Q4 FY2024 (January 1, 2024 – March 31, 2024)
Financial Announcement – May 10, 2024
Transcript

Moderator: Opening Remarks
Now it's time for us to start the Tokyo Electron Financial Announcement for the fiscal year ending in March
2024. Thank you very much for joining us today despite your busy schedule. I am Koichi Yatsuda fromthe IR Department, acting as the moderator for today's session. Now I would like to introduce today'sattendees.
Mr. Toshiki Kawai, Representative Director, President and CEO.
Kawai: I'm Toshiki Kawai. Thank you for joining us.
Next, Mr. Hiroshi Kawamoto, Senior Vice President and General Manager in charge of the Finance Unit.
Kawamoto: I am Hiroshi Kawamoto.
Prior to the presentations, let me explain the flow of today's conference. First of all, Mr. Kawamoto andMr. Kawai will make presentations. After that, until 6:15 Japan time, we will have a question-and-answer
session where we take questions from the audience. This meeting uses two channels of WebEx for
simultaneous interpretation between Japanese and English. As we explained in our email, you are kindly
requested to use apps on PCs or mobile terminals if you plan to ask questions. But if you are not goingto ask questions, then you can use telephones. Since this conference is intended for institutional investors
and analysts, we would appreciate your understanding that we receive questions only from institutional
investors and analysts as usual. We will post the audio contents of this conference in Japanese andEnglish on our website within a few days. It would be appreciated if you could also visit our website.
Now, Mr. Kawamoto will present the consolidated financial summary. Mr. Kawamoto, please.

FY2024 Consolidated Financial Summary
Hiroshi Kawamoto - Senior Vice President and General Manager, Finance Unit
Good afternoon. I am Hiroshi Kawamoto of the Finance Unit. I would like to present the consolidated
financial summary of the fiscal year ending in March 2024.

FY2024 (April 2023 - March 2024) Financial Highlights: Slide 4First of all, I would like to present the financial highlights of FY2024. From the left, this slide shows net
sales, operating income, and net income attributable to owners of parent in chronological order. For net
sales, due to the slowdown in customer capital investment, we generated ¥1.8305 trillion, which was adecline of 17.1% on a year-over-year basis. By contrast, gross profit margin hit a record level because of
the growing proportion of sales in high profit margin products. We delivered operating income of ¥456.2
billion and net income of ¥363.9 billion. ROE declined to 21.8% on a year-over-year basis.
Financial Summary: Slide 5This shows the financial summary for the fiscal year ending in March 2024. The results surpassed thefinancial estimates we announced in February in net sales, profit, and profit margin. I will mainly refer tothe figures in the blue box. In FY2024, we generated net sales of ¥1.8305 trillion, a 17.1% decline on ayear-over-year basis due to the slowdown in customer WFE spending as I said before. Gross profit margin
was 45.4%, hitting a record level because of the growing proportion of sales in high value-added products
as I said earlier. We delivered operating income of ¥456.2 billion, a decline of 26.1%. Operating profit
margin was 24.9%, a 3.1 percentage point decline. This was due to investment in future growthparticularly in R&D investments, despite a decline in net sales. Net income attributable to owners of parent
was ¥363. 9 billion, a drop of 22.8% on a year-over-year basis. R&D expenses were ¥202.8 billion, an
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Q4 FY2024 (January 1, 2024 – March 31, 2024)
Financial Announcement – May 10, 2024
Transcript
increase of 6.1% on a year-over-year basis since we kept R&D investment for future growth as I saidearlier. This is a record high. Capital expenditures were ¥121.8 billion along with the construction ofdevelopment buildings in Yamanashi, Miyagi, and Kumamoto and the construction of the Iwate
distribution center. Depreciation and amortization were ¥52.3 billion, a 21.9% increase from the previous
fiscal year because of the growing number of evaluation tools for our development activities.
Financial Summary (Quarterly): Slide 6
This slide shows the quarterly-based financial summary. In the fourth quarter, we generated net sales of¥547.2 billion, a 18.0% increase from the third quarter. We delivered gross profit of ¥256.1 billion, anincrease of 15.3%. Gross profit margin was 46.8%, a decline of 1.1 percentage points, as a result ofstrategic replacement of leased tools as well as recording one-off costs including disposition of inventories.
Operating income was ¥145.2 billion, an increase of 9.6% from the previous quarter. Operating profit
margin was 26.5%, a drop of 2.1 percentage points from the third quarter because of the decline in grossprofit margin and increase of R&D expenses and labor costs coupled with our business performance.
Income before income taxes was ¥157.8 billion, a 17.4% increase from the third quarter due toextraordinary income generated as we sold off land and buildings along with the relocation of the head
office of our American subsidiary. Net income attributable to owners of parent was 124.9 billion yen, a
23.1% increase from the third quarter.
Composition of Net Sales by Region (FY2024 Q1-Q4): Slide 7
This slide shows net sales by region. As we switched to a single-segment disclosure from FY2024, hereis the composition of company-wide net sales by region. As you can see here, gradual recovery of netsales is evident after bottoming out in the first quarter. In general, net sales by region in the fourth quarterremained flat or showed an increase from the third quarter. The proportion of sales in China in FY2024
topped 40% as Chinese customers' investments for mature nodes were active throughout the year while
there were adjustments in the capital investments for leading-edge nodes.
SPE New Equipment Sales by Application: Slide 8This shows SPE new equipment sales by application. In the fiscal year ending March 2024 at the bottomof this chart, sales to non-memory customers accounted for 66%, non-volatile memory accounted for 7%,and DRAM accounted for 27%. For DRAM, both absolute amount and proportion of sales showed a risedue to active investments by Chinese customers. For non-volatile memory, both absolute amount andproportion of sales declined, as capital investments were continuously low due to inventory adjustments
by customers. For non-memory, although customer spending on leading-edge nodes reduced, our sales
for mature nodes were strong.
Field Solutions Sales: Slide 9This slide shows Field Solution sales. In FY2024, sales were ¥428.5 billion, a 9.6% decrease on a yearover-year basis. Along with a decline in the utilization rate of customers' fabs, sales dropped both in theparts and service business, and the business of used equipment and modifications.
Balance Sheet (Quarterly): Slide 10
This slide shows the balance sheet. Total assets were ¥2.4564 trillion yen. Cash and cash equivalents
were ¥472.5 billion. Notes and accounts receivable (trade and contract assets) were ¥391.4 billion.
Inventories were ¥762.9 billion. Inventories declined by ¥15 billion as demand showed a gradual recovery
while we strategically secured inventories. Investment and other assets amounted to ¥386.2 billion,growing by ¥54.1 billion from the previous quarter due to the rising price of shares we owned. For theliabilities and net assets shown on the right-hand side, liabilities were ¥696.2 billion, increasing by ¥56.4
billion partly due to income taxes payable. Net assets were ¥1.7601 trillion, increasing by ¥182.5 billion
from the previous quarter due to the rising price of shares we owned, while we recorded net income of2 / 5

