TOKYO ELECTRON ANNUAL REPORT 2020

PAGE

13

CONTENTS

To Our Stakeholders

Business Overview
and Financial Highlights

Review of Operations
and Business Outlook

Interview with the CEO

Financial Section
Investor Information

Corporate GovernanceConsolidated Balance Sheets
Consolidated Statements of Income
Consolidated Statements of Comprehensive Income
Consolidated Eleven-Year Summary
Financial Review
Consolidated Statements of Changes in Net Assets
Consolidated Subsidiaries
Consolidated Statements of Cash Flows
Independent Auditor’s Report
Notes to Consolidated Financial Statements

Investor Information

Financial Review
with semiconductors, however, demand for displays began to

R&D Expenses

billion in fiscal 2020, down 25.4% from fiscal 2019. Net income

recover in the second half of the year. In 2020, the FPD pro-R&D expenses were up ¥6.2 billion year on year to ¥120.2 bil-

per share (basic) declined 22.7% year on year to ¥1,170.57.

Operating Environment

duction equipment market is expected to grow driven by thelion, a record high, due in large part to the continued rein-

The overall world economy in fiscal 2020 continued to grad-

demand for OLED displays for mobile.

forcement of R&D in the fields of etch, deposition andComprehensive Income

N Sales and Income

cleaning systems, in which the Company is working to

In fiscal 2020, Tokyo Electron recognized comprehensive

solid and the recovery continuing in Europe, despite slowing

Sales

expand its market share. The ratio of R&D expenses to net

income of ¥187.0 billion, compared with ¥242.6 billion in fis-growth due to such factors as Brexit-related concerns andNet sales in fiscal 2020 came to ¥1,127.2 billion, down 11.8%

sales rose 1.8 percentage points to 10.7%. The Corporatecal 2019. This was mainly due to the ¥185.2 billion in net

weakness in China and other parts of Asia.

year on year but surpassing the forecast despite concerns

Innovation Division also engaged in the development ofincome, ¥7.0 billion in unrealized gains on investment securi-

about the impact of COVID-19 in early 2020, reflecting recov-

equipment and processes in new fields in order to create

ties related to strategically held shares, ¥8.4 billion in loss on

behind slowing investment in semiconductor production

ery in capital investment for semiconductors and FPDs. By

markets. Furthermore, we are proactively developing new

foreign currency translation adjustments and ¥3.2 billion inequipment (SPE), gradually improved. Although investment

segment, net sales in the SPE segment fell 9.1% year on year

applications leveraging IoT and AI technologies to provide

remeasurements of defined benefit plans.

in memory chip underwent adjustment, as memory prices

to ¥1,060.9 billion. Net sales in the FPD production equip-

better customer service.

bottomed out, investment began to pick up near the end ofment segment decreased 40.6% year on year to ¥66.0 billion.

the fiscal year. In contrast, investment by logic chip manufac-

For details on performance by segment, please refer to

PICP™ plasma etch system, which offers superior processing

It is the policy of Tokyo Electron to pay dividends on theturers and foundries grew considerably, reflecting growth in

Review of Operations and Business Outlook on page 7.

uniformity, has progressed as planned, Tokyo Electron isbasis of business performance. The Company aims for a pay-demand for high-performance microprocessors for personal

Furthermore, net sales in the field solutions business (encom-

developing a new generation of the PICP™ in response toout ratio of 50% of net income attributable to owners of thecomputers and data centers as well as next generation appli-passing sales of parts and used equipment, modifications anddemand for higher resolution. In addition, the inkjet system isparent. Furthermore, with an eye to ensuring stable divi-

cation processors for 5G smartphones in conjunction withmaintenance services) rose 5.7% year on year to ¥304.8 bil-

being evaluated to manufacture OLED displays, not only fordends, a lower limit of ¥150 per share has been set on annual

efforts to realize a data-driven society, which are expected tolion, accounting for 27.0% of consolidated net sales.

large-size TVs, but also for high-resolution, rapid response

dividends.1 Accordingly, although the Company’s markets

gaming displays.

were undergoing adjustment, Tokyo Electron paid annualually expand, with the United States economy remaining

Demand for memory chips, which had been a major factor

ramp up from 2020. Furthermore, demand for power devic-

Dividend Policy and Dividends

In FPD production equipment, while promotion of thees, discreet devices and other semiconductors that utilize

