CONTENT BY THE WORLDFOLIOTokyo Electron makes R&D investment pledge toensure company’s prosperity and continuous growth
The company’s long-established commitment to technological innovation, creativity
and dreaming big means the future is as bright as ever.

“At Tokyo Electron, weembrace the conceptof Creating Shared
Value, leveraging ourcorporate expertiseto address various
social issues as wellas contributing tosociety.”Toshiki Kawai,
Representative Director,
President & CEO,Tokyo Electron Ltd.
Since the invention of transistors in 1947, the semiconductor
industry has seen the emergenceof PCs in the 90s, mobile communications in the 2000s and,most recently, significant growth
in AI-centric and virtual reality
applications. In other words, it isthe driving force behind numerous technological breakthroughs,
a state of affairs reflected by
the fact that the semiconductor
market reached USD 574 billion
in the fiscal year 2022, and ispredicted to almost double by2030 (Source: 2022 (WSTS)/
2030 (IBS, August 2023)).
Meanwhile, the so-called
MAGIC market (a term originally coined by Tokyo Electron)
encompassing the Metaverse, Autonomous mobility, Green energy,
IoT/information, and Communications (MAGIC), is also expected togrow steadily in the next decade,with demand for semiconductor
production equipment increasingaround the globe.
The semiconductor industry,therefore, is expected to have abright long-term future, but thecompanies involved in the sec-

tor need to sit tight and prepare
for the future. For its part, Tokyo
Electron (TEL), which will sooncelebrate its 60th anniversary,has set a new vision.
President and CEO Toshiki
Kawai emphasizes that TEL’s vision is to be: “‘A company filledwith dreams and vitality that contributes to technological innovation in semiconductors.’ Indeed,
we currently hold about 22,000
patents for semiconductor production equipment, making us
the industry leader.”“At TEL,” he continues, “weleverage our expertise in semiconductor production equipment
to contribute to the world’s digitalization efforts and support
environmental sustainability,
promoting the realization of amore carbon-neutral society. By
doing so, we enhance both ourcorporate value and society’ssustainable growth.”
Key here is the company’ssustained investment in R&D.
Mr. Kawai takes up the thread:“We are investing significantly
in R&D, having already invested
JPY 600 billion between FY2018
and FY2022, and with plans toinvest over JPY 1 trillion between
FY2023 and FY2027.”
So far, the investments havebeen a startling success. See, forexample, groundbreaking innovations such as etching processequipment capable of reachinga depth of 10 microns at morethan twice the speed of previous
capabilities while also consuming 40% less power.
In addition to increased R&D
funding, the firm has both expanded the production capacityof existing plants and built newplants, and plans to invest 124
billion yen in capital expenditures this fiscal year.
Mr.Kawai highlights the importance of R&D investment. “When I
joined TEL in 1986,” he says, “theJapanese semiconductor industry
held a global market share of 50%,
but when the economic bubble
burst, many Japanese firms halted
their capital investments. In contrast, our overseas customers,such as Taiwanese and Korean
semiconductor manufacturers,
persisted in their investments. We
must keep these insights at theforefront of our minds to ensure
prosperity and further growth.”

TEL will continue to cater todifferent customer needs andnew entries into the field. Mr.
Kawai again: “Our company
boasts a diverse product lineup,
leveraging various cutting-edge
technologies. From deposition,
coating/development and etching
to cleaning, we have a wide arrayof offerings. Our products areunderpinned by extensive chemical knowledge, and drawing fromthis rich expertise, we are able topresent our clients with a rangeof proposals and solutions.”
Looking to the future, the company is aiming to achieve morethan JPY 3 trillion in net sales, anoperating margin of over 35% andat least a 30% return on investment (ROE) by fiscal year 2027.
Exciting times are ahead,
meanwhile, for the country andJapanese firms as a whole. With
comparatively lower profit ratios than larger US and European companies, there is a wealthof opportunities for growth andenhancement, opportunities
that are there for the taking if
companies such as TEL can continue to demonstrate tangible
progress and growth.

CONTENT BY THE WORLDFOLIO