Inherited
ULVAC-StyleULVAC’s Vision

Message to OurReaders

About ULVACULVAC’s VisionCorporateGovernance

ULVAC’s Strategy

Financial Data/
Corporate Information

New Mid-term Management Plan (FY 2023-FY 2025)

Review of the Previous Mid-termManagement Plan (FY 2020-FY 2022)

External Environment

During the three years covered by the previous mid-term management plan, the business environment remained
uncertain owing to the COVID-19 pandemic, supply chain disruptions, and increasing geopolitical risks. Meanwhile, thetrend toward a smart society that could potentially resolve social issues accelerated and there was vigorous investment
in advanced technologies and equipment.
Viewing the advent of a smart society and technological innovation, such as reduction in power consumption, as
business opportunities, ULVAC pursued its basic policies of “investment in development for growth” and “profit-orientedmanagement through structural change.”
In the semiconductor field, we strengthened product development capabilities in response to technologicalinnovation, establishing a global development structure by promoting joint development of cutting-edge technologies
with leading companies worldwide. As a result, not only were our products adopted in the mass-production process of
cutting-edge logic devices but also their adoption in other processes began to expand. Sales of growth drivers greatly
exceeded the initial plan also in other fields against the backdrop of vigorous investment in power devices, opticaldevices, batteries for EVs, etc. In addition, components and materials businesses, which are stable sources of revenue,
also grew steadily.
For enhancing manufacturing capabilities, we pursued integrated reform of engineering & design, procurement,and production processes. With regard to engineering and design reform, we have incorporated “modular design” andpromoted the sharing and standardization of products. In procurement reform, we strove to reduce procurement costs
through reestablishment of the global supply chain. For production process reform, we promoted specialization ofproduction sites and improvement of manufacturing productivity.
As part of the initiatives to enhance Group management efficiency, two manufacturing subsidiaries in Japan wereconsolidated into ULVAC, Inc. and certain overseas subsidiaries were consolidated to promote business unit-based
management throughout the Group.
With regard to strengthening of the management base, we introduced a new personnel system and put varioussystems in place to improve productivity. In addition, we steadily increased shareholders’ equity and secured financialstability.
As a result of these various initiatives, net sales exceeded the initial plan. In particular, sales of semiconductor andelectronic device fields significantly outperformed the plan. On the other hand, profits fell short of the initial plan becauseof the rapid deterioration of the market environment and longer delivery lead times for procured parts.
Net sales, operating profit, and operating profit margin

Data flows, data analytics, and communications are all expected to increase dramatically as digitization advances towardrealization of a smart society, the metaverse, and generative AI. This trend will create tremendous demand for servers,
sensors, and various other devices, which will fuel a soaring demand for semiconductors, and in proportion to thesedevelopments, it will involve significant power consumption.
On the other hand, in order to curb power consumption, the shift to clean energy must be pursued. The to-do list
includes improving the efficiency of power devices, miniaturizing semiconductors, improving the energy efficiency ofvarious electronic devices, and extending the service life of EV batteries.
Moreover, in recent years, investment in countermeasures for geopolitical risks and to establish regional supply
chains has continuously increased.
Data volume
Analysis volume
Communication
volumeAI

Clean energy
Increased energy efficiency
and storage efficiency
Power devices
Batteries

Smart society

Smart factory

Various electronicdevices

SensorMobile

AR/VR display

Smart mobility

Smart house

Building regional supply chains
Attracting factories with government support
We will focus on the semiconductor and electronic device fields and the EV battery field, where significant growthis expected, in order to meet diverse customer needs and help resolve social issues while expanding business
opportunities for the ULVAC Group.

