Inherited
ULVAC-StyleULVAC’s Strategy

Vacuum Equipment Business

Review of FY 2022
Although slowing investment made the market
environment challenging, ULVAC increased its investment
in development, continued joint development with key
customers, and was able to increase the number ofcustomers adopting ULVAC equipment in advanced logic
mass-production processes.
In February 2022, the decision was taken to construct
Technology Center PYEONGTAEK in South Korea toaccelerate product and technology development nearcustomers while also strengthening collaboration andtechnological support.
Although market growth slowed temporarily owing toexcess inventory and export restrictions, we implemented
measures to spur development and improve productivity inpreparation for the next round of growth.
Medium- to long-term outlook of the market
environment
We expect the market will bottom out at the end of 2023
and recovery to start in the first half of 2024 for certain
production equipment for memory products, with a recovery
trend becoming apparent from the second half of 2024. While
investment in production equipment for older generation logic
products continues mainly in China and the U.S., we expect arecovery of investment in production equipment for advanced
logic products to begin around 2025.
Medium- to long-term initiatives
We will concentrate management resources and continue
our initiatives to increase the number of processes forwhich customers adopt ULVAC’s semiconductor production
equipment. At the same time, we will work to accumulatetechnologies whose application to production equipment
for advanced logic products will strengthen manufacturing
capabilities.
With regard to the development of production
equipment for advanced logic products, the technologies
we established when entering the field of advanced device
processes will be applied to novel deposition materials andin technologies required for next-generation devices. We
also expect to achieve positive results through horizontal
deployment to the production equipment for older
generation logic products of the technologies originallyobtained through the development of production equipment
for advanced logic products.
Moreover, we will further strengthen planned production
with the aim of improving production efficiency.

29

ULVAC VALUE REPORT 2023

ULVAC’s VisionCorporate
Governance

ULVAC’s Strategy

Financial Data/
Corporate Information

Electronic Device Production Equipment

Orders received (Billions of yen)

35.6

35.0

32.3

24.4
19.4

2019

About ULVAC

Vacuum Equipment Business

Semiconductor Production Equipment
Demand for semiconductors is expected to increase overthe long term as they are the key foundation supporting
an increasingly diverse society. Without semiconductors,
everything from PCs and smartphones to EVs, industrial
robots, and generative AI would be inconceivable.
Through the vacuum technology we have cultivated asa semiconductor production equipment manufacturer,
ULVAC wishes to contribute to social development andgrow together with society.
ULVAC positions the semiconductor production
equipment business as a growth driver and will continue
to invest aggressively in development geared to customer
needs.

Message to Our
Readers

2020

2021

2022

Orders received (Billions of yen)

46.0
34.3
25.5

1. E
 limination of excess inventory in the memory
market2. R
 ecovery of investment and growth in theadvanced logic field
3. C ontinuing investment to expand production ofolder generation logic products
4. R edevelopment of the semiconductor supply chain(Japan and the U.S.)
Conceivable Risks
1. D
 elay in elimination of excess inventory in thememory market
2. D elay in recovery of investment in the advanced
logic market
3. Greater security-related export restrictions, etc.
4. C
 urtailment of capital investment due todeterioration of China’s domestic economy
Measures for Reducing Risks and Maximizing
Opportunities
1. Continue investment in development to increase thenumber of processes for which ULVAC equipment is
adopted and promote selection & concentration indevelopment geared to market needs
2. S trengthen technological capabilities to establish
installation and customer support systems
3. Accumulate manufacturing technologies that can
respond to cutting-edge technologies and promote
manufacturing reforms to improve profit margins
4. F
 urther strengthen planned production to improve
production efficiency

