Management Planning Department
ULVAC, Inc.
2500 Hagisono, Chigasaki, Kanagawa Prefecture 253-8543, Japan
TEL. +81-467-89-2033 FAX. +81-467-82-9114

https://www.ulvac.co.jp/en/

U L T I M A T E
I N V A C U U MInherited
ULVAC-Style

Message to Our
Readers

About ULVACULVAC’s Vision

ULVAC’s Strategy

Corporate
Governance

Financial Data/
Corporate Information

Inherited ULVAC-Style
The essence of ULVAC’s Business Philosophy established in 1966 remains
unchanged even in an era of dynamic change. It is our responsibility to transmit
our founder’s aspirations to the present generation, passing the baton from one
generation to the next far into the future.

Start of a Journey with Aspirations to Contributeto Industry through Vacuum Technology
Amid Japan’s post-war recovery, a group of talented young researchers and engineers led by Jin Imachi(Second president of the Company) gathered with the aim of “contributing to the revival of Japaneseindustry through vacuum technology.” In 1952 six angel investors, impressed by the passion of thesevisionary young people, invested in the establishment of Japan Vacuum Engineering Co., Ltd., the forerunnerof present-day ULVAC.
Fascinating!
Y’all must do it!

Each invested ¥1 million (equivalent to ¥25 million today) of their own money
Japan Vacuum Engineering Co., Ltd.

First president

Soughtinvestment
Kohnosuke Matsushita

Great idea!
Through vacuum
technology let’s help
create an affluent future
for the up-and-coming
generation.

President of Matsushita
Electric Industrial

Yoshijiro Ishikawa

President of Keifuku Electric Railroad

We will provide
wholehearted support
to a company wishingto establish the vacuum
technology business inJapan.

Cooperation
NRC Equipment
Corporation
U.S. vacuum equipment
manufacturer

Consult

I want to establish avacuum technology
company to help drive
Japan’s recovery.

Tamesaburo
Yamamoto

President of Asahi Beer

Six investors
Gen Hirose

President of Nissay

Yoshio Osawa

President of Osawa-ShokaiSecondpresident

Thirdpresident

Jin Imachi

Chikara Hayashi

Mazda ResearchLaboratory of ToshibaAiichiro Fujiyama

Chairman of Chamber ofCommerce & Industry of Japan
President of Dainihon Sugar
Refining Company
Foreign Minister

Sagane Lab of the
University of Tokyo

1941
Vacuum Clubwas established.
*1950
Renamed Vacuum
Technology Association*Names of companies, organizations and titles are those at the time mentioned.

1966
Business Philosophy established1996
Basic Corporate Philosophy
established

2001
Management Policies established

Evolution of the Business Philosophy
Japan Vacuum Engineering Co.,Ltd. (which later became known as ULVAC) established the Business
Philosophy consisting of six articles (later seven articles) in July 1966, the 15th anniversary of its founding.
It codified the philosophy that had been at the heart of ULVAC’s management as an unwritten rule since its
founding, and this philosophy was inculcated throughout management and employees, becoming ULVAC’s
corporate DNA.
Subsequently, in line with the change of the business environment, including globalization, ULVAC
established the Basic Corporate Philosophy in 1996 to articulate ULVAC’s purpose, that is, proposing thecreation of extraordinary value to customers through its business in the quest to realize the remarkablepotential inherent in vacuum technology. Then, in order to clarify the thrust of the ULVAC Group, which offers
not only vacuum equipment but also materials and solutions, including analysis and services, ULVAC set
five Management Policies in 2001. In April 2004, ULVAC shares were listed on the First Section of the Tokyo
Stock Exchange.
The Business Philosophy has been inherited by successive generations. In 2021 ULVAC announced Our
Goal for 2050, reflecting the spirit of the Business Philosophy. In 2022, the 70th anniversary, to realize thegoal, we set Vision 2032 and Four Key Issues (Materiality), thus clarifying ULVAC’s direction.
70 years of contributing to the development of industry and science through vacuum technology is justone milestone in the development. The passion of our founder and all our predecessors is embodied in our
Business Philosophy, burning brighter than ever.

Business Philosophy
1. Our company’s life is eternal.
2. O ur company can thrive through its people andcan face ruin through its people.
3. Our company pursues profits.
4. Our company is a public instruments.
5. O ur company continues to exist solely because of
our customers.
6. Our company value time.
7. Our company’s business is the promotion ofcomprehensive use of vacuum technology is ourbusiness.

Vacuum Technology, ULVAC’s Core CompetenceStated simply, a vacuum is a space where the pressure is lower than the atmospheric pressure. A vacuum
has fascinating properties: for example, materials’ lower boiling points in a vacuum mean they are more
likely to evaporate and gas molecules can travel in a straight line in a space. ULVAC has developed various
application technologies that exploit the properties of a vacuum in its quest to realize the remarkablepotential inherent in vacuum technology. ‘ULVAC’ is a combination of ‘UL’ from ‘ultimate’ and ‘VAC’ from‘vacuum,’ signifying that we pursue the ‘Ultimate in Vacuum Technology.’
For example, using vacuum technology, it is possible to create ultrathin films with micron-to nanometerorder thickness. Since such thin films cannot be produced by physically stretching materials, advanced
vacuum thin film processing technology is required for depositing layers of atoms or molecules ofmaterials in a vacuum.
Led by IoT, 5G, and AI, a tremendous wave of technological innovation is making the digital society
an everyday reality. Vacuum thin film processing technology is destined to fulfill a vital role for thefundamental technologies underpinning the digital society.

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ULVAC VALUE REPORT 2023

ULVAC has been pursuing innovation as a leader in vacuum technology, which is indispensable for industrial
development. We continue to boldly take on challenges to resolve social issues for our customers andthe world. Our management philosophy is people-centered. We are emphasizing human resources
development, upholding our founding principles of faithfulness and integrity that have guided us since
our inception. For business stability and growth, it is essential to secure reasonable profits, develop
technologies, and cultivate relationships of trust with stakeholders. Positioning “creation and co-creationof innovation with vacuum technology as the core” at the heart of our management, we are pursuing thepotential of vacuum technology, anticipating changes in an era in which the business environment is rapidly
evolving, and exploring new business opportunities with our stakeholders. Inspired by our Vision, “Continue
to Be a ‘Field of Potentiality’ for the Future,” we aim for sustainable growth and the creation of social value.

ULVAC VALUE REPORT 2023

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Inherited ULVAC-Style (Basic Corporate Philosophy/Management Policies)

Inherited
ULVAC-Style

Message to Our
Readers

About ULVACULVAC’s Vision

ULVAC’s Strategy

Corporate
Governance

Financial Data/
Corporate Information

ULVAC VALUE REPORT 2023 TABLE OF CONTENTS
Message to Our Readers
5

Message from Top Management

About ULVAC
91113ULVAC’s Value Creation<Value Offered by ULVAC’s Businesses>

Here & There, Near your side
ULVAC’s Businesses
ULVAC’s HistoryULVAC’s Vision
15
19
21
23
25
26

ULVAC’s Value Creation<Process> <Priority Issues>
ULVAC’s Strengths
ULVAC’s Sustainable Management
Toward the Realization of Our Goal for 2050
Review of the Previous Mid-termManagement Plan (FY 2020-FY 2022)
New Mid-term Management Plan (FY 2023-FY
2025)

ULVAC’s Strategy
The ULVAC Group aims to contribute to the development
Basic Corporate
Philosophy

of industries and science by comprehensively utilizing its
vacuum and peripheral technologies through the mutual
cooperation and collaboration of the Group companies.

Improve Customer Satisfaction
Innovations in Production Technology
Management
Policies

29

Development of Original Products
Free and Open-minded Organization

value for the world with its partners and continues to contribute to the future of people and

34
35
37
41
45
49

55
59
63
65
67
68

ceaselessly striving to fulfill our social responsibilities.

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ULVAC VALUE REPORT 2023

FPD Production Equipment

Components

Report’s Scope and Period
Scope: ULVAC GroupIn principle, this report covers the ULVAC Group; any portions
that cover only ULVAC, Inc. are indicated as such.
Period: Year ended June 30, 2023
(July 1, 2022 to June 30, 2023, FY 2022)
Some portions of the report include activities and initiatives from
July 2023 onward.
<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 scopeof reporting was expanded or calculating methods have beenchanged.

Vacuum Application Business Materials
Details of Initiatives for Materiality
Promotion of Creation and Co-creation of
Innovation with Vacuum Technology as the Core
Development of Diverse Human Resources
and Promotion of Their Advancement;
Cultivation of Resilient Organizations
Respect for Human Rights and Responsible
Conduct in the Value ChainContribution to a Sustainable Global
Environment

Corporate Governance
External Directors Roundtable Discussion
Management Structure
Risk Management
ComplianceWith Our StakeholdersF inancial Data/
Corporate Information

In an era of change, we are never satisfied with the status quo but always embrace
will contribute to the realization of a sustainable society through vacuum technology,

 lectronic Device Production
E
Equipment

Published:
November 2023 (Previous issue published in November 2022)
Guidelines Referenced:
The International Integrated Reporting Framework, theInternational Integrated Reporting Council (IIRC)
Guidance for Integrated Corporate Disclosure and CompanyInvestor Dialogues for Collaborative Value Creation (Guidance
for Collaborative Value Creation), Ministry of Economy, Trade andIndustry (METI)ISO 26000

ULVAC’s Communication Tools
Summarized
ULVAC VALUE REPORT(Japanese and English version)

Corporate Governancethe planet.”change, pursuing cutting-edge vacuum technology together with our partners. We emiconductor Production
S
Equipment
Industrial Equipment

Enhancing Corporate ValueULVAC’s goal for 2050 is to become “a company that utilizes vacuum technology to create

Vacuum Equipment Business

Editorial Policy
We publish the ULVAC VALUE REPORT as a summary of ourinitiatives in the past year to achieve sustainable growth andenhancement of corporate value, our medium- to long-term
vision, and our management approach.
We consider this report to be an important communication
tool to facilitate stakeholders’ understanding of our activities anddeepen dialogue with them.

69
71
73
77

11-year Financial and Non-financial Data
Financial Overview
Consolidated Financial Statements
Company Data/Stock Information

Securities
reportDetailed
Financial information

Business report

Corporate
governance report

Business resultspresentationmaterials(Japanese/English)

Sustainability(Website)Non-financial information

We endeavor to achieve the optimum information disclosure by making
various communication tools available to meet your needs.
To help you deepen your understanding of the ULVAC Group, ourcommunication tools range from statutory disclosure documentation
centering on information on financial closing to this report that offers
non-financial information, such as on social and environmental initiatives
indispensable for creating corporate value, in addition to information on
business activities, management strategies, and financial information.
Please also refer to our website for the latest information.

ULVAC VALUE REPORT 2023

4

Inherited
ULVAC-Style

Message to Our Readers

Message to Our
Readers

About ULVACULVAC’s Vision

ULVAC’s Strategy

Corporate
Governance

Financial Data/
Corporate Information

Message from Top Management

Vacuum Technology
to Create Social Valueand Contribute to
the Future of People,
Society, and the Planet

Setsuo Iwashita
President and Chief Executive Officer

Beyond epochs, inheriting the
ULVAC’s founding spirit Vacuum
technology for value creation
ULVAC’s history began in 1952 with agroup of young people who were eager tocontribute to the development of industry
and science through the application of
vacuum technology. The company started
as a distributor of imported products. In
its third year, the company succeeded in
manufacturing vacuum heat treatment
furnaces in Japan. Since then, always
abreast of the changing times, ULVAC has
been the source of various types of vacuum
equipment, including vacuum metallurgicalequipment for the heavy chemical industry,vacuum heat treatment furnaces for the
automotive and home appliance industries,
5

ULVAC VALUE REPORT 2023

and evaporation roll coaters for capacitors,
as well as vacuum deposition equipment for
semiconductors and electronic devices in
the 1980s and vacuum deposition equipment
for flat panel displays since the 1990s.
We take pride in the fact that the value
we offer has contributed to the developmentof industry and science and the growthof our customers’ businesses while also
underpinning people’s affluent lifestyles.
In recent years, technological innovation
has been accelerating toward realizationof the smart society, typified by the trend
toward electrification of automobiles andautonomous driving, progress in digitalization,
and advances in AI and robotics. Meanwhile,
decarbonization initiatives are proliferating
to address global environmental issues.
All this technological innovation together
with initiatives to resolve social issues has
spurred demand for ever more sophisticatedsemiconductor memory and logic, MEMS
and sensors, electronic and power devices,
batteries, etc. In this context, ULVAC iscommitted to meeting these needs byleveraging its vacuum thin-film processing
technology, micromachining technologies, andfundamental technologies for equipment andmaking comprehensive use of them.

Seize changes in the businessenvironment as opportunities togrow
In the semiconductor industry, capital
investment by semiconductor manufacturers
is slowing in the short term, in line with theslowing tempo of demand for smartphones,
PCs, etc. However, over the medium tolong term, expectations for generative
AI are likely to spur semiconductor
demand. Moreover, from the perspectiveof addressing geopolitical risks, there isongoing planning and construction of new
semiconductor plants worldwide. Vigorous
investment has been continuing in theelectronics industry, too. Notable examples
are investment in power devices, reflecting
the impact of policies promoting mass
adoption of EVs with the aim of achievingcarbon neutrality, digitalization for thesmart society and technological innovation
affecting various electronic devices, as wellas investment to increase production. In theflat panel display (FPD) industry, IT panels fortablets and PCs are transitioning from LCD
to OLED and investment in large-size OLED
is expected to increase in the near future. In
the industrial battery industry, investment inmass production of EV batteries to achievesmaller size, larger capacity and higher
safety is also gaining momentum.
We intend to develop technologies that
address these social issues, aiming toachieve growth through business practices
that contribute to sustainability of the global
environment and development of society.

