ULVAC REPORT2016
CSR & Annual Report

ULVAC, Inc.
For inquiries concerning the ULVAC REPORT:

Corporate Communications & IR Department,
Management Planning Headquarters, ULVAC, Inc.
2500 Hagisono, Chigasaki, Kanagawa 253-8543, Japan
Phone 81-467-89-2033
Fax 81-467-89-2250

www.ulvac.co.jp

Corporate Profile of the ULVAC Group•Name:ULVAC, Inc.

•Trademark:ULVAC•Head Office:2500 Hagisono, Chigasaki, Kanagawa•Established:

August 23, 1952

•Capital:¥20,873,042,500•Number of Employees: Non-consolidated 1,148
Consolidated 5,886 (As of June 30, 2016)•Business Areas:

Development, manufacturing, sale and customer support
for vacuum equipment, peripheral devices, vacuum
components and materials for the display, solar cell,
semiconductor, electronic, electric, metal, machinery,automobile, chemical, food product and medical productindustries, as well as universities and research labs, andimport and export of various equipment. Additionally,
research guidance and technical advising on vacuum
technologies in general.

Business Segments of the ULVAC Group
Vacuum equipment business
FPD and PV production equipment
Liquid crystal display (LCD) production
equipment
OLED production equipment
Roll Coater
Solar cell production equipment
●

●

●

●

Components
Vacuum pumps
Vacuum gauges
Helium leak detectors
Process gas monitor
Thin film measuring equipment
EB, RF and DC power generator
Vacuum valve
Deposition controller
Vacuum transfer robots

CONTENTS
About the ULVAC Group and Editorial Policy

1

ULVAC Group’s history

3

Interview with Top Management

5

ULVAC Group’s Value Creation Flow

9

ULVAC’s Businesses

11

Technology Topics: Special Feature

ULVAC’s vacuum technology supports energy
saving and power generation

●

●

●

ULVAC Group’s Strengths●●

Research and Development

17

Global Network

19

Customer Support

20●

Semiconductor and Electronic device
production equipment
Semiconductor production equipment
LED production equipment
Electronic device production equipment
●

●

●

●

●

●

Industrial equipment
Vacuum heat-treating furnaces
Vacuum melting furnaces
Vacuum brazing furnaces
Rare-earth magnet production
equipment
Vacuum freeze-drying equipment
High-vacuum distillation equipment
Automatic Leak Tester●

Major Vacuum Equipment
Sputtering equipment, vacuum
evaporation equipment, CVD
equipment, etching equipment, ashingequipment, ion implantationequipment, annealing equipment, etc.

●

●

●

The ULVAC Group aims to contribute to the development of industries andscience by comprehensively utilizing its vacuum and peripheral technologies
through the mutual cooperation and collaboration of the Group companies.

Management Policies• Improvement of Customer Satisfaction • A Free and Open Culture• Innovative Production Technology• Enhancement of Corporate Value• Innovative Product Development

1

Unlocking new possibilities throughthe integration of research and development

21●

Vacuum application business

Basic Corporate Philosophy

Research and Development Roundtable Discussion●●

Materials
Sputtering target materials
High-melting-point materials andproduction of components
Nano metal inks

13

Others
Surface analyzers
Controllers
Mask blanks

●

●

●

●

●

●

Editorial Policy
We have integrated the previous Annual Report and the CSR Report into this ULVAC REPORT.
We consider this report to be an important communication tool to promote understanding of
the ULVAC Group’s operating results and CSR activities among our stakeholders.
■ Published:
November 2016
(Previous Japanese edition published in December 2015)■ Guidelines Referenced:
ISO26000; 2010 (Guidance on social responsibility) first Edition
Report’s Scope and Period[Scope]■ ULVAC Group
While the report covers the ULVAC Group as a whole, any portions for which the scope
differs are indicated.
[Period]■ Year ended June 30, 2016 (July 1, 2015 to June 30, 2016)
A portion of the report includes activities and initiatives from July 2016 onwards.
(Disclaimer)
Figures shown in tables and graphs in this report may not add up to the indicated total
because of rounding. Some figures have been revised from previous years’ data because
the scope of reporting was expanded or calculating methods have been changed.

Foundations of value creation
Initiatives to Achieve Integrated MONODZUKURI

25

Interactions with Customers

26

Interactions with Suppliers

27Interaction with Employees

28

Initiatives for the Global Environment

33

Interactions with Local Communities

35

Corporate Governance

36

Board of Directors and Auditors

37

Compliance

39

Risk Management

40

CSR Activities for Fiscal 2015 andTargets for Fiscal 201641

Financial Highlights
Financial Highlights

43

Analysis of Business Results

45

Consolidated Financial Statements

47

ULVAC Report 20162

The world’s first liquid
crystal display and ULVACULVACThe spirit of the ULVAC Group,
passed down over more than 60 years

Group’s

Vacuum technology is now an indispensable part of a range of manufacturing
processes.

1973

Origin of the “ULVAC” trademark:Striving for the ultimate

As the world’s only comprehensive vacuum products manufacturer, ULVAC provides

HISTORY

products to industry and research institutions etc.
The DNA of young researchers with the ambition to “contribute to Japanese industry

Transparent conductive film deposition
equipment that contributed to thedevelopment of the liquid crystal display

1963

through vacuum technology” has been passed down to this day. ULVAC has been

Executive Director Chikara Hayashi
unveils the “ULVAC” trademark when
it is first introduced

providing the latest technology to the world for more than 60 years.

Electrical tabletop calculating device (calculator) is one of the great global hit
products created by Japanese companies, and they made a tremendous

In the 1960s, as products developed by ULVAC began to contribute toJapanese industry bit by bit, more and more advanced vacuum technology

The story of ULVAC’s establishment - the 6 angels* and ULVAC * Referring to the individual investors who invest in, advise, and guide a venture business.

became sought after.
The Company unveiled the “ULVAC” trademark in 1963, in order to clearly

ULVAC was established in 1952, which was a year in which Japandemonstrate the critical nature of the demands placed on vacuum technology.

was attempting post-war recovery and it was unimaginable that

The name “ULVAC” is an abbreviation of “ULtimate in VACuum” (striving to be

vacuum technology could form the basis for a business, let alone

the ultimate in vacuums).

contribute to manufacturing.

1952

ULVAC was established in that time period with the blessing of 6angels, led by Konosuke Matsushita, who is known as the god of

Yoshijiro Ishikawa

Gen Hirose

President of Keifuku Electric
Railroad Co., Ltd. andULVAC’s first president

President of Nippon
Life Insurance Co.

management and is the founder of Matsushita Electric Industrial

Konosuke
Matsushita
President of
Matsushita ElectricIndustrial Co., Ltd.

Co., Ltd. (now Panasonic).

changed to “ULVAC Corporation” (currently “ULVAC, Inc.”) and the Japanese
corporate name was adapted in 2001, when the brand name “ULVAC” had

who came together with the aim of “establishing vacuum
technology in Japan and contributing to Japanese industry” andinvested accordingly. These investments resulted in ULVAC (thenYoshio Osawa

Aiichiro Fujiyama

Chairman of the board of
J.Osawa Group Co., Ltd.

Chairman of the Japan
Chamber of Commerceand Industry

Japan Vacuum Engineering Co., Ltd.).

Tamesaburo
Yamamoto

1970~
1960~

1952

●

●

1955
1956
~
1959

1959

3

●

●

●

Established Japan Vacuum
Engineering Co., Ltd.
Received first order for vacuum
evaporation equipment toplate automotive parts from
Hakkosha (now Ichiko
Industries, Ltd.)
Opened Omori Plant andcommenced domestic
equipment production
Merged with Toyo Seiki
Vacuum Research Corporation(1956) and expanded
operations to become acomprehensive vacuum
products manufacturer
through the transferal ofengineers from the Tokuda
Manufacturing Co., Ltd. (1959)
Opened the Yokohama Plant

1960

●

1964

●

1968

●

Developed successive
large-scale vacuum devices
for heavy industries, such as
vacuum melting furnaces
and vacuum distillationequipment
Established ULVAC’s firstoverseas subsidiary in Hong
Kong
Completed Chigasaki Head
Office and Plant

1972

●

1975

●

2001
1990

1992
1986

●

Opened the Institute forSuper Materials as ULVAC’s
first dedicated researchfacility
Received order from IBM for
System 731, which was theworld’s first fully automatedvacuum evaporationequipment

The MCH Series, which was
the world’s firstmulti-chamber sputtering
equipment, received positive
reviews from many
semiconductor
manufacturers

Opened the Fuji Susono Plant
as a specialist semiconductor
manufacturing equipment
plant● Released the SMD series ofsingle substrate film deposition
equipment, which became thebasis for ULVAC’s FPD (flatpanel display) business●

2004

Opened the Institute of
Semiconductor and Electronics
Technologies● Changed company name to
ULVAC, Inc.
● Completed the new Chigasaki
Head Office and Plant building
aimed at development and trial
manufacture of large liquid crystal
display manufacturing equipment
●

1995

●

The SHD Series of hard disk
manufacturing equipment
was a global hit

and production equipment, which was a key to the manufacturing process for
the Sharp hit product ELSI MATE EL-805 LCD calculator. Leveraging thisexperience, ULVAC gained the top global share of display device manufacturing
equipment for LCD flat-screen TVs.

Joined first section of the Tokyo
Stock Exchange● Established a dedicatedproduction center for vacuum
equipment in Suzhou, China●

Established a vacuum pumpproduction center in China anda sales and service center inSouth Korea

De-facto standard for sputtering equipment forflat panel displays (FPD)

2010~

2005~
2005

2006

2007

2008

●

1988

In 1973, ULVAC perfected the transparent conductive film trial manufacture

1990~

President of Asahi
Breweries, Ltd.

1980~

crystal display manufacturing technology to take hold domestically.

become well-known by many users.

2000~

researchers such as Jin Imachi, Chikara Hayashi, and Hideo Shibata,

contribution to Japan by allowing cutting-edge semiconductor and liquid

In 1969, the corporate name “Japan Vacuum Engineering Co., Ltd.” wasThe 6 angels were moved by the devoted passion of young

1952~

The world’s first LCD
calculator display

Established a large-scale
production center for large
liquid crystal display
manufacturing equipment inSouth Korea● Established a production
subsidiary for large liquid
crystal display manufacturing
equipment in Taiwan● Opened the Chiba Tomisato
Plant to handle development
and production of materials● Received order for a thin-film
photovoltaic modules
production turnkey line
● Developed the Magrise
mass-production system forrare-earth magnets andthin-film lithium rechargeable
battery integrated
mass-production technology
as post-FPD businesses

2011

●

2012

●

Established the South
Korea Institute for Super
Materials in South Korea

●

2014

2015

2016

Celebrated theCompany’s 60th
anniversary● Established ULVAC
VACUUM EQUIPMENT(SHANGHAI) CO., LTD. in
China● Established the Future
Technology ResearchLaboratory●

ULVAC (SUZHOU) CO., LTD.
began manufacturing
production equipment
for large displays

Latest model “SMD-3400”

The continually evolving SMD Series
Since they first went on sale in 1992, ULVAC has boasted a market share ofdelivered. The latest model can accommodate super-large substrates,

over 80% of the world’s sputtering equipment for FPDs, and “SMD Series”,

known as G10.5, which exceed 3 m in length. Going forward, we aim to dowhich is a favorite of many customers, has continued to evolve along withan even better job of meeting the needs of our customers.

the expansion of substrate glass sizes. In 2012, we exceeded 1,000 total units
ULVAC Report 20164

advanced electronic devices, power devices, and high-density mounting.

Consolidated Business Results (unit: billion yen)Interview with Top Management

June 2015 Results

We are aiming to increase our corporate value by
harnessing the power of diverse human resources andexpanding the range of and deepening integration activities.

June 2016 Results

Year on year

In the industrial equipment market, we forecast a certain level of growth,
but do not anticipate major growth, as the economy remains uncertain

Orders received

182.7

223.6

40.9
(+22%)Net sales

179.2

192.4

13.3
(+7%)

Operating profit

11.1

17.9

6.7
(+60%)

Operating profit to net sales

6.2%

9.3%

Ordinary profit

12.5

18.4

Ordinary profit to net sales

7.0%

9.5%

Net income attributable toowners of parent

8.9

16.7

in China and emerging countries. In the FPD production equipment
market, capital investment in organic LED is expected to increase, butinvestment in large TVs is expected to experience a temporary
slowdown after having reached a peak in Fiscal 2015.

5.9(+47%)
7.8(+88%)

Even while our earnings environment becomes increasingly
severe, due to such factors as the fierce cost competition caused by
the strong yen, we will steadfastly respond to changes and grasp newopportunities. In the fiscal year ending June 2017, we anticipate orders
worth ¥185.0 billion, net sales of ¥194.0 billion, operating profit andordinary profit of ¥18.0 billion each, and net income attributable toc o n t i n u o u s t r e n d t o w a r d h i g h e r- p e r f o r m a n c e , t h i n n e r

the knowledge that we have so far cultivated in the ULVAC Group, such as

smartphones, but due to the declining growth of sales quantities,

past manufacturing data and technical specifications, and ensuring thata general wariness toward capital investment was observed

thorough precautions are already in place in the early stages of operations.

among electronic component manufacturers. LCD production

By taking this approach to meticulously pursue quality in the early stages

equipment, on the other hand, benefitted from a concentration ofof operations, we have been able to prevent additional costs andactive capital investment. Investment in organic LED also showedsignificantly improve our profit-earning capacity. Furthermore, we

signs of improving, and maintained a higher level than in thedesignated the year ended June 2016 as the first year of Group-wide

previous fiscal year.

integrated management, and promoted efficient management

Results

Forecast

194.0

200.0

192.4

150
100
50

Year ended
June 2015

Year ended
June 2016

Year ending
June 2017

Operating profit (consolidated) (unit: billion yen)
Plan

Results

Forecast

20
15

18.0

"Front Loading" realizes trouble-free, stable manufacturing by gathering

Plan

200

16.0

The electronics market, in which the ULVAC Group operates, saw a

Net sales (consolidated) (unit: billion yen)

17.9

capacity by implementing“front loading*” andpromoting Group-wide
integr ated management.

Progress of the medium-term management plan(from the year ended June 2015 to the year ending June 2017)

190.0

Please tell us about the business environment and results

owners of parent of ¥12.0 billion.

179.2

Q1 for this consolidated fiscal year (year ended June 2016).
achieved
A1 We
record-high profits.

Q2 year (year ended June 2016)?
have strengthened
A2 We
our profit-earning

175.0

Looking back on the fiscal year ended
June 30, 2016

How do you rate your results for this consolidated fiscal

fiscal year ended June 30, 2016 showed a year-on-year increase inbeen able to foster a sense of group solidarity that goes beyond theboth orders received and net sales, with orders received

boundaries of each company, as well as integrate our Group’s production

amounting to ¥223.6 billion (a year-on-year increase of 22%), andframework. This has maximized our profit and pushed forward our efforts

net sales totaling ¥192.4 billion (a year-on-year increase of 7.0%).

to create an organization conducive to accumulating advanced

With regard to profit and loss, operating profit, ordinary profit andtechnologies within our company, and is another significant achievement.

* The plan figures are those that were announced in August 2014.

Outlook for the fiscal year ending June30, 2017 and progress of the mediumterm management plan

Q4 medium-term management plan.
will promote Expand theA4 rWeangeof and deepen

5

9.0

10

Year ended
June 2015

13.0

particularly in our production departments. As a result, I believe we have

11.1

In this business environment, the consolidated results for theYear ended
June 2016

Year ending
June 2017

net income attributable to owners of parent all exceeded thetargets under our initial plan at the beginning of the term, with anoperating profit of ¥17.9 billion (a year-on-year increase of 60%),
ordinary profit of ¥18.4 billion (a year-on-year increase of 47%) andnet income attributable to owners of parent of ¥16.7 billion (ayear-on-year increase of 88%).
In addition to achieving the above results, we also aimed topromote financial soundness, and were able to purchase and cancel
all of our remaining class A classified stock (¥10 billion capital) in
July 2015. Our balance sheet has slimmed down as a whole, but weshall continue to increase our equity ratio and strive to be a

Hisaharu Obinata
President and Chief Executive Officer

company capable of adapting to changes in the businessenvironment. Based on our performance for the year ended June
2016, we have increased our dividend payments for the term by ¥20

Q3 June 2017.
adapting to changes inA3 By
our earnings environment,

Please tell us about the outlook for the fiscal year ending

we forecast the samestrong level of sales andprofit as last year.