Q4 FY2024 (January 1, 2024 – March 31, 2024)
Financial Announcement – May 10, 2024
Transcript¥124.9 billion. The equity ratio was 71.1%
Cash Flow (Quarterly): Slide 11
This slide shows the cash flow. In the fourth quarter, the cash flow from operating activities was ¥139.0billion. The cash flow from investing activities was minus ¥20.3 billion. Cash flow from financing activities
was minus ¥600 million yen. As a result, free cash flow was ¥118.7 billion.

This concludes my presentation about the consolidated financial summary. Thank you very much.

Moderator: Introduction to the next presentation
Next, Mr. Kawai will report on the business environment and financial estimates. Mr. Kawai, please.

Business Environment and Financial Estimates
Toshiki Kawai - Representative Director, President & CEO
I am Toshiki Kawai. I will report on the business environment and financial estimates.
FY2024 Highlights: Slide 13
Let me start with the full-year business highlights in FY2024. In FY2024, although leading-edge
chipmakers suppressed their investments, investments on capacity enhancements of mature nodes werepulled forward. As a result, we revised our financial estimates upward during the fiscal year. The resultsfor FY2024 were in line with the revised estimates, generating net sales of ¥1.8305 trillion, operating
income of ¥456.2 billion, and net income of ¥363.9 billion. Preparing for future growth, we implemented
record-high R&D investment of ¥202.8 billion. In July 2023, construction of a new development buildingin Yamanashi was completed. We made good progress in winning PORs, with high value-added strategic
products for high volume production as well as for development. We won volume-production PORs anddevelopment PORs with a broad range of our products including cryogenic etching, conductor etching,super-critical dry, and bonders/debonders for HBM, and we are making steady progress towardachievement of the Mid-term Management Plan. We also achieved numerous results in non-financial
areas such as sustainability. We pulled forward the target year of net zero achievement including Scope
3 by ten years to CY2040, which is part of our mid-term environmental goals. In April 2024, we wereselected for "the SX Brands 2024" established by METI and the Tokyo Stock Exchange.
Business Environment (WFE Market Outlook as of May 2024): Slide 14
Next, I will present the business environment. There have been no changes in our WFE market outlookthat we announced in the previous financial announcement in February. Toward CY2025, the market iscurrently recovering in general. The CY2024 WFE market is expected to be $100 billion in size. We expectthat investment for leading-edge DRAM will start to recover from late CY2024, driven by growing demandfor DDR5 and HBM among others. In CY2025, following DRAM, a full-fledged recovery in capital
investments is also expected for NAND and advanced logic/foundry. One of the drivers is Al servers
whose annual growth rate is 31%. In addition, Al will be mounted not only to servers but also to PCs andsmartphones. Also there will be a demand to replace those products purchased during the COVID-19
crisis, and businesses are actively investing in IT systems. These factors are expected to further boost
semiconductor demand. Driven by these factors, the WFE market is expected to achieve two-digit growth
in CY2025.
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Q4 FY2024 (January 1, 2024 – March 31, 2024)
Financial Announcement – May 10, 2024
Transcript
Business Opportunities and Focus Areas: Slide 15
In parallel, semiconductor technology innovation will further advance. For logic, investment for the 2 nm
node will finally start. To achieve low power consumption and high-speed CPU, gate-all-around nanosheet
and backside PDN structure will likely play a core role in technological inflection. For DRAM, to realize
DDR5 high-speed working memory, EUV lithography and high-k metal gate will be introduced. HBM
packaging technology to realize high-bandwidth, high-storage, and high-speed memory will be evolving
even more. For NAND, to realize larger storage, initiatives to deliver a high-stacking structure of 300