(Billions of yen)

300

Order Forecast of Growth Drivers
241.3

Battery

LogicMemory

Various electronic devices

227.5(Billions of yen)

210.0
200

185.4

Net sales

16.0%

Others183.0

Materials
Industrial Equipment

100Semiconductor andElectronic DeviceProduction Equipment

8.8%

9.4%

8.6%

FPD Production
Equipment

Operating profit

34.0

2019
Results

ULVAC VALUE REPORT 2023

30.1

1.6x

4.7x

140

Logic

1.5x
1202022
Initial plan

2020
Results

2021
Results

2022
Results> Full-scale investment in mass production of double-sided
evaporation roll-to-roll equipment for smaller, higher-capacity andsafer EV batteries has started, driving future growth> Growth in new processes and new customers in addition to MHM
processes> Continuous investment in legacy semiconductors (new customers)

109.0
94.1

100Memory1.8x> Growth due to recovery of investment in DRAM, NAND, and othermemory products, as well as entry to new processes

80

VariousElectronicDevices

60

1.2x

> Continuous investment in technological innovation and increased
production in µOLEDs, µLEDs, sensors and MEMS, packaging(WLP+PLP), etc.

40

Power Devices

20

1.5x

> Continuous growth due to increased demand for clean energy andEVs, investment in SiC, and wafer size upgrade

019.9

17.2

16.0

25

Battery44.9

Operating profit
margin0vs. FY2022
160Components

12.5%

Power devices

2019202220232025(FY)(FY)

ULVAC VALUE REPORT 2023

26

InheritedULVAC-StyleULVAC’s Vision

Key Points of the New Mid-term Management Plan

Net sales······································································¥300.0 billion

Gross profit margin·································································· 35%

Enhancing Profit and Capital
Efficiency-oriented Management
Net sales

247.2

Operating CF·············· ¥63.0 billion (cumulative total for 3 years)

Operating profit margin(%)
20245.0
16.0%

15200

8.8%

109.4%

10019.9548.023.0002022
Results

2025
Target2023
Plan(FY)

Semiconductor Production Equipment Business
Capitalizing on our technological capabilities in advanced logic andour track record of manufacturing processes for which customers
have adopted ULVAC equipment, we will strengthen sales expansion
activities with the aim of also securing the adoption of ULVAC
equipment in those manufacturing processes in the memory andlegacy semiconductor fields, thus expanding business.

1.6X

50DRAM
35.0

We view covering the entire product lifecycle as a business
opportunity for the ULVAC Group. We will strengthen the support
system in regions where we need to sharpen our focus and promote
proposal-based business, such as the improvement and upgrading ofexisting equipment, so as to further strengthen the ULVAC Group’s
comprehensive services.

Strengthen strategic purchasing capabilities
We will work to further strengthen strategic purchasing
capabilities in response to planned production by strengthening
cooperation with key suppliers.

Logic

10

Strengthen
strategicpurchasing
capabilities
Strengthening
Manufacturing
Capabilities

Improveproductivity

Expandplannedproduction

Reinforcing the Information System
Infrastructure

As well as reviewing business processes to further promote efficient production, we will promote digitization, including the introductionof various information systems so as to further improve productivity.

2002022
Results2023
Plan(FY)

2025
TargetStrengthening the Management BaseElectronic Device
vs. FY2022(Billions of yen)
80

1.4X
54.7

60

Strengthening ESG Management

PackagingElectronic devices

57.0(sensors, MEMS)

Communication
devices
Optical devices

40

Strengthening Customer Support Business

Strengthen
product
planning
capabilities

Reinforcing the Information System Infrastructure

Non-volatilememory

30

Electronic Device Production Equipment BusinessIn our five priority fields (power devices, optical devices,
communication devices, electronic devices, packaging), we aim toachieve differentiation of mainstay ULVAC equipment in terms ofperformance, delivery, etc. and further strengthen sales expansion
activities to expand business.

Strengthen product planning capabilities
In order to strengthen product planning capabilities, we will
strengthen collaborative business processes of the ULVACGroup (development, sales, engineering and design, purchasing,manufacturing, and others) and promote modularization andstandardization.