Achievements and issues of theprevious mid-term management
plan
Basic policies of the previous mid-term
management plan (covering the period fromFY 2020 to FY 2022) were “investment
in development for growth (selection
and concentration)” and “profit oriented
management through structural change.”
Our objective was to clarify the growthfields ULVAC should target as well as
the overall direction, while concentrating
management resources so as to succeed
in developing technologies and products.
In order to secure financial resources fordevelopment, we considered it necessary to
improve the profit margin by enhancing ourmanufacturing capabilities.
Regarding the first policy, “investment
in development for growth (selection andconcentration),” led by growth drivers,
including logic, power devices, and various
electronic devices, orders received for FY
2022 were 1.6 times greater than in FY 2019.
Net sales also grew and exceeded the initialplan. These results attest to the fact that we
seized the opportunities created in recent
years by social and market changes as well
as by technological innovation. The entry
into the metal hard mask (MHM) process
related to EUV led to the application of
ULVAC equipment to other semiconductor
production processes. Orders received
increased mainly for equipment for powerdevices and optical devices. We began mass
production of roll-to-roll vacuum evaporationequipment used in EV battery production.
These are major achievements under theprevious mid-term management plan.
As for the second policy, “profitoriented management through structuralchange,” the key strategies were to“strengthen manufacturing capabilities”
and “strengthen the management base.”
Specific measures included the gradualtransition to a planned production structure
mainly for semiconductor and powerdevices, etc., promotion of standardization,
consolidation of subsidiaries in Japan andoverseas, in addition to the development
and implementation of various systems
ULVAC VALUE REPORT 2023

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Inherited
ULVAC-Style

Message to Our Readersfor productivity improvement. As a result,the profit margin improved steadily
until the first half of FY 2021. However,subsequently, longer parts delivery leadtimes mainly attributable to supply chain
disruption diminished the improvement
impact and the profit margin fell short of
the target. Moreover, a root-cause analysisof the non-attainment of the target clarified
ULVAC’s internal issues. We will addressthese issues under the new mid-term
management plan. Furthermore, regarding
the strengthening of the management
base, we steadily increased shareholders’equity during the period of the previous
mid-term management plan and secured
financial stability. Under the new midterm management plan, we will continue
our efforts to establish a more robust
management base by resolving, one by one,the issues that have been clarified.
Meanwhile, in a project led by young
employees, the question of what the ideal
configuration of the ULVAC Group should bein 10 years’ time was thoroughly discussed.
The outcome of the project is Vision 2032
“Continue to Be a ‘Field of Potentiality’for the Future,” which was announced on
the occasion of the 70th anniversary of
our founding in 2022. Vision 2032 aligns
and expresses the corporate culture andvalues inherited from ULVAC’s foundation
with the future. The “Field of Potentiality”

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ULVAC VALUE REPORT 2023

refers to a “vacuum field” with potentiality
where new value may be created. The term
“Field of Potentiality” also alludes to “themargin of a person’s mind.” An “empty
space” in one’s mind is a “container” thatcatches the thoughts of people inside andoutside the company. Vision 2032 indicates
our commitment to pursuing the value of
vacuum technology, continuing to rise to thechallenge of technological innovation, andcontributing to the resolution of global issues
through the innovation.

Strengthen manufacturing
capabilities in the three years of
the new mid-term management
plan to achieve growth
We formulated the new mid-term
management plan (FY 2023-FY 2025) bybackcasting from Vision 2032 and in lightof the issues clarified in the course of theprevious mid-term management plan.
Under the basic policies, “creating social
value through vacuum technology” and“enhancing profit and capital efficiencyoriented management,” we set priority
strategies, namely, “strengthening productcompetitiveness in growth businesses,“improving global productivity,” and“strengthening the management base,” aswell as specific initiatives corresponding toeach priority strategy. These policies andstrategies are largely a continuation of thoseunder the previous mid-term management
plan.
Various devices essential for a sustainable
society cannot be produced without vacuum
technology. The fields in which we canprovide social value are expanding and wewill continue to innovate and create value
in them. To this end, we intend to enhance
the competitiveness of our growth driverproducts and promote innovation together
with our customers.
During the period of the previous mid-term
management plan, we faced the problem
of longer delivery lead times for procured
parts. Treating this as a good opportunity
to thoroughly review our conventional
manufacturing systems, we recognized the

Message to Our
Readers

About ULVACULVAC’s Visionneed to ensure our systems are attuned
to the reality of the current times. During
the period covered by the new mid-term
management plan, we will continue
our efforts to strengthen manufacturing
capabilities so as to improve profit margins.
For this purpose, we will strive to further
improve global productivity by promoting
planned production through implementationof measures, such as improving efficiency
by reviewing business processes andintroducing various information systems.
Recognizing that our policy on returning
profit to shareholders is of great importance,
we aim to increase dividends over thelong term through further growth. On theother hand, as we operate in an industry
subject to rapid market fluctuations andtechnological innovation, we believe it isnecessary to secure sufficient funds for R&D
investment in growth fields and to secureand maintain a stable financial base. Taking
into consideration our policy, the financialbase, and other factors, we plan to increase
the performance-linked dividend payout ratio
from 30% to 35% from FY 2023.

Expanding the circle of cocreation with an eye to the future
In order to fulfill Vision 2032, it is crucial
for us to form an organization that can fully
leverage our comprehensive capabilities in a
rapidly evolving technological society. At thesame time, strengthening our managementfoundation and increasing resilience.
This aligns with ULVAC’s basic corporate
philosophy: “The ULVAC Group aims tocontribute to the development of industries
and science by comprehensively utilizing its
vacuum and peripheral technologies throughthe mutual cooperation and collaboration of
the Group companies.”
Regarding structural changes in
FY2023, we implemented two significant
reorganizations. Firstly, the introduction of
the HQ system, comprising seven HQs:
Administration, Research & Development,
Sales, Production, Equipments Business,
Components Business, and CS Business.
In particular, in the equipment business,

ULVAC’s Strategy

Corporate
Governance

Financial Data/
Corporate Information

devices in various fields, in the course of theirevolution, have incorporated technologies
from other fields. To offer value to customers
beyond traditional structures, we formed
the Equipments Business HQ, to oversee
the Semiconductor Equipment Division, theAdvanced Electronics Equipment Division,and the FPD Division, enhancing interdivisional collaboration and synergy.
Additionally, we established the Sustainable
Management Department, directly reportingto the President. This department is
responsible for monitoring and guiding global
activities aligned with our Sustainability
Policy, such as carbon neutrality initiatives andhuman rights considerations. Going forward,
ULVAC will clarify the responsibilities of eachorganization with regard to the relationshipbetween ULVAC’s business and sustainability,
evaluate performance, and share themeasures globally and vigorously promotethem.
With the aim of expanding the application
fields of vacuum technology, we areencouraged to seek more co-creation
opportunities and innovations globally,
considering “what we want to achieve
together” with our customers, universities,
research institutes, and communities. For
example, we decided to establish Technology
Center PYEONGTAEK in South Korea and its
construction began in March 2023. Bringing
collaboration and technological support close
to customers will help us cultivate fruitfulpartnerships with them.
Our objective is to keep contributing
to the future of people, society, and theplanet through vacuum technology and its
peripheral technologies. ULVAC is dedicatedto rigorously implementing our mid-term
management plan and attaining our set
objectives.
We encourage our stakeholders to join
ULVAC on this significant journey as we
expand the circle of co-creation towards
the future. We greatly value and seek yourongoing support in all our endeavors.

ULVAC VALUE REPORT 2023

8

Inherited
ULVAC-Style

About ULVAC

Message to Our
Readers

ULVAC’s Vision

About ULVACULVAC’s Strategy

Corporate
Governance

Financial Data/
Corporate Information

ULVAC’s Value Creation <Value Offered by ULVAC’s Businesses>

Here & There,
Near your side

The ULVAC Group’s Basic Corporate Philosophy states, “The ULVAC Group aims to contribute to thedevelopment of industries and science by comprehensively utilizing its vacuum and peripheral technologies.”
As ULVAC manufactures production equipment, the general public rarely see our products. But the products
produced using vacuum technology and equipment are integral to people’s daily lives.
With our vacuum technology, we will continue to be a company needed by society.
Semiconductor

ULVAC’s Vacuum Technology
AI

Hospitals

Artificial intelligence (AI) made possible byadvanced, high-speed information processing
technology is expected to overcome labor
shortages, improve operational efficiency, andincrease the value provided to customers. Vacuum
technology is used in the production of thesemiconductors and electronic devices that
support this innovation.

Development of
IoT technology has
improved access to
medical care. Highquality telemedicine
using high-definition
displays is becoming
available. Vacuum
technology is also
used to meetgrowing medical
needs, such as for
vaccine production
and R&D of sterile
pharmaceuticalproducts.

Data Centers

Electric
Vehicles9Wind Power
Generation

Semiconductor
Electronic Device
Components
Materials

Electronic Device Electronic Device

Production Equipment

Components

Components

FPD
Materials

Renewable energy has a low impact on the
global environment and is not depleted.
Wind power generation is a major
renewable. Vacuum technology is used in
the production of the power devices andhigh-performance magnets applied inwind turbines.

Smart
Home

Electronic Device
FPD
Industrial Equipment
Components
Materials

Demand for data centers
is surging in response toexpanding data flows, as
teleworking spreads andneeds for big data storage
increase. Vacuum technology
is used in the production of thesemiconductor memories,
logic devices, power devices,and electronic devices
indispensable for data centers.

Smart homes leverage
IoT, AI, and othertechnologies to achieve
greater comfort andconvenience. In view of
their advantages, they
are expected to spread.
Vacuum technology isused in the productionof the semiconductors,
electronic devices,and displays that makesmart homes possible.

Freeze-dried
Foods/
Supplements

Semiconductor
Electronic Device

Industrial Equipment

Components

Components

Materials

FPD Production
Equipment
Materials

Semiconductor
Electronic Device
Industrial Equipment
Components
Materials

Semiconductor
Electronic Device
FPD
Components
Materials

The need to reducefood waste and foodloss has become apressing issue, in viewof global shortagesof food. Vacuum
technology is used in
the food processing
industry to freeze dryfood products andproduce nutritional
supplements.

Semiconductor

DronesElectronic Device
FPD
Components
Materials

The aging of infrastructure in developed countries and the need forindustrial infrastructure in emerging countries are issues that demandattention. Vacuum technology is key to improving the performance of thevacuum circuit breakers in power receiving and transforming facilities,
heat exchangers of air conditioning equipment, and other equipment toensure safety, security, and efficient maintenance.

ULVAC VALUE REPORT 2023

Industrial Equipment Industrial Equipment

Semiconductor

In pursuit of carbon neutrality, the transition
to non-gasoline-powered vehicles is
accelerating as the world seeks to reduce
driving-related CO2 emissions. Vacuum
technology is used in the production of
power devices, electronic devices, highperformance batteries, high-performancemagnets, and other parts at the heart of EVs
and other electric vehicles.

Vacuum Circuit
Breakers

Semiconductor
Production Equipment

Industrial Equipment
Components

Solar Cells

The use of drones in smart
agriculture is attracting attention
nowadays, not least as a way ofcompensating for labor shortages
in the agricultural sector. Vacuum
technology is used in the productionof the semiconductors, electronic
devices, and batteries essential for
drones.

Solar power generation is a mainstay form of renewable energy
and is playing an increasingly important role in the energy mix.
Vacuum technology is used in the production of the control powerdevices applied in solar power generation systems.

Semiconductor
Electronic Device
Components
Materials

Electronic Device
FPD
Components
Materials

ULVAC VALUE REPORT 2023

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Inherited
ULVAC-Style

About ULVAC

Message to Our
Readers

ULVAC’s Vision

About ULVAC

Corporate
Governance

ULVAC’s Strategy

Financial Data/
Corporate Information

ULVAC’s Businesses
Across a wide range of industries, ULVAC is the source of numerous products and technologies that meet theneeds of our customers and the market. For FPD production equipment and semiconductor and electronic
device production equipment, which are ULVAC’s current mainstay businesses, many of our major customers arein East Asia. ULVAC is characterized by a high ratio of sales overseas, centering on East Asia.

We have a global R&D system to promote joint development in close proximity to the world’s leading companies
and advanced research institutions as well as a global support system to satisfy customers in every situation.
With regard to production, we are working to strengthen our manufacturing capabilities, optimize production
in light of business needs and regional characteristics, and enhance integration of the global supply chain andcollaboration, with a focus on East Asia.

Net Sales by Business Segment (Amount and %)Net Sales by Region (Amount and %)19%[¥42.8 ]Vacuum Application
Business

81%[¥184.8 ]billionOther

billion10% [¥23.1 ]FPD production equipment

billionSurface analyzers
Mask blanks, etc.