"integr ation" activities in all
our departments and delivercompetitive, high-value-added
products to the world.

As fiscal 2016 is the final year of our medium-term management plan,
we are making every possible effort at this very moment to achieve
the earnings we have projected. We set a policy of expanding therange of and deepening "integration" activities in fiscal 2016.

compared to the previous fiscal year, and paid out ¥30 per share.

5

Please tell us about your efforts for the final year of theWe expect future growth in the semiconductor and electronic

Expanding the range of "integration" activities means all ourcomponent market, which includes 3D-NAND and non-volatile memory,

departments, including the production departments as well as the* "Front Loading" generally means placing a larger proportion of the burden (load) at the beginning (front) of an operation and performing alarge part of the operation in the early stages. This approach ensures quality by allowing problems to be identified as early as possible.

ULVAC Report 20166

development, sales, and head office departments, will endeavor towhich our Group’s products and technology can contribute arecharacterized by flexible thinking and an open and dynamic spirit.

My aim is for us to continue to be a corporate group that creates

We believe human resources development is an essential element

new value in response to the times and is truly needed by society, by

and produce results as a integrated group. It also means we must

Although we face various social issues, we aim to make aof our organization, and have implemented a variety of specialized

bringing together our manufacturing capability and the power of ourdepart from our conventional emphasis on sub-optimization andcontribution in mainly two fields. One of these is the energy-saving

programs for professional production related training, including

employees who support it, and firmly rooting them in a corporate

instead place priority on total optimization from a consolidated

and power generation field. Today, there is mounting concern about

education for manufacturing professionals, engineers, and designers,

culture that places top priority on safety and quality. I will build a stable

perspective and pursue the ultimate in efficiency. Deepening

the depletion of energy sources due to the increasing population. We

to ensure that our engineering skills is handed down to the next

corporate structure that is conducive to expanding our business in a

"integration" activities means gathering the wisdom of our Groupwill use our Group’s technology to solve this deepening social issue.

generation. In Fiscal 2015, we concentrated on establishing programs

sustainable manner and continually increase our corporate value.

companies in marketing, development, production, and field services,

Vacuum equipment is indispensable to the production of powerfor instructor development and engineer education. In Fiscal 2016, weand creating and delivering new added value to the world. Due to thedevices, such as those that save energy by controlling large electricalare now preparing an e-learning program for engineers, and we areadvancement of globalization and commoditization, the vacuum

currents, solid-state batteries that store electricity, and long-life, high-pushing forward our plan to create an “ULVAC Academy.”equipment industry faces severe cost competition today. To escapebrightness LEDs. Various types of vacuum equipment are also used in

We also promote working styles that allow our employees tofrom this situation, we must develop a new lineup that offers greater

the production process of solar cells, the representative solution tomaintain a good work-life balance, and are aiming to create

added value and is more competitive than ever before. Thus, in Fiscal

power generation. Thus, we will implement a priority energy project

workplaces that are employee-friendly. We have produced steady

2016, we have continued to work to create even higher added value

in the four areas of power devices, high-brightness LEDs, high-results by granting our employees annual paid leaves from the day

by increasing capital investment in research and development andefficiency solar cells, and automotive related technology.

they join our company, launching campaigns that encourage them topromote integrated management, and will aim to improve efficiency

R&D budget.

ULVAC’s mission and value creation

Q5 What are your thoughts concerning ULVAC’s mission?
believe our mission is toA5 Icontributeto society with
cutting-edge technology.

expanding at a rapid rate.

The second field that we will contribute to is the field related totake spot-leaves, and implementing a host of other relevant measures.
Another characteristic of our company is the high rate at which ourOur company has faced countless difficulties over the years, but has

highly information-oriented society, represented by the acronym “IoT,”

female employees take parental leave and subsequently return toovercome them all to grow into a leading company in vacuum

we are focusing our efforts on four projects related to display-related

work. However, our efforts will not stop there. We will continue totechnology. From our founding to the present, we have continued totechnology, non-volatile memory, hyperfine wiring, and high-density

take measures to further promote diversity in the future.

exist thanks to our predecessors, who laid the foundation of theaddition, it is our utmost duty to contribute to society through the
ULVAC Group’s greatest strength, which is cutting-edge technology,
while fulfilling our responsibility to all of our stakeholders.
Since our establishment in 1952, at ULVAC, we have dauntlessly
challenged ourselves to create new value that is demanded by the times,
seeking out the infinite possibilities of vacuums, and refining technology

company, and to our stakeholders, who have supported us all the way.

mounting. We have also launched a project that involves electronic
components and MEMS. MEMS technology is extremely important tothe creation of communication devices and sensors that support the
IoT age. With our Group’s advanced processing technology related tothese areas, we can make significant future contributions to our
information-oriented society. By designating these two fields related
to energy and information technology as priorities for our Group, we

Q8wish to continue
A8 We
to be a presence that

Please tell us about the kind of group ULVAC aspires to be.

creates new value andis needed by society.

Q7 upholds.
are building
A7 We
an organization

Please tell us what values or principles your organizationthat embr aces diversity
and is worth working for.

I wish to take this opportunity to express anew my sincerest gratitude
to everyone. By further improving our channels of communication
with you, I hope you will favor us with your understanding and walkalongside us as we forge our way into the future.
The sight of people working hard to do what they must, strikes
the hearts of others around them, and naturally attracts support. The
same is true of companies. I realize that unless each and every one ofus makes every effort to deal with what lies in front of us, ourrealization of a rich and safe lifestyle for people all over the world.

aware that we only exist because of society at large, so we work on
the premise that we must be a company that is valuable to society. In

feelings of gr atitudeetched in my heart.

advanced information technology. As we increasingly become awill aggressively promote technological development toward theCompanies are said to be a public instrument of society, and we are

Q9 Lastly, please give a few words to your stakeholders.
will devote myself to ourA9 Ibusinessactivities, with

I believe business management is about ensuring safety, quality andcompany cannot expect to receive your understanding. Only byprofits, in that order. Without safety and quality, we cannot expect toworking faithfully, with enthusiasm, can we gain the support ofproduce profit. If we merely pursue profit and neglect safety, we may

people around us and realize our significance. Furthermore, to bemeet with an accident somewhere down the line and inconvenience

recognized from outside the company for standing firm to thissociety. If we neglect quality, we stand to lose our customers’ trust.

conviction will increase our corporate value.

Therefore, we must build a strong foundation of safety and quality

Thus, we will make ongoing efforts to be a company that is

before we can begin to pursue profit. This, I believe, is the essence ofneeded by society, and ask for your continued support andbusiness management.

cooperation.

that freely manipulates vacuums, based on our corporate philosophy of“contributing to manufacturing and science through vacuum technology.”

The globalization of the economy has also taken down the barriers

In addition, a diverse range of fields utilize the vacuum technology thatbetween nations with regard to human resources, and mutual

we have developed, including semiconductors, electronic components,

understanding of different races, cultures and customs has becomeflat-panel TVs, solar cells, automobiles, pharmaceuticals, food, and science,

more important than ever before, such that each and every one ofand it is a fundamental technology that is indispensable for theus is expected to be tolerant of diversity. In our Group, we haveadvancement of many industrial fields and science.

established measures for providing oppor tunities to makepresentations and a system of awards that turn the spotlight on

Q6 in the future?
hope to contribute toA6 We
society in the fields of

In what specific fields do you hope to contribute to societyenergy and IoT.

employees in all job categories, and have created a personnel
system that values professionalism, for example, with respect fordiversity. I believe having a system that rewards people who makegreat effort is the key to revitalizing both individuals and theorganization. That is why we employ a system of management by
objectives and evaluation systems that do not focus solely on
results, but rather acknowledge and encourage employees’ boldIn recent years, global environmental problems and other suchchallenges to address difficult issues and initiatives to work as acomplex social issues have become prominent, and the fields inteam. We also take pride in our corporate culture, which is

7

ULVAC Report 20168

13-p16)
p
(
s
d
fiel

ULVAC Group’s Value Creation Flow
Ener
gy s
avi
ng
an
dp
o

Highefficiency
solar cells

MedicalCare

LEDs

Environment

Nextgeneration
automobiles

Powerdevices

Since ULVAC was established, we have dauntlessly challenged ourselves to create new valuethat is demanded by the times, seeking out the infinite possibilities of vacuums, and refining
technology that freely manipulates vacuums.

s
rea
ea
tur
Fu

Contributing to the progressof society by tackling social
issues through the provision of
products and technology

ion
rat
e
n
ge
r
Highwebrightness

NewenergyContributing to theprogress of society byproviding value in a range ofdifferent fields

We provide products and technologies that contribute to the solution of social issues throughElectronic
components
and MEMS

our three strengths of “research and development,” “global networking,” and “customer
support,” in order to respond to the needs of customers and the market. Furthermore, we will

Hyperfinewiringcontribute to the progress of society through sustainable expansion and continual
improvement in corporate value in order to be an institution that is valued by society.

Nextgeneration
non-volatilememorySop

Research anddevelopment

ULVAC’s Vacuum
Technology

histi

Revolutionary andadvanced vacuum
technology paving theway for the future

Vacuum generally refers to a space with a pressurethat is lower than the atmospheric pressure.
In a vacuum, if the pressure is lowered, theboiling point of substances decreases, and gas
molecules pass directly
straight through the space.
ULVAC utilizes these properties of
vacuums, develops technology, andseeks the limits of the possibilities
provided by vacuums.

Nextgeneration
displayscate dHighdensity
mounting

information field

Vacuumtechnology

Globalnetworking

Customer
supportSolution networks that
support global
industrial
development

ULVAC’s strengths

ULVAC CS Solutions
focuses all of theGroup’s knowledge

P17

Value chain
Research and development

Needs of customers
and the market• Responding to the IoT• Miniaturization and thinning• Energy Saving• Network diversification• Higher performance

Manufacturing

Sales

After-sales support

Foundations of value creation
P25 Initiatives to Achieve Integrated
Manufacturing
P26 Interactions with Customers•Earn the trust of stakeholders •Increase corporate value

ULVAC Groupand sustainablesocial progress

P27 Interactions with Suppliers
P28 Interaction with Employees
P33 Initiatives for the Global Environment
P35 Interactions with Local Communities

9

P36 Corporate Governance

ULVAC Report 201610

ULVAC’s Businesses
ULVAC has provided many products and technologies in a broad range ofindustries to meet the needs of our customers and the market.
At present, ULVAC operates in 6 business areas.

Vacuum equipment business

FPD and PV production equipment
ULVAC is involved with a range of FPD*1 and PV*2 manufacturing technologies, and in addition to thedevelopment of production equipment, we provide global solutions through the development of materials.

Proportion of
net sales per
businesssegment

Components

43%*1 FPD: Abbreviation for “flat panel display”*2 PV: Abbreviation for “photovoltaic,” which refers to solar power generation

Main Products
FPD production equipment• LCD production equipment• OLED production equipment• Roll Coater

PV production equipment• Crystalline silicon solar cell
production equipment• Compound solar cell production
equipment

Sputtering equipment,
Vacuum evaporation equipment,
CVD equipment, Ion implantationequipment, Encapsulationequipment for OLED, etc.

Product Use• Thin-film deposition during the manufacture of LCD and OLED panels• Luminescent layer deposition, etc., during the manufacture of OLED panels

LCD production
equipment• Thin-film deposition during the manufacture of solar cells• Thin-film deposition for various types of films
Proportion of
net sales per
businesssegment• FPD, semiconductor andelectronic device manufacturers• Vacuum equipment manufacturers• The general manufacturing industry• Research institutions, universities,
and public agencies• Evacuation and pressure measurementof the vacuum chambers of vacuum equipment• Evacuation of vacuum suction lines• Testing for leaks from vacuums using He• Analysis within vacuums

16

%

%

Leak detector

Cryo pump

Industrial equipment• Thin-film deposition during the manufactureof semiconductors, etc.
• Thin-film deposition and microfabrication,etc., during the manufacture of electronic
devices.

Sputtering equipment forelectronic devices• EB, RF, and DC power generator• Vacuum valves• Deposition controllers• Vacuum transfer robots

13

Product Use

OLED production equipment

Product Use

Sputtering equipment, vacuum
evaporation equipment,
CVD equipment, etching equipment,
ashing equipment, ion implantationequipment, annealing equipment, etc.

Main Customers• Vacuum pumps• Vacuum gauges• Helium leak detectors• Process gas monitors• Spectroscopic ellipsometers• Stylus profilers

Higher integration and higher performance are demanded at low cost for next-generation semiconductors andhigh-performance devices. ULVAC develops this type of hyperfine semiconductor and electronic device technology
and delivers new technologies and products to the world, one after another, to support the progress of society.

• Semiconductor production equipment• LED production equipment• Electronic device production equipment• Optical film deposition equipment

As a comprehensive vacuum product manufacturer, ULVAC is also dedicated to the development of components.
ULVAC pursues cutting-edge vacuum technology while providing a wide variety of product lineup, from vacuum pumps andmeasurement and analysis equipment, to components, such as power generators for various types of deposition
equipment and vacuum valves.
Main Products

Semiconductor and electronic device
production equipment

Main Products

Proportion of
net sales per
businesssegment

ULVAC has a long history of producing vacuum equipment for industrial uses, and has been involved in this businesssector since the 1950s, in the dawn of vacuum technology. Now, ULVAC leverages the fundamental
technology that it has developed up to this point to provide a variety of solutions in a range of industries and sectors,
such as automobiles, pharmaceuticals, and food.
Main Products

Main Customers• Vacuum heat-treating furnaces• Vacuum brazing furnaces• Vacuum melting furnaces• Rare-earth magnet production equipment• Vacuum freeze-drying equipment• Vacuum distillation equipment• Automatic leak testers• The heat treating industry• Heat treatment• Automotive parts manufacturers• Vacuum brazing of heat exchangers for• High performance magnet manufacturers automobiles, etc.
• Chemical manufacturers• Vacuum melting and vacuum sintering for• Pharmaceutical and food manufacturers
the manufacture of high-performance magnets• Manufacture of freeze-dried food andpharmaceuticals

Proportion of
net sales per
businesssegment

Dry vacuum pump

11%

Product Use

Vacuum melting furnace

Sputtering equipment for
semiconductors

Vacuum heat-treating furnace

Vacuum application business

Materials
ULVAC provides electronics materials, such as sputtering targets, for a range of manufacturing sectors.
Also, in the high-performance materials sector, ULVAC provides integrated manufacturing and precision
processing technology for titanium, tantalum, zirconium, and niobium, etc.
Main Products

Main Customers• Sputtering target materials• Production of high-melting-point
active metal materials andcomponents• Nano-metal inks

• FPD (LCD and OLED) panel
manufacturers• Semiconductor and electronic device
manufacturers• Research institutions, universities, andgovernment agencies

Proportion of
net sales per
businesssegment

Analysis equipment, controllers, mask blanks, etc.

8%

Product Use• Target materials for the depositionof thin films using the sputtering method• Acceleration cavities forsuperconducting accelerators, etc.
• Wiring formation through the ink-jet
methodSputtering target materials for
FPD production equipment

11

Proportion of
net sales per
businesssegment

ULVAC provides technology derived from production equipment that utilizes vacuums to a range ofdifferent industrial sectors.
Main Products

Main Customers• Surface analyzers• Mask blanks, etc.

• Research institutions, universities,
and public agencies• FPD, semiconductor, andphotomask manufacturers

9%

Product Use• Analysis and observation ofsolid surface composition and propertie• Photomasks for lithography process
when manufacturing FPDs andsemiconductors

X-ray photoelectron spectroscopy equipment

Mask blanks

ULVAC Report 2016

12

T

Technology Topics

Special Feature

ULVAC’s vacuum technology supports
energy saving and power generation

We are working to achieveenergy saving and power
generation from two perspectives.
ULVAC’s manufacturing equipment
plays a role in the process of creatingproducts that lead to energy saving andpower generation
Vacuum equipment is essential for the manufacture of powerdevices, which are necessary for regulating heavy current, as
well as long-life, high-brightness LEDs. Furthermore, many
vacuum devices are used in the manufacturing process of
solar cells, which are representative of power generation.
Going forward, the roles that ULVAC vacuum equipment
plays in order to produce highly energy-efficient andpower-generating products will continue to expand.
We are also devoting resources to future development by
including the energy saving and power generation fields
among the important areas for development, for therealization of safe and secure lifestyles.
P.16

Contributing to energy saving at ourcustomers’ factories
ULVAC contributes to reducing environmental impact andenergy saving by providing deposition equipment andexhaust equipment that help save energy used at ourcustomers’ factories.
P.15

T

Energy problems are a social issue on
a global scale.
ULVAC’s vacuum technology also plays a role inenergy saving and power generation.