Gross Profit and Operating Income

mature technologies increased. Accordingly, although invest-

Gross profit in fiscal 2020 was down 14.1% year on year to

Other Income (Expenses) and Net Income Attributable toof 50.2%), its third highest ever. Going forward, the Company

ment in memory chip was restrained, the wafer fab equip-¥451.9 billion, reflecting the decrease in net sales. The grossOwners of Parent

will seek to build world-class profitability and reciprocate thement market remained strong, at over US$50 billion for a

profit margin fell 1.1 percentage points to 40.1%, due to an

During fiscal 2020, net other expenses came to ¥0.3 billion,

support of shareholders by delivering profit growth.

third consecutive year.

increase in the production cost ratio as a result of thereflecting ¥0.5 billion in extraordinary loss due mainly to adecrease in net sales. The operating margin similarly declined

loss on sales and disposal of property, plant and equipment,

ation 10.5 panels for LCD TVs remained strong, a slowdown in

3.3 percentage points to 21.0%. This was mainly due to anoffsetting ¥0.1 billion in extraordinary income due in part toshipments of mobile devices led to adjustment in investment

increase in the R&D expense ratio as a result of continued

gain on change in equity. Income before income taxes camein small- and medium-sized panels for OLED display.

aggressive investment to maximize future growth opportunities

to ¥244.6 billion, down 23.9% year on year. As a result, net

Accordingly, the market for flat panel display (FPD) produc-even during this period of customer investment adjustment.

income attributable to owners of the parent totaled ¥185.2

In the display market, although investment in large gener-

dividends for fiscal 2020 of ¥588 per share (for a payout ratio

1 This lower limit may be revised in the event that the Company does not­generate net income for two consecutive fiscal years.

tion equipment shrank approximately 25% year on year. As

Millions of yen

Sales and Income
Net sales
Gross profit

2016

2017

2018

2019

2020

¥663,949¥799,719¥1,130,728¥1,278,240¥1,127,286

267,210322,291

475,032

526,183

451,941

40.2%

40.3%

42.0%

41.2%

40.1%

Selling, general and administrative expenses

150,421

166,594

193,860

215,612214,649

Operating income

116,789

155,697

281,172

310,571

237,292

17.6%

19.5%

24.9%

24.3%

21.0%

Income before income taxes

106,467

149,116

275,242

321,508

244,626

Net income attributable to owners of parent

77,892

115,208

204,371248,228

185,206

Gross profit margin

Operating margin

Net Sales and Gross Profit Margin

Operating Income andOperating Margin(Billions of yen)(%)(Billions of yen)

44

320

1,600

42.0 41.2
40.2 40.3
40.1
1,278.2

1,200

1,130.7

1,127.2

799.7

800

33

240

19.5

(%)

(Billions of yen)

28

280

(%)

29.0

24.9 24.3 237.2

160

21

19.1
14

155.6
116.8

0

17

18

19

20

80

0

0

16
 Operating Income Operating Margin

17

18

19

20

7

70

0

0

24
21.8
185.2

140
13.0

11

32

30.1

248.2
204.3

210

21.0

17.6
22

400

 Net Sales
 Gross Profit Margin

310.5
281.1

663.9

16

Net Income Attributableto Owners of Parent and ROE

16

115.2

77.9

8

0

16

17

18

19

20

 Net Income Attributable to Owners of Parent
 ROE
ROE = Net income attributable to owners of parent /Average total equity x 100

TOKYO ELECTRON ANNUAL REPORT 2020

PAGE

14

CONTENTS

Business Overview
and Financial Highlights

To Our Stakeholders

Review of Operations
and Business Outlook

Interview with the CEO

Financial Section
Investor Information

Corporate GovernanceConsolidated Eleven-Year Summary
Consolidated Balance Sheets
Consolidated Statements of Income
Consolidated Statements of Comprehensive Income
Financial Review
Consolidated Statements of Changes in Net Assets
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
Independent Auditor’s Report
Consolidated Subsidiaries

Investor Information

Financial Review­billion year on year to ¥10.9 billion, reflecting decreases due to

N Financial Position and Cash FlowsAs a result, the equity ratio fell 5.9 percentage points year

the end of fiscal 2019. The combined balance including ¥90.4

depreciation and amortization (including of goodwill), as wellon year to 64.1% at the end of March 2020. ROE remained

billion in deposits and short-term investments with original

Assets, Liabilities and Net Assets
Assetsan increase related to the core business systems to be intro-

high at 21.8%, despite the decrease in net income attributablematurities of more than three months that are not included

duced from fiscal 2022. As a result, total assets as of March 31,

to owners of the parent due to market adjustment.