layers will begin. In addition, the NAND manufacturing process is expected to adopt multi-tier stackingand bonding technology to bond memory cells and peripheral circuits fabricated on different wafers. Our
company offers a broad product portfolio in line with such future technology inflection. We believe theareas indicated in boldface, in particular, will provide us with great business opportunities. We aim toexpand market share in these high value-added areas.
R&D Investment for Future Growth: Slide 16
In order to make sure we capitalize on these business opportunities, we are investing actively in R&D. In
addition to the development of strategic products to achieve the Mid-term Management plan, to make us
ready for longer-term sustained growth, we are developing technologies for next-generation and beyond,increasing domestic and overseas development sites, and enhancing our resources. To go beyond theenhancement of standalone equipment performance, we have initiated new initiatives such as smart
manufacturing and robotics leveraging digital-based technology while visualizing future semiconductor
manufacturing.
Investment for Future Growth (FY2025 to FY2029): Slide 17
As I presented in the previous financial announcement in February, in order to maximize our growthpotential, we are planning R&D expenses of ¥1.5 trillion and capex of ¥700 billion in the coming five years.
We consider that it is people that drive our company’s growth, and that our employees are sources forvalue creation. Based on this belief, we plan to hire 2000 people every year, with the plan of hiring ten
thousand people in total in the next five years.
FY2025 Financial Estimates: Slide 19
As I said earlier, driven by growing demand for Al-related devices, the WFE market is currently recoveringin general. Toward CY2025, WFE spending on advanced logic is expected to start in a full-fledged manner.
Accordingly, in FY2025 we expect net sales of ¥2.2 trillion, gross profit of ¥1.022 trillion, operating incomeof ¥582 billion, and net income of ¥445 billion. Gross profit and gross profit ratio are expected to record
an all-time high. Under such a business environment, we are planning to invest ¥250 billion in researchand development in order to capture future growth opportunities as much as possible.
FY2024 SPE New Equipment Sales Forecast: Slide 20
This slide shows the SPE new equipment sales forecast. As you can see here, net sales are recoveringin general, after bottoming out in the first half of FY2024. This chart shows little change in the proportionsof different applications, but toward the second half of this fiscal year, the proportion of investment inadvanced nodes is expected to increase.
FY2025 R&D Expenses and Capex Plan: Slide 21
This shows our plan for R&D expenses and capex. In FY2025, both R&D expenses and capex areexpected to hit a record high. We expect R&D expenses of ¥250 billion, capex of ¥170 billon, anddepreciation of ¥63 billion as I said earlier.
Acquisition of Treasury Stock: Slide 22
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Q4 FY2024 (January 1, 2024 – March 31, 2024)
Financial Announcement – May 10, 2024
Transcript
The Board of Directors meeting held today decided to implement share repurchase of up to ¥80 billion.
This decision was made in accordance with our capital policy by comprehensively taking account ofvarious factors such as investment for future growth based on expected mid- and long-term profit increase
and current cash position. We will continue to manage our balance sheet flexibly.
FY2025 Dividend Forecast: Slide 23
This slide shows the dividend forecast. Based on the FY2025 financial estimates and the payout ratio of50%, the full-year dividend per share is expected to be ¥481.
Total Return Amount: Slide 24
This is my last slide, showing total return amount. The total return amount in this fiscal year, totaling thedividend per share that I presented earlier, and share repurchase is expected to be ¥303.3 billion, hittinga record high level.

This concludes my presentation. Thank you very much for listening.

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