We will expand planned production of equipment for
semiconductors, power devices, and batteries, while at thesame time, we will continue efforts to shorten lead times.

vs. FY2022

32.3

P.19 ULVAC’s Strengths

Expand planned production

Semiconductor

40

Financial Data/
Corporate Information

Improving Global Productivity

We will promote production at optimal production sites foreach type of equipment and flexible allocation of management
resources among the ULVAC Group’s business divisions in orderto further improve productivity.

Order Forecast(Billions of yen)60

CorporateGovernanceThe new mid-term management plan calls for R&D investment, which includes R&D capital investment and R&D cost, of ¥75.0 billion
over the next three years. Investment will be focused on growth drivers, such as semiconductors, power devices, and batteries.
Moreover, by promoting joint development of cutting-edge technologies with world-leading companies, universities, and otherinstitutions in the respective fields, we will strengthen our product development capabilities so as to keep abreast of technologicalinnovation. We will also strive to enhance our global development system.
The Technology Center Pyeongtaek in South Korea, scheduled for completion next year, will strengthen collaboration and technicalsupport by accelerating development of products and technologies close to our customers in the semiconductor field.

Improve productivity

Strengthening Product Competitiveness in Growth Businesses xpanding Semiconductor and Electronic Device
E
Production Equipment BusinessFor details

ULVAC’s Strategy

Strengthening Manufacturing Capabilities

300.0(Billions of yen)
300

Operating profit (margin)··················· ¥48.0 billion (16%)

ROE······································································································ 14%

Operating profit

ULVAC’s Vision

Our aim is to establish a structure that enables production worth ¥300 billion and improve profitability. In order to achieve
the gross profit margin of 35%, we will strengthen manufacturing capabilities and reinforce the information systeminfrastructure that supports manufacturing.

Basic Policies

Numerical Targets for Fiscal 2025

About ULVAC

Promoting Innovation through Co-creation

The basic policies of the new mid-term management plan are “creating social value through vacuum technology” and“enhancing profit and capital efficiency-oriented management.”
In order to achieve the plan, we will further strengthen business in the semiconductor and electronic device fields
where medium- to long-term growth is expected. We will also increase investment in development so as to strengthen
product competitiveness.
Regarding global productivity improvement, we will further strengthen manufacturing capabilities and strive toestablish a production structure that will enable us to achieve the target of ¥300 billion in net sales.
We will strengthen the management base by building a robust financial base to secure funds necessary forinvestment in development for securing the ULVAC Group’s growth and enabling a swift response to change in theexternal environment. We will also emphasize strengthening of human capital.

Creating Social Value throughVacuum Technology

Message to OurReaders

20Power devices

02022
Results

2023
PlanCustomer Service (Reference)

(FY)

2025
Targetvs. FY2022

Strengthening the financial base and cash flow management

1.3X(Billions of yen)
80

65.6

We will step up our efforts to build a robust financial base to secure funds necessary for investment in development for the ULVACGroup’s further growth and enabling a swift response to change in the external environment. We will also further strengthen cash flow
management to improve capital efficiency.

Other68.4

 e will continue our efforts to reduce CO2 emissions in the ULVAC Group’s business activities and strive to further develop andW
expand sales of environmentally friendly products that help resolve social issues such as the climate crisis.
We will share our conception of the human rights-conscious business operations that we promote not only throughout the ULVACGroup but also with our stakeholders, including our business partners, and aim to further ensure respect for human rights, including
the working environment and labor relations.
In order to realize sustainable growth of the ULVAC Group, we will strive to enhance the effectiveness and transparency of ourmanagement systems so as to reinforce our corporate governance structure.

60

Components

40

FPD

Promoting Human Capital Management
20

Semiconductor/
electronic device

02022
Results

27

ULVAC VALUE REPORT 2023

2023
Plan2025
Target(FY)

We will increase employee engagement by creating an environment where diverse human resources can demonstrate their fullpotential at the ULVAC Group. At the same time, with the aim of reinforcing the ULVAC Group’s human capital, we will rebuild programsfor the development of core human resources who will become the next generation of leaders.
ULVAC VALUE REPORT 2023

28