in cash and cash equivalents decreased ¥54.2 billion year on

Current assets decreased ¥20.4 billion from the end of the2020 stood at ¥1,278.4 billion, up ¥20.8 billion year on year.

year to ¥338.4 billion at the end of March 2020. Cash flows
Capital Expenditures1 and Depreciation and Amortization2

previous fiscal year to ¥962.4 billion, reflecting a ¥27.7 billion

during the fiscal year under review were as follows.

decrease in cash and deposits, a ¥26.5 billion decrease in

Liabilities and Net Assets

Capital expenditures totaled ¥54.6 billion in fiscal 2020, a

short-term investments included in securities, and a ¥37.8

Current liabilities increased ¥77.6 billion from the end of fiscal

9.9% year on year increase. Major expenditures included thelion, up ¥63.5 billion from fiscal 2019. Major contributors werebillion increase in inventories. The turnover period for trade2019 to ¥382.5 billion at the end of fiscal 2020. This was main-

acquisition of equipment and measurement instruments for¥244.6 billion in income before income taxes, a ¥58.6 billion

notes and accounts receivable in fiscal 2020 was 49 days,

ly due to a ¥58.0 billion increase in customer advances andR&D in order to strengthen key areas in the SPE business as

increase in customer advances and ¥29.1 billion in depreciationcompared with 42 days in fiscal 2019, and the inventory turn-a ¥20.4 billion increase in trade notes and accounts payable.

well as the construction of new production buildings at theand amortization. Major outflows included a ¥44.0 billion

Tohoku and Yamanashi plants to meet rising demand forincrease in inventories and ¥41.8 billion in income taxes paid.

Non-current liabilities increased ¥1.5 billion year on year toover period in fiscal 2020 was 127 days, compared with 101¥66.2 billion.

days in fiscal 2019.

deposition equipment and the seismic reinforcement of

Net assets came to ¥829.6 billion at the end of fiscal 2020,

Net property, plant and equipment increased ¥25.5 billion

Net cash provided by operating activities came to ¥253.1 bil-year on year to ¥175.5 billion. This was largely due to an

down ¥58.4 billion from the end of fiscal 2019. This wasincrease in construction in progress reflecting the new pro-mainly due to ¥154.0 billion in repurchase of treasury stock

duction buildings being built at the Yamanashi and Tohoku

and ¥95.5 billion paid in cash dividends (the fiscal 2019 year-

plants, and the acquisition of new evaluation tools.

end dividend and fiscal 2020 interim dividend), despite theNet cash provided by investing activities was ¥15.9 billion,buildings at subsidiaries.

compared with ¥84.0 billion used in the previous fiscal year.

Depreciation and amortization increased 19.7% to ¥29.1 billion.

This was mainly due to an ¥80.0 billion inflow from thedecrease in short-term investments, despite outflows of ¥49.3

1 Capital expenditures represent only the gross increase in property, plantand equipment.
2 Depreciation and amortization does not include amortization of goodwill or
losses on impairment.

billion used as payment for purchases of property, plant andequipment, and ¥10.4 billion due to an increase in deposits.

recording of ¥185.2 billion in net income attributable to own-

Investments and other assets increased ¥13.9 billion year

ers of the parent.

on year to ¥129.5 billion. Intangible assets increased ¥1.8

Millions of yen

Financial Position

2016

2017

2018

2019

2020

Total current assets

Net cash used in financing activities came to ¥250.3 billion,
Cash Flows

compared with ¥129.7 billion in fiscal 2019. This was mainly

The balance of cash and cash equivalents at the end of March

attributable to ¥154.0 billion in payment for purchases of2020 stood at ¥247.9 billion, an increase of ¥15.3 billion fromtreasury stock and ¥95.5 billion in dividends paid.

¥617,416¥775,938¥ 946,597¥ 982,897¥ 962,484

Net property, plant and equipment

96,317

100,441

125,952

150,069

175,580

Cash Flows

Total investments and other assets

79,63581,067130,246

124,661

140,431

Total assets

793,368

957,447

1,202,796

1,257,627

Total current liabilities

166,061

247,770

368,452

Total liabilities

229,129

311,447

Total net assets

564,239645,999

Millions of yen

2016

2017

2018

2019

2020

Cash flows from operating activities¥ 69,398¥136,948¥186,582¥189,572¥253,117

1,278,495

Cash flows from investing activities(150,014)(28,893)(11,833)(84,033)

15,951

304,882

382,578

Cash flows from financing activities(138,601)(39,380)(82,549)(129,761)(250,374)

431,287

369,510448,802

Cash and cash equivalents at end of year

95,638164,366

257,877

232,634

247,959

771,509888,117829,692

Note: From fiscal 2019, the Company applied the Accounting Standards Board of Japan’s “Partial Amendments to Accounting Standard for Tax Effect Accounting”(ASBJ Statement No. 28, revised on February 16, 2018). Total current assets, total investments and other assets, total assets and total liabilities for fiscal 2018
have been restated in accordance with the revised accounting standard.