Vacuum Equipment
Business

23% [¥52.8 ]Controllers

billionMaterials

LCD production equipment
OLED production equipment
Roll coaters (vacuum deposition,
sputtering)

Net sales in FY 2022

9¥227.5% [¥19.7 billion]

billionSputtering target materials
High-melting-point materials andproduction of components
Nano-metal ink

34% [¥77.7 ]billion10% [¥21.9 ]S emiconductor (memory, logic, powerdevices, etc.) production equipment
Electronic device (MEMS,
communication devices, opticaldevices, etc.) production equipment
Electronic packaging equipment (WLbillion
CSP, FoPLP, etc.)
Vacuum pumps Vacuum gauges Helium leak detectors Process gas monitors
Power generators for deposition processes Vacuum valves
Film deposition controllers Vacuum robots

ComponentsbillionVacuum heat treatment furnaces
Vacuum melting furnaces Vacuum brazing furnaces
Rare-earth magnet production equipment
Vacuum freeze-drying equipment
High-vacuum distillation equipment
Micro powder dry Automatic helium leak testers[¥7.0 billion]

Europe, North
America andelsewhere

Other
Asia

14% [¥32.4 ]

14%

5%

[¥12.0 billion]

Net sales in FY 2022

¥227.5

Taiwan[¥22.8 billion]

Semiconductor and electronic
device production equipment

Industrial equipment

3%
10%

66%

Ratio of Sales
Overseas[¥31.4 billion]Japanbillion

South
Korea

34%

[¥77.0 billion]

34%

China

[¥77.3 billion]

Major Vacuum Equipment Sputtering equipment, vacuum evaporation equipment, CVD equipment, etching equipment, ashing equipment, ion
implantation equipment, annealing equipment, etc.

Net Sales by Business Segment

FPD production equipment*
Industrial equipment

Semiconductor and electronic device production equipment

Materials

Components

Other

ULVAC’s Global Reach(Billions of yen)

231.8

163.4

173.9

179.2

241.3
220.7

192.4

185.4

183.0

Vacuum Equipment Business

100

0

2012

2013

2014

*Includes PV production equipment business up to FY 2018.

11

ULVAC VALUE REPORT 2023

2015

2016

2017

2018

2019

2020

2021

2022

2,986
11
25
5

1,651
15
15
1

795
3
7
2

586
6
6
1

Europe,North
Americaandelsewhere
147
3
9
1

3

1

1

1

0

0

4

1

1

1

1

0

4
2
4
4

3
2
1
3

1
0
1
1

0
0
1
2

0
0
0
0

0
1
1
1

Japan

227.5
VacuumApplication
Business

200

249.3

(FY)

Number of employees*1
Number of companies
Number of support bases
Number of R&D bases
Number of production bases
by business*2
FPD production equipment
Semiconductor and electronic
device production equipment
Components
Industrial equipment
Materials
Other

South
Korea

China

TaiwanOther Asia

Total

99
3
8
0

*1 The number of employees is on a consolidated basis (as of June 30, 2023). The number of bases includes non-consolidated subsidiaries and associates (as of
September 30, 2023).
*2 As for production bases, plants that produce items for more than one business are counted for each business.

6,264
41
70
10

ULVAC VALUE REPORT 2023

12

Inherited
ULVAC-Style

About ULVAC

Message to Our
Readers

About ULVACULVAC’s Vision

ULVAC’s Strategy

Corporate
Governance

Financial Data/
Corporate Information

ULVAC’s History
Ever since its foundation in 1952, ULVAC has been contributing to the resolution of social issues in eachsuccessive era by deploying its core state-of-the-art vacuum technology, and has grown remarkably. ULVAC willcontinue contributing to the development of industry and science through the comprehensive application of
vacuum technology in accordance with the Basic Corporate Philosophy.

Customers’ products

Industrial restoration and convenience in daily life
Applied vacuum equipment to contribute to industries supporting
people’s lives

1952 Japan Vacuum Engineering Co., Ltd. was founded.
1955 Opened the Omori Plant in Tokyo to start manufacturing equipment in Japan.
1959 Opened the Yokohama Plant.
1964 Established the first overseas subsidiary in Hong Kong.
1968 Head Office/Plant completed in Chigasaki, Kanagawa Prefecture.

Used in the late 1950s

Established in 1963

Contribution to resolution of social issues
Developed vacuum arc furnaces for stainless steel and other steel
manufacturers, contributing to industrial restoration.
Developed vacuum melting and casting furnace for nuclear power development,
contributing to the solution of energy problems.
Developed highly sensitive vacuum gas analysis for direct analysis of air pollution.
Delivered a large-scale space chamber to the space research lab at the
University of Tokyo, contributing to space development.
Developed vacuum freeze-drying equipment for instant foods, contributing to
the improvement of food culture.

Minor change in 1983

Reflectors for automobiles

Comfortable working environment

1972 Opened the Institute for Super Materials as ULVAC’s first research facility.
1975 Established a subsidiary in North America as a base for exports to the U.S.
1982 Established a subsidiary in Taiwan.
1983 Opened the Beijing Office in China.
1990 Opened the Fuji Susono Plant in Shizuoka Prefecture, as a plant dedicated to
semiconductor production equipment.

Results for FY 2022

Ratio ofsales
overseas:
Operatingprofit¥19.9

Contribution to resolution of social issues
Delivered vacuum pumping system for a critical plasma tester to Japan Atomic
Energy Research Institute.
Developed transparent conductive film deposition equipment for LCDs for calculators.
Developed the world’s first multi-chamber deposition system for semiconductor
memory.
Delivered the world’s first computer-controlled vacuum deposition system forsemiconductors to IBM.
Developed sputtering equipment for hard disk deposition, making a significant
contribution to improvement of computer performance.

billion66%

Special steel

100 kg-class induction heat-type
vacuum melting furnace

LCD calculator display

Transparent conductive film
deposition equipment

Computer (Photo:
Courtesy of IBM Archives)

1991-2010 Information society, spread of digital home appliances

billionULVAC grew significantly in line with the expansion of the FPD market
from Japan to South Korea and Taiwan.

Contribution to resolution of social issues
Developed the CERAUS series of multi-chamber deposition systems for semiconductors.
Developed the SMD series of sputtering systems for LCDs, contributing tomass production of laptop PCs. It subsequently became the foundation for the
popularization of flat-screen TVs.
Developed deposition equipment for OLED, which is a next-generation display.
Developed ion implantation system for mass production of power devices that
contribute to power saving.
Developed the ECO-SHOCK power-saving attachment for dry pumps.
Developed an integrated production line for thin-film solar cells to meet thedemand for renewable energy.

Sales overseas*

Operating profit*

Disks/discs (magnetic,
optical)In-line sputtering equipment
for magnetic disks

Flat-panel display

LCD production equipment

Large flat-panel display

LCD production equipment

Electronic devices

Electronic device
production equipment

Advanced semiconductor

Semiconductor production
equipment

2011-Present Digital society*Sales overseas and operating profit only for FY 2004 onward are
indicated.

Sustainable future

Contributing to a wide range of fields by leveraging strengths as acomprehensive vacuum equipment manufacturer in line with the spreadof mobile devices and the development of ICT

1952

Head Office at the timeof establishment (1952)

13

1960

1970

Head Office/Plant completed in Chigasaki(1968)ULVAC VALUE REPORT 2023

Fully automated vacuum
evaporation equipment

High-performance devices

2001 Changed the company name to ULVAC, Inc.
2003 Established a full-scale production and service base in China.
2004 Listed on the First Section of the Tokyo Stock Exchange. New buildings ofthe Head Office/Plant (Chigasaki) completed.
2005 Opened the Chiba Tomisato Plant for the development and manufacturing of materials.

Net sales

High-vacuum
distillationequipment forplasticizers

Pharmaceuticals

In line with increasing demand for semiconductors, a stream of ULVAC
products gained top shares in the global market.

¥227.5

Vacuum evaporation equipment
for general industries

1971-1990 Development of electronics

The current logo was established in 2001.

Net sales:

ULVAC’s solutions

1952-1970 High economic growth period

1980

Institute for Super Materials(1972)

1990

2000

Fuji Susono Plant (1990)20102020 2022 (FY)

Listed on the First Section of theTokyo Stock Exchange (2004)

2011 Established the South Korea Institute for Super Materials in South Korea.
2015 Established the Future Technology Research Laboratory.
2018 Opened the ULVAC-Osaka University Joint Research Laboratory for Future
Technology at Osaka University.
2021 Opened the ULVAC Advanced Technology Collaborative Research Cluster at
Tokyo Institute of Technology.
2022 Listed on the Prime Market of the Tokyo Stock Exchange.
Contribution to resolution of social issues
Development of thin-film lithium metal anode using vacuum deposition technology
was selected for the NEDO* Green Innovation Fund Project “Development of NextGeneration Storage Batteries and Next-Generation Motors”
The ULVAC-Osaka University Joint Research Laboratory for Future Technology at
Osaka University is conducting basic research in the regenerative medicine andenergy fields and accepts students for Japan’s first corporate co-creation program.
The ULVAC Advanced Technology Collaborative Research Cluster at Tokyo Instituteof Technology aims at co-creation, such as human resources development andintegration of plasma diagnostics technology and AI technology.
Developed extreme ultraviolet (EUV) lithography-ready sputtering equipment for
Metal Hard Mask (MHM) process, contributing to mass production of highspeed, low-power-consumption advanced logic devices.
* New Energy and Industrial Technology Development Organization

OLED production
equipment
OLED

ULVAC VALUE REPORT 2023

14

Inherited
ULVAC-StyleULVAC’s Vision

ULVAC’s Value Creation <Process>Message to Our
Readers

About ULVAC

Vision 2032

Materiality andPriority Domains

Contribution to Resolutionof Social Issues

Financial Capital¥42.0 billion

Shareholders’ equity:

Materiality
P.23
Promotion of creationand co-creation of
innovation with vacuum
technology as the core
Development of diverse
human resources andpromotion of theiradvancement; cultivationof resilient organizations
Respect for human rights
and responsible conduct
in the value chain
Contribution to asustainable global
environment

Priority Domains
P.17
Realization of the digitalsociety, fundamental
technology for realizationof the digital society
Energy management,
next-generation energy
Healthcare, life
innovation
Construction, social
infrastructure, mobility

D/E ratio:¥198.2 billion
0.21

Manufactured Capital
Number of principal production bases
Japan:
Overseas:Investment in manufacturing
facilities and product quality
improvement activities

13
11Intellectual Capital
R&D bases:
Accelerated development
near key customers andstrengthened collaboration
R&D cost and R&D capital
investment:

7

Examples of products
and services

Semiconductor
production equipment¥227.5 billion
29.5%
Operating profit margin:
8.8%
ROE:
7.3%
 perating CF (cumulative totalOfor 3 years):
billion¥60.5

Coatingbusiness

ULVAC’sBusinesses

Advancedmaterials Materials

Large evaporationroll coater

Customer
supportServices

VacuumApplication
Business

FPD

New Mid-termManagement Plan

Human Capital reating Social ValueCthrough Vacuum
Technology
Enhancing Profit andCapital EfficiencyOriented Management

Number of employees:

P.26

¥57.9

billion (3-year total)E xtensive knowledge andtechnological capabilities
related to comprehensive use of
vacuum technology
Investment in information systems

Control
Analysis

Surfaceanalysis

Vacuum Vacuum
Equipment
Business

6,264 persons

Customer-oriented
development, design,
procurement, manufacturing,sales, and service capabilities

Social Capital articipation in consortia andPcollaboration with universities
and other institutions
Relationships of trust withcustomers and business
partners worldwide
Foundation of businessactivities in local communities

Natural Capital
Electricity consumption:
167,040 thousand kWh
Water consumption:
1,573 thousand m3

Value ULVAC Offers
to Stakeholders

Net sales:Gross profit margin:

P.19

Equipment
control

Value CreatedFinancial CapitalSee below for
allocation.

P.11

Intellectual Capital

Screw-type dry
vacuum pump

Semiconductors /Electronics

2,065
2,423

Overseas:
Resolution of social issues
through miniaturization, enhanced
performance, and reduced power
consumption of customer devices
Swift, high-quality, comprehensive
engineering services

Human Capital atio of women inR
managerial positions:Localization ratio ofpresidents of overseas
subsidiaries:

9.0%
83.3%

Enhancement of customer satisfaction
Conducted CSR survey of suppliersCreation of employment
opportunities, tax payments tonational and local governments, andsocial contribution activities in theregions where ULVAC operates

Natural Capital10% reduction of ULVAC’s GHG
emissions (vs. 2020)
Creation of environmentally friendly
products

Robust Corporate Governance

Customers

Contribution to customers’
business activities,
technological innovation,and value creation; offeringof cutting-edge production
technology, enhancementof productivity andquality, and reduction ofenvironmental impacts
through equipment andservices

Shareholders andinvestors

Realization of long-term
growth and enhancementof corporate value, andgreater returns

Suppliers

Achievement of growth
together with ULVAC
based on trust andcollaboration, fair and freecompetitive environment

Social Capital

Sputtering targets forsemiconductor applications

Promotion of Sustainability
Management
P.21

Manufactured Capital
Safety-first operation
High-quality, reliable products withstate-of-the-art technology
Meeting equipment delivery andinstallation schedules
Production efficiency and productdefect rate

Number of patents owned
Japan:

Equipment
Industrial
equipment /Components

Financial Data/
Corporate Information

Continue to be a “Field of Potentiality”
for the Future

R&D / Global Network /Customer Support

Interest-bearing debt:

Corporate
Governance

Enhancement ofCorporate ValueULVAC’s Strengths

Invested Capital

ULVAC’s Strategy

A company that utilizes vacuum technology tocreate value for the world with its partners and
Our Goal for 2050
continues to contribute to the future of people
P.24
and the planet

Through the implementation of the Basic Corporate Philosophy which states that the ULVAC Group aims tocontribute to the development of industries and science by comprehensively utilizing its vacuum and peripheraltechnologies, ULVAC aspires to be an enterprise indispensable for society.