W

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C

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S

hat do you think of when you hear about things that contribute to “energy saving”?
Energy-saving devices such as high-brightness LED lamps and high-efficiency motors
readily come to mind. In order to improve the fuel efficiency of motor vehicles, it isimportant to make them lighter. We have begun to implement measures such as introducing resin
gasoline tanks and window panes, as well as creating lighter motors and batteries for electric andhybrid vehicles. Although you rarely notice them, power devices are essential to efficiently regulate
electricity.
What about “power generation”? If you are thinking about clean energy sources, solar cells andwind power come to mind.
What is the common thread between all of these things? That’s right. Vacuum technology isessential to the manufacturing process of all of these products that help achieve “energy saving and13

power generation”.

ULVAC Report 2016

14

T

Technology Topics

Special Feature

ULVAC’s vacuum technology supports energy
saving and power generation

ULVAC Manufacturing equipment that contributes to energy
saving and power generation at our customers’ factories

ULVAC’s vacuum equipment is used extensively for manufacturing processes in a

Manufacturing
equipment

large HD TVs, as well as semiconductors and electronic components, in addition

Solar cell

High-brightness LEDs

to freeze-dried products, such as food and pharmaceuticals, and metal melting.

Solar cells are representative of renewable energy, and in addition to mega

The move away from fluorescent lamps and incandescent lamps to LED

We are also pursuing energy-saving features in our vacuum equipment, itself, in

solar projects, we are also working to increase the uptake of solar cells forhas been continuing at offices and homes, and is emblematic of efforts togeneral household use. In order to achieve higher power-generationsave energy. Furthermore, the use of LED lights has been expanding for

performance, we are engaging in a range of initiatives to improveapplications such as outdoor usage, including billboards, and forconversion efficiency.

automobile headlights.

Between the 1980s, when solar cells were emerging, and now,ULVAC has been involved with the manufacture of solar cells in a
number of different ways. We will continue to contribute to thesuperior performance of solar cells through vacuum deposition
equipment and ion implantation equipment.

ULVAC will contribute to the manufacturing process of various
types of LEDs, from conventional to high-brightness, throughdeposition equipment such as vacuum evaporation andsputtering, as well as PE-CVD equipment, and etching equipment.

• In-line type sputtering system : SCH Series• In-line type PE-CVD system : CCV Series• Dry etching system : NE Series• In-line type Cat-CVD system : CIV Series• Ion implantation system : PVI Series• Vacuum evaporation system : ei Series

wide range of fields, such as LCD and organic EL displays for smartphones andorder to achieve energy saving at our customers’ factories.

• Sputtering system : SIV Series

Vacuum evaporation systemei Series

Ion Implantation system
PVI-3000
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ULVAC components that contribute to energy saving
and power generation at our customers’ factories

Components

15

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S

Next-generation automobiles

Power devices

Although we are now seeing many environmentally friendly hybrid cars

When supplying electricity to household appliances, trains, andand EVs (electric vehicles), initiatives aimed at producing next-generation

automobiles, etc., it is necessary to convert the electricity to the correct

automobiles, such as improving fuel efficiency, are ongoing. One of thesevoltage and frequency, and power devices regulate this. In order toinitiatives is to make vehicles lighter. We expect a dramatic improvement

handle higher voltages, minimize energy loss, and increase the speed ofin the lightness of vehicles by using polycarbonate (PC) resin for side andconversion, there is a trend toward creating products that use newrear windows.

materials such as SiC and GaN in place of the conventional Si.

ULVAC will contribute to the lightening and reduction in fuelconsumption of next-generation automobiles by coating the resin
glazing with a hard film and providing PE-CVD equipment toimprove abrasion resistance.

With our vacuum deposition equipment, etching equipment, andion implantation equipment, etc., ULVAC will contribute to the
production process of power devices that use new materials aswell as conventional Si.

Components

Components

Power saving accessory fordry pumps

Freeze drying processmonitoring system

ECO-SHOCK ES4ADRYMONIDry vacuum pumps are devices that require a lot ofFreeze drying is a method of drying that involves freezing aqueous solutions or food andpower, even among production lines that utilize

reducing the pressure to below the saturated vapor pressure at below-freezing temperatures to• PE-CVD system : for mass production of PC resin glazing : ULGLAZE Series• Sputtering system : SRH Series

vacuums. Until recently, it was difficult to reduce thesublimate any water content. In addition to food products, it is often used to manufacture• Rare earth magnet mass production system : Magrise Series• Etching system : NE Series

power consumption of dry vacuum pumps, whichpharmaceuticals. Until now, it was standard practice for temperature to be measured by

are regularly used to exhaust gas from load/unload

inserting a temperature sensor into the substance to be dried, and for a human operator tochambers for vacuum equipment, and which use ajudge when the drying process was complete. Operators would often allocate excessive time forsignificant amount of sealing gas.

fear of leaving residual moisture, which caused time and energy to be wasted. With “DRYMONI”,

The “ECO-SHOCK ES4A” achieves a wide range of

we have succeeded in creating a “visualization” of the drying process. This has been acknowledgedenergy savings in this field, as well. It can even bein the pharmaceuticals industry, which has strict quality assurance requirements, leading to thefitted to dry vacuum pumps that have already been

fitting of “DRYMONI” to ULVAC vacuum freeze drying equipment. We also stock a standalone typeinstalled.

that can be fitted to the precede model of equipment that has already been installed.

PE-CVD system
ULGLAZE Series• Ion implantation system : SiC IH Series

Ion implantation system
IH Series

ULVAC Report 201616

ULVACGroup’sStrengths

Product creation at the source of responding tomarket needs and profits
ULVAC contributes to the shaping of a safe and prosperous society
by investigating vacuum technology and creating new value thatwill be needed in the future.

↗

Important areas

Research andDevelopment
Sustainably creating value from a
medium to long-term perspective

Energy-saving andpower generation field

ULVAC Group’s Global Intellectual Property—— 	Planting the seeds of long-term growth byestablishing a new Future Technology ResearchLaboratory

With regard to ULVAC’s intellectual property rights, we are mainly

We are establishing a global development structure that includes theapproximately 2,200, which is an increase over last year. In particular,

overseas arms of the group in addition to the domestic arm.

the ratio of patents held in Asian countries and regions, such as Korea,

We are dif ferentiating our technology by speeding up- Technological solutions to deepening social issues

development through unification, as well as innovative technology,
and technological fusion at each company.

materials around a core of vacuum technology,
which is indispensable in a range of sectors. In

all patents.
In recent years, development of improved equipment and uniqueproducts that meet the requirements of our customers and businesses

Next-generation non-volatile memory (high capacity and low power

designated important areas to conduct product development toin different countries has become common, as we have establishedconsumption memory) and hyperfine wiring

ensure short to medium-term profits, we have established andoverseas development centers that conduct process development andElectronic components, MEMS (devices and sensors to support the(IoT), and high-density mounting

commenced operation of the Future Technology Development

equipment development, and intellectual property applications

Laboratory in order to sow the seeds for the long term future, in 10 oroutside of Japan have increased accordingly. Therefore, we have

20 years.

appointed patent managers in Korea, China, Taiwan, and the US,

High-efficiency solar cells, high-brightness LEDs, power devices,and next-generation automobiles

allowing us to understand and manage the state of affairs for

Nine important areas

situation reports. Furthermore, we hold periodic meetings, exchange
utilization of intellectual property rights, and promote the protection

President andChief Executive Officer—— Working towards a prosperous and safe lifestyleintellectual property at each group company through periodic
information concerning the promotion of knowledge and effective

Hisaharu Obinataof the whole Group through intellectual property rights.
In Japan, we promote effective patent applications, mainly forthe future, we will continue to contribute to
the advancement of society by seeking out

In order to leverage ULVAC’s strengths, we have designated nine areas as “important

revolutionary and advanced technologies toareas” and we are dedicating ourselves to development in these areas. Furthermore, we

respond to actual and potential needs andare conducting development and enhancement in each area through the cooperation of

producing products and technologies withthe marketing manager (CPM), design and cost reduction manager (CDM) and thehigh added value around a core of vacuum

technology manager (CTM).

Dr. Choong-Ryul PaikManaging development
Executive Officer

Research andDevelopment Planning Department
Global Market andTechnology Strategy Division
Research and Development Division

technology.

Institute for Super Materials

Priority fields

Next-generation
displays

High-efficiency
solar cells
High-brightness Energy-saving
and power
LEDs

generation field

Next-generation
automobiles

Institute of Semiconductor andElectronics Technologies

Next-generation
non-volatile memory
HyperfinewiringSophisticatedinformation field

Power devices
Electronic devices
and MEMS

Future fields- Advancement that pre-empts changes- Creating added value by refining technology

strategic priority products, based on marketing information. We makeeffective and high-quality foreign patent applications, giving
consideration to their relationship with our business plan.
Going forward, we will promote the enhancement of global
intellectual property rights.

Overseas patents held by area (as of June 30, 2016)
Southeast Asia
88 (4%)Other
63 (3%)

Europe296 (13%)South Korea
520 (23%)

North America
335 (15%)

Taiwan464 (21%)

Future Technology Research Laboratory

High-density
mounting
New energy

17

China, and Taiwan, has increased, accounting for approximately 70% of

Furthermore, in addition to development and operation in our

ULVAC’s Research and Development Structure (as of July 2016)
The ULVAC Group provides products andapplying for patents in countries in which ULVAC has many sales, andthe number of foreign patents held as of June 30, 2016 totaled- Key technologies for growing and developing fields
Next-generation displays(High-definition displays and flexible displays)

Sophisticatedinformation field

Development institutions

Environment

ULVAC KOREA, Ltd./South Korea :Korea Institute for Super Materials
U.S.A. :ULVAC Technologies, Inc.

Taiwan :ULVAC TAIWAN INC.

China :ULVAC Research Center
SUZHOU Co., Ltd.

China
461 (21%)

MedicalULVAC Report 201618

ULVAC Group’s Strengths

Customer Support

Global Network

ULVAC CS Solutions focuses all of the Group’s knowledge

ULVAC Group

Solution networks that support
global industrial development

ULVAC, Inc.

We are building sales and service

ULVAC Group Companies in Japan●

networks that are optimized for each

ULVAC TECHNO, Ltd.

ULVAC Technologies, Inc.

ULVAC TAIWAN INC.

equipment, from installation of equipment to operation, field support, evaluation, analysis,

region, not only in Japan, but

ULVAC KYUSHU CORPORATION

Physical Electronics USA, Inc.

ULTRA CLEAN PRECISION TECHNOLOGIES CORP.

provision of materials and parts, and maintenance etc. of vacuum pumps etc. In the future,throughout the Group’s 49 companies

ULVAC TOHOKU, Inc.

●ULCOAT TAIWAN, Inc.

in order to respond appropriately to the demands of diversification and sophistication, wewith a focus on North America and Asia.

ULVAC KIKO, Inc.

ULVAC GmbHULVAC AUTOMATION TAIWAN Inc.

will pursue value-adding service focusing all of our knowledge, such as our unique

Vacuum technology is one of the key

ULVAC EQUIPMENT SALES, Inc.

●

technologies for many other cutting

ULVAC CRYOGENICS INCORPORATEDULVAC (CHINA) HOLDING CO., LTD.

ULVAC Materials Taiwan, Inc.

ULVAC-PHI, Inc.

ULVAC (NINGBO) CO., LTD.

●

TIGOLD CORPORATIONULVAC (SUZHOU) CO. LTD.

ULVAC KOREA, Ltd.

ULVAC COATING CORPORATIONULVAC Orient (Chengdu) Co., Ltd.

Ulvac Korea Precision, Ltd.

NISSIN SEIGYO Co,. LTD.

ULVAC Automation Technology (Shanghai) Corporation

Pure Surface Technology, Ltd.

ULVAC Human Relations, Ltd.

ULVAC Tianma Electric (Jingjiang) Co., Ltd.

ULVAC CRYOGENICS KOREA INCORPORATED

Equipment maintenance service

SHINKU CERAMICS CO., LTD.

ULVAC Vacuum Furnace (Shenyang) Co., Ltd.

ULVAC Materials Korea, Ltd.

comprehensive vacuum products

ULVAC (Shanghai) Trading Co., Ltd.

UF TECH, Ltd.

By valuing close communication with our customers, we are able to achieve rapid

FINE SURFACE TECHNOLOGY CO., LTD.

manufacturer, we conduct everything

Reliance Electric Limited

ULVAC Materials (Suzhou) Co., Ltd●from research and development,

SHOWA SHINKU CO., LTD.

ULVAC Opto-electronics Thin Film Technology(Shenzhen) Co., Ltd.

ULVAC SINGAPORE PTE LTD

edge technologies, and will be
increasingly required for a wide range ofindustries and growth fields in the
future.
As the world’s largest

Overseas ULVAC Group Companies

through to manufacture, sales, andNorth America●

EuropeULVAC SOFTWARE CREATIVE TECHNOLOGY,CO., LTD.

China

ULVAC NONFERROUS METALS (NINGBO) CO., LTD.

will continue to support thetechnology, service, and know-how, in order to support our customers’ production activities
in a manner that meets their needs. Furthermore, by using information about our customers’

South Korea

needs as feedback for development of new equipment, we are able to produce even moresophisticated vacuum technology and service.

service.

Southeast Asia●ULVAC MALAYSIA SDN. BHD.

ULVAC CRYOGENICS (NINGBO) INCORPORATED

customer support. Looking forward, we

We provide global customer support to keep our customers satisfied after purchase of

TaiwanGlobal CIP (continuous improvement program)This service is for the purpose of providing our overseas customers, in addition to our domestic customers, withULVAC（THAILAND）LTD.

effective usage techniques, and improvements in yield rate and productivity over many generations for theequipment they are already using.

ULVAC Research Center SUZHOU Co., Ltd.

advancement of the world’s industries

Hong Kong ULVAC Co., Ltd.

through vacuum technology.

ULVAC VACUUM EQUIPMENT (SHANGHAI) CO., LTD.

●

Factory outsourcing (FOS)

We conduct support for the operation and maintenance of equipment and facilities, as well as the ordering ofparts, selection of equipment, and process development, by contract, dispatch or personnel transfer.

Employees (people)

5,886
144

●

1,554

(Consolidated)

144

511

Centers555

49

49 Group Companies

Rejuvenation, precision cleaning, and resource recovery

We aim for overall cost reductions through extension of component life and the cleaning cycle, and recoveryof valuable materials etc. Based on our extensive knowledge of vacuum equipment as a whole, we propose theoptimal surface treatment and cleaning for your needs.

Component maintenance●

Pump maintenance

We maintain components such as vacuum pumps.
North
AmericaSoutheast
Asia

TaiwanSouth Korea

China

2,978

Research andDevelopment Centers
Manufacturing
Centers●

8

JCSS vacuum gauge calibration service

ULVAC is an MRA/JCSS* accredited calibration laboratory in the pressure (vacuum gauges) category.

17*JCSS (Japan Calibration Service System): Calibration laboratory accreditation system under the Measurement Act*International MRA (mutual recognition agreement)

Components and consumables
We achieve high-quality, swift, and reliable delivery through in-house manufacture of components.

Service Centers

Japan

66

Analysis service
We conduct an analysis service using the ULVAC Group’s analysis and evaluation equipment.

Second-hand sales and purchase
We sell, purchase, refurbish, relocate, import and export, etc., second-hand products, ranging fromcomponents to production equipment.

Training service
We conduct a training service for ULVAC products (equipment, vacuum pumps, and components).

19

ULVAC Report 201620

Research and Development Roundtable Discussion
important semiconductor film deposition technologies.

misunderstandings can lead to new discoveries, so I would like toOohashi: I work at the Research and Development Division (R&D), and I

embrace a range of challenges.

am involved with analysis, which is slightly different from what the rest

Oohashi: Apart from that, once you have mulled over the problem asof you do. My role is to respond to the range of requests for analysis

thoroughly as you can, it can be good to switch your brain over todirected to us by other departments. Although my involvement issomething completely different. Sometimes you can make use of yourindirect, I am involved in a wide range of products and technologies.

realizations in another task.

Gibo: ISM sends you a lot of requests for analysis, doesn’t it? Wecommunicate regularly to consult or receive proposals for methods ofanalysis.
Oohashi: We also participate in development meetings. We not only
analyze what is in front of us, but we also consider it important tocollect information concerning what is currently being developed.
Sometimes it is difficult for us to participate due to the high number ofrequests for analysis, but we would like to remain close, in order to bepart of a unified ULVAC team.
Paik: I also came from ISM, so I have a lot of memories of this. Once we
had received the results of an analysis that we had requested, the mostimportant thing was to reflect on whether the results were as we
expected, and if they weren’t, work out exactly how they differed.