2019

Review of FY 2022
In the electronic device market, investment in powerdevices expanded worldwide due to rising EV-related
demand. Investment was particularly active in China,
where we worked to reinforce our local sales andtechnical support systems. As a result, orders received
and net sales reached record highs.
Medium- to long-term outlook of the market
environment
In line with the progress of the smart society and thetrend toward clean energy, the demand for technologicalinnovation and expanded production of electronic devices
is further increasing.
This trend is particularly pronounced in the SiC powerdevice field in line with the diffusion of EVs, and growth isexpected to continue on a global scale owing to boosted
investment in view of the increase in wafer sizes andother factors.
MicroLEDs are attracting attention because of theirenergy-saving, high-brightness, and high-definition
attributes, and there are high expectations for further
progress of packaging technology. Business opportunities
for ULVAC are expected to continue to grow.
Medium- to long-term initiatives
To strengthen competitiveness of ULVAC productlines, we will enhance the provision of solutions to
our customers, demonstrating our strengths as acomprehensive vacuum manufacturer. For this purpose,
while promoting modularization and standardization ofequipment modules, we will expand planned production
to shorten lead times. At the same time, we will continue
to propose new processes.
Moreover, we will pursue optimization of development
and production structures for business development in
China and worldwide.
To keep pace with development in the rapidly
growing electronic device market, we will concentratedevelopment investment and strengthen collaboration
with key customers.

57.0

54.7

2023 (FY)(Forecast)

Recognized Business Opportunities

5. Strengthen responses to the U.S. market

The market for electronic devices, which are supporting the
emerging smart society and the transition to clean energy,
is expected to continue to see technological innovationand increased production. In particular, investment in
power devices, which are indispensable for EVs and otherapplications, is becoming increasingly active in many
countries. ULVAC aims to achieve business expansion that
outperforms market growth.

2020

2021

2022

2023 (FY)(Forecast)

Recognized Business Opportunities
1. D iffusion of EVs in line with the trend toward clean
energy2. Expansion of demand in the electronic device market
3. E
 volution of electronic devices for realization of adigital society
4. Acquisition of new customers by leveraging the
track record of adoption of ULVAC equipment bymajor customers
Conceivable Risks
1. Intensifying competition
2. Tight supply of parts and materials due toincreasing capital investment
3. Greater security-related export restrictions, etc.
Measures for Reducing Risks and Maximizing
Opportunities
1. D evelop equipment meeting customer needs
and achieve technological differentiation bystrengthening marketing systems
2. Improve productivity by enhancing manufacturing
capabilities
3. R edevelop and strengthen the structure of the
global supply chain
Priority fields
Priority fields

Final products

Communication devices

Smartphones

Optical devices

Smart devices

Electronic devices(sensors, MEMS)
Power devices
Packaging

AR/VR

3D sensors

sensors

Devices for EV application
Industrial robots
Energy-saving equipment
Smartphones
High-speed data servers
IoT devices

ULVAC VALUE REPORT 2023

30

Inherited
ULVAC-StyleULVAC’s Strategy

Vacuum Equipment BusinessMedium- to long-term initiatives
We will continue development of mass-production
equipment featuring our core large-substrate transportation
technologies and higher-definition displays with the aim ofgaining the No. 1 market share for sputtering equipment
for IT panels. Moreover, we will expand investment indevelopment in the customer support field, such as forautomated control of deposition processes using AI and big
data.
With the aim of securing a share of the EV battery
market by offering mass-production technology for doublesided and high-speed film deposition ahead of competitors,
we will work on development of large equipment ready forincreased film width, which will improve mass-production
efficiency for customers.
Furthermore, in order to further expand the applicationof vacuum technology, we will promote differentiation with31

ULVAC VALUE REPORT 2023

ULVAC’s VisionCorporate
Governance

ULVAC’s Strategy

Financial Data/
Corporate Information

Components

The FPD production equipment business comprises thedisplay and energy fields. Considering that equipment
for both of these fields tends to be large, ULVAC handles
equipment for display devices and equipment for energy
devices in the same business segment. There is increasing
demand for display devices that are used as information
infrastructure tools ensuring smooth communication.
Moreover, there has been growing demand for highly efficientenergy devices to realize stable energy supply and reduce
environmental impacts. By providing “products and services
that contribute to both the development of society and asustainable global environment,” we aim to enhance the valueof our business and achieve further growth.

Medium- to long-term outlook of the market
environment
The supply/demand balance in the display field is returning
to normal, and opportunities for new capital investment are
expected to grow to accommodate increasingly diverse
display applications, including IT products and in-vehicle
equipment. Demand for displays is expected to continue,
especially in the IT panel market, as new lifestyles takeroot, typified by the growing sophistication of information
infrastructure, the shift to EVs, and use of AI.
In addition, in the EV battery market in which full-scale
investment has begun, greater application of vacuum
technology is expected to realize smaller size, larger
capacity, improved safety, and improved productivity.