Recognition ofSocial Issues

ULVAC’s Vision

Local communities

Creation of employment
opportunities, industrial
development, reductionof environmental impacts

Employees

Workplaces offering job
satisfaction

P.55

Basic Corporate Philosophy

The ULVAC Group aims to contribute to the development of industries
technologies through the mutual cooperation and collaboration of the15

ULVAC VALUE REPORT 2023

and science by comprehensively utilizing its vacuum and peripheral
Group companies.
ULVAC VALUE REPORT 2023

16

Inherited
ULVAC-StyleULVAC’s Vision

Message to Our
Readers

About ULVACULVAC’s Vision

ULVAC’s Strategy

Corporate
Governance

Financial Data/
Corporate Information

ULVAC’s Value Creation <Priority Issues>
We are committed to realizing a society that is not only safe and secure but also affluent and convenient by offeringvalue utilizing vacuum technology, which is indispensable and fundamental for industrial and scientific development.
We will continue helping to resolve social issues in cooperation with our customers through the provision of
products and solutions to them.
ULVAC’s business activities
Social issues

Progress of digitalization,
advances in 5G and IoT, andestablishment of network
infrastructureMarket opportunities

Aspiration for the progressof all industries andtechnological innovation
Diversification ofsemiconductor and electronic
device applications and needs
Trend toward devices that aresmaller, faster, larger-capacity
and consume less power

ULVAC’s six businesses
Priority domains

Realization of the digital society
Autonomous driving, agriculture, healthcare,virtual currency, etc.

Fundamental technology forrealization of the digital society
IoT, cloud, AI, robots, big data, drones

Environmental issues, such as
global warming and climatechangeGlobal energy issues due todependence on finite resources

Progress of renewable andlow-carbon energy systems
Improvement in energy
conversion efficiency

Food safety and security,
population explosion and sharp
increase in demand for food in
emerging countries, increase infood loss
Longevity, needs and progressof health promotion andhealthcare

Longer preservation of foodand pharmaceuticals, volume
reduction

Aging of infrastructure indeveloped countries
Development of industrial
infrastructure in emerging
countries
Wider gap between rich andpoor

Development of safe, secureand convenient infrastructure

Semiconductor
production
equipment

Electronic
deviceproduction
equipment

FPD production
equipment

Components

Industrial
equipment

See

See

See

P.29

P.32

P.34

See

See

P.30

P.31

Energy management,
next-generation energy
See

P.33

Healthcare, life innovation

Construction, social
infrastructure, mobility

Materials

Main value
offered by thebusiness

Customers and their products

Response to new
semiconductor
and electronic
device fields
and needs byapplying vacuum
depositionand othertechnologies andR&D of cuttingedge processes
through cocreation withcustomers

FPD, semiconductor, electronicequipment, and device manufacturers

Enhancementof performanceof solar cells andpower devices byvacuum deposition,ion implantation andother technologies,
contribution to
reduction of power
consumption ofvarious devices

Solar cell manufacturers, battery
manufacturers, etc.

Longer life andvolume reductionof freeze-dried
food, vaccines,
drugs, etc. byvacuum freeze
drying and othertechnologies

Food manufacturers, pharmaceuticalmanufacturers, etc.

Enhancementof performanceof industrial
materials andresponse to newmaterials byapplying vacuum
heat treatment
and othertechnologies

Chemical and materials manufacturers,
steelmakers, transportation equipment
manufacturers, etc.

Semiconductors:
Memory, logic

Contribution toresolution of principal
social issues*

Contribution to realizationof an advanced,
convenient, safe andsecure, digital society

DRAM, PCRAM,
3D-NAND, CPU, etc.

Functional
devices: Sensing,communication(5G), display
MEMS, SAW/FBAR
devices, LCD,
OLED, etc.

Energy: Heatgeneration,
power storage,
conversion

Contribution to creation ofa sustainable society bypower generation, energy
storage and energy saving

Solar cells, secondary
batteries (lithium ion
batteries etc.), powerdevices, magnets for windturbines, etc.

Foodstuffs,
pharmaceuticals:
Freeze drying
Freeze-dried
foods, emergency
provisions,
supplements,
vaccines, etc.

Industrial materials:
Heat treatment

Contribution to human health,the future of medicine, andrealization of a sustainable
society with minimal food loss
by means of safe and secure
foods and pharmaceuticals

Contribution to creation ofa sustainable society thatis safe and secure andcomfortable

Glass building
materials, industrial
materials, materials
for transportationequipment, heatexchangers, etc.

*Indicates relationships with the United Nations’ Sustainable Development Goals (SDGs).

17

ULVAC VALUE REPORT 2023

ULVAC VALUE REPORT 2023

18

Inherited
ULVAC-StyleULVAC’s Vision

Message to Our
Readers

About ULVACULVAC’s Strategy

ULVAC’s VisionCorporate
Governance

Financial Data/
Corporate Information

ULVAC’s Strengths
Strength1

Research and Development

Strength2

Ongoing value creation from a medium- to long-term perspective
Having positioned promotion of creation and cocreation of innovation with vacuum technology
as the core as materiality, ULVAC is promoting
development of technologies that contribute torealization of a sustainable society. Semiconductors
and sophisticated electronic devices are essential
for addressing social issues such as climatechange and other environmental concerns. We arepromoting development to ensure that the Group’s
vacuum thin film processing technology becomesa core technology for manufacturing these devices.
So, to realize the above, our development structure
leverages business partnerships with various
companies and research institutions. We are also
laying the foundation for long-term sustainablegrowth underpinned by the latest technologies.
Specifically, we will endeavor to respond swiftly tothe progress from 5G to 6G and IoT in line with theproliferation of global network infrastructure andthe emergence of the digital society while flexibly
addressing social issues, such as global warming
and climate change.

Advanced logic•

NAND/DRAM•

Next-generation batteries•

Power devices•

Electronic devices (MEMS, sensors)•

Optical devices (μOLED, μLED)•

Packaging (WLP, PLP)

Networks offering solutions to support industrial development worldwide
ULVAC has established optimal networks covering development, sales, manufacturing, and services not only
for Japan but also for East Asia. To spur development by capitalizing on the global development system,ULVAC is promoting joint development with leading companies and research institutions around the world.

TOPICS
Relevant SDGs

Japan

Collaborative Research Cluster at Tokyo Instituteof Technology
On September 22, 2021, ULVAC, Inc. and Tokyo Instituteof Technology (hereinafter “Tokyo Tech”) established the
ULVAC Advanced Technology Collaborative Research Cluster(hereinafter the “Collaborative Research Cluster”) on the
Ookayama Campus of Tokyo Tech. ULVAC and Tokyo Tech haveachieved results through ad hoc research cooperation, but tofurther strengthen the collaboration between the company andthe university as partners at the organizational level, we set
up the Collaborative Research Cluster with the support of theTokyo Tech Open Innovation Platform.
Combining Tokyo Tech’s plasma diagnostics technology
and AI technology, the Collaborative Research Cluster aims
to improve the performance of plasma processing equipment
by measuring plasma conditions that could not be measured
previously. The synergy created by laboratories from different
fields working together is expected to produce new research
results that cannot be obtained through ad hoc collaborative
research. Additionally, leveraging this organization-toorganization collaboration will lead to a wide range of positive
outcomes, not only in joint research but also in fields suchas personnel development, leading to future growth of bothULVAC and Tokyo Tech.

Principal themes•

Global Network

Head Office/
Plant

Kyushu Plant

Fuji Susono Office Tohoku Plant

China

South Korea

TaiwanSuzhou Plant

Strength3

In regard to manufacturing, ULVAC has expanded a production
system centering on Japan, China, South Korea, and Taiwan. Goingforward, we will emphasize improvement of production efficiency
by further promoting optimal production. Each site of the ULVACGroup has established its own local supply chain. In addition, the
ULVAC Group is reestablishing a global supply chain to optimize
procurement.
For details

Website>>Support>Sales Offices

For details

Website>>Support>Service Center

Hyeon-gok Plant Tainan Plant

Customer Support

ULVAC’s customer support solutions pool the Group’s know-how
Our customer support network in Japan and around the world underpins our customers’ production
operations in a manner that meets their needs throughout the product life cycle. We offer comprehensive
maintenance services covering components and make proposals for modification and improvement.
Furthermore, by using information on customer needs as feedback for the development of new equipment,
we aim to offer even more sophisticated vacuum technologies and services. We will also expand remotecustomer support packages utilizing IoT equipment.
On-siteRemoteModification/
improvement

Field support(maintenance)

Website>>NewsFor details

Before refurbishing

After refurbishing

Progress and Plan for R&D Investment

Sales ofrefurbishedusedmachines

Sales ofparts and
consumables

Precisioncleaningand surface
treatment¥75.0 billion in R&D investment (R&D capital investment and R&D cost) is planned centering on semiconductor and electronic device
production equipment, which is a growing field, for the three years covered by the mid-term management plan.
TOPICS

R&D investment (3-year total)
R&D capital investment

R&D cost(Billions of yen)
80

57.9
44.6

40

25.4
20

0

19

17.3

Initiatives for enhancement ofequipment recyclability andproduction technology improvement

75.0

60

30.9

8.1

12.1

2011-20132014-2016

ULVAC VALUE REPORT 2023

Semiconductors: more than 40%
Logic and Memory (Sputtering for MHM andwiring process)

35.2

32.5

18.9
2017-201925.4
2020-2022

Mining of materials
for products

Procurement of parts andconsumables

Electronics: more than 20%
Power Devices (Ion Implanter, Sputtering, Etching, etc.)

25.7

18.8

Effective utilization of resources throughout the product life cycle
and addressing environmental issues

FPDs: mid-10%

39.8

Battery (Evaporation)

Others: more than 20%
2023-2025(Plan)(FY)ULVAC is contributing to reductionof power consumption, waste, andconsumption of raw materials
throughout the product life cycle,
including the customer support
phase.

Relevant
SDGs

Modification and improvement ofequipment and machines already inoperation, reduction of power consumption,
maintenance that also covers components

ULVAC’s plants

Customers’ plants

Modification and improvement of equipment,
sales of refurbished used machines
Refurbishing, precision cleaning,
and resource recovery(extension of component life and the cleaning cycle,
recovery of valuable materials, etc.)

ULVAC VALUE REPORT 2023

20

Inherited
ULVAC-StyleULVAC’s Vision

Message to Our
Readers

About ULVACULVAC’s Vision

ULVAC’s Strategy

ULVAC’s Sustainable Management
The foundation of all business activities is the Basic Corporate Philosophy stating our aspiration: “tocontribute to the development of industries and science by comprehensively utilizing its vacuum andperipheral technologies.” We will work with our partners to pursue cutting-edge technology, and contribute to
the creation of a sustainable society with vacuum technology while fulfilling our social responsibility.

Basic Corporate Philosophy
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.

Materiality Identification Process

Identification Process
STEP 1

STEP 4

Our Goal for 2050

Environment

Vision 2032
Continue to be a “Field of Potentiality” for the Future

Materiality
Promotion of creation and co-creation of innovation with vacuum technology as the core
Development of diverse human resources and promotion of their advancement; cultivation ofresilient organizations
Respect for human rights and responsible conduct in the value chain
Contribution to a sustainable global environment

21

ULVAC VALUE REPORT 2023

Based on our goal for 2050 and Vision 2032, we organized the points of emphasis.
• Basic Corporate Philosophy and purpose, Business Philosophy, Employee Principle• Uniqueness that differentiates ULVAC• To enhance economic, social, and environmental value

Identify issues
Social Issues: We firstly exhaustively selected items from among the evaluation items of ESG evaluation organizations, non-financial
information disclosure standards*, and other requirements, and then, based on the points of emphasis, we shortlisted the items,
considering the degree of importance and the aspects that should be addressed from a long-term perspective in order to achieve our goals.

Business Issues: The secretariat of the Board of Directors played a central role in identifying ULVAC’s unique management issues.
In addition, at the Management Council on strategy, the awareness of issues at head office divisions was clarified and opportunities andrisks for business divisions were identified.

STEP 3

Human happiness

Organize points of emphasis*Global Reporting Initiative (GRI) Standards, ISO 26000 (Guidance on Social Responsibility), Sustainable Development Goals (SDGs), Ten Principles of the UN Global Compact, Task Force on Climate-related Financial Disclosure(TCFD), Responsible Business Alliance (RBA) Code of Conduct, International Integrated Reporting Framework of the International Integrated Reporting Council (IIRC), Guidance for Integrated Corporate Disclosure andCompany-Investor Dialogues for Collaborative Value Creation (Guidance for Collaborative Value Creation) released by the Ministry of Economy, Trade and Industry (METI), etc.

The ULVAC Group strives to create economic, social, and environmental value
by comprehensively utilizing its vacuum and peripheral technologies.

Use the latest technological development to contribute to
the realization of a safe, secure, affluent and convenientsociety
Contribute to the creation of a society in which all people
can lead happy lives
Contribute to creation of an environmentally friendly andsustainable society

For details
Website >>Sustainability > ULVAC’s Sustainable Management> Materiality

In the process of identifying materiality, we conducted an internal review and had in-depth discussions as well as
dialogues with external directors, external experts, institutional investors, and others. Reflecting the suggestions
obtained, we considered materiality in a broader sense from the viewpoint of enhancement of corporate valueand have positioned materiality as “ULVAC’s unique management issues for realization of our goal for 2050 and
Vision 2032.”