Research and Development Division Tomomi Oohashi

When I received an analysis report, I would often be introduced toKeon-Chang Lee

Manabu GiboULVAC, Inc.
ULVAC, Inc.
(*Seconded from ULVAC KOREA, Ltd.) Institute for Super Materials,
Institute of Semiconductor andResearch Office No. 2,
Electronics Technologies
Research Division No. 2
Research Office No. 1,
Research Division No. 4

Choong-Ryul Paik

Junki Nagakubo

Tomomi Oohashi

ULVAC, Inc. Managing Executive
Officer(Supervisor of Development)
Concurrently serving as President of
ULVAC KOREA, Ltd.

ULVAC, Inc.
Future Technology ResearchLaboratory
Nano Functional Materials
Research Office

ULVAC, Inc.
Research and Development
Division, Analysis Center
Materials Evaluation
Research Office* Positions and departments are correct as of the time of the roundtable discussion.

Unlocking new possibilities through the "integration" of
research and development

materials that I didn’t know about, so I think that interaction with the

Nagakubo: When I am stuck, I value returning to basic principles ofpeople at the Analysis Center is a valuable opportunity to exchange

Physics. In the case of FTRL, it is not uncommon for us to conduct

useful information.

research that has never been engaged in at ULVAC, so there are times

Lee: That’s very true. At one point, when an experiment did not go as

when our experience is insufficient to solve the problems that we face.

planned, I consulted with the people from the Analysis Center , andIn those instances, we are instructed by the head of the laboratory tothey provided advice from a completely unexpected perspective,

consider the results of the work we have performed in terms of what

which allowed me to take the first step toward solving the problem. It

they mean from the perspective of physics, and we do our best totaught me that when it comes to research and development, weshare and discuss the data.

mustn’t get caught up in what is directly in front of us, but rather, it is

Paik: Although we are all involved with research and development,

important to exchange opinions with a variety of people.

there are many different fields of research and types of researchers. Mr.

Gibo: I also had an experience in which I had unexpected results, and I

Nagakubo is the type of researcher who examines physical concepts.

was unable to discover the cause, no matter how hard I tried, but

He thinks about things from the perspective of principles, while clearly

analysis helped me to find a clear answer. Breaking your thoughtstating the processes and reasoning that he uses. On the other hand,

ULVAC is constructing a research and development structure that aims for

Nagakubo: I work at the Future Technology Research Laboratory (FTRL).

patterns, such as by listening to the opinions of people from different

chemists and engineers do things slightly differently. They think aboutsustainable value creation, from short to medium-term product development

Our mission is to develop new materials and processes aimed at 10 orfields, really helps you make discoveries. Sometimes mistakes andhow to achieve the required results, particularly in the development of

to developing seeds for the future. Furthermore, we have established

20 years in the future. Our job is to conduct research and development

materials. There are some things that they will be unable to explain

overseas development sites, and are promoting research and developmentwith the aim of entering the fields of new materials, new energy, andusing theory and empirical assumptions, for example. Also, mankind

through global collaboration throughout ULVAC. On this occasion, thethe environment.

evolved from hunter-gatherers to an agricultural people, and this isManaging Executive Officer supervising development, Choong-Ryul Paik,

Gibo: In my case, my task is to create products that lead to securing

also indicative of types of researcher. In recent times, agricultural-type

along with 4 researchers from the Research and Development Division, theprofits in the shor t to medium-term. I am in charge of theresearchers, where success is built by following processes, have been

Institute for Super Materials, the Institute of Semiconductor and Electronics

development and launch of sputtering equipment for next-generation

increasing in number. However, we also need hunter-type, who judge

Technologies, and the Future Technology Research Laboratory, gathered todisplays at the Institute for Super Materials (ISM). Compared to Mr.

whether there is anything of value to be garnered through theirshare their thoughts about a variety of topics, including the future of ULVAC.

Nagakubo’s field of basic research, my position is more involved withexperience and intuition, in research and development. The ideal

manufacturing and specifically responding to the demands oforganization is one that gathers a range of different types andA diverse exchange hints at the answers

customers.

leverages their strengths to produce results.

Moderator: Although it is easy to say research and development,(ISET) is also involved with product development. I have come here on

research can actually take many different forms. What tasks do you

secondment from ULVAC KOREA, Ltd., and have been involved withengage in on a day-to-day basis?

the development of the CVD*1 and ALD* 2 processes, which are

21

Lee: The Institute of Semiconductor and Electronics Technologies

Institute of Semiconductor and Electronics Technologies Keon-Chang Lee*1 CVD =	C hemical Vapor Deposition: A type of deposition technology that utilizes
chemical reactions.
*2 ALD =	Atomic Layer Deposition: A type of deposition technology that deposits a thinfilm at an atomic level.

ULVAC Report 201622

overseas locations – Korea, America, Taiwan, and China. These are all

Actively promote contact with customers,
and contribute from their perspective

The challenge to become the best in the world andour hopes after integration

Moderator: I suppose you gain knowledge from experience, too. Is

Moderator: Please tell us about your opinions concerning the outlook

needs of customers around the world. As Mr. Gibo said, it isthere anything else you are working toward?

going forward and how you envision ULVAC in the future.

important for us to come together as a company and proceed with

Paik: The thing that teaches us the most is our relationship with our

Oohashi: First, it is necessary to deliver high-value products andunification to stay ahead of the pack in the future. Based on ourcustomers. We gain a lot by going to our customers and directly

technologies to the world in the current market. However, it is also

Open R&D strategy, we hope to ensure a diverse research andfinding out what kind of research they are conducting and what theyessential to embrace new challenges. Research and development candevelopment structure.

require from us.

cover a wide range of fields, and they should not be thought of as a

Oohashi: I sometimes receive urgent requests for analysis from thesingle entity. It is important to undertake research and development inequipment manager regarding problems that have occurred at oura balanced fashion, even though that is hard to sum up in a single

customers’ sites. If the person in charge of the equipment needs help,

sound bite.

areas in which our customers are expanding their businesses. We
must effectively leverage these research and development centers inorder to be able to respond swiftly and appropriately to the varied

Shifting to a global focus andpursuing dynamic research and development
Institute for Super Materials Manabu Gibo

that means a customer also needs help. I feel a great sense of relief

Moderator: Finally, please give us your messages for the youngwhen we are able to quickly conduct analyses and convey the results,

researchers who will bear the expectations of the next generation.

which lead to a discovery of the cause of the problems. Analysis for the

Lee: The benefit of working at ULVAC is the many opportunities toGibo: Research and development is a job that involves creating

evaluation of the performance of equipment is necessary to achieve

work alongside people from countries all around the world. I am

something new. Naturally you need the will to challenge yourself, but

customer satisfaction. Although we do not deal with customers

currently in Japan on secondment, and there are many people within

you also need to thoroughly conduct risk analysis and otherdirectly, I am proud that we are able to make a contribution to them.

my department with overseas work experience. Improving individuals’

procedures. If you are able to do both of these things, you will be able

Lee: As a process developer, there are many ways in which I can makeskills leads to the development of the company, and also improves

to contribute to a broad range of areas at ULVAC. Also, whencontributions to customers. For example, the other day I conducted an

personal satisfaction. I hope to further improve my ability to

conducting research and development, trivial things often lead to new

evaluation of the membrane characteristics of a metal film that uses aunderstand other cultures, view things from the perspectives of others,

doors being unlocked, so I also value a sense of curiosity and fun.

new material. The results showed that the membrane characteristics

and empathize with others.

Nagakubo: ULVAC is a company where people are able to challenge

were better than those of the product being developed by the

Oohashi: ULVAC provides an environment in which we can freely

themselves if they have the vision to contribute to the world throughcustomer, which led to the customer requesting that we continue ourchallenge ourselves, irrespective of our gender or academic record. In

research and development or to make certain products. Also I aim toother words, it is important to have the ability to think and act for

produce results from research and development that lead the younger

yourself. Without doubt, you will develop specialist knowledge andgeneration to have dreams for the future, without forgetting to apply

skills through your day-to-day work. I would like us to be a group ofmyself diligently.

people who actively challenge ourselves.

Moderator: Thank you very much for joining us today.

development. I hope that I am able to actively participate in thesolution of issues that customers struggle with, from the perspective

Future Technology Research Laboratory Junki Nagakubo

of a researcher, so that we are able to solve them together, allowing
both companies to grow.

Nagakubo: I would like to be involved with manufac turing

Paik: It was actually customers that led me to become a researcher.

equipment for key parts that are used in growing markets, such as

The needs of the customer are the seeds of our business. I hope that all

robotics and artificial intelligence. It would be ideal to secure ourof you youngsters have as much contact with customers as possible

position at the top of our niche, and for ULVAC to be a company thatand maintain a high level of motivation for your research and

top researchers think of as a desirable place to work.

development work.

Gibo: I believe that, at present, ULVAC is not fully utilizing its research

Moderator
Senior Manager, Corporate Communications & IR Team,Management Planning Division, ULVAC, Inc.

Noriaki Suzuki

and development and its technological capabilities. I strongly feelthe need to achieve integration, which has been a topic for thewhole company, such as by making sure that we are all on the same
page and increasing ties between departments.
In addition, I think that there are many opportunities for ULVAC’s
businesses to be involved with producing world-leading products. In
order to produce cutting-edge technology and products, both
equipment and materials are indispensable. It is my dream to be able

Message

After theRoundtable
Discussion

to proudly declare that ULVAC is involved with the production of theworld’s best products because of its technology.
Paik: I would like to strengthen the solidarity within ULVAC bycontinually embracing new challenges and fostering bonds that go
beyond individual organizations. The fact that we have research anddevelopment centers around the world is one of ULVAC’s uniqueManaging Executive Officer Supervisor of Development Choong-Ryul Paik

23

Choong-Ryul Paik

Since fiscal 2015, we have promoted a policy of integrating

ex tremely impor tant, and in order to do that, eachdevelopment, and merging, selecting and concentrating

department must produce many proposals. Going forward, I

technology at an even higher level, under the slogan ofwould like to increase the opportunities to engage in“Open R&D.” Going forward, we will expand and deepen our

discussion with young researchers at the company. Also, it isintegration by strengthening solidarity throughout the

my hope that you will all become global citizens. At present,

ULVAC Group, such as by introducing management systems

overseas orders and sales account for more than half ofto further improve the speed and efficiency of development,

ULVAC’s total orders and sales. In 10 years’ time, the ratio of

integrating the development, sales, and manufacturing

overseas orders and sales may jump to 70% or 80%. I would

departments, and discovering development items that will

like you to experience foreign countries while you are still

form the pillars of ULVAC’s business in the future. At thisyoung, and apply yourself diligently to your research,roundtable discussion, I felt everyone’s strong enthusiasm

working closely with customers and other researchers fromfor research and development. In order to succeed ataround the world.

research and development, selecting the right theme isI expect great things from our young researchers.

strengths. ULVAC has research and development centers in fourULVAC Report 201624

Foundations of value creation

Initiatives to Achieve
Integrated MONODZUKURIInteractions with Customers
Quality assurance and product safety

Integrated group management in relation to production
Since Fiscal 2015, the ULVAC Group has engaged in developing

Integrated group management inrelation to production

strategies to increase production efficiency under the theme of movingfrom “vitalization to integration to become ‘One ULVAC.’”
By improving work efficiency in the next process through "Front

Interactions withcustomers

Loading*1" activities, by identifying all risks before work is conducted,

Interactions with
suppliers

Interaction with
employees

such as technical reviews before orders are received, throughsimulations and inspections, and considering responses to them, we
limit instances of nonconformity and greatly increase quality. By
integrating with our domestic production assignees, we havestreamlined our design organizations and conducted optimal
positioning, and we have greatly increased overall production efficiency
by enhancing the upstream portion of our production processes.

The ULVAC Group is engaging in initiatives to meet customer
expectations for high-quality and safe “ULVAC quality”
products through quality assurance activities, centered around"Front Loading".

Quality assurance andproduct safety

Procurement(Supply chain management)• Global integration of
the quality management system• Group-wide roll-out of“Front Loading”• Group-wide roll-out of productsafety risk assessment activities• Sharing of purchase information
for procurement items• Interaction with suppliers• Rolling out of buyer education
to overseas group companies

Strengthening humanresources development(passing down ofengineering skills)• “ULVAC Academy” forprofessional production
related training• Group Vitalization Program

thoroughly implemented, while increasing the efficiency of theactivities themselves.
Furthermore, with regard to procurement of parts, we havepromoted sharing of procurement information with domestic
manufacturing assignees and the introduction of an electronic
procurement system, while also achieving a reduction in the numberof hours spent on procurement, as well as a reduction in printing
expenses and communication expenses.
We have also introduced this procurement system at overseas
production sites, and by sharing procurement data, we are gradually
implementing centralized production cost management andunderstanding the production costs for each location.
With regard to the professional development of the personnel
who support MONODZUKURI we have conducted professional"Product quality assurance strengthens our customers' confidence
in ULVAC." The ULVAC group is committed to elaborate ULVAC
quality through "Front Loading" in development and to offer
products and services with needs from all parts of the world, andkeep developing as the customers' everlasting partner.

Action Policies
We comply with all rules and procedures.
	We do not deliver any nonconforming products to the next
process.

"Front Loading" activities will be the source of our profits, so from
Fiscal 2016 onward, we will ensure that "Front Loading" is moreAt the next stage, each company in the ULVAC Group is

ULVAC Group Quality Policy

We observe delivery times leading to the next process.
We commit to the production budget.

Results of "Front Loading" activites

the aim of realizing an effective quality management system that is
unified with our business activities, which is the intent of theISO9001 : 2015.

Product Safety
Ensuring a corporate culture that values safety and quality
above all else
We have been promoting the implementation of risk assessment
activities, company-wide product safety education, and SA *1

In order to enhance "Front Loading" activities, we are creating

Quality Management Systemdevelopment at ULVAC and throughout the Group. Also, personnel

department, as well as sharing our experience, know-how and related

The ULVAC Group has a integrated quality management systemproduct safety through risk assessment at each stage, frominformation and data. We are also putting effort into activities to reflect

We maintain ULVAC quality for the ULVAC Group’s products by strictly

confirmation of specifications through design and manufacture,each of our successes in our upstream development and design

managing and evaluating conformity with the usage policy of theprocesses. Looking forward, we will implement training and up-skilling

ULVAC trademark.

engineering and skills-based links between our sales department,
technology department, design department, and manufacturingwith SA qualifications conduct an assessment of the adequacy ofwith direct control over our overseas quality assurance members to

In Fiscal 2016, which is the final year of our 3-year plan, we will

deliver ULVAC quality that meets the needs of globalization throughout

aim for further improvements in quality of the products of eachthe world. In Fiscal 2015, we were able to make quality improvements

company in the ULVAC Group, and aim to merge the ISO 9001

through activities that create quality through "Front Loading" andcertification of 37 group companies, as well as promoting "integration"

greatly contribute to improvements in the earnings structure.

of the quality management system.

centered around activities to "produce quality through "Front Loading"."
The results are then used as items for confirmation in the design review(DR0 - DR5) and quality inspections at each stage. ULVAC’s productsafety initiatives such as these received the Mukaidono Safety Awards’*2
encouragement prize, having been evaluated as contributing to theimprovement, progress, and spread of safety for MONODZUKURI.
Going forward, we will continue to promote SA development
throughout the group, and hope to increase customer satisfaction by

production related training, such as manufacturing professional

contributing to safe and secure MONODZUKURI.

training, and promoted instructor development, as well as the uptake

2.3%

of training worldwide, in order to be able to pass down our engineering

Fiscal 2014
Fiscal 2015

skills to the next generation. Furthermore, we have prepared for the

Costs related to
2.5%
nonconformity
Percentage of sales(non-consolidated)
2.0%

1.6%

launch of the "ULVAC Academy", which begins with the launch of

The ULVAC Group’s quality management system
Global Quality Assurance Committee(Central office: ULVAC)

1.5%

e-Learning.