About ULVAC

Vacuum Equipment Business

FPD Production Equipment

Review of FY 2022
In the display field, capital investment was sluggish in linewith the decline of panel prices due to the deterioration of
the supply/demand balance. Affected by this trend, orders
received by the Company fell short of the plan. In the IT
panel market, which is expected to grow in the future, weinvested in the development of sputtering equipment readyfor the size increase from the conventional G6 to G8, aiming
to gain the No. 1 share in the sputtering equipment market.
In the energy field, full-scale investment in double-sided
evaporation roll-to-roll equipment began, which will realize
larger-capacity, more compact, and safer EV batteries, andwe began receiving orders from several customers. ULVAC
developed this equipment to contribute to the mitigation of
global warming and the resolution of energy issues.

Message to Our
Readers

Orders received (Billions of yen)
80.5

52.7

53.6

52.0

2022

2023 (FY)(Forecast)

33.5

2019

2020

2021

new material deposition technologies, such as the metallithium vacuum deposition equipment for EV batteries,
which was adopted for the Green Innovation Fund Project
led by the Ministry of Economy, Trade and Industry and
the New Energy and Industrial Technology Development
Organization (NEDO) in FY 2022, with an eye to its
application for other battery layers.
Recognized Business Opportunities
1. L arger display substrates supporting the use of
OLED for IT products
2. Increased demand for lithium-ion batteries due todiffusion of EVs worldwide
3. A
 ccelerating adoption of vacuum technology for
improvement of EV battery performance, including
improvement of safety
Conceivable Risks
1. D
 elay in recovery of supply/demand balance in thedisplay field
2. N
 o adoption of next-generation technology in the
IT panel market
3. M arket entry of competing manufacturers in the
EV battery market
4. R estrictions on the handling of batteries if they
are designated a strategic commodity in viewof the international situation and supply chain
fragmentation
Measures for Reducing Risks and Maximizing
Opportunities
1. S trengthen marketing and product planningcapabilities in view of post-FPD
2. E
 ngage in co-creation of advanced technology withleading companies and research institutions
3. S
 witch to standardization and modularization ofdesign to improve production efficiency throughplanned production
4. R edevelop and strengthen the structure of the
global supply chain

With the aim of becoming a global leader in vacuum andcryogenic technology solutions, we will contribute to therealization of the smart society by fulfilling our responsibilities
to the environment and society. We will continue providing
superior products and services to maximize customer
satisfaction through vigorous investment in development andcollaboration with external parties.

Review of FY 2022
Special demand associated with the COVID-19 pandemic
ended and investment in OLED panels for IT was
postponed. However, the electronic device and EV battery
markets remained firm. The effects of the measures we
implemented to deal with longer delivery lead times forparts gradually began to appear in the second half of FY
2022. As a result, both orders received and net sales
surpassed the results of the previous fiscal year and theplan.
In addition, as part of our efforts to improve production
technology, we worked to optimize the production system
and improve production efficiency, and we managed to
improve the profit margin.
Medium- to long-term outlook of the market
environment
We recognize that the semiconductor, electronic device,
optical film, display, EV battery, and industrial equipment
markets are expected to grow over the medium to longterm.
Since our major customers in the semiconductor,
electronic device, optical film, and display fields are
manufacturers of vacuum deposition equipment, we
expect that the growth of the above-mentioned markets
will lead to a stable increase in demand for the DC power
generators and dry pumps installed in such equipment.
In the EV battery and industrial equipment markets, we
anticipate increased demand for helium leak detectors andleak testers as well as increased demand for cryocoolers
for quantum computers and MRIs.
Medium- to long-term initiatives
Having set DC power generators, helium leak detectors,
dry pumps, and cryocoolers as four strategic products, wewill promote vigorous entry into the market and businessexpansion by developing fundamental technologies
and new products. In particular, we will strengthen
cooperation with external parties to accelerate market
entry, enrich the product lineup for the semiconductor andelectronic device markets, and expand business in Europe.