Selling, General and Administrative
Expenses and Ratio to Net Sales

R&D Expenses(Billions of yen)(%)(Billions of yen)

240

40

120

113.9

215.6 214.6
193.8
180
150.4
120

22.6

166.5

Capital Expenditures andDepreciation and Amortization

Cash on Hand

(Yen)

(Days)(Billions of yen)(Billions of yen)

160

60

800

758

90

83.8

127

624

600

400

588

120
107

108

111

50

49.7
45.6

10

0

0

18

19

20

 Selling, General and Administrative Expenses
 Ratio to Net Sales

200

30

0

30
64

237

40

0

16

338.4

315.3

300
236.7

80

400

60

19.1

60

392.6

40

101

29.1

352

20.8

373.8

54.6

76.3
20

17

Receivable Turnover andInventory Turnover

97.1
30

17.1 16.9

16

120.2

Cash Dividends per Share

17

18

19

20

61

20
52

42

49

19

20

17

18

19

20

24.3
100

0

0

16

10

20.6
19.320.6
17.8
13.3

16
 Receivable Turnover
 Inventory Turnover

17

18

200

0

16

17

18

 Capital Expenditures Depreciation and Amortization

19

20

16

17

18

19

20

Cash on hand = Cash and cash equivalents at the end of the year
+ short-term investments with original maturities of more than
three months that is not included in cash and cash equivalents

TOKYO ELECTRON ANNUAL REPORT 2020

PAGE

15

CONTENTS

To Our Stakeholders

Business Overview
and Financial Highlights

Interview with the CEO

Review of Operations
and Business Outlook

Corporate GovernanceConsolidated Eleven-Year Summary
Consolidated Balance Sheets
Consolidated Statements of Income
Consolidated Statements of Comprehensive Income
Financial Review
Consolidated Statements of Changes in Net Assets
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
Independent Auditor’s Report
Consolidated Subsidiaries

Financial Section
Investor Information

Investor Information

Financial Review
N Business-Related and Other Risks
The following risks may have a material impact on Tokyo
Electron’s business performance, financial ­position or stock price.
(1) Changes in the Semiconductor Market
The semiconductor market is influenced by a wide range offactors, including the global economy, demand for end­products, trade and tariff policies, and geopolitical factors.
As a result of such factors, supply and demand can become
unbalanced and undergo significant short-term fluctuations.
Unforeseen rapid contraction of the semiconductor market
could lead to order cancellations, production capacity excess,increases in dead inventory, or losses from bad debts resulting from the worsening of a customer’s financial position, orotherwise adversely affect Tokyo Electron’s business performance. In addition, a rapid increase in demand that exceeds
the Company’s assumptions could lead to an inability to­provide products to customers in a timely manner resulting
in lost sales opportunities or otherwise adversely affect
Tokyo Electron’s business performance.
The semiconductor market is expected to expand over the
medium and long terms, reflecting ongoing technologicalinnovation in step with the adoption of IoT, next-generation(5G) telecommunications standards, AI and other technologies. Nevertheless, in order to respond to potential shortterm market fluctuations, Tokyo Electron constantly works toappropriately adjust its capital investment, personnel, inventories and other aspects of its businesses based on the latest
market forecasts, taking such steps as periodically reviewing
market conditions and orders received at Board of Directors
and other important meetings. Furthermore, Tokyo Electron’sability to respond to market fluctuations is enhanced by its
wide-ranging lineup of semiconductor manufacturing­products, all of which have high market shares in theirrespective categories and are mutually reinforcing.
(2) C oncentration of Transactions on Particular Customers
A large portion of Tokyo Electron’s sales are to major, leadingedge semiconductor manufacturers. As such, Tokyo
Electron’s performance tends to be impacted by changes incapital investment by these major customers. Reductions intheir capital investment could lead to temporary decreases insales, while postponed payment due to the worsening of amajor customer’s financial position could delay the collectionof trade notes and accounts receivable, and these could
adversely affect Tokyo Electron’s business performance.
The semiconductor market is expected to expand over the
medium and long terms. Tokyo Electron has established an
Account Sales Division, which works in close coordination withmajor customers and quickly grasps trends in their capital investment outlook, as well as a Global Sales Division, which responds
to a wide range of customer needs and cultivates new customers emerging in step with growth in semiconductor demand.
Through such efforts, the Company strives to strengthen andexpand its sales framework and customer base.
(3) Research and Development
Through ongoing R&D investment in leading-edge technologies, Tokyo Electron quickly brings to market new products
incorporating such technologies, succeeding in capturinghigh market share in each product category and achieving
a high profit margin. However, delays in the launch of new
products that meet customers’ technological needs, the­mismatch of newly developed products with such needs, orthe launch of new technologies or products by competitors