Sustainability Policy

Economic growthand social abundance

Financial Data/
Corporate Information

Basic Approach

STEP 2

A company that utilizes vacuum technology to create value for the world with its
partners and continues to contribute to the future of people and the planet

Corporate
Governance

STEP 5

Evaluate importanceIn evaluating importance, we evaluated and prioritized items based on the two axes of the “degree of importance for stakeholders” and the“degree of impact on ULVAC’s business,” and then considered whether the items have a significant impact over the long term.

Identify
A series of discussions were held at meetings attended by members of the Sustainability Promotion Committee, internal directors, andmanagers of head office divisions and business divisions. Following discussions under a company-wide cross-functional structure, based on
certain hypotheses, we had dialogues with external directors, institutional investors, experts, and others to confirm their expectations andrequests of the ULVAC Group and to organize the issues.

Determine
The Executive Officer in charge of sustainability who chairs the Sustainability Promotion Committee verified the appropriateness of themateriality evaluation process and analysis results. Then, after discussion at a meeting of the management team, the Board of Directors
deliberated and approved the items of materiality.

For details
Website >>Sustainability > ULVAC’s Sustainable Management> ULVAC’s Sustainability

Promotion Structure
We have established the Sustainable Management
Department, which reports directly to the President,
to promote sustainability initiatives throughout theGroup. The Sustainability Promotion Committee,
which meets twice a year, is attended by internal
directors, executive officers, and department heads.
The Committee sets sustainability targets, manages
progress, considers policies, and discusses initiatives
on key themes. Important matters are reported
and resolved as appropriate at the Management
Council, a body that deliberates on matters related toimportant business execution based on management
policies decided by the Board of Directors. Moreover,the Executive Officer in charge of sustainability
reports to the Board of Directors on the contents
of discussion by the Sustainability Promotion
Committee and the sustainability initiatives of theentire Group, so that the Board of Directors canaccurately grasp the status of business execution andsupervise it appropriately.

Promotion Structure
Board ofDirectors

Chief Responsible Officer: Chairman of the Board of
Directors (President and Chief Executive Officer)

Supervise

Sustainability Promotion
Committee

ReportChairperson: Executive Officer incharge of sustainability

Supervise

ReportSustainable Management Department

ReportInstruct

Divisions of the Company

InstructGroup companies

ULVAC VALUE REPORT 2023

22

Inherited
ULVAC-StyleULVAC’s Vision

Message to Our
Readers

About ULVACULVAC’s Vision

ULVAC’s Strategy

Corporate
Governance

Financial Data/
Corporate Information

Toward the Realization of Our Goal for 2050
ULVAC sets our goal for 2050 based on the Basic Corporate
Philosophy.
In the last fiscal year, we formulated “Vision 2032,” the ideal
configuration of the ULVAC Group 10 years from now, and identified“materiality,” management issues specific to ULVAC toward therealization of our goal for 2050 and Vision 2032.
We have formulated a mid-term management plan for FY 2023
to FY 2025 to realize these medium- to long-term visions bybackcasting. Through the achievement of this plan, we will work torealize our goal for 2050.

Backcast

Mid-term Management Plan
(FY 2023 to FY 2025)
For details

P.26 New Mid-term Management Plan

Basic Policy

Mid-term Management Plan
(FY 2020 to FY 2022)
For details

P.25 Review of the Previous

Mid-term Management Plan

Basic Policy
 evelopment Investment for GrowthD(Selection and Concentration)
Profit-Oriented Management
Through a Change in Structure

Priority Strategies
Strengthening the Growing
Business; Strengthening Researchand Development
Enhancing Manufacturing Capabilities
Enhancing Group Management
Efficiency
Strengthening Management Base reating Social Value through Vacuum
C
Technology
Enhancing Profit and Capital EfficiencyOriented Management

Priority Strategies
 trengthening Product CompetitivenessS
in Growth Businesses
Improving Global Productivity
Strengthening Management Base

Numerical Targets
Net sales¥300.0 billion
Gross profit margin
35%
Operating profit (margin)
¥48.0 billion (16%)
ROE
14%Operating CF (cumulative total
for 3 years)
¥63.0 billion

Numerical Targets
Net sales ¥210.0 billion
Gross profit margin
35%
Operating profit margin
16%
ROE
13%
Operating CF
¥29.0 billion

23

ULVAC VALUE REPORT 2023

Forecast

Our Goal for 2050
Vision 2032
Continue to be a
“Field of Potentiality”
for the Future

A company that utilizes vacuum
technology to create value forthe world with its partners andcontinues to contribute to the
future of people and the planet

The term “Field of Potentiality”
alludes to “the margin of each
person’s mind.” Having an empty
space in one’s minds allows one
to absorb more from the outside
world. Using the knowledge thus
gained, one can venture into theunknown and create the new. This
begins when a person becomesaware of the “Field of Potentiality”
within their mind. We believethat the ULVAC Group, where theenergy of such people is gathered,will also become a “Field ofPotentiality,” which will lead tothe creation and co-creation of
innovation with vacuum technology
at its core that will contribute to asustainable future.

Materiality

For details

Promotion of creationand co-creationof innovation withvacuum technology as
the core

Economic
growth andsocial abundance
Use the latest technologicaldevelopment to contributeto the realization of asafe, secure, affluent andconvenient society

Human happiness

Environment

Contribute to thecreation of a society
in which all people
can lead happy lives

Contribute to creationof an environmentallyfriendly andsustainable society

P.35 Details of Initiatives for Materiality

Development ofdiverse humanresources andpromotion of theiradvancement;
cultivation of resilientorganizations

Respect for humanrights and responsible
conduct in the value
chain

Contribution to asustainable global
environment

ULVAC VALUE REPORT 2023

24

Inherited
ULVAC-StyleULVAC’s Vision

Message to Our
Readers

About ULVACULVAC’s VisionCorporate
Governance

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-oriented
management 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 of
production 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 various
systems in place to improve productivity. In addition, we steadily increased shareholders’ equity and secured financial
stability.
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 electronic
devicesSensorMobileAR/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

Logic

MemoryVarious electronic devices

227.5(Billions of yen)

210.0
200

185.4

Net sales

16.0%

Others183.0

Materials
Industrial Equipment

100

Semiconductor andElectronic Device
Production 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
120

2022
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

100

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

80

VariousElectronic
Devices60

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

0

19.9

17.2

16.0

25

Battery

44.9

Operating profit
margin0

vs. FY2022
160

Components

12.5%

Power devices

2019

2022

2023

2025

(FY)

(FY)

ULVAC VALUE REPORT 2023

26

Inherited
ULVAC-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
(%)
20

245.0
16.0%

15

200

8.8%

10

9.4%

100

19.9

5

48.0

23.0

0

0

2022
Results

2025
Target

2023
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

50

DRAM
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.

20

0

2022
Results

2023
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-volatilememory30

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 of
performance, 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

Corporate
Governance

The 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 Our
Readers

20

Power devices

02022
Results

2023
Plan

Customer 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.

Other

68.4

 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
Plan

2025
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

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

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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.
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Financial Data/
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Key initiatives status

Pages

Relevant
Sustainable
Development
Goals (SDGs)

We endorse the Task Force on Climate-related Financial Disclosure (TCFD) recommendations andstrive to disclose relevant information. As part of the comprehensive climate-related strategy, we haveset greenhouse gas emission reduction targets and are promoting introduction of renewable energy
and working to improve energy efficiency.

P.50, P.51

About ULVACULVAC’s Vision

ULVAC’s Strategy

Details of Initiatives for Materiality
The ideal state, success factors, and targets are set for each materiality. Meeting twice a year, theSustainability Promotion Committee confirms the progress situations and determines and reviews actionplans, which are implemented by the respective responsible persons.

ESG

Materiality

Key initiatives

Initiatives for the Task Force on Climaterelated Financial Disclosures (TCFD)
Recommendations and Climate Action

E

Contribution to a Sustainable Global
Environment

Development of Diverse Human Resources
and Promotion of Their Advancement

S

Respect for Human Rights and Responsible
Conduct in the Value Chain

Promotion of Creation and Co-creation of
Innovation with Vacuum Technology as theCore“ULVAC Green Products” Certification Programfor Environmentally Friendly Products

The program certifies products that satisfy the applicable standards for ULVAC’s evaluation items
concerning environmentally friendly design.

P.54

Environmental Activities in FY 2022
Efficient Use of Water, Management ofChemical Substances, Participation in the
Reforestation Partner System

With the aim of protecting the planet’s ecosystem and maintaining biodiversity, we are vigorously
working on preservation of water resources, proper management of chemical substances, and forest
preservation and reforestation projects.

P.50, P.53

Human Resources Development,
Development of Core Human Resources

We provide comprehensive programs to support employees’ skills enhancement and careerdevelopment.

P.42-P.43

Respect for Diversity and Inclusion
Creating an Excellent Working Environment

35

ULVAC VALUE REPORT 2023

We foster a corporate culture conducive to employees from diverse backgrounds working together,respecting and supporting one another. We also focus on cultivating a working environment inwhich individual employees can demonstrate their strengths and originality while enhancing theirproductivity.

P.41, P.43

Key metric: Ratio of women in managerial positions
Target: 10% or more by June 2026 in the ULVAC Group
Result: 9.0% (FY 2022)

Promotion of Health and Productivity
Management

We are promoting health and productivity management as an important management issue. Initiatives
include periodic medical checkups, stress management, and exercise programs.

P.44

Occupational Safety and HealthAs the implementation of precautionary measures to ensure the health and safety of our employees,
improvement of safety awareness, and establishment of appropriate response measures in theevent of an emergency, we are striving to improve safety standards, reduce accident rates, and raise
employee safety awareness.

P.48

Human Rights
Responsible Procurement Management

We are striving to ensure respect for human rights and responsible procurement throughout our
supply chain, including ensuring fair working conditions, ensuring there is no forced labor or childlabor, and building sustainable relationships with our suppliers.

P.45-P.47

Development Policy, R&D Investment Policy
R&D System

With the aim of strengthening the semiconductor field, which is a growth driver, we are making
strategic investments and allocating resources. We are also emphasizing development of new
products, an increase in the number of patents granted, and expansion of R&D partnerships.

P.37, P.38

Intellectual Property Assets

In accordance with the basic policy: “to develop and enhance the business environment, strengthen
the competitiveness of the entire ULVAC Group, and enhance corporate value through intellectual
assets,” we are striving to create and utilize intellectual property assets.

P.40

Green Innovation Joint Research

Capitalizing on our prowess in vacuum technology in the development of new technologies for the
manufacture of compact and lightweight storage batteries, we will create innovation leading toresolution of social issues. We are also promoting various joint research projects.

P.38, P.39

ULVAC’s Sustainable Management
Corporate GovernanceRisk Management
With Our Stakeholders

In order to promote sustainable management, we are implementing management strategy from theintegrated environmental, social, and governance (ESG) perspective.
Regarding corporate governance, we have put in place systems to ensure organizational transparency
and protect the interests of our stakeholders. This includes establishing appropriate oversight systems
and strengthening risk management.
Moreover, we also attach great importance to relationships with our stakeholders, and aim to enhance
corporate value and achieve sustainable growth through dialogue with employees, customers,
business partners, investors, and local communities.

P.21
P.55-P.66
P.68

Compliance

We are committed to preventing misconduct and to maintaining high ethical standards through thedevelopment of a compliance system and education for employees. The whistleblowing system isestablished for early detection and correction of misconduct and violations.

P.67

G
Cultivation of Resilient Organizations

Key metric: Greenhouse gas emissions
Target: Reduce greenhouse gas emissions in 2030 by 40% as compared with 2020 (Scope 1 and 2)

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Promotion of Creation and Co-creation of Innovation
with Vacuum Technology as the Core
Development Policy

R&D Structure

We are promoting innovative research and development focused on vacuum technology,
with the ultimate objective of realizing a sustainable society. In view of recent investmentin the development of advanced semiconductors and electronic devices around theworld, we have decided to take on the challenge under a new structure geared to cocreation with customers. Spearheading our initiatives is the Research & Development
HQ, a new organization established in July 2023. Consist of three organizations, theInstitute of Advanced Technology, Future Technology Research Laboratory, and Software
Development Department, the Research & Development HQ promotes R&D of the entire
ULVAC Group to maximize R&D resources and results. For this purpose, the Research& Development HQ collaborates with other divisions and group companies to plan,
formulate, and promote development strategies.

Strengthening of the R&D Strategy
In the semiconductor and electronic device fields, which are our priority fields, we have reallocated resources.
The R&D Center will conduct next-generation product development and basic R&D to acquire basic IP, while theTechnology Center will swiftly promote product and technology development by deepening collaboration withcustomers and provide technical support. By enabling development meeting the needs of each product and region,
this new structure will maximize development outcomes.

