan)
TDC:
LPDC:
TDI:
TEKS:
TTCA:
TTCT:

TDC, TDI, LPDC (Japan)

Technology Development Center
Leading Edge Process Development CenterTokyo Electron Technology Development InstituteTokyo Electron Korea Solution
TEL Technology Center, America
TEL Technology Center, Taiwan

Expanding R&D functions focusing on leading edge technology
23
CORP IR/May 13, 2011

Main Businesses: Key Actions in FY2012
Coater /Developer• Maintain/grow share for immersion lithography• Develop technology with EUV lithography products in an inline
environment

Thermal processing system• Grow share and enhance position especially in Korean market• Strengthen business base through full-scale entry into ALD and othernew markets

Single wafer deposition system• Develop new products to address broad needs in metal film deposition• Establish process using Ru and lead its broad adoption

RLSA• Accelerate widespread sales for low-damage Poly etch processes• Build a ¥50 billion business including application of CVD
24
CORP IR/May 13, 2011

Main Businesses: Key Actions in FY2012
3DI• Promote evaluation and adoption of etching/deposition/bonding
tools by multiple customers• Expand sales of reverse exposure Fusion Bonder for CIS*

Test system• Further enhance profitability• Develop new systems to meet decline in test costs

Field solutions• Respond flexibly to new investment and expansion mainly in thecommodity device market• Targeting ¥150 billion sales through used equipment, modificationand service contract business

CIS: C-MOS Image Sensor

25
CORP IR/May 13, 2011

Changes in Markets and Technology: FPD
Market changes• Capex for large TV displays becoming centered on China• Active investment in small- and mid-sized displays for touch panels• Emergence of Korean equipment makers, intensifying costcompetition

Technology changes• Trend for enlarging mother glass size has peaked,
small, mid-sized ratio increasing• High definition, high speed• Post liquid crystal — OLED26
CORP IR/May 13, 2011

Establishing FPD Plant in China
Objectives
Business details• Strengthen our customer response capabilities• Enhance cost competitiveness• Preventative maintenance for electrode of FPD production
equipment for Chinese market• To become a base for modification and manufacturing ofcertain existing equipment

Location: Kunshan, Jiangsu Province

Construction start: January 2011
Planned completion: January 2012
Total investment: ¥5.0 billion

27
CORP IR/May 13, 2011

Initiatives in the Growing OLED Market

Evaporation Method

Inkjet Method

TEL own technology

Collaboration with Seiko
Epson

Precision deposition control

Separate RGB layers with one
coating

Effective use of highly organic
materials

Accumulated knowledge oflarge glass substrate production

Space saving design

High quality print technology

28
CORP IR/May 13, 2011

OLED Roadmap
2011

2012

2013

Development

Evaporation

Evaluation

Production

Development

InkjetEvaluation
Production

29
CORP IR/May 13, 2011

PV Market Forecast （2010-2020）
160

Compound type120

Thin-film silicon(GWp*)

80

Single crystal silicon

400
2010

2012

2014

2016

2018

2020

GWp (Giga watt peak) is the unit for the maximum level of output: the normal output level of one nuclear reactor is about 1GW
Source: TEL forecasts based on EPIA (European Photovoltaic Industry Association) announcement

30
CORP IR/May 13, 2011

PV Business Strategy

Productdevelopment

Inroad into
Asian market

Processdevelopment

Shipped toJapan & EU

Achieving€0.5/wp

TEL owntechnology

31
CORP IR/May 13, 2011

Establish TEL Technology Center Tsukuba
Objectives

Expected benefits• Accelerate R&D in base and core technologies• Develop technology to raise efficiency of thin film Si PVE• Collaborate with research institutes and universities etc.
in Japan’s largest research location• Promote networking with other industries• Recruit top class engineers

Location: Tsukuba, Ibaraki
Construction start： August 2011
Planned completion: March 2012
Total investment: ¥7.0 billion
Staffing: approx. 100

32
CORP IR/May 13, 2011

FY2012 Overview▶ SPE
Strengthen existing businessSpecifically, improve upon our position in etch and cleaning systems
Promote 3DI and test system business development▶ FPD, OLED, PV
Enhance competitiveness by new China plant
Upfront investment to secure medium-term growth▶ Start-up in each new facility
Miyagi, Tsukuba, Korea
Strengthen our core technologies and developments of adjacent areas,
and lead the markets in technology and products
33
CORP IR/May 13, 2011

Disclaimer regarding forward-looking statement
Forecast of TEL’s performance and future prospects and other sort of information
published are made based on information available at the time of publication. Actualperformance and results may differ significantly from the forecast described here due tochanges in various external and internal factors, including the economic situation,
semiconductor/FPD/PV market conditions, intensification of sales competition, safety andproduct quality management, and intellectual property-related risks.
Processing of numbers
For the amount listed, because fractions are rounded down, there may be the cases
where the total for certain account titles does not correspond to the sum of the respectivefigures for account titles. Percentages are calculated using full amounts, before rounding.
Exchange Risk
In principle, export sales of Tokyo Electron’s mainstay semiconductor and FPD/PV cell
production equipment are denominated in yen. While some settlements are denominatedin dollars, exchange risk is hedged as forward exchange contracts are made individuallyat the time of booking. Accordingly, the effect of exchange rates on profits is negligible.
FPD/PV: Flat panel display/Photovoltaic

34
CORP IR/May 13, 2011