before such launches by Tokyo Electron could negatively
affect the competitiveness of the Company’s products,
impede the recovery of R&D costs and the maintenance ofa high profit margin, or otherwise adversely affect Tokyo
Electron’s business performance.
Tokyo Electron has established a Corporate Innovation
Division, which develops innovative technology and makes
groundbreaking technology proposals that integrate theproducts and technologies of other development divisions, aspart of a Groupwide development framework. In addition, theCompany shares technology roadmaps spanning multiple
technology generations with leading-edge customers in order
to constantly provide highly competitive next-generation
products that meet future needs ahead of its competitors.
(4) Production and Supply
Tokyo Electron’s key production sites are located in Japan,
and it supplies products to customers in and outside Japan.
As such, earthquakes or other natural disasters, war, acts ofterrorism, infectious disease outbreaks or other unavoidable
events occurring in Japan could cause interruptions in production that, if not promptly resolvable, could delay the supply of
products to customers. Furthermore, the stable supply ofcomponents provided by suppliers is indispensable to smooth
production. As such, in addition to the risk of disasters, delays
in component procurement due to the worsening of a supplier’s management situation or similar factors could result indelays in the supply of products to customers and adversely
affect Tokyo Electron’s business performance.
Tokyo Electron formulates and periodically reviews business continuity plans (BCPs) and works to establish alternate
production structures, develop multiple sources of importantparts, seismically reinforce its plants, maintain backups ofinformation systems and implement appropriate inventory
control. Through these and other measures, the Company
strives to maintain stable product supply.
(5) Safety
Damages to customers or order cancellations due to safetyrelated issues or other problems related to Tokyo Electron’s
products could result in liability for damages, decrease sales,
diminish trust in the Company, or otherwise adversely affect
Tokyo Electron’s business performance.
Tokyo Electron’s “Safety First” approach entails the constant consideration of safety and health in the execution ofbusiness activities, including development, manufacturing,sales, services and management. In accordance with thisapproach, Tokyo Electron works actively and continuously to
improve the safety of its products and to eliminate any
harmful impact on health. Measures to this end include thoroughgoing safety design at the product development phase,safety training and maintaining an accident reporting system.
(6) Quality
Tokyo Electron’s products are based on the integration andoptimization of numerous leading-edge technologies. The
occurrence of unforeseen defects could lead to recalls or
responsibility for other damages based on product or quality
liability, necessitate additional costs related to implementing
defect countermeasures, decrease sales, diminish trust in the
Company, or otherwise adversely affect Tokyo Electron’sbusiness performance.
Based on a uniform Groupwide quality control policy,
Tokyo Electron provides quality training for its employees
and suppliers and strives to maintain a quality assurance system, including ISO 9001 certification, as well as a world-classservice system. The Company also seeks to solve customer
issues by working with customers from the early stages of
product development and design. When defects occur, theCompany investigates the root of the problem and takes
thoroughgoing measures to prevent recurrences and similar
issues. Moreover, in order to increase the quality of procured
components, the Company constantly monitors supplierquality, conducting audits and providing support for suppliersin accordance with its regulations.
(7) Laws and Regulations
Tokyo Electron operates globally and is therefore subject tothe various laws and regulations of the countries and regions
where it does business, including those regarding imports
and exports, the environment, competition, labor, the prevention of corruption and bribery, and transfer pricing­taxation. Tokyo Electron strives to ensure compliance withsuch laws and regulations. However, violations of such laws
or regulations could result in diminished public confidence in
the Company, fines, damages or restrictions on businessactivities, or otherwise adversely affect Tokyo Electron’s­business performance. Furthermore, unanticipated future
legal amendments or tightening of regulations could, if theCompany is unable to respond appropriately, result in liability
for costs related to such response or restrictions on businessactivities, or otherwise adversely affect Tokyo Electron’s­business performance.
Tokyo Electron has built a system for monitoring compliance activities at key sites in and outside Japan under the
direction of a Chief Compliance Officer. The Company­conducts compliance assessments, and the identified issues
are reported to the CEO, Board of Directors and Audit &Supervisory Board so that they can be dealt with quickly
and effectively.
(8) Intellectual Property Rights
Tokyo Electron’s products are based on the integration andoptimization of numerous leading-edge technologies.
Obtaining and legally protecting Tokyo Electron’s intellectual
property rights and preventing infringements of such rights
by third parties are crucial to differentiating and ­reinforcing
the competitiveness of its products. Furthermore, infringements by Tokyo Electron of the intellectual property rights ofthird parties could lead to restrictions on the ­production andsale of the Company’s products or liability for damages, orotherwise adversely affect Tokyo Electron’s ­business performance.
By advancing R&D strategy, business strategy and­intellectual property strategy in an integrated manner, Tokyo
Electron strives to build an appropriate intellectual property
portfolio and obtain exclusive rights to numerous proprietary
technologies to capture high market share and achieve highprofit margins in each of its product fields.
(9) Information Security
In the course of its business activities, Tokyo Electron obtains,holds and utilizes confidential information, customer information and personal information. The unintentional leak ofsuch information could result in diminished public confidence
in the Company, liability for damages or reduced productcompetitiveness, or otherwise adversely affect Tokyo
Electron’s business performance. In addition, Tokyo Electron’sbusinesses rely on information systems and networks.
Problems with these systems and networks due to cyberattacks, unauthorized access, natural disasters, power outages,
equipment malfunctions, human errors or other factors could
cause interruptions to operations or a loss of trust.