About
85%
reduction

Handing down engineering skills to the next generation has
always been an issue for manufacturers. We aim to improve

1.0%

0.5%

promoting training to this end.
July

June

Reduction in costs related to nonconformity inthe manufacturing process

Group-wide implementation of the quality policy

1.0%

engineering skills for everyone on site, not just technicians, and we are*1 "Front Loading" refers to accelerating the work process by placing extra load (loading) on the initial phase ofwork (front). Doing this allows us to work out any issues in the early stages and produce higher quality.

proceeding with implementation of the 2015 edition of ISO 9001, with

2013

2014

2015 (FY)

Reduction in costs related tononconformity after delivery

0.0%Japanesegroup
companies

Koreangroup
companies

Chinesegroup
companies

South-East
Asian
group
companies

EuropeanandAmericangroup
companies

Individual companies’ quality policies and target deployment activities inaccordance with the Group’s policy*1 SA (Safety Assessor) qualifications are based on a third-party assessment of mechanical safety knowledge andability under international safety standards. They are granted under the auspices of the Nippon ElectricControl Equipment Industries Association (NECA), and certified by Japan Certification Corporation (JC).
*2 This prize is named after Dr. Mukaidono, a professor emeritus at Meiji University, who received the Prime
Minister’s Commendation on Contributors to Public Safety. It is granted to organizations or individuals forcontributions to the improvement, progress, and spread of safety in the MONODZUKURI industry.

Sharing of case studies and lateral spread of success and effectiveness25

ULVAC Report 201626

Foundations of value creation

Interactions with SuppliersInteraction with Employees

Procurement (supply chain management)

Strengthening Human Resouces Development(Achieving ideal form for each person)

The ULVAC Group values communication with our suppliers,
based on the following Basic Procurement Policy, in order to createa system for consistently providing products and services thatsatisfy the quality, price, and delivery schedule sought bycustomers. Based on solid relationships of trust, we build
partnerships and contribute to the progress of society throughout
the entirety of our supply chain.

At "Kyoeikai", we mainly allocate time to explaining our
production plans and confirming future production load. At
Operations Briefing Meetings, explanations of our business are

It is essential to enhance our MONODZUKURI, while also
strengthening human resources development for the staff that
supports them. In addition to the employee training conducted by
the Personnel Department, we have established the Production
Training Planning Center in the Advanced Manufacturing Division,
and we are driving professional engineering training forward.

given by the President of ULVAC, and the main purpose of these

The ULVAC Group Basic Procurement Policy
1. Compliance with laws and regulations
The ULVAC Group conducts its corporate activities lawfully andin accordance with regulations, social norms, and public
decency.
We fully comply with the relevant laws and regulations.

We have set up the ULVAC Academy as an training institution, under thecompetition were an opportunity to

QCD and production

concept of “providing the necessary training materials for ULVAC’s

open our minds through interaction.

technology.

production to those who need them, and creating an environment to

Buyer Education
have begun rolling out buyer education, titled “Improving Cost Price
Calculation Ability” and “Using Analysis Tools to Analyze Prices,” at ouroverseas group companies.
In Fiscal 2015, introductory training was conducted at ULVAC
Going forward, we will further develop education and promote theprocurement activities that support manufacturing as a integrated
ULVAC Group.

and the passing down of engineering skills. We will set up portals, suchas e-Learning, gather education resources and engineering materials

2.Global Business Improvement Competition

ULVAC Group Vitalization Program
different cultures) stimulates and vitalizes organizations. We will conduct

improvements: Work improvements as an integrated group.” This was avitalization with the aim of achieving ideal form for each individual. We

great opportunity for people in a wide range of fields, such asthen aim to share the results throughout the Group and utilize them topersonnel, accounting, general administration, finance, sales,

achieve ideal form for individuals, departments, companies, and the groupenvironment safety and health, IT, and design management to

as a whole.

find out how each contributes"Kyoeikai" (supplier meetings) (3 times/year) and Operations Briefing
Meetings (once/year).

27

Ideal Formto the group’s management andoperations. After the competition,

Further
Improvement

extend back around 50 years, to the time of the Yokohama Factory.
and exerting influence on its departments, ULVAC has enabled us to

Shinji Kinno Section Chief
Atsugi Office, Kanto Co., Ltd.,

Global Manufacturing Technology Competitionsome companies got together to

Global Business Improvement Competition

hold study meetings for future

Skills Challenge

reference, and although this is only

Competition

ULVAC pursues thorough cost management, and by working with us

just, and free competition as suppliers.

searching for opportunities to implement improvements in daily tasks,on the theme of “Creating new added value by implementing small

We have a long-running relationship with ULVAC, and our dealings

ULVAC’s goals, we are able to engage in fair,

Reports were given*2 on the results of activities being conducted while

Diversity (having human resources with different ways of thinking and from

Voice of Supplierto the fair and just transactions that are*1 13 companies from 6 countries paticipated in 15 themes.

there, and open these resources throughout the Group.

the second time we have held thiscompetition, we have seen it lead

Training

to group-wide initiatives.

Daily Businessbeen able to achieve on our own. Thanks

to achieve a range of communication. Information is exchanged atMichito Hirayama
No.1 Measurement Instruments Department
Components Division
ULVAC, Inc.

and design training, etc., while also conducting instructor development

implement value chain engineering proposals that we would not have

We exchange information with our suppliers 4 times per year in orderGold Medalcooperation. The discussions at theof each person through manufacturing professional training, engineering

KOREA, Ltd., ULVAC TAIWAN Inc., and ULVAC (SUZHOU), CO., LTD.

Active Communication

showed the success of cross-company

facilitate learning for the entire Group.” We aim to increase the expertise

4. Advancing global procurement
We optimize our components procurement from worldwide
sources, while always keeping pace with our global business
operation.

We promote environmentally-conscious procurement by
developing green procurement standards.

the manufacturing site, and ensuring

greatly contributed tosuppliers that have

In order to enable conversation at the same table as our suppliers, we

5. Advancing green procurement
ULVAC recognizes that protecting the global environment is
one of the momentous challenges posed to all humankind. In
all its business operations, we contribute the technologies that
we have developed or will develop on behalf of environmental
conservation for the development of an affluent society on amore livable Earth.

improving work procedures and jigs at
safety. The measures presented alsoof affairs and future outlook. In addition, we present awards to

3. Healthy and good relationships with business partners
and affiliates
ULVAC enforces strict security measures with regard to individuals
who share in or gain unfair enrichment in commercial transactions
inside or beyond the Group. Our directors and employees carry out
appropriate decision making and exercise moderation to avoid
damaging the Group's reputation.

Based on our international perspective, we cooperate with ourbusiness partners in different countries to procure superior
components, technologies, and services.

the "Front Loading" approach,"ULVAC Academy" for Professional
Production Related Training

meetings is to facilitate an understanding of ULVAC’s current state

2. Maintaining and promoting fair and free competition
We maintain and promote fair, impartial, and free competition
among our business partners regardless of the country inwhich they are located.
We do not take advantage of our business partners bydemanding unfair transactions.

design and manufacturing processes,

Administration

Engineering

Gold Medal
Lianhua Jin
Finance Department
ULVAC (CHINA) HOLDING Co., Ltd.

Skills1.Global Manufacturing Technology Competition
Each group company*1 presented reports on the theme of “A reformation in
MONODZUKURI with integrated ULVAC Group: Promoting "Front Loading"and improving our field capabilities.” There were many different activities toaddress the issues facing the various companies, such as improving product*2 13 companies from 6 countries participated in 18 themes.

ULVAC Report 201628

Foundations of value creation
3. Skills Challengesame time, we are aggressively conducting transfer of authority to

The Skills Challenge is conducted for the purpose of promoting thecreate an environment where each employee can fulfill their

sharing and handing down of skills, and fostering a renewed awarenessresponsibilities with passion and ambition as a full participant, with theof the importance of field skills for the operation of global manufacturing

desire to make ULVAC the best it can be and what it should be.

businesses. In it, people compete using the skills that they havedeveloped in their workplaces, setting ever-higher goals for themselves.

—— ‌Management of objectives and evaluation
systems

Sales Administration
Corporate Sales & Marketing Division I

Representatives from each company*3 gathered in Japan to participate

We are constructing a system that values the flexible generation of

Obtaining parental leavein the competition between young employees of manufacturingideas and open and the dynamic corporate culture that is essential to a

departments. Through competition,

development company. We are expressing our vision at each level andparticipants became aware of theputting energy into the management and evaluation of goals using

issues they were facing, andclear benchmarks, as well as implementing a system that more highly

showed us all how manufacturing,values boldly attempting to solve difficult issues and tackling tasks as amanufacturing engineering, andteam, rather than merely focusing on results.

After taking maternity leave, I was also granted 1 year and 3 months of parental
leave. I have now returned to the same workplace as before I took leave, and I
make use of the system of shortening morning and afternoon working hours
by one hour each. While I was on leave, my position was covered by mysuperiors and my colleagues. Even after returning to work, I am unable to workovertime because I have to pick my child up from preschool. However, I feelthat my colleagues and superiors look after me generously, such as byfollowing up on any work that remains after I leave.

Production Managing Department
Advanced Electronics Equipment Division
ULVAC Inc.

We have a system for each person to develop their own career plans
and share them with their superiors and the Company once per year.
Rotations are conducted taking into account the wishes of the person
concerned.

—— ‌Diverse education programs
Education plans are developed based on the ULVAC Basic Policy for
Human Resource Development. We are actively pursuing targetededucation, in addition to providing a range of programs to encourage*3 12 people from 11 companies in 6 countries participated.

Aiming to achieve a work-life balance

individual growth, such as the level education system, various types of—— ‌C‌ reating workplaces that are conducive to work

skill training, OJT, and support for self-development, so that all

At ULVAC, we aim for employees to have both meaningful work and aemployees are able to actively engage with skills development.

fulfilling lifestyle.
In Fiscal 2015, we increased the maximum number of days ofProfessional and Organizational Development

have enhanced pre-transfer training for staff stationed overseas. Also,

accumulated paid leave from 30 days to 40 days in order to create awe have been promoting active participation by group companies insystem in which employees could feel more secure in their work.

We are concentrating on increasing the abilities of eachindividual, while vitalizing organizations in order to build avalue creation business model.
Fur thermore, we aim to invest in organizations andpersonnel that enable the ULVAC Group as a whole tocontribute to society from a global perspective.

the level education system, which raises the overall skill level and—— ‌Hiring and utilization of human resources■ Features of the system● We grant annual paid leave from the date joining ULVAC

We are increasing the hiring of new graduates in order to maintain an● We conduct spot leave promotion activities to enable all employees

appropriate age composition of employees. Furthermore, employees

to take paid annual leave at least once every 6 months

who have reached the age of retirement can make use of our elderly● We are continuing our selective summer leave system

employee scheme to contribute to the passing on of skills and● We personnel management person in charge at each department

Seeking an Organization that Ensures
Rewarding Job Experiences

knowhow.

and closely manage overtime worked—— ‌Future issues and initiatives● We have implemented optional staggered work hours and flex time policies

We are conscious of the fact that development of the next generation● We have “no overtime” days—— ‌Vitalize the Individuals and Organization of
ULVAC

and rotation of personnel are essential for the achievement of further

Furthermore, with regard to promoting diversity, in recent years,

organizational vitalization. We will encourage diversity-conscious

female employees have had a particularly high rate of taking parental

We understand that a system whereby employees who make great

exchanges between personnel, including at domestic and overseas

leave and returning to their position. Although we have few female

efforts are rewarded properly is the basis for vitalization of both people

group companies, and work to achieve flexible organizational

employees, in the Fiscal 2015, 2 of them took parental leave and 3

and organizations. We are proceeding with continuous review of eachmanagement, while giving consideration to the balance of specialists

returned to work. This is a 100% rate of return.

of our rules and systems using the keyword of “reasonableness.” At theand generalists.

Fiscal year
2015
2014
2013

Responding to the results of the Employee CSR Awareness Survey
At ULVAC, we promote CSR activities, stating the goals of our yearly
initiatives aimed at stakeholders.
In Fiscal 2015, we conducted the Employee CSR Awareness
Survey for employees between June 13 and June 17, 2016.

29

We will analyze employee expectations and satisfaction with theactivities they perform, provide feedback regarding each activity, andwork to improve the quality of CSR activities.

■ Number of employees of the ULVAC Group (by country)

Commencement of
parental leave2
2
7

Return to work
(conclusion of parental leave)3
62

Notable support systems
Parental leave (may be extended up to a year and a half)
System of shorter work hours for childcare● Leave to nurse sick or injured child● Family care leave
●

15.06

16.06

2,500
2,000

1,000
500
0

ULVAC, ULVAC Group South Korea
companies
nonconsolidated in Japan

China

TaiwanSoutheast
Asia

North
America■ Gender ratio in employees■ Gender ratio in management

Female5%(63)Female2%(8)(non-consolidated)

positions (non-consolidated)

ULVAC,
non-consolidated

ULVAC,
non-consolidated

Male
95% (1,085)

Male
98% (353)■ The number and percentage of disabled employees
Number of disabled employees

Employment ratio(％)(Persons)

40
30

●

14.06

(Persons)

1,500

In particular, as globalization has progressed in recent years, we

provides opportunities to deepen communication.

HR data

515
510
511
128
139
144
137
138
144

future.

Daiki Shimada

1. Human resources who respect other individuals, trust eachother and fulfill their responsibilities
2. Human resources who can see the true nature of each issue andcreate revolutionary technologies and projects with passion
and tenacity
3. Human resources who are full of aspirations to improve
themselves and take voluntary actions to achieve goals
4. Human resources who have a global perspective and aim totake leadership in exploring the world

1,630
1,636
1,554

further hone their skills in the

We are conscious that the most important resources for corporate
vitalit y and competitiveness are the personnel and theorganizations in which they work. We are conducting thefollowing HR development, based on our corporate philosophy
and basic management policy

578
566
555

while using the experience to—— ‌Self-reporting system

ULVAC Basic Policy for Human Resource Development

1,878
1,818
1,830

Gold Medal

Takae Fujiwara

1,105
1,097
1,148

service improve the ULVAC brand,

Voice of Employee

1.83

2.08

2.19

2.14

2.11

2.0
1.5

20

1.0

10
0

2.5

0.5

27

28

28

27

2011

2012

2013

2014

26

0.0
2015 (Fiscal year)

ULVAC Report 201630

Foundations of value creation

Supporting the MONODZUKURI of ULVAC by
Promoting Employees’ HealthWith the vision of “Vitalizing the Individuals and Organizationof ULVAC,” the Health Promotion Office takes the initiative inpromoting employees’ health so that they can work to achieve
the highest possible productivity, thereby supporting theMONODZUKURI operations of ULVAC.

Occupational Safety and Health
Employee satisfaction (ratio of respondents who indicated thatthey were satisfied on the post-training survey)

Motivation
management
94%

Contributing to the Progress of Industry and
Science with Vitalization in Body and Mind

Healthfeedback
92%

UL-fit92%

The ULVAC Group positions “Safety first” as the fundamental
principle of business operations. As such, we endeavor to securesafety in products and services used by our customers, as well as
during work in our customers’ factories, and ensure a lively working
environment in which employees can work in good physical andmental health, by operating our Occupational Safety and HealthManagement System (OSHMS) with a focus on risk assessment.

At ULVAC, we collect responses to psychological and social questions,—— ‌To ensure the safety and health of ourcustomers and employees

but to encourage vitalization in body and mind while working.

which are included in the interview items of health checks, at an

To ensure the safety and good health of its customers and employees,organizational level, and use them as an indicator of organizational

the ULVAC Group regularly holds meetings of the Global Safety

Vitalization ofindividuals and organizations

Contributions to the progress ofindustry and science

health, in order to vitalize organizations as well as individuals. The

Committee, which are joined by representatives from the Group

Strategy

Tactics

health promotion of fice provides the results as feedback tocompanies to determine the Group policies on occupational safety

Vitalization inbody and mind

Motivation
management

departments that request them, and management personnel fromand health and ensure that they are laterally spread, thereby promoting

each division and department then use the results to engage in

integrated safety and health efforts of ULVAC on a Group-wide basis.

strategic workplace vitalization initiatives (Health feedback). As a result

Each Group company operates the OSHMS system, which involvesof these initiatives, organizational health improved in Fiscal 2015 overmanagement review by the president or the director in charge of

Fiscal 2014.

safety and health activities and risk assessment by each employee to*1Vitalization in
the brain
Organizational
Vitalization

UL-fit(exercise measurement)

Health feedback(organizational health)ensure company-wide involvement in safety and health management

Organization health (ratio of respondents who indicated “good”)

efforts from the top management to field workers. We received an
e n co u r a g e m e n t a w a r d i n t h eSocial and Psychological healthparticipants in line-care training (for management personnel).
Since Fiscal 2015, we have introduced motivation management toencourage vitalization in body and mind, and exercise measurement

63

75
57
65

61
67
50

51

ULVAC (non-consolidated)
2015

47
52

participants in self-care training (for all employees) and 386

ULVAC (non-consolidated)
2014

34
35

training. Employees attend on a voluntary basis, with a total of 1,313

58

Since Fiscal 2012, ULVAC has conducted various types of health

80
70
60
50
40
30
20
10
0

National

45
46—— ‌Voluntary health initiatives（%）

Respect

Adversity/Optimism

Expected role

1.00

the Kumamoto Earthquake, have raised global awareness of theimportance of local disaster prevention. The companies of the ULVAC

instructor training in order to ensure health and safety. In a single year,

Companies in South Korea

we trained 59 instructors, and we now have approximately 400 people

Companies in Taiwan

capable of providing basic live support because of the instruction

Companies in China

provided to colleagues by these instructors within their designatedCompanies in Southeast Asia

areas during disaster drills.
There has been great interest shown by group companies,■ Frequency ratio of occupational accidents throughout the ULVAC GroupJapan

Disasters and accidents that have occurred around the world, such as

evacuation centers. In addition, we conducted basic life support (BLS)

Companies in Europe and the United States

Group as a wholeFirst Aid Coursewith the city to contribute to provide our premises to local residents as

Companies in Japan

Occupational physician’s comments2

disaster prevention measures, such as by concluding an agreement

accidents as a integrated group.