Junya Kiyota

Senior Executive Officer
Research &Development HQ

R&D Investment Policy
Our aim is to strengthen the three semiconductor fields that will be growth drivers: logic, memory, and powerdevices. In the logic and memory fields, based on our experience with metal hard mask processes in the cutting-edge
logic field, we are developing equipment that will enable our entry into other processes and we are also improving theperformance of deposition processes. In the memory field, in line with the progress of miniaturization and ever-higher
integration, we are developing equipment for DRAM and 3D NAND flash memory with the aim of entering otherprocesses, while also developing deposition processes. In the power device field, which is attracting attention in viewof its potential contribution to energy saving, we are emphasizing the development of ion implantation systems.
In the logic and memory fields, the complexity of manufacturing technology is rapidly increasing. Therefore, inorder to succeed in the market, it is essential to collaborate ever-more closely with manufacturers of advanced
semiconductors. Against this backdrop, construction of Technology Center PYEONGTAEK is underway (scheduled forcompletion in March 2024) to further
strengthen ULVAC’s foundation for
R&D Investment Trends (3-year total) (Billions of yen)further development in South Korea.
75.0
The Technology Center’s mission isR&D capital investment
R&D cost
to accelerate product and technology> Semiconductors: more than40%
57.9
development near customers and
Logic and Memory
35.2
enhance collaboration and technical(Sputtering for MHM and wiring process)44.6
support.
> Electronics: more than 20%

32.5

30.9
25.4
17.3

8.1
20112013

Power Devices(Ion Implanter, Sputtering, Etching, etc.)

25.7

18.8

12.1
20142016> FPDs : mid-10%

39.8
18.9

20172019

Battery (Evaporation)

25.4> Others: more than 20%
20202022

20232025(Plan)(FY)

Overview of Technology Center Pyeongtaek

Integration of the Group’s R&D functions
By integrating the R&D structure of
the entire Group, we aim to continuallycreate differentiated products andnew technologies, acquire IP, andaccelerate development. In this way,
we will establish and operate a systemthat will continue to provide cuttingedge products and technologies
in a timely manner in response tocustomer requirements. The Research& Development HQ will play a central
role in releasing advanced technologies
that enable us to quickly address social
issues for the benefit of society.

ATI China-Technology Center Suzhou

ATI Korea-Technology Center Pyeongtaek

Institute of Advanced Technology(ATI)-R&D Center Chigasaki-R&D Center Susono-R&D Center Tomisato

ATI Taiwan-Technology Center Zhubei

20%
2%
17%

ATI America

61%-Technology Center Boston

Semiconductor and electronic devices
FPD
Materials
Fundamental technologies**Fundamental technologies include software.

Green Innovation
Large quantities of greenhouse gas (GHG) emissions, which are a consequence of the development of the global
economy, are causing global warming. In order to solve this major environmental problem, developed countries
have declared their intention of achieving carbon neutrality and are implementing various greening measures. In
particular, with CO2 emissions from the use of automobiles currently accounting for 16% of global GHG emissions,the trend toward electrification of automobiles is accelerating. However, due to the constraints on car body designand considering the cost, more compact and lightweight storage batteries are needed to spur mass adoption ofelectric vehicles. ULVAC will capitalize on its prowess in vacuum technology in the development of new technologies
for the manufacture of compact and lightweight storage batteries, thus creating innovation leading to resolution ofsocial issues. Specifically, we are developing production technology for lithium metal anodes by applying vacuum
technology to achieve social implementation of high-energy density storage batteries with lithium metal anodes. In
collaboration with manufacturers of parts and materials, film processors, etc., applying the deposition technology ofroll-to-roll vacuum lithium evaporation equipment for mass production, we will offer equipment capable of producing
thin-film, high-purity lithium anodes at low cost, thereby contributing to realization of more compact, higher-capacity
storage batteries and reducing
By changing the anode from graphite to Li, the conventional manufacturing processes of mixing, drying, and pressing
GHG emissions. ULVAC’s lithium
are no longer necessary, and a 73% reduction in GHG emissions can be expected.
Since the Li anode manufacturing process is electrified, fossil fuels are not required.
metal anode production technology
GHG emissions
was adopted by the New
MixingCoatingDryingPressing(t-CO /GWh)
Energy and Industrial Technology
Graphite-based
active materials
Development Organization (NEDO)
BinderConductivity
Graphiteadditive
11,200 *1
as a “development of material
based
Hot air drying furnaceanodetechnologies for next-generation
73%
storage batteries” theme in the
reductionarea of R&D of “high-performancestorage batteries and materials”
2,970 *2
Li
*Calculated by annual
anode
under the “Next-generation Storage
electricity consumption
Li material
Li material
0.00047t-CO /kWh
Battery and Motor Development”*1 Source: “EU Competitiveness in Advanced Li-ion Batteries for E-Mobility and Stationary Storage Applications –project of the Green Innovation Fund
Opportunities and Actions,” 2017
Projects.
*2 Substitute value for emission factor by electric utility operator (for calculation of GHG emissions of specified emitters)
2

Location:
Construction began:
Construction scheduled
to be completed:
Site area:
Building area:
Investment amount:

37

ULVAC VALUE REPORT 2023

1029, Yulbuk-ri, Cheongbuk-eup,
Peyongtaek-si, Gyeonggi-do
March 2023
March 2024
Approximately 11,550 square meters
Approximately 13,168 square
meters (including clean room area ofapproximately 2,008 square meters)
Approximately 6 billion yen

2

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Promotion of Creation and Co-creation of Innovation
with Vacuum Technology as the CoreULVAC-Osaka University Joint Research Laboratory for Future Technology

Intellectual Property Assets

ULVAC, Inc. established ULVAC-Osaka University Joint Research Laboratory for Future Technology within Osaka
University and is promoting the following studies through industry-academia co-creation with the aim of creating
innovation.

As a pioneer of vacuum technology in Japan, the ULVAC Group has accumulated intellectual property rights andknowhow in many vacuum-related fields over the past 70 years. The vacuum-related intellectual property assets
accumulated within ULVAC, ranging from technologies for equipment, such as vacuum freeze-drying equipment forpharmaceutical applications and semiconductor manufacturing equipment to materials technologies, are expected tobe applied to new technologies in the future. With vacuum technology at its core, the ULVAC Group will continue tocreate and utilize intellectual property assets for the advancement of industry and science.

Development of Next-generation Semiconductor

Innovative semiconductor technologies are expected to constitute the foundation of the future information society.
Research is underway around the world into photoelectric fusion device, the next-generation optical semiconductor
devices expected to enable high-speed communication and low power consumption. The ULVAC-Osaka University
Joint Research Laboratory for Future Technology is researching photonics-spin convergence semiconductor devices,which are photoelectric fusion device that exploit the degree of freedom of spin of electrons. This technology has
the potential to transcend the issues constraining development current semiconductor devices, such as the processscaling limit and heat generation, to achieve higher information density. ULVAC also aims to create new processes
and materials facilitating application of advanced vacuum deposition technology in the semiconductor industry.

Basic Policy on Intellectual Property Assets
The basic policy on intellectual property assets is“to develop and enhance the business environment,
strengthen the competitiveness of the entire
ULVAC Group, and enhance corporate value throughintellectual property assets.” To accomplish this basic
policy, we are implementing four measures.

Medical-engineering collaboration

The ULVAC-Osaka University Joint Research Laboratory for Future Technology isconducting research in the medical field in which it is applying vacuum technology.
Using vacuum deposition technology, the Lab is focusing on circularly polarized lightsources for medical equipment applications and, using vacuum drying technology,
on storing of living cells and pulverization of pharmaceuticals. In particular, theLab is collaborating with the Faculty of Medicine, Osaka University, to develop
a lyophilization technology for storing living cells in powder form using ULVAC’s
proprietary Micro Powder DryTM spray-freeze-drying technology, which utilizes thephenomena of water self-freezing and ice sublimation in a vacuum. If applicationof this technology realizes pulverization of blood, it will enable long-term storage ofliving blood cells for immediate use, leading to the further development of medicine.

Intellectual Property Strategy Design
Our IP grand design covers not only patent application planning but also consideration of market trends, the value
chain (from product design to disposal), ESG factors, such as energy saving, environmental impact, and social
responsibility, and revenue-generating business models.
Such a comprehensive IP strategy facilitates innovative inventions and deployment of development outcomes in
the marketplace, and contributes to acquisition of IP rights with clear objectives.
Lyophilized red blood cells

Example of IP landscaping for technology distribution

Area where threeleadingcompanies are
主３社競合領域
competing

ULVAC Advanced Technology Collaborative Research Cluster
The ULVAC Advanced Technology Collaborative Research Cluster (hereinafter “Collaborative Research Cluster”)
was established by ULVAC, Inc. and Tokyo Institute of Technology (hereinafter “Tokyo Tech”) on the Ookayama
Campus of Tokyo Tech on September 22, 2021. Joint study is underway, combining Tokyo Tech’s plasma diagnostics
technology and AI technology, with the aim of improving the performance of ULVAC's plasma processing equipment
by measuring plasma conditions that could not be measured previously. In the course of the past two years, wehave cultivated collaborative relationships with five more laboratories which are engaging in joint research with us
and providing academic guidance, not only with respect to plasma measurement and AI, and are addressing new
basic research themes with a view to improving the performance of our equipment. Good results are being achieved
as evidenced by presentations at academic conferences in Japan and abroad and the submission of papers. Active
discussions were held among the joint research reporting meeting and we will deepen collaboration with the aimof producing new research results that cannot be
obtained through ad hoc collaborative research, but
Establishing a
are the fruits of the synergy created by laboratories
predictive model for
plasma processes
from different fields working together. Leveraging thisorganization-to-organization collaboration, we would
Plasmalike to strengthen a wide range of relationships,
measurement
not only in joint research but also in fields such as
personnel development, leading to future growth of
AI and machinelearning
both ULVAC and Tokyo Tech as well as technologicalinnovation.
Elucidation of a physical modelof the deposition process

Precise high control of substrate
position and temperature

39

ULVAC VALUE REPORT 2023

1. Respect intellectual property rights of othercompanies
2. U tilize intellectual property marketing (IPlandscape) for management
3. Integrate business, development, and intellectual
property strategies (trinity strategy)
4. P romote utilization of intellectual property andcollaboration through centralized management ofintellectual property of the entire Group

Area where ULVAC has
ULVAC優勢領域
competitive edge

Area where Company A
A社優勢領域
has competitive edge

Intellectual Property Governance Structure
The Intellectual Property Strategy Committee has been established as an organization to discuss Group-wide IP
strategies. The committee is chaired by the director in charge of innovation and is working closely with the Boardof Directors. Membership of the committee comprises those people responsible for development departments,
divisions, and Group companies. In formulating intellectual property strategies, the committee adopts a bird’s-eyeview of the entire Group.
For details

Website >> Research and Development > Intellectual Property Assets (Japanese only)

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Development of Diverse Human Resources andPromotion of Their Advancement; Cultivation of
Resilient Organizations
For the ULVAC Group to achieve sustained growth, dynamic organizations must serve as a foundation enabling
diverse human resources to fulfill their potential.
We will step up our engagement in organizational and human resources development more than ever,focusing on securing and cultivating tomorrow’s leaders to strengthen the management base.

Basic Policy
Amid intensifying global competition, with overseas sales accounting for 70% of total sales, in order to achievesustainable growth of its businesses, the ULVAC Group needs to cultivate an environment where people with diverse
personalities and strengths can maintain physical and mental health, bring their differing capabilities into full play, andenhance one another’s effectiveness through friendly competition.
In the ULVAC Group, people with different backgrounds, in terms of nationality, ethnicity, philosophy, culture,
language, gender, age, and specialty, are flourishing. We respect such diversity and promote inclusion, innovating toresolve customers’ and society’s issues. By doing so, we aim to continue delivering new value that also leads to thepersonal growth of each employee.
Based on this approach, we are reinforcing the development of global human resources who are resilient
to changes in the external environment and capable of working globally with an eye to the future from a broad
perspective including the planet, society, markets and customers.
Basic Policy for Human Resources Development
We are conscious that the most important resources for corporate vitality and competitiveness are the personnel and theorganizations in which they work. We are conducting the following human resources development, based on the Basic Corporate
Philosophy and the Management Policies.
1. Human resources who respect other individuals, trust each otherand fulfill their responsibilities
2. Human resources who can see the true nature of each issue andcreate revolutionary technologies and projects with passion andtenacity

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 to takeleadership in exploring the world

Respect for Diversity and Inclusion

Group-wide Level-specific Training and Training for Managerial Personnel
Level-specific education starts with an introductory program for new employees and includes a program for
employees in their second year and third year and subsequent programs according to internal qualifications andpositions. We have continued to redesign our education system. Specifically, we now provide training that runs forabout nine months for newly appointed managerial personnel so that they can equip themselves with the managerial
skills and operational knowledge they need as managers. In addition, in FY 2022, a new training program on
unconscious bias was provided for executive management and newly appointed managerial personnel. The purposeof this training is to deepen understanding of unconscious bias, which affects respect for diversity and promotion ofinclusion, raising awareness and creating a climate that encourages diverse human resources to fulfill more activeroles. Following the training of management, we will implement this training as a Group-wide mandatory training in
the future.

Manufacturing Education
Our vision is to offer a wealth of educational opportunities covering the diverse techniques and skills essential for
manufacturing throughout the Group in a consistent and equitable manner. This wide-ranging education includes
reskilling and the passing on of skills from one generation to the next. We are focusing on raising the level of theGroup’s technical capabilities through education on the fundamentals of manufacturing and vacuum technology,
which constitutes essential knowledge for all ULVAC engineers. Furthermore, for trainees from Group companies inJapan and overseas, we have established a course that in a systematic manner covers ULVAC’s history, culture, andmanagement strategy as well as other subjects. We are also promoting personnel exchanges globally.