Components

Application

examplesULVAC supplies components essential
for vacuum equipment, including vacuum
pumps, vacuum gauges, vacuum valves,
Cryopumps
helium leak detectors, gas analyzers, power
generators for deposition processes, etc.,
to vacuum equipment manufacturers,
machinery manufacturers, etc.
Dry pumps

Orders received (Billions of yen)

28.5

29.1

2019

2020

33.9

34.6

2021

2022

39.0

2023 (FY)(Forecast)

We are working on enhancement of product quality as
the top priority. In order to enhance product quality andimprove production efficiency for business growth, we will
strive to improve production technology at all production
bases and build an optimal production structure.
Recognized Business Opportunities
1. B usiness environment in which the components
business can take advantage of synergy withthe semiconductor, electronic device, and FPD
production equipment businesses
2. R obust market environment for semiconductors,
electronic devices, optical films, IT panels, EVbatteries, etc.
3. E
 xpansion of the measuring instrument market inline with the diffusion of EVs
4. C ultivation of European markets, the Chinese
market, the consumer electronics market, etc.
Conceivable Risks
1. E
 mergence of latecomer, low-cost manufacturers
due to quality improvements
2. Delay in development of strategic products
3. Delay in collaboration with external parties
4. Soaring raw material procurement prices
Measures for Reducing Risks and Maximizing
Opportunities
1. R elease differentiated products through collaboration
with the equipment business and external parties
2. C oncentrate development resources on strategic
products
3. Improve production technology at all production
bases
4. E
 stablish sales and service networks for new markets

Examples of installation

Vacuum measurement

Helium leakdetectors

Vacuum valves
Film deposition
controllers
DC power generators

VacuumgaugesResidual gas analyzers

Advanced research,
medical, etc.
4K cryocoolers
for coolingsuperconductive
magnets

Liquid nitrogengenerators

ULVAC VALUE REPORT 2023

32

Inherited
ULVAC-StyleULVAC’s Strategy

Message to Our
Readers

About ULVACULVAC’s VisionCorporate
Governance

ULVAC’s Strategy

Financial Data/
Corporate Information

Vacuum Application Business

Vacuum Equipment Business

Materials

Industrial Equipment

Orders received (Billions of yen)
22.4

The industrial equipment business contributes to society
by reducing environmental impacts and spreading healthand happiness. We provide vacuum heat treatment
furnaces for brazing used in the manufacture of heatexchangers and vacuum melting furnaces for magnet
materials applied in motors mounted on EVs worldwide,
centering on China. Moreover, we are promoting sales
expansion of vacuum freeze-drying equipment used forpharmaceuticals and other applications mainly in Japan.

Orders received (Billions of yen)

25.1

Medium- to long-term outlook of the market
environment
In response to the global policies toward carbon neutrality,
demand for EVs and renewable energy, such as wind power
generation and power storage, is expected to continue toincrease. Customers in China related to renewable energy
are demanding vacuum heat treatment furnaces that will
increase their production output.
In the medical field, we expect an increase in orders for
vacuum freeze-drying equipment for biopharmaceuticals,such as injectable pharmaceuticals.
Medium- to long-term initiatives
Regarding vacuum heat treatment furnaces, we aim to
expand orders globally. At the same time, we will further
pursue safety and quality improvement.
With regard to vacuum freeze-drying equipment, we
will strive to make improvements to meet customer
requirements and enhance quality to ensure compliancewith strict industry standards.

26.3

20.0

20.0

2020

2021

2022

2023 (FY)(Forecast)

Recognized Business Opportunities
1. L arge-scale investment for mass production ofmagnets for EV motors
2. Increasing demand for the energy business such as
wind power generation and power storage
Conceivable Risks
1. Greater security-related export restrictions, etc.
2. S
 hift of production and sales overseas byJapanese pharmaceutical companies
Measures for Reducing Risks and Maximizing
Opportunities
1. Improve performance of vacuum heat treatment
furnaces for magnets and promote joint
development with key customers
2. A chieve compliance with overseas standards
and enhance quality of vacuum freeze-drying
equipment