Global Safety
Committee

Activity Case Study

SHOWA SHINKU CO., LTD. :on-site safety instructionin which it operates. At the Chigasaki Plant, we are contributing to local

that attempt to eliminate work-related

these programs.

ULVAC COATING CORPORATION :High-pressure gas handling training

giving consideration to the location of each company and environment

Awards, for an attitude and activities(UL-fit) to encourage vitalization in the brain. Participants have praised

After UL-fit

for all workers who undertake on-site work, such as manufacturing

evacuation, and initial firefighting, but they conduct disaster drills,

Labor Bureau’s Health and Safety

Strengths/Challenges

Participation in and understanding of health training at ULVAC has been
gradually increasing, and as an occupational physician, I have felt the increased
awareness of health from both management personnel and general employees.
It has been particularly striking that not only Health Promotion Office, but
management, Personnel department, Corporate Enviromnent, Safety and
Health department, General Administration department, and the health andsafety managers of each department have cooperated to lay the groundwork topromote self-management of health by employees. Going forward, we would
like to make efforts in a range of areas to integrate all group companies, in orderfor each employee to be able to engage in health promotion activities evenmore independently.

SEMI (semiconductor equipment and materials international) standards

Group not only undertake basic drills, such as ensuring safety,

Director General of the Kanagawa■ ULVAC Group Safety Management System
Consultation

The ULVAC Group conducts health and safety training based on thesite work.

—— ‌Organizational vitalization initiatives

Goal

ULVAC Service Safety Education

who have not yet received training are forbidden from engaging in on-

ULVAC’s Safety and Health Initiatives

believes that it is not only important to prevent illness for employees,

Objective1

and development, in order to ensure the safety of employees. Workers

In order to contribute to the progress of industry and science, ULVAC

Health initiatives at ULVAC

Activity Case Study

China

0.90
0.73

South
Korea

Taiwanincluding those located overseas, and the scope of these activities isever increasing.

North
Southeast
America Asia

0.79
0.54

*1 Promoting vtalization by balancing the brain’s neurotransmitters through regular exercise.

2011

2012

2013

2014

2015

(Fiscalyear)

ULVAC SINGAPORE PTE LTD :Fire drill

ULVAC, Inc. : Disaster drill(All participants experienced using an AED)

This graph shows the rate of work-related accidents in the entire ULVAC Group for each fiscal
year, indicating the value for Fiscal 2011 (as of June 2012) as 1.00. In Fiscal 2015 (as of June, 2016),
the rate of work-related accidents decreased by 46% compared to Fiscal 2011.

31

ULVAC Report 201632

Foundations of value creation

Initiatives for the Global
Environment

Product energy-saving initiatives

Norihiro Suzuki
Development Division, Development Section No. 1, ULVAC KIKO, Inc.

The ULVAC Group provides products that allow customers to feel thatthey have made environmental contributions based on ourenvironmental policy of “Develop products that contribute to energy
saving, resource saving and environmental conservation.” Furthermore,
we are ensuring thorough management and saving of energy
consumption and waste emissions and conducting activities with the
purpose of minimizing environmental impact.
The ULVAC Group possesses a global production system that isEnvironmental Philosophy
ULVAC Group takes on one of major issues for everyone around theworld, which is to conserve and protect the global environment. We
will consider environmental conservation in all aspects of ourbusiness activities and will contribute to develop a better place tolive and an enriched society.

focused on the Asian region, yet has expanded broadly to regions such

Environmental Policy

as Europe and America. It is essential that we share information within

Develop products with a goal to save energy, reduce the use ofnatural resources and contribute to the conservation of ourenvironment.

the group and swiftly carry out instruction from top management etc.
We are working to unify the ISO14001 certification currently held by
each company, and strengthen group governance.
The ULVAC Group will continuously reduce the environmental❶ ULVAC Group products/Final products❷ ULVAC Group manufacturing process

impact through its products.

Initiatives to reduce the cost of energy consumed

Activities for the reduction of electricity purchasing
costs and "visualization of electricity" usage throughgroup integration
Until now, ULVAC has reduced contract demand through steady electricity
usage reduction activities. Specifically, we have promoted improved awarenessin each employee, in addition to conducting initiatives, such as increasing thespaces between lights, changing lighting in clean rooms to LED, fixing
increased temperatures for air conditioners, operating clean room air
conditioners at intervals, and shifting the operation of large-scale equipment
to nights and holidays, while giving thorough consideration to the effects on
corporate activities and employees.
Since the electricity deregulation for general households in April 2016, it
has become possible to reduce energy costs through comprehensive electricity
contracts with Chiba, Kanagawa, and Shizuoka. For the second phase, we helda Joint Electricity Consideration Meeting, which was attended by the electricalchief engineers and managers in order to promote the Group’s integration
efforts. As a result of this meeting, it was decided to adopt a policy of
expanding the scope of the comprehensive contract by including the Aomorisite. We are promoting activities to purchase electricity in a manner that is
advantageous to each locality. We began our activities in factories that use alarge amount of electricity; however, going forward, we will integrate smalland medium-scale factories.
Furthermore, by monitoring the operation of factory equipment in

33

real time and through visualizationof ele c t r ici t y, an d p rov idin g thisinformation to customers, we hope tobe able to correctly understand theelectricity usage of the equipment to beinstalled by our customers. We will
promote further group integration andfurther increase employee awareness of
reducing electricity usage.

0

0.1

1.0

10.0

100.0

Inlet pressure (kPa)Comparison of the brushless DC motor and AC induction motor

This fiscal year, we achieved a reduction in energy (electricity)

the previous fiscal year. We are seeing the effects of limiting theconsumption of 0.8% over last fiscal year. We believe that the total

amount of landfill disposal of international group companies.

reduction of 1.1% that we have achieved since the year before last

Furthermore, our rate of recovery of valuable materials was 26%, whichindicates that an awareness of energy conservation is gradually taking

continues the level trend of recent years. Recovery of valuable materials

hold at ULVAC Group companies.

is also important from the perspective of material recycling, which is a

Joint Electricity Consideration Meeting
Attended by representatives of 3
companies from 5 locations

Electricity
use

157,819 thousand kWh

Gas usage

LPG: 70 t
LNG: 632 t
City gas: 1,513
thousand m3

Contract demand

Fuel use
volumeOUTPUTvaluable resource, and we will continue to promote it throughout thegroup.

CO2
emissions

Heavy oil: 304 kL
Kerosene: 20 kL
Diesel oil: 193 kL

Steadyactivities

5,000
3,000

250

Water use
volume2013*Sales increased in Fiscal 2015; however, contract demand reduced.

2014

50
0

2015 (Fiscal year)

Packagingmaterials

91,661 t-CO2(Emitted by use ofelectricity, gas and fuel)1,295 t■ Transition of water use volume（t-CO2）■ Domestic companies of the Group■ Overseas companies of the Group(Thousand m3) ■ Domestic companies of
the Group■ Overseas companies of
the Group
1,800
1,500 332 391
1,200
343 387 370

33,21325,642
32,212
31,73360,000 20,670
80,00040,00057,32959,80420,00050,28660,99659,9280

Total
volumeof wasteemissions

The total recycled
amount accounted for
7,072 t of the 7,286 t ofwaste emissions.
The landfill amountwas 214 t.

■ Total recycled amount (t) ■ Amount of recycled valuable materials (t)■ Landfill amount (t) ■ Landfill percentage (%)

（t）

（%）

12,0008,000

Fina
disposal
rate

2.9%

* The above data is based on the data from 34 Group companies in Japan and overseas.
*	The volume of packaging materials is based on the data from 26 Group companies in Japan and overseas.

2011 2012 2013 2014 2015
（Fiscal year）

900
600
300 1,091 960 729 775 803
02011 2012 2013 2014 2015
（Fiscal year）■ Waste10,0001,172 thousand m3

150■ Transition of CO2 emissions

100,000

350

2012

20

3% or below with the final disposal rate falling to 2.9% from 3.7% in

INPUT(billion yen)

2011

DAU-20DC

our target landfill percentage, which was the ULVAC Group standard of■ Material Balance

Broad-scale
reductions

2010

40

Brushless DC motor

Performance data

Net sales (non-consolidated)2009

Up to 72%
energy saving

60

target of reducing energy costs by 10% in the 5 years from Fiscal 2013.

(Chigasaki Headquarters and Factory)

1,000
0

80

The ULVAC Group is conducting energy-saving activities with the■ Contract demand and net sales

（kW）
7,000

DAU-20AC induction motor(conventional type)increase in production volume, etc., during this period. We achieved

the previous fiscal year. The cause of this increase is thought to be theGeneral Administration Department

120
100

Environmental Activities in Fiscal 2015

However, waste emissions increased by approximately 6.5% overHideto Sasao■ Saving energy through the adoption of DC motors
Energy consumption (W)Environmental management

ULVAC KIKO, Inc. manufactures and sells small vacuum pumps.
At this point, we have developed three types of energy-saving diaphragmvacuum pumps.
We have achieved a 70-72% reduction in energy usage
compared to conventional models by changing the motor
specifications to a brushless DC motor and reducing shaft
seals through the use of magnet coupling. (DAU-20DC)
Furthermore, we have achieved energy savings of up to
50% for regions of 1 kPa or under in pressure, compared to
DAU-20DC
conventional models, by reducing internal residual gas. (RDA500H)
Going forward, we will promote improvements and enhancements inorder to continue to satisfy the demands of our customers.

3.7
11,174

2,000
0

4.9

4.4

6,000
4,000

6

520

2011

240

5
3.7
289

254

2.9

214

4
3

2
7,072
6,216
5,613
6,556
2,040
1,769
1,920 1
1,288
2012

2013

2014

2015
(Fiscal year)

0

ULVAC Report 201634

Foundations of value creation

Interactions with Local
Communities

Activity Case Study

1

Holding vacuum demonstration classes
and factory tours (ULVAC, Inc.)ULVAC, Inc., conduct vacuum demonstrations, mainly for local public

Corporate
Governanceamount of responsibility and authority over their designated areas, basedon delegation by the Board of Directors. Also, ULVAC has a Board ofStanding Directors and Auditors, which comprises a total of 16 internal
directors and executive officers. The Board of Standing Directors andAuditors holds regular meetings twice monthly, as well as ad-hoc

institutions, such as elementary schools, and hold factory tours. In

ULVAC’s Social Contribution Activities

Fiscal 2015, 300 people participated in a tour of the Chigasaki

We are promoting global social contribution activities rooted
in local regions and cultures based on the ULVAC Group’s Basic
Policy for Social Contribution Activities.

conduct dialogue with local residents, while deepening their

The ULVAC Group has long been involved in a wide range of social

demonstrations and factory tours.

Headquarters and Factory. Going forward, we will continue to work tounderstanding of ULVAC, and to contribute to the development of
the next generation and local communities through vacuum

contribution activities around the world. In 2013, We set out a basic
policy and priority subjects for social contribution activities in order tothe growing awareness of the importance of corporate social
contributions.
In line with the policy, we will continue to contribute to regional
and international communities by effectively using the technologies

Vacuum demonstration classand human resources of the ULVAC Group to solve various social issues.
Activity Case Study

Basic Policy for Social Contribution Activities
Based on its corporate philosophy of contributing to the growth ofindustry and science with innovative, cutting-edge technologies,
the ULVAC Group provides distinctive technological innovations
globally and implements initiatives for solving various social
problems by using ULVAC’s technologies and human resources.

2

Factory tour

Parking lot security for the Malaysian "Bon
Odori" festivities (ULVAC MALAYSIA SDN. BHD.)

In July 2016, ULVAC MALAYSIA SDN. BHD. (UMY) participated in "Bon
Odori" festivities held by the Japan Club of Kuala Lumpur, Malaysia, andsupported by the Selangor State Government, by acting as volunteer
parking lot security staff. 18 UMY staff members supported the world’s
largest "Bon Odori" event, which had 36,000 participants, through suchactivities as guarding the parking lot and directing traffic around thevenue, together with other member companies of "Sansui-kai", which■ Priority subjects

is a subcommittee of the Japanese Chamber of Trade and Industry,
Malaysia. We are contributing to the "Bon Odori" festival, which links

Education /The Environment Local communities
Education support

the cultures of Malaysia and Japan, while deepening our exchanges
with the local community.

the ULVAC Group in Fiscal 2015

flexible and swift business operations that are appropriate for a rapidly

ULVAC’s Management Structure andOperational Structure

auditors, whose independence is ensured, as well as through attendance

ULVAC values agile and swift business judgment and decision-making,and Auditors, and through regular meetings between the Internalfrom the perspective of responding rapidly to the business conditions in

Auditing Division and the President , etc. Through this structure, we have

which we operate, etc. For that reason, we have adopted theachieved rigorous, fair, impartial, and transparent auditing andmanagement structure of a company with a board of corporate auditors.

supervisory functions, ensuring that each corporate auditor obtains

changing business environment, based on a clear expression of the
responsibilities and authority of each executive officer.
In addition, ULVAC has a Board of Corporate Auditors, which
performs auditing and oversight of management decision-making andbusiness operations. The Board of Corporate Auditors comprises 4
members, of whom 2 are external auditors. 1 of the external auditors isdesignated as an independent external auditor. Furthermore, we ensure
full auditing and supervisory functions through close links between
corporate auditors and the Internal Auditing Division and independentand comments by corporate auditors at important meetings, such as
meetings of the Board of Directors and the Board of Standing Directors

First, ULVAC has a Board of Directors, which is a decision-making

sufficient information.

body for important management issues. The Board holds regular

In addition, we have a Committee for Appointment and Remuneration,

meetings once each month, as well as ad-hoc meetings as necessary toetc., for instances that require objective determination of important

ensure flexibility. The Board of Directors comprises 9 members, of whommatters, such as the appointment and remuneration of directors and

3 are external directors. 2 of the external directors are designated as

executive officers. The Committee for Appointment and Remuneration,

independent external directors. Through this structure, ULVAC is not only

etc., comprises 5 members, of which 3 are independent externalable to make swift and efficient judgments concerning important

directors or independent external auditors. Of the remaining 2 members,

management issues, but is also able to achieve fair, impartial, and highly

1 is an external director. By having these kinds of advisory bodies for thetransparent deliberation, as well as operational oversight. Next, with theBoard of Directors, we are able to achieve fair, impartial, and highly

introduction of an executive officer system, executive officers aretransparent deliberations with regard to especially important management

engaged with executive functions, having been granted a certain

decisions, and increase the effectiveness of the Board of Directors.

General Meeting of Shareholders

Education /Education support
15

Activity Case Study

3

Total
94

The ULVAC Group works to ensure thorough corporate
governance in order to increase corporate value in themedium to long term, based on our corporate philosophy of“contributing to manufacturing and science through vacuum
technology.” From this perspective, we will respect the interests
not only of shareholders, but also of business relations, local
communities, employees, and other stakeholders that are
involved with our business activities. We will also value
competitive and efficient operation, while ensuring strict
compliance with laws and corporate ethics.

■ ULVAC Management Structure (As of September 30, 2016)■ Number of social contribution activities conducted by

The Environment
44

meetings as necessary. Through this structure, we have achieved more

Local communities
35

Volunteer activities to assist with germination of riceseedlings in local villages (Ulvac Korea Precision, Ltd.)