Tokyo Electron has established regulations and systems forappropriate information management. In addition, theCompany reinforces its information and network system bymonitoring the reliability of its security though such means
as security assessments.
(10) Securing Human Resources
Securing and developing human resources in and outside
Japan is crucial to the continued innovation and growth ofTokyo Electron’s global businesses. The inability to hire andmaintain the necessary human resources on an ongoing basisor the loss of important human resources could lead to staffing shortages, resulting in diminished product development
capability or customer support quality and adversely affecting
Tokyo Electron’s business performance.
Tokyo Electron believes that its employees are the sourceof ongoing value creation and that increasing employee
engagement is one of the most important factors in increasing
corporate value. The Company has introduced a globally unified human resources system and incentive plans linked tomedium-term business performance, and is advancing­ongoing measures to improve work environments as well as
health and productivity management, including steps to prevent excessively long work hours and workplace harassment.
(11) Environmental Issues
Requests from Tokyo Electron’s stakeholders related to reducing
environmental burden are growing. Given this, difficulties inadequately conforming to environmental laws and regulations,or meeting industry standards of conduct or customer needs,
could result in related costs, reduce product competitiveness,damage public confidence in the Company, or otherwise
adversely affect Tokyo Electron’s business performance.
Tokyo Electron strives to comply with environmental laws
and regulations and industry standards of conduct, sets its
own medium- to long-term environmental goals, and works
to reduce greenhouse gas emissions from the use of its­products as well as energy consumption at its facilities. In
addition, the Company works to protect the global environment through its business activities by such means as­providing technologies to reduce semiconductor power­consumption, promoting used equipment and parts businesses, reducing equipment size, and increasing productivity
by improving throughput.
(12) The Novel Coronavirus (COVID-19)
The spread of COVID-19 could affect Tokyo Electron’s business
continuity, including its manufacturing and sales activities. In
addition, restrictions on the worldwide movement of people
and things, the deterioration of global economic conditions,and other such impacts from the spread of COVID-19 could
adversely affect Tokyo Electron’s business performance.
Tokyo Electron has established an Emergency Task Forceheaded by the CEO and is implementing related countermeasures, including restricting travel to high infection-riskcountries and regions, steps to maintain supply chains, andthoroughgoing infection prevention measures at its facilities.
(13) Other Risks
Tokyo Electron’s businesses are influenced by many factors,
including economic conditions worldwide and in specificregions, financial and stock markets, product and real estatemarkets, foreign exchange rates, the success or failure of­corporate acquisitions, major lawsuits, and competition overstandardization. The Company expects that such factors will
sometimes adversely affect performance and takes appropriate
measures to counter such risks.