Administration Education
We provide training for employees engaged in administration so that they can acquire the basic knowledge required
for their roles step by step and become adept. The program is designed to help trainees acquire a wide range ofknowledge on such matters as economic and business trends, company policies and the mid-term management plan,
basic knowledge of accounting and taxation, corporate governance, and the Companies Act, and also encourages
them to take ownership of their education and training, showing initiative and pursuing personal growth with a viewto the next stage of their career.

ULVAC Academy Portal

The ULVAC Group has been striving to create workplaces offering job satisfaction without disparities in terms ofgender, nationality, or ethnicity. The ratio of women in managerial positions in the ULVAC Group as a whole was 9.0%,
up 1.3% from the previous fiscal year. Moreover, approximately 50% of all managerial positions in the Group are heldby non-Japanese nationals.
In order to further increase corporate value, the need to expand opportunities for female employees so that they
can fulfill active roles in the ULVAC Group constitutes an important management issue. We will take steps to enhance
educational opportunities and various personnel systems in order to foster a growing number of female candidates for
managerial positions, targeting an increase of the ratio of women in managerial positions in the ULVAC Group to 10%
or more by June 2026.

Launched in 2016, the ULVAC Academy Portal offers and develops programs that can flexibly respond to the increasein mid-career hiring and the flow of human resources among Group companies. Incorporating methods such as
blended learning, which combines online training and group training, the portal fulfilled a particularly important role inpromoting self-motivated learning during the COVID-19 pandemic. We are also working to standardize training acrossthe Group and offer an environment in which anyone can learn whenever they wish. Some 6,000 ULVAC employees
have registered and are using the portal, which now supports Japanese, English, simplified Chinese, traditional
Chinese, and Korean, and currently offers around 2,500 items of content.

Human Resources Rotation

UL-GAIA 2022

We are vigorously promoting human resources rotation in the Group, especially between ULVAC Head Office andoverseas Group companies, as a measure to promote the diversity and inclusion mentioned above. Moreover, byvigorously promoting assignment of ULVAC employees to companies outside the Group on loan and vice versa, while
striving to vitalize human resources and establish human networks, we aim to achieve innovation through technicalexchanges.

ULVAC holds ULVAC Global Awards of Improved Achievement (UL-GAIA) to ensure that employees share and put into
practice the Basic Corporate Philosophy, the Business Philosophy, and the Employee Principles, and furthermore, tocommend their activities and recognize outstanding achievements. Likening the ULVAC Group to Gaia (the Earth), ULGAIA reflects our desire to create an award to promote Group-wide unity worldwide and to combine our energy andexpertise.
The theme of UL-GAIA was changed from FY 2021, and UL-GAIA is positioned as an “opportunity to share the bestpractices corresponding to the Basic Corporate Philosophy, the Business Philosophy, and the Employee Principles”
to ensure the wholehearted participation of the entire workforce of the ULVAC Group in UL-GAIA for the purpose ofpromoting deeper penetration of the Basic Corporate Philosophy, etc. embodying the ULVAC Group’s shared values
and its orientation.
The number of entries was greater for FY 2022 than for FY 2021. Presentations included not only the activities
based on the new theme but also activities in line with the previous theme of “Production Technology/Manufacturing
Technology/Business Improvement,” such as value creation through improvement and reform of value chain
processes, maximization of synergy across the Group, and strengthening of cross-functional support and solutions for
issues affecting multiple Group companies. The outcomes (benefits) of these activities and the process of problem
solving were shared.

Employment of People with Disabilities
People with a variety of disabilities work at ULVAC, Inc. They aim to achieve personal growth and contribute tobusiness, and by accumulating experience they have become indispensable in the workplace. After they join
the company, ULVAC works with job assistance organizations, conducts regular interviews, offers support in thedepartments where they work and makes improvements to the working environment, providing follow-up according
to the characteristics of each disability to ensure each employee becomes well established in the workplace. In
addition, students with disabilities are also accepted from local educational institutions for on-the-job training.

41

Human Resources Development

ULVAC VALUE REPORT 2023

ULVAC VALUE REPORT 2023

42

Inherited
ULVAC-StyleULVAC’s Strategy

Message to Our
Readers

About ULVACULVAC’s Vision

ULVAC’s Strategy

Corporate
Governance

Financial Data/
Corporate Information

Development of Diverse Human Resources and Promotion of Their
Advancement; Cultivation of Resilient Organizations

Development of Core Human Resources

Promotion of Health and Productivity Management

To ensure diversity in the promotion of core human resources, we evaluate and promote employees based on theirabilities, not on their inherent characteristics. For the selection of core human resources, we have set guidelines
according to the composition of the workforce in order to promote selection and development free of any bias related
to inherent characteristics.

Human resources are the key to achieving Vision 2032 “Continue to be a ‘Field of Potentiality’ for the Future.” Basedon the belief that “health” and “family” support human resources, we promote health and productivity management
as one of the most important management issues. At ULVAC, Inc., the president, the Chief Health Promotion Officer,
the senior manager of the Personnel Department, occupational health physicians, occupational health nurses, andstaff of ULVAC Health Insurance Association act in unison to promote initiatives for health improvement. In addition to
health checks, stress checks, and face-to-face guidance for employees who work long hours by an occupational healthphysician, other initiatives include reduction of health risks and support to enable employees to receive treatment
while continuing to work.

Developing the Next Generation of Leaders
ULVAC conducts the ULVAC Executive Program (UEP) with the aim of cultivating leaders who will persistently
and aggressively grapple with global change. The participants selected from among candidates at ULVAC, Inc. anddomestic and overseas Group companies participate in the program over a period of six months. By combining UEP
with the ULVAC Leadership Program (ULP), an education program for young leaders, we will focus on developing thenext generation of leaders.

Creating an Excellent Working Environment
ULVAC, Inc. is creating a working environment in which employees can demonstrate their strengths and originality
while enhancing their productivity. Furthermore, we are developing conditions and programs that minimize the impactof life events, so that diverse human resources can flourish and perform well.

Human Resources Subcommittee
We have established the Human Resources Subcommittee consisting mainly of young employees to thoroughly
examine initiatives for sustainable management from the viewpoint of human resources in order to achieve “our goalfor 2050.” Members of the subcommittee are drawn from various departments and roles, vary in age, and genders
are fully represented. They discussed various themes such as “how to raise awareness, how to promote diversity, andhow to create a comfortable working environment and flexible workstyles necessary for promoting diversity” overa period of six months and drafted a proposal of concrete measures and presented it to management as a series ofrecommendations. The Human Resources Subcommittee is currently addressing the issue of how best to implement
the proposed measures.
Male

Improvement of Systems for Flexible Workstyles

FemaleULVAC, Inc. offers a staggered working hour system and a flextime
system. We also introduced an Malehourly annual paid
Femaleleave system in 2020 that is used by many employees. The average number of days of annual paid leave taken was% hours and the establishment %12.8. We have also taken steps such as the introduction of shortened workingof satellite
5,272
992
offices.
persons
Many employees take advantage of systems such as childcarepersons
leave, the short-working-hours system for childcare,and nursing care leave. In order to facilitate the use of the systems, we are publicizing the systems by holding
meetings to explain the details of the systems, including through the use of explanatory videos.

84.2

15.8

Human Resources Data

Employee gender ratio
Male

FemaleMale

Male

Female

84.2%

15.8%

5,272
persons992
persons

43

Male

Female9.0%

132
persons

The target is “an increase of at least 10% in work engagement by FY 2025
compared with FY 2021.” The rate of work engagement at ULVAC, Inc. has
been higher than the average in Japan*1 but declined in FY 2022 to 93%*2of the FY 2020 100% baseline. In order to overcome the challenges, with“cultivation of resilient organizations” as a material issue, ULVAC, Inc.
introduced a resilience program for executives with the aim of forming habitsthat improve physical, emotional, mental and spiritual condition. In FY 2023,“case study meetings” were launched at which participants take ownership of
their most difficult experiences and examine them with a view to enhancing
unity among management. This approach has also been applied to dialogue
activities among employees and is becoming more active step by step. Goingforward, the ULVAC Group will continue implementing measures to increase
work engagement.

Health Risk Reduction
Our health risk reduction target is “Health age*3 3.0 years lower than actual
age by FY 2025.” Programs available for all employees of ULVAC, Inc. include
online education programs covering long working hours, nutrition, women’s
health, and preparation for health checks, and a walking program thatutilizes the PepUp healthcare platform. Thanks in part to the effects of thesemeasures, the health age of employees is gradually improving. Whereas thedifference between the health age and the actual age of employee was 2.1
years in FY 2021, it was 2.8 years in FY 2022. Going forward, we will continue
to implement measures to lower health age.
As a result of implementing these measures, ULVAC, Inc. has been certified
by the Ministry of Economy, Trade and Industry as a 2023 Certified Health andProductivity Management Organization under the large enterprise category
and the Group companies have been certified as 2023 Certified Health andProductivity Management Organizations under the SME category. ULVAC willcontinue pursuing various initiatives to maintain and promote the health of
employees.

Work Engagement
Average in Japan

(%)
105
100

Average at ULVAC, Inc.

100

95
90
85

93
87

87

80
75

2021

2022

(FY)

*1 Shimazu et al. 2008*2 O
 n the basis that the figure for FY 2021
based on the results of the Utrecht WorkEngagement Scale (UWES-9) survey of
ULVAC, Inc. employees at the time of
applying for a medical checkup is set at
100%.

Health Age
0

-1

-2

-2.1
-2.8

-3

2021

2022

(FY)

*3 An index developed by JMDC Inc. basedon the medical checkup data and medical
expenses of 1.6 million people. ULVAC,
Inc. began measurement in FY 2016.

Female

Male

91.0%
1,334
persons

FemaleULVAC VALUE REPORT 2023

FemaleManagement gender ratio

Work Engagement Improvement

ULVAC VALUE REPORT 2023

Male

91.0%

44

Inherited
ULVAC-StyleULVAC’s Strategy

Respect for Human Rights and Responsible
Conduct in the Value Chain
Human Rights
Approach to Human Rights

Human Rights Initiatives
We respect the United Nations Guiding Principles on Business and Human Rights as well as the international
norms and standards set forth in the International Bill of Human Rights (Universal Declaration of Human Rights andInternational Covenants on Human Rights) and the ILO Declaration on Fundamental Principles and Rights at Work.
We respect human rights in accordance with the Ten Principles of the UN Global Compact and other guidelines of theinternational community and industry guidelines.

Key Human Rights Issues
The ULVAC Human Rights Policy covers “prohibition of
discrimination/harassment,” “employment autonomy,”“product safety, workplace health and safety, andemployee health,” “freedom of association,” and “ensuring
appropriate working conditions.”
The Corporate Code of Conduct also prohibits any
form of discriminatory treatment. In accordance with
the Corporate Code of Conduct and the Basic Policy for
Human Resources Development, we are striving to create
workplaces offering job satisfaction.
P.67 Compliance

For details

P.41 Human Resources

About ULVACULVAC’s VisionCorporate
Governance

ULVAC’s Strategy

Financial Data/
Corporate Information

Employee Health
ULVAC has concluded labor agreements with labor unions and promised to sincerely work together with them toadhere to these agreements in order to establish and develop labor-management relations based on mutual faith andtrust. Furthermore, we engage in close dialogue with labor unions on management plans and measures, in addition tolabor conditions.
From the perspective of work-life balance, we are conducting a review of working hours that includes thoroughovertime management and productivity improvement initiatives.
Health and Productivity Management
For details
P.44

We believe that consideration for human rights is an important management issue in the context of further global
business development. At ULVAC, we respect human rights in every aspect of business activities and are promoting
initiatives in accordance with international guidelines and norms. ULVAC has established the Corporate Code of
Conduct as guidelines for all officers and employees to keep in mind so as to ensure their work does not infringe
human rights. In response to recent changes in awareness and issues regarding human rights in the international
community, ULVAC has formulated the ULVAC Human Rights Policy based on international norms and will strengthen
initiatives in accordance with those norms. This policy is the most authoritative statement of the regulations governing
the ULVAC Group companies concerning human rights and it applies to all officers and employees of all Group
companies. In addition, we strive to ensure that this policy is endorsed and put into practice not only by the Group
companies but also by our business partners.

For details

Message to Our
Readers“Requests to Our Business Partners” states ULVAC’s
requests to business partners concerning human rights.
We conduct a questionnaire survey of business partners
and confirm whether employment autonomy is maintained.

Prohibition of Discrimination/Harassment
ULVAC does not and will not discriminate on the basis of race,skin color, age, sex, sexual orientation, gender identity and gender
expression, ethnicity or national origin, disability, pregnancy, religion,
political party, union membership, military service, protected genetic
information, marital status, or on any other basis. Inhumane treatment,
including any form of harassment will not be tolerated. We ensure
equal opportunities and fairness in hiring, placement, training,
compensation, and promotion.

Employment Autonomy
No form of child labor, forced labor, debt labor, human trafficking, or
prison labor will be tolerated. All work is voluntary, and we will ensurethat employees are able to request termination of their employment
in accordance with the standards set forth by the relevant laws andregulations of each country and region.
Product Safety, Workplace Health and Safety, and Employee Health
We will take steps to ensure that ULVAC Group products and services
do not endanger the lives or health of those who manufacture, provide,or use them, and we will comply with the laws and regulations
concerning health and safety as established in the countries andregions where we operate. We will strive to manufacture and provide
safe products and to maintain a safe, secure, and healthy work
environment.