Appointment/Dismissal

Board of Directors

Ulvac Korea Precision, Ltd., provided volunteer staff to farmers who were

Recommendations

short on labor in Pyeongtaek, Gyeonggi Province. These volunteers

Committee for Appointment and Remuneration, etc.

Appointment/Dismissal

Audit

Appointment/Dismissal

Board of Corporate Auditors

Independent Auditors

Collaboration
Accounting Audit

provided support for rice farming in the areas surrounding the company,
from preparing seedling trays to laying sheets in the fields.

Board of Standing Directors and Auditors
Risk Management Committee
Compliance Committee

President and CEO
Collaboration

Collaboration

Executive Officers

Divisions of the Company

Audit

Internal Auditing OfficeGroup Companies
Beach Cleaning (coastal clean-up activity)

35

Tanbo (Rice Field) Project

ULVAC Report 201636

Foundations of value creation

Board of Directors and Auditors (End of September 2016)

Board of Directors

Hisaharu Obinata
President and Chief Executive Officer
Responsible for Internal Auditing Office

Executive Officers

Akinori Bo

Mitsuru Motoyoshi

Masasuke Matsudai

Dr. Choong-Ryul Paik

Director andExecutive Vice President
Supervisor of Head Office Divisions

Director and Senior Managing Executive Officer
Supervisor of Affiliated Business Department,
General Manager of
Global Business Strategy Headquarters

Senior Managing Executive Officer
President of ULVAC TECHNO, Ltd.

Managing Executive Officer
Supervisor of Development

Setsuo Iwashita

Junki Fujiyama

Hideyuki Odagi

Hiroyuki Hirano

Dr. Kazuya Saito

Akira Umeda

Ryou Matsumoto

Director and Senior Managing
Executive Officer
General Manager of Management
Planning Headquarters

Director and Senior Managing
Executive Officer
Supervisor of Corporate Sales &Marketing, General Manager ofCorporate Sales andMarketing Division I

Director andManaging Executive Officer
Supervisor of Manufacturing,
General Manager ofAdvanced Manufacturing Division

Executive Officer
Director of ULVAC Vacuum
Furnace (Shenyang) Co., Ltd.

Executive Officer
General Manager of Research andDevelopment Planning
Department and Institute for Super
Materials

Executive Officer
General Manager of Business
Planning Administration
Department, Management
Planning Headquarters

Executive Officer
General Manager of AffiliatedBusiness Department, Global
Business Strategy Headquater

Akira Mihayashi

Norio Uchida

Dr. Kozo Ishida

Youichi Oohinata

Kiyokazu Yanagisawa

Shigemitsu Sato

Yu Jer Tsai

External Director
President of Nissay Credit
Guarantee Co., Ltd.

External Director
Outside Director of Nabtesco
Corporation

External Director
Senior Advisor for HORIBA, Ltd.

Executive Officer
General Manager of Industrial
Equipment Division

Executive Officer
General Manager ofComponents Division

Executive Officer
General Manager of
FPD . PV Division

Executive Officer
President of ULVAC TAIWAN INC.

Seiichi Takahashi

Makoto Ito

Senshu Asada

Kazumi Ohtsuka

Audit & Supervisory
Board Member

Audit & Supervisory
Board Member

External Audit & Supervisory
Board Member
LawyerExternal Audit & Supervisory
Board Member

Auditors

37

ULVAC Report 201638

Foundations of value creation

Compliance
ULVAC values compliance, and in addition to conducting
awareness activities so that each person in the ULVAC Group
acts with a spirit of compliance, we are establishing andoperating a range of institutions and regulations to ensure
more thorough compliance.

Risk Management
Whistleblowing System
ULVAC has adopted a whistleblowing system. The system operates
through the Internal Auditing Office, which is under the direct authorityof the president and has guaranteed independence. The Internal
Auditing Office also serves as the office for the Compliance Committee,

Establishment of a Corporate Code of Conduct

and it is structured to give full consideration to confidentiality

ULVAC has established a Corporate Code of Conduct comprising 18

system does not prevent the person making the report from selecting

items, conducted education, and distributed booklets to create a spirit ofother institutions or organizations within the Company as the destination

compliance, in order to ensure that the execution of the duties of officers

for the report, and in those instances, the report will be handled as

and staff is compliant with the law and internal regulations, and fulfills

appropriate to the circumstances. Anonymous reports are also accepted,

our social responsibility as a corporation.

and the people making the reports are not treated unfavorably in any

throughout the process of investigating the content of reports. This

The ULVAC Group considers that responding to increasingly
complex and diverse risk factors leads to the creation of
governance structures that contribute to the fulfillment of legal
requirements and the creation of internal control structures,and by extension, the medium- to long-term improvementof corporate value. We are expanding systems that can
respond appropriately to risk factors through identification,
classification, analysis, and evaluation, and we are working toincrease corporate value by reflecting them in our management
strategy.

ULVAC, Inc.

ULVAC Group companies

Chief Risk Officer =President and CEO

Chief Risk Officer =President and CEO

Risk Management
Committee

Risk Management System(Controls entire business risks)

Reportingandinstructionfor
improvement

Risk Management
Committee

ULVAC has established rules related to our risk management system as away.
After a whistleblower report has been received, the initial responserisk management initiative. We classify a broad range of risks from ais for the Compliance Committee to investigate the facts. This

number of different perspectives, and establish risk control offices forinvestigation is particularly mindful of fairness, and is conductedeach risk classification. Furthermore, the risk control offices identify morejudiciously and thoroughly. If necessary, assistance may be sought from

specific risks and respond to them. We work to ensure that especiallyexternal experts, such as lawyers, and thorough interviews that are asimportant information for the operation of the risk management system

Compliance Education

wide-ranging as possible may be conducted and analyzed. Also, theis gathered efficiently in these risk control offices. In addition, in order topresident of the Company shall chair the Compliance Committee, andshare and evaluate information concerning the operation of the risk

ULVAC is working to create a spirit of compliance through awarenessmembers of the Committee shall observe a strict duty of confidentiality

management system on a company-wide basis, we have a Risk

activities. As an element of this, we are conducting activities such as

when carrying out their duties.

Management Committee, which is chaired by the President, and mainly

providing opportunities for regular and ad-hoc education and training.

Risk Management System

Dealing with Acts of Violation

Risk
Control
OfficeRisk
Control
OfficeRisk
Control
OfficeRisk
Control
OfficeRisk
Control
OfficeRisk
Control
Office●Risk management activities are implemented by the responsible departments
through the PDCA processes.

●

Each group company decides upon the necessity of establishing its
Risk Management Committee in consideration of its size and other factors.

comprises the various risk control offices. The Risk Management
Committee holds regular twice-yearly meetings as an umbrellaorganization for risk management, and it determines company-wide

If it is deemed that a violation of laws or regulations has been committed

basic policy, monitors the state of management and administration, andbased on the results of an investigation by the Compliance Committee,

considers any improvements that can be made, etc. Furthermore,then the opinion of an external expert, such as a lawyer, may be sought

initiatives at ULVAC are implemented at ULVAC Group companies asas necessary, immediate shutdown or improvement measures will beappropriate for the scale and business type of the company in question.

implemented, and those who were involved with the violation will be
dealt with after deliberation by the appropriate institution. In addition,
the fundamental causes that brought about the violation are alsostudied to formulate effective measures for preventing recurrence.

39

ULVAC Report 201640

Foundations of value creation

CSR Activities for Fiscal 2015 and Targets for Fiscal 2016
Based on its corporate philosophy of contributing to the growth of industry and science with innovative, cutting-edge technologies, the
ULVAC Group provides distinctive technological innovations globally and implements initiatives for solving various social problems byusing ULVAC’s technologies and human resources.

◎: Higher achievements than targeted ○: Targets achieved or proceeded as planned △: Effort required ×: Further effort required

Stakeholders

Fiscal 2015 targets

Fiscal 2015 achievements

Self-assessmentof the fiscal 2015
achievements

Fiscal 2016 targets

Referencepage○◦ Thoroughly implement globally integrated ISO9000/14001 certification(phase 3).
◦ P romote systematization and group-wide roll-out of upstream process
workflow for "Front Loading".
◦ Aim to reduce the number of the ULVAC Group’s product accidents tohalf that of the previous fiscal year.
◦C onduct risk assessment for 100% of equipment products by people
with SA (Safety Assessor) qualifications.

P26

P27

Customers◦ T horoughly implement the global integration cer tification (Phase 2) of
ISO9000/14001.
With a high priority on a trusting relationship with customers, ◦ P romote group-wide roll-out of quality improvement items from the global
we engage in various efforts to enhance the quality and safety
management review.
of our products.
◦ Promote group-wide roll-out of "Front Loading".
◦ Aim to reduce the ULVAC Group’s product accidents to half the level of the previous
fiscal year.

◦ Completed globally integrated ISO9000/14001 certification (phase 2).
◦ Promoted expansion of quality improvement items through the Global
Quality Assurance Committee, which convenes twice yearly.
◦ Promoted group-wide roll-out of "Front Loading".
◦ Reduced the number of product accidents to the lowest level ever, eventhough this was only a reduction of 30% over the previous fiscal year.

Suppliers◦ Continue the supplier BCP survey.
◦ Respond to the conflict minerals issue.
We strive to maintain and promote fair and appropriate- Consider obtaining CFS certification.
transactions with our suppliers to help establish a secure◦ Periodically exchange information with suppliers.
relationship of mutual trust.
- Ensure substantial content of supplier meetings.
- Visit major suppliers individually.

◦ E xpanding and continuing checks of BCPs and the implementation ofnecessary measures for major suppliers.
◦M aterials division acquired CFS certification.
◦ Periodically exchanged information with suppliers.
- Held 3 mutual prosperity meetings, 1 operations briefing meeting, andindividual visits.

○◦C ontinue legal compliance.
◦ Actively communicate with suppliers.
- Actively conducting new activities with the aim of growing together
through coexistence and mutual prosperity.
◦C ontinue buyer education.

We will endeavor to ensure the timely disclosure of business Promote transmission of information, such as through technology seminars, while
activities and financial information to promote communication working to provide more interviews with institutional investors than in the previous
with shareholders and investors.
fiscal year.

Held 212 meetings for interviews with institutional investors those exceed thenumber of meetings conducted last fisical year.

○

Promote information transmission, such as through technology seminars,
while continuing to hold interviews with institutional investors.

-

Provide the results of the CSR awareness survey as feedback to each department andendeavor to reflect them in initiatives.

Although awareness surveys continued to be conducted as in the previous
fiscal year, feedback was insufficient.

△

Provide feedback on the previous fiscal year’s results to each department
and reflect them in the Fiscal 2016 survey.

P29◦C ontinue interviews for the purpose of gathering opinions and sharing information
related to HR (system, employment, and education).
◦ Promote initiatives for the development of next-generation leaders.
◦C onduct activities aimed at preventing the aggravation of health conditions inconjunction with the ULVAC Health Insurance Association, in order to reduce healthrisks.
◦ U tilize the results of stress checks and promote activities for the purpose oforganizational invigoration.

❶C onducted integrated personnel and general administration meetings ,including group companies, and created a system for collecting and sharing
opinions.
❷ A lthough the curriculum and content of nex t- generation leader
development was considered, it has not yet been implemented.
❸ Activities aimed at preventing the aggravation of health conditions wereconducted in conjunction with the ULVAC Health Insurance Association, andthe number of employees at high risk of health issues, who had not beentreated by a medical institution, was reduced by approximately 70%.
❹M
 anager training was conducted for 98 people, utilizing the results of stresschecks, and the level of activity increased in Fiscal 2015 over Fiscal 2014.

❶○
❷△
❸◎
❹◎

◦C
 onduct education as part of next-generation leader development,
having selected participants and determined specific content.
◦ Incorporate new ideas aimed at management and problem solving thatare appropriate for the modern age in the existing level education
system.
◦O
 rganize walking events using wearable devices and launch a personal
health page to visualize healthcare-related information in conjunction
with the ULVAC Health Insurance Association, in order to create anenvironment in which each employee plays a central role in the
management of their health.
◦U tilize the results of stress checks and launch activities for the purposeof organizational vitalization.

P29-31◦ S ystematize the manufacturing professional training curriculum and begin
instructor development.
◦ Continue global competitions, arising from the Global Manufacturing Technology
Competition, the Global Business Improvement Competition, and the Skills
Challenge; share initiatives, thoughts, and results related to manufacturing andengineering throughout the group; and vitalize interactions.

◦ Determined "Ideal Form" with the Board of Department Managers, createdan education system, and commenced education at selected departments.
◦ Held global competitions, arising from the Global Manufacturing Technology
Competition, the Global Business Improvement Competition, and the Skills
Challenge, and promoted group-wide information sharing and roll-out.

◦ R oll out "Front Loading" on a group-wide basis, complete the necessary
specialist education system for it to be effective, and implement it.
◦C ontinue global competitions, arising from the Global Manufacturing
Te chnology Competition, the Global Business Improvement
Competition, and the Skills Challenge, share initiatives, thoughts, andresults relating to MONODZUKURI and engineering throughout thegroup, and further promote interactions.

P28-29Halve the number of occupational accidents in ULVAC Group compared to the previous
fiscal year.
* We will transfer product safety targets to the customer section from this fiscal year.

As a result of conducting safety campaigns, such as promoting risk assessment
for the entire ULVAC Group, the number of workplace accidents at the Groupdecreased by 32% over the previous fiscal year. At ULVAC alone, the record of no
accidents continued, and the system of working to eliminate workplace
accidents as a unified group received praise, so that ULVAC received a prize
from the Director General of the Kanagawa Labor Bureau.

○

Aim to further reduce the number of ULVAC Group work-related accidents,
even though they are already at a low level.

P32

Continue to promote the development of products that contribute to reducing theenvironmental burden.
Example: ◦ Products with low energy consumption◦ Products with less resource loading◦ Products compatible with Restrictions of Chemical Substances in Products

ULVAC’s business divisions and group companies released products with low
energy consumption.

◎

Continue to develop and release products to reduce environmental impact.

Reduced the energy usage of the entire ULVAC Group in Fiscal 2015 by 10.6%
from Fiscal 2013.

◎

Reduce the ULVAC Group’s energy use by 10% compared with the Fiscal
2013 in the next five years.

Continue to pursue the creation of the ULVAC Pictorial Book of Nature Around Rice
Fields, which introduces the creatures that live in the rice fields around Chigasaki as partof the Tanbo (Rice Field) Project. Create awareness of coexistence with the naturalenvironment around Chigasaki and the ULVAC Tanbo (Rice Field) Project.

The Pictorial Book of Nature Around Rice Fields project was completed, as thelisting of living creatures scheduled for inclusion ended, and delivery tointended recipients was judged to be finished.

○

Publicize the status of activities related to the Tanbo (Rice Field) Projectthroughout the year through SNS and raise awareness for ULVAC’s Tanbo(Rice Field) Project as broadly as possible.

We will perform social contribution activities based on theContinue to introduce initiatives and promote activities to deepen understanding ofpractices and cultures of the countries and regions in which we
ULVAC Group Companies’ social contribution activities
operate.

Introduced ULVAC’s social contribution activities both internally and externallythrough internal bulletins, ULVAC reports, and SNS, etc., and actively conductedactivities that will lead to the development of the next generation, such as offsite vacuum experiment demonstrations.

○Share information concerning each company’s activities within the ULVACGroup, and introduce initiatives and promote activities to deepen
understanding of social contribution activities.

Shareholders andinvestors

Employees

Environment

Local community

41

Communication guidelines

We will endeavor to provide employees with diverse working
opportunities and an environment in which they can work in
comfort and with a sense of security.

We will consider environmental conservation in all aspects ofour business activities and will contribute to develop a better Continue to reduce the ULVAC Group’s energy use to meet the 5-year target of a 10%
place to live and an enriched society.
reduction compared with fiscal 2013.