Review of FY 2022
In the semiconductor market, a growth field, demand
for sputtering targets for advanced semiconductors,
especially those used for logic and memory, decreased,reflecting a decline in customers’ facility utilization rates in
the first half of 2023. However, we were able to increase
orders for the products that use powder metallurgy
technology, whose technological superiority over those ofcompetitors is recognized.
As for sputtering targets for displays, the environment
remained severe throughout the year because demanddecreased as a result of deteriorating market conditions.
However, we were able to improve the profit margincompared to FY 2021 through manufacturing reforms,
including improvements in production efficiency andmanufacturing methods.
Medium- to long-term outlook of the market
environment
Regarding the semiconductor field, investment in themarket temporarily declined due to production adjustments,
but is expected to resume growth starting in 2024. Also
technically speaking, in line with further miniaturization ofadvanced semiconductor devices, demand for sputteringtargets for wiring and semiconductor layers to beincorporated in these devices is expected to increase.
The display market where facility utilization rates were
declining has also begun to recover. In particular, the shift
to OLEDs for IT panels is progressing, and demand for
IGZO targets, a product category in which ULVAC has
strengths, is expected to grow.
Medium- to long-term initiatives
As a partner to our customers, we will supply sputteringtargets, functional materials, and other high-added-valuematerials.
Regarding products for advanced semiconductors, which
are expected to generate high profit, we aim to further
expand the adoption of our mainstay products, W/WSi, by
manufacturers of advanced semiconductor devices.
Moreover, we will strengthen the development
structure so that we can develop and prepare materials

Other
Batch-type vacuum heat
treatment furnace

33

ULVAC VALUE REPORT 2023

Hot roller-type vacuum heat
treatment furnace

Vacuum freeze-drying
equipment

21.0

19.3
13.9

2019

2019

Review of FY 2022
Having completed establishment of mass-production
systems for vacuum heat treatment furnaces at our basesin China, we promoted global sales expansion. We also
optimized production efficiency. In China, a growth market,
we conducted customer-oriented sales expansion activities,
which led to an increase in orders received.
Although we were unable to achieve the target fororders received for vacuum freeze-drying equipment due
to postponement of investment and other factors, we
continued product development with the aim of expanding
sales when the market recovers in the future.

28.0

The products of the materials business are indispensablefor the manufacture of semiconductors, electronic devices,displays, and various other applications that are essential
in the smart society. As a partner to our customers, we are
striving to ensure stable supply of highly functional, highquality materials such as sputtering targets and functional
materials globally.

15.4

2020

2021

2022

2023 (FY)(Forecast)necessary for ULVAC’s equipment business in advanceand grow together with the equipment business. In
particular, we will accelerate differentiation of highmelting-point metals and alloys in terms of technology,
cost, and quality to maximize customer satisfaction.
Furthermore, by reviewing the functions of ourbases, we will promote optimization of plants,
equipment, products, and human resources, andstrive to improve manufacturing capabilities throughinvestment in equipment, replacement of old equipment,
computerization, and semi-automated production.
Recognized Business Opportunities
1. R ecovery of semiconductor investment and facility
utilization rates at customers’ factories
2. Continued investment in electronic devices related
3. Expanding demand for IGZO displays
Conceivable Risks
1. Intensifying competition
2. D elay in development and adoption for mass
production
3. Unstable supply of raw materials and soaring prices
Measures for Reducing Risks and Maximizing
Opportunities
1. E
 xpand sales of sputtering target products forsemiconductors using core powder metallurgy
technologies
2. Improve production technology and production
efficiency, optimize production bases, and enhancequality to secure profit
3. A chieve stable procurement of raw materials andpromote recycling

Surface analyzer business
Whereas university and company laboratories werepreviously the principal users of surface analyzers, they
are increasingly used nowadays for routine purposes suchas product inspection. Surface analyzers are being applied
to more materials in more regions and markets throughout
the world. ULVAC will continue offering surface analyzers
and services from customers’ perspectives around theworld.

Production and sales of semiconductor/FPD
mask blanks
Mask blanks are indispensable in the fabrication ofelectronic circuits for semiconductors and FPDs, which
are essential for smartphones, IT panels, IoT, automobiles,
communications, and other fields. Demand for mask blanks
is trending upward, especially as devices evolve. We will
respond to customer requirements to ensure that we ride
the wave of market growth.
ULVAC VALUE REPORT 2023

34