Freedom of Association
We respect the right to freely form and join labor unions and to participate
in collective bargaining and peaceful assembly. We will also create anenvironment in which workers have opportunities to engage in dialogue
with management regarding working conditions and management
practices without fear of discrimination, retaliation, intimidation, or
harassment.

Supply Chain Initiatives
We endeavor to comply with the RBA Code of Conduct, which is a CSR promotion group focused on the electronics
industry. In addition to implementing, evaluating and correcting self-evaluations and thoroughly managing labor
hours at major production bases, we request business partners to work with us on these initiatives. We conductedquestionnaire surveys mainly of major business partners and have incorporated the questionnaire items into theevaluation at the time of periodic renewal. Furthermore, we have established a policy on the handling of conflictminerals and conduct due diligence.
For details
P.47 Procurement

Due Diligence on Human Rights
We have incorporated international norms into the ULVAC Human Rights Policy and have established human rights
due diligence processes according to the procedures corresponding to the international norms. We are making aneffort to further strengthen relief mechanisms by recognizing, preventing, and addressing possible negative effects ofbusiness activities on human rights.

Education
We educate all officers and employees about human rights and compliance so that they are well-informed and able toact appropriately.

Remedies and Corrections
We will establish a system (a mechanism for filing grievances) through which any infringement on human rights
caused by or associated with our business activities can be reported. If we are made aware of a violation of humanrights through this system, we will promptly investigate and take appropriate measures to remedy and correct thesituation after fully confirming the facts.
ULVAC has adopted a whistleblowing system operated via the Manager of the Internal Auditing Department for
which independence is secured. The Compliance Committee will implement appropriate measures with adequate
consideration for confidentiality, anonymity and protection of whistleblowers, and strive to promptly resolve issues
and prevent their recurrence.
For details
P.67 ComplianceGroup’s Issues with Significant Impact on Human Rights and Relations with Stakeholders
Business-related human rights issues/stakeholders

Quality Assurance and Product Safety Initiatives
Our top priority is to ensure the quality and functions related to “health and safety” of ULVAC products, which are theresult of sound business activities, at the customer's side.
For details

Ensuring Appropriate Working Conditions
We respect the right of employees to live a healthy
lifestyle, and we will comply with applicable laws andregulations regarding working hours and the use of
breaks, holidays, and vacation time in the conduct ofour business.

Website >> Sustainability > Quality Assurance and Product Safety

Workplace Health and Safety
In the execution of development, manufacturing, transport, installation, maintenance and other business processes,
everyone in the ULVAC Group, from senior management to line workers, is encouraged to seize the initiative incontinuously undertaking improvements placing the highest priority on safety, striving to maintain and improve thesafety of everyone involved and ensure a healthy working environment.
For details
P.48 Occupational Safety and Health

Employees

Business
partners

Customers

Localcommunity
residents

Forced labor and child labor
Violations of workers’ rights (e.g., the right to collective bargaining anddecent working conditions)Occupational health and safety
Discrimination and harassment
Invasion of privacy
Restrictions on freedom of expression
Human suffering due to misuse of products and promotion of discrimination
Complicity in conflicts and inhumane acts (e.g., conflict minerals)
Violations of local residents’ livelihoods and cultures (indigenous peoples’
rights, right to water resources/access to medical care, etc.)

45

ULVAC VALUE REPORT 2023

ULVAC VALUE REPORT 2023

46

ULVAC’s Strategy

Respect for Human Rights and Responsible
Conduct in the Value Chain

Responsible Procurement Management
Suppliers are our important partners for manufacturing. ULVAC is committed to responsible procurement
throughout the supply chain, in cooperation with business partners, taking human rights, labor, and theenvironment into consideration.

Procurement Policy
The ULVAC Group has established the Basic Procurement Policy. We observe the policy and are promoting CSR
procurement in cooperation with our business partners. Furthermore, “Requests to Our Business Partners” states
our requests to business partners in areas such as the environment, human rights, labor and compliance as wellas compliance with the RBA*1 Code of Conduct. With regard to promoting CSR procurement, we had conducted aquestionnaire survey with reference to the RBA Code of
Conduct covering 610 suppliers by FY 2022. As a result,
Promoting CSR
we confirmed that there were no incidences of child labor,
procurement
forced labor, inhumane treatment, fraud or bribery, which
PromotingCompliancegreenwith laws andare particularly emphasized in the RBA Code of Conduct,procurement
regulations
Basicand the handling of conflict minerals. We plan to expand
Procurement
the scope of this CSR questionnaire survey to cover
PolicyMaintaining
Promoting
ULVAC Group companies in Japan in FY 2023 and overseas
and promoting
globalfair and freeprocurement Sound, goodGroup companies in FY 2025.
competition
relationships
Furthermore, we revised the basic transaction
with business
partners andagreement in April 2020 and explicitly mentioned
affiliates
Purchasing Code of Conduct
understanding the content of “Requests to Our Business
Website >> Sustainability > Procurement
For details
Partners” and its observance.

Purchasing Code of Conduct
We established the Purchasing Code of Conduct, a set of principles emphasizing compliance for employees engaged
in procurement, in 2019 with the aim of maintaining sound, good relationships with business partners. In-house
education such as case studies on the Act against Delay in Payment of Subcontract Proceeds, Etc. to Subcontractors
is provided twice a year for employees engaged in ULVAC, Inc.’s procurement and that of Group companies in Japan.

Communication with Business Partners
We had been holding operations briefing meetings once a year as a forum for our president to directly explain tobusiness partners matters such as the business environment and ULVAC’s business results and supplier meetings
three times a year for the person in charge of procurement to communicate production plans in a timely manner.
We cancelled these meetings in view of the COVID-19 pandemic, but launched and started operating a membershipbased website in FY 2020. We will strive to build closer relationships with business partners by resuming face-toface meetings, in view of the abatement of the COVID-19 pandemic. Moreover, we will hold seminars for business
partners on specific social issues (environment, human rights, etc.) to promote swift responses to those issues.

Responsible Minerals Procurement
Conflict minerals are minerals, such as 3TGs*2 and cobalt, that are sourced from conflict-affected and high-risk areas(CAHRAs) and whose extraction and sale directly or indirectly serve as sources of funding for armed groups or areroot causes of serious human rights abuses and poor working conditions. ULVAC, Inc. does not purchase 3TGs,
cobalt, or other raw materials that are derived from these conflict minerals.
In particular, we manufacture and sell sputtering targets and various tantalum wrought products in the materials
business. We conduct due diligence in accordance with the guidance of OECD and RMI*3 through conflict minerals
surveys covering raw materials suppliers in order to ensure transparency of transactions.
*1 Responsible Business Alliance. CSR promotion group focused on the electronics industry in global supply chains*2 Tantalum, tin, tungsten, and gold
*3 Responsible Minerals Initiative. An organization that inspects smelters and refiners handling 3TGs to certify that they are not using conflict minerals

47

ULVAC VALUE REPORT 2023

Inherited
ULVAC-Style

Message to Our
Readers

About ULVACULVAC’s Vision

ULVAC’s Strategy

Corporate
Governance

Financial Data/
Corporate Information

Green Procurement Initiatives
We revised the Green Procurement Standards in August 2020 and request suppliers to share information on chemical
substances in commercial components used for products through the chemSHERPA*. In FY 2021, we conductedactivities with a focus on creating an internal structure, implementing systems, and penetration of the Green
Procurement Standards among business partners. Since FY 2022, a cross-departmental team for management ofchemical substances contained in products established within the company has been organizing and managing
information collected from our business partners.
* Scheme for enabling sharing of information on chemical substances contained in products throughout the supply chain

Occupational Safety and Health
The ULVAC Group has made “Safety First” the fundamental philosophy of business management. By operating
our Occupational Safety and Health Management System (OSHMS) focused on risk assessment, we endeavor toensure safety of the products and services used by our customers and create dynamic workplaces where Group
employees can work in good physical and mental health.

Approach to Occupational Safety and HealthIn the execution of development, manufacturing, transport, installation, maintenance and other business processes,
everyone in the ULVAC Group, from senior management to line workers, is encouraged to seize the initiative incontinuously undertaking improvements placing the highest priority on safety, striving to maintain and improve thesafety of everyone involved and ensure a healthy working environment.

Implementation of Safety and Health Activities
To ensure the safety and good health of its customers
and employees, the ULVAC Group holds meetings ofthe Global Safety Committee, twice a year and all Group
companies promote safety and health activities in an
integrated manner. Furthermore, we have established a
network of the safety personnel in each Group company
and promptly share, discuss or implement safety
information such as revisions of laws and effective
accident prevention measures.
Each Group company operates the OSHMS anddeclares safety based on management reviews
conducted by the president and other executives.
To ensure safety, every employee is engaged in
occupational safety and health activities through risk
assessments etc. We identify hazardous risks at thetime of work planning and implement measures before
commencement of work. The positive impact of thestrengthening of safety measures is apparent in thetrend of the frequency ratio of occupational accidents.
We hold monthly meetings of the Safety and
Health Committee at each business site, where
representatives from the company and the labor union
work together to discuss workplace safety and healthof employees. We also hold Safety and Health Council
meetings twice a year to share a variety of information
on safety and health activities in an effort to prevent
accidents in unison with our contractors.
ULVAC Group Safety Management
SystemPresident and CEOULVAC, Inc.

Global Safety
Committee

ULVAC Group Basic Policy on Occupational Safety
and Health Management System (OSHMS)
1. Compliance with the code/regulations, andimplementation of risk assessment
Comply with Codes of Occupational Safety & HealthManagement and Rules according to ULVAC’s
OSHMS, and conduct Risk Assessment in order toperform Occupational Safety & Health Management
activities with the help of all the employees.
2. Assure safety of ULVAC’s products
Comply with ULVAC’s standard for safety design andperform risk assessment of our products, in orderto deliver our safe products and services to ourcustomers.
3. Planned education about Occupational Safety &Health & Product Safety
For all the employees and contractor’s employees,
perform Occupational Safety & Health training basedon ULVAC Safety Management system, while offeringscheduled Product Safety training for our users.
4. Promotion of mental health care
Promote mental health care to achieve a healthy,
vigorous workplace environment.
5. Global expansion of ULVAC GroupThrough the Safety & Health promotion activities of
the Global Safety Committee, we will strive to createa safe, secure and appropriate working environment
for the whole ULVAC Group, and contribute toprosperity of our businesses.

Frequency ratio of occupational accidents at the ULVAC Group
Group as a whole

Companies in Japan

1.50

Companies inSouth Korea

1.00

Companies in Taiwan
Companies in China
Companies inSoutheast Asia
Companies in Europe
and North America

1.00

0.88

Japan

0.83

0.50

China

South Korea

Taiwan

0.54

0.59

2021

2022

0

2018

2019

2020

(FY)

* This graph shows the rate of occupational accidents for each fiscal year, with thevalue for FY 2018 (as of June 2019) as 1.00. We have maintained a low frequency
ratio of accidents by preventing accidents through various safety activities.

ULVAC VALUE REPORT 2023

48

Inherited
ULVAC-StyleULVAC’s Strategy

Message to Our
Readers

About ULVACULVAC’s Vision

ULVAC’s Strategy

Corporate
Governance

Financial Data/
Corporate Information

Contribution to a Sustainable Global Environment
The Sixth Assessment Report of the Intergovernmental Panel on Climate Change (IPCC) states that in line with
global warming, weather and climate extreme events, such as heatwaves, heavy precipitation, droughts, andtropical cyclones, are increasing in every region across the globe and are likely to continue increasing. The global
average temperature has already risen more than 1°C above pre-industrial levels and, with the aim of keeping
the temperature increase below 2°C, further mitigation efforts by countries are required. At the 27th Conferenceof the Parties to the United Nations Framework Convention on Climate Change (COP27), the focus was onstrengthening measures to limit the global temperature increase to 1.5°C. Concrete plans are being formulated
and climate change initiatives are intensifying worldwide. Furthermore, in consideration of the sustainability oflife on Earth, the conservation of biodiversity is also positioned as an urgent international issue.
We have signed the United Nations Global Compact and our initiatives are in accordance with the principles
for environmental action advocated by the UN. Moreover, we endorse the recommendations of the Task Force on
Climate-related Financial Disclosures (TCFD) and disclose information on the impact of climate change on ourbusiness. Furthermore, we have been responding to a survey conducted by CDP, an international NGO. We are
striving to enhance our commitment and information disclosure.

Environmental Activities in FY 2022
In growth fields such as semiconductors and electronic devices, we are actively investing in regions across the world,with a particular focus on China and South Korea, which are positioned as strategically important regions, and we arepromoting capital investment. Regarding the material balance, electricity consumption increased in these strategic
regions. To save energy, having set a target of a 1% reduction in greenhouse gas (GHG) emissions compared with theresult for the previous year (ULVAC standard), we promoted installation of renewable energy facilities such as solar
power generation facilities and vigorous procurement of renewable energy. As a result, GHG emissions decreasedby 10% from the base year (2020). As for waste, both the total amount of waste recycled and the amount of landfill
increased owing to increased production overseas, and the final landfill disposal rate also increased by 0.2%.
Total water consumption increased following the start of full-scale operation of ULVAC Coating Technology (HEFEI)
Co., Ltd., which is engaged in the deposition and coating business that uses large amounts of water. Meanwhile, ULVAC