○○

P33-34P35

P35

ULVAC Report 201642

Financial Highlights

Financial Highlights

6,115

11,996

11,132

17,864

Income (loss) before income taxes(33,704)(565)

15,137

12,654

17,786

Net income (loss)(49,984)(3,807)

11,538

8,874

16,698

Capital expenditures

12,719

6,761

6,217

6,731

7,046

Depreciation

9,096

7,967

7,421

7,630

6,931

R&D costs

7,088

4,989

5,213

5,562

6,284

200,000

200,000

150,000
100,000

100,000

50,00050,0000Millions of yen

YEAR-END DATA

2012.06

2013.06

2014.06

2015.06

2016.06

Total assets

249,651

243,289

230,791

242,348

219,561

Net assets/Shareholders’ equity

41,18759,436

72,23884,92878,032

Number of employees

6,981

6,579

5,971

5,904

5,886

Net assets

2012.06

2013.06

2014.06

2015.06

2016.06

751.00806.381,040.23

1,398.66

1,477.29(87.79)223.18172.73338.37-Diluted－－

165.62148.48－Cash dividends

－

－

－

10.00

30.00

14.06

15.06

0

16.06

0

13.06

14.06

16.06

15.06

Depreciation

10,0008,000

15,000

5,000

12.06

R&D costs (Millions of yen)

20,00010,000(1,012.94)

13.06

Capital expenditures

Net income (loss)-Basic

12.06

Capital expenditures/Depreciation (Millions of yen)

(Yen)

PER SHARE DATA

150,000

223,608(6,384)250,000

6,000

12.06

4,000

13.06

14.06

15.06

16.06

13.06

14.06

15.06

6,284

Operating income (loss)

250,000

182,732

192,437

5,562

179,174

169,808

173,878

5,213

163,351

166,778

196,804

4,989

Net sales

152,221

223,608

7,088

182,732

192,437

169,808

7,046
6,931

166,778

179,174

152,221

Orders received (Millions of yen)

6,731
7,630

Orders received

Net sales (Millions of yen)

173,8782016.06

6,217
7,421

2015.06

163,351

2014.06

6,761
7,967

2013.06

12,7199,096

2012.06

FOR THE YEAR DATA

196,804

Millions of yen

2,000
0

12.06

16.06

(%)

OTHER INFORMATION

2012.06

2013.06

2014.06

2015.06

2016.06

Net income / Average total assets (ROA)

－

－

4.9

3.8

7.2

Net income / Average shareholders’ equity (ROE)

－

－

18.8

12.1

21.9

14.8

22.7

29.2

32.8

33.2

Shareholders’ equity ratio

Total net assets (Millions of yen)/
Shareholders’ equity ratio (%)

Cash flows (Millions of yen)
Cash flows fromoperating activities

Shareholders’ equity ratio

Total net assets

40

100,000
84,928Disclaimer regarding forward-looking statements
Forward-looking statements of the company in this report are based on information available at the time these documents were prepared.

75,00059,43650,000ULVAC’s customers in the flat-panel display (FPD), solar cells, semiconductor, and electronic parts industries face the challenge of therapid pace of technological advances and fierce competition.

72,23841,187

29.2

32.8

33.2

30

20

10

25,00012.06

22,35720,000

13.06

14.06

15.06

16.06

0

Free cash flow

29,19021,992

23,70818,115

17,937

17,851

0 -8,492-10,000

14.8

032,213

10,00022.7

Consequently, actual earnings may vary substantially from the projections included in this report due to a number of factors that could
cause, directly or indirectly, performance to fluctuate. The factors that could cause results to differ materially from the statements herein

40,00030,00078,032

Cash flows frominvesting activities-20,000-11,328-4,506-3,023-4,055-5,593-19,820-30,000
12.06

13.06

14.06

15.06

16.06

include the world economy; fluctuations in the exchange rate; market conditions for flat-panel displays, semiconductors, and electric devices;and trends in capital investments.

43

ULVAC Report 201644

Financial Highlights

Analysis of Business Results

Business results for the current fiscal year
In the consolidated fiscal year under review, the Japanese economy

generally cautious due to reduced growth in the number of units sold,continued its gradual recovery, with employment and the earnings

in spite of the continued advancement and slimming of smartphones.

environment continuing to improve in spite of a plateau inWith regard to capital investment in LCD production equipment, active

improvements in corporate earnings. In the United States, although

investment focused on this area, leading to positive results that

capital investment and exports were on the weak side, economic

exceeded those of the previous fiscal year.

recovery continued with increases in individual consumption andAs a result, orders received rose by 40.876 billion yen or 22.4%

private housing investment. In Europe, although some divisions wereyear on year to 223.608 billion yen, and sales rose by 13.263 billion yen

weak, a gentle economic recovery continued, such as a reduction

or 7.4% year on year to 192.437 billion yen for the consolidated fiscal

in the unemployment rate despite the continued high level ofyear under review. With regard to consolidated profit and loss,

unemployment. In China, the economy began to gently slow, with aoperating income rose by 6.731 billion yen or 60.5% year on year to

slowing of production growth, etc., in spite of a strong increase in

17.864 billion yen, ordinary income rose by 5.898 billion yen or 47.3%

consumption and the bottoming out of exports.

year on year to 18.373 billion yen, and net income attributable toIn the electronics market, in which the ULVAC Group operates,
capital investment by electronic component manufacturers wasowners of the parent rose by 7.824 billion yen or 88.2% year on year to
16.698 billion yen.

Net sales by business segment (Millions of yen)

Net sales by region (Millions of yen)

■FPD-PV production equipment■Semiconductor and electronic device production equipment ■Components■Industrial equipment ■Material ■Others■ Japan

250,000

250,000

200,000

200,000

150,000

150,000

100,000

100,000

50,00050,0000

12.06

13.06 14.06

15.06

Material
15,106 (8%)
Industrial equipment
20,676 (11%)■FPD and PV production equipment

well as the temporary postponement of investment in non-volatile memory

With regard to FPD (flat panel display) production equipment, investment

production equipment.

0

16.06

Vacuum Application Business
32,000 (17%)

VacuumEquipment Business

Others
16,894 (9%)

Vacuum Equipment Business■ Taiwan

160,437 (83%)

Total
192,437

FPD•PV
production equipment
82,849 (43%)(Millions of yen)

Semiconductor and electronic
device production equipment
30,871 (16%)

Components
26,040 (13%)■ South Korea■ China■ Other Asia

12.06

14.06

15.06

13.06

■ Europe, others

16.06

Europe, others
11,555 (6%)
Other Asia
4,019 (2%)

Japan

Total
192,437

Taiwan20,551 (11%)

82,282 (43%)(Millions of yen)China
46,291 (24%)

South Korea
27,738 (14%)

Overseas
110,155 (57%)

concentrated on small to medium LCD production equipment for mobile
handsets and large LCD production equipment for TVs, and with the■Components

addition of investment in OLED display production equipment, both orders

Markets steadied behind the FPD, semiconductor, electronic components,

received and sales greatly exceeded those of the previous fiscal year.

and automotive-related industries. Orders received exceeded those of theprevious fiscal year, with a large order for cryo pumps received from

■Semiconductor and electronic device production equipment

overseas in the second half of the fiscal year; however sales remained on

With regard to Semiconductors, sputtering equipment and natural oxide

par with those of the previous fiscal year.

film removal equipment for memories, with regard to electronic
components, advanced device manufactring equipment for mobile■ Industrial equipment

devices, those mainly contributed to orders received and sales; however,We recorded orders received and sales centered around vacuum heat

results fell below those of the previous fiscal year because of the effects oftreating furnaces for the production of automotive components; however,reduced production of electronic components due to reduced growth inboth fell below the level of the previous fiscal year, due to the effect of thesales of smartphone units and reduced capital investment for DRAM, aseconomic slowdown in China, etc.

Stock Information (As of June 30, 2016)
Total number of stocks authorized

100,000,000

Number of Shareholders (Common Stock) total: 11,276 shareholders

Total number of stocks issued

49,355,938

Individuals and Other

Total number of shareholders

11,276

Shareholder’s name

Vacuum Application Business■Materials■Others

Orders were received for sputtering target materials for LCDs, mainly from

Mask blanks and analysis equipment remained solid. In relation to mask

Korean customers, etc., and both orders received and sales exceeded thoseblanks, there was increased demand for high-definition small and medium-of the previous fiscal year.

sized panels for smartphones and in-vehicle semiconductors, while analysis
equipment focused on the Asian market.

Japan Trustee Services Bank, Ltd. (Trust account)
TAIYO FUND, L.P.
Nippon Life Insurance Company
Mizuho Bank, Ltd.
Sumitomo Mitsui Banking Corporation
The Master Trust Bank of Japan, Ltd. (Trust account)
TAIYO HANEI FUND, L. P.
SAYCO Building Management Co., Ltd.
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Japan Trustee Services Bank, Ltd. (Trust account 9)

Number of shares Ratio of shareholding(thousands)
(%)

3,703
3,244
3,242
1,916
1,864
1,775
1,225
1,006
910
902

7.50
6.57
6.57
3.88
3.78
3.60
2.48
2.04
1.84
1.83

138

Domestic Corporations
Securities Companies

53

Financial Institutions

45

Foreign Investors

Major Shareholders

10,791
224

Foreign Companies

24

Treasury stock: 1 shareholder

Number of Shares Held (Common Stock) total: 49,355,938 shares
Foreign Companies

19,584,330

Financial Institutions
Individuals and Other

18,221,720
6,479,560
3,937,726

Domestic Corporations
Securities Companies
Foreign Investors

1,096,436
32,903

Treasury stock: 3,263 shares

Note: Ratio of shareholding is calculated by the number of treasury stocks (3,263 stocks)

45

ULVAC Report 201646

Financial Highlights

Consolidated Financial Statements
Consolidated Balance Sheets(Unit: Millions of yen)

Fiscal year ended June 30, 2015
(June 30, 2015)

Fiscal year ended June 30, 2016
(June 30, 2016)

AssetsFiscal year ended June 30, 2015
(June 30, 2015)

Fiscal year ended June 30, 2016
(June 30, 2016)

Liabilities

Current assets

Current liabilities

Cash on hand and in banks

62,68445,713

Notes and accounts payable, trade33,81635,303

Notes and accounts receivable, trade

56,68457,958

Short-term borrowings

62,84439,453Merchandise and finished goods

3,551

4,645

Lease liabilities

385

319

Work in process

18,685

16,808

Accrued income taxes

1,392

2,039

Raw materials and supplies

9,897

8,009

Advances received

14,492

13,598Deferred tax assets

1,620

4,746

Deferred tax liabilities

52

11

1,931

2,206

203

368

2,059

1,964

Other

5,264

6,356

Accrued bonuses for employees

Allowance for doubtful accounts

△482

△621

Accrued bonuses for directors and corporate auditors

157,903

143,616

Total current assets
Fixed assets

Accrued warranty costs
Provision for loss on contract

Property, plant and equipment

Other

129

558

9,976

10,331

127,277

106,150

81,341

78,132

Accumulated depreciation△43,718△44,765

Buildings and structures, net

37,62333,367Long-term debt

19,80523,237

Machinery, equipment and vehicles

67,281

63,885

Lease liabilities

557

546

△51,787△50,194

Deferred tax liabilities

1,590

1,399

15,494

13,690Net defined benefit liability

6,715

8,711

13,684

13,286

Accrued pension and severance costs for directors and corporate auditors

394

319

△12,390△11,961

Asset retirement obligations

333

336

747

831

30,14235,378

157,420

141,529

Buildings and structures

Accumulated depreciation
Machinery, equipment and vehicles, net
Tools, furniture and fixtures
Accumulated depreciation

Total current liabilities
Long-term liabilities

1,294

1,325

Other

Land

8,198

8,109

Total long-term liabilities

Leased assets

1,490

1,516

△923

△884

Leased assets, net

567

632

Construction in progress

2,487

3,252

Total property, plant and equipment

65,66260,374Tools, furniture and fixtures, net

Accumulated depreciation

Intangible fixed assets

166

112

Software

1,023

754

Other

3,436

3,051

Total intangible fixed assets

4,625

3,916

Investment securities

4,718

4,035

Guarantee deposits

1,877

1,717

Deferred tax assets

1,766

1,924

Other

6,896

6,358

Allowance for doubtful accounts△1,100△2,379Total investments and other assets

14,156

11,65584,44475,945242,348

219,561

Leased assets

Investments and other assets

Total fixed assets
Total assets

47(Unit: Millions of yen)

Total liabilities

Net Assets
Shareholders’ equity
Capital stock

20,873

20,873

Capital surplus

16,435

4,582

Retained earnings

34,60950,813

Treasury shares

△10

△10

71,90876,258718

130

Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment

7,462

△667

Remeasurements of defined benefit plans△718△2,822

Total accumulated other comprehensive income

7,462△3,359Non-controlling interests

5,559

5,133

Total net assets

84,92878,032

Total liabilities and net assets

242,348

219,561ULVAC Report 201648

Financial Highlights

Consolidated Statement of Income

Consolidated statement of cash flows(Unit: Millions of yen)

Fiscal year ended June 30, 2015
(July 1, 2014–June 30, 2015)
Net sales
Cost of sales
Gross profit

Fiscal year ended June 30, 2016
(July 1, 2015–June 30, 2016)

179,174
135,710
43,464

192,437
141,314
51,122

14,97817,35332,331
11,132

15,74017,51833,25917,864

181
310
333
743
360
128
1,763
3,818

113
251
360
578
541
299
477
2,619

1,038
365
363
710
2,475
12,475

797
244
277
793
2,110
18,373

326
28
354

60
241
301

176
176
12,654
3,183
13
3,196
9,458
584
8,874

749
31
109
888
17,786
3,892△3,433459
17,327629
16,698Selling, general and administrative expenses
Selling expenses
General and administrative expenses
Total selling, general and administrative expenses
Operating income

Dividend income
Rent income
Foreign exchange gains
Insurance and dividends income
Share of profit of entities accounted for using equity method
Other
Total non-operating income

Commission for syndicate loan
Loss on valuation of inventories
Other
Total non-operating expenses
Ordinary income
Gain on sale of fixed assets
Reversal of impairment loss on fixed assets
Gain on sales of stocks of subsidiaries and affiliates
Total extraordinary income

Impairment loss
Loss on sales of investments in capital of subsidiaries and affiliates
Total extraordinary losses
Income before income taxes and minority interests
Current income taxes
Deferred income taxes
Total income taxes
Net income
Net income attributable to non-controlling interests
Net income attributable to owners of parent

Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses
Increase (decrease) in net defined benefit liability
Increase (decrease) in provision for directors’ retirement benefits
Increase (decrease) in provision for loss on order received
Interest and dividend income
Interest expenses
Subsidy income
Share of (profit) loss of entities accounted for using equity method
Decrease (increase) in notes and accounts receivable - trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable - trade
Increase (decrease) in accrued consumption taxes
Other
Sub totalInterest and dividend income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities

Extraordinary losses
Loss on disposal of fixed assets

Income before income taxes and minority interests
Depreciation

Increase (decrease) in advances received

Extraordinary income

Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment and intangible assets
Loss on sales of investments in capital of subsidiaries and associates
Proceeds from sales of shares of subsidiaries resulting in change in scope of consolidation
Subsidy income
Other
Net cash provided by (used in) investing activities
Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable
Repayments of long-term loans payable
Repayments of lease obligations
Cash dividends paid
Dividends paid to non-controlling interests

Fiscal year ended June 30, 2015
(July 1, 2014–June 30, 2015)
Net income

Fiscal year ended June 30, 2016
(July 1, 2015–June 30, 2016)

9,458

17,327

346
5,999
672
40
7,056
16,514△588△8,781△2,107△36△11,512
5,815

15,427
1,087

5,877
△63

Other comprehensive income
Valuation defference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of entities accounted for using equity method
Total other comprehensive income
Comprehensive income

17,786
6,931
31
1,520
443
△263
△75
69
435
△364
797
△151
△299
△5,888
△328
3,844
700
162
1,401
26,750429△805△2,666
23,708△624
379△5,846
1,070
490
207
269
△4,055△1,950
1,896△5,947
316
△286
293
84
△5,593△3,972
7,525△10,893△387△1,050△5,811△287△20△14,895
1,616
4,658
57,012
61,670△23,752
13,610△9,196△397△491△11,854△368△32,448△2,474△16,808
61,67044,862

Cash flows from financing activities

Purchase of treasury shares(Unit: Millions of yen)

12,654
7,630
271
857
△176
△301
348
△458
△491
1,038
△53
△128
△7,626
4,354
3,740
3,344
297
1,103
26,403539△1,043△3,90721,992

Cash flows from investing activities

Proceeds from sales of property, plant and equipment and intangible assets

Consolidated Statement of Comprehensive Income

Fiscal year ended June 30, 2016
(July 1, 2015–June 30, 2016)

Cash flows from operating activities

Increase (decrease) in provision for product warranties

Non-operating expenses
Interest expenses

Fiscal year ended June 30, 2015
(July 1, 2014–June 30, 2015)

Impairment loss

Non-operating income
Interest income(Unit: Millions of yen)

Other
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

Comprehensive income attributable to:
Owners of parent
Non-controlling interests

49

ULVAC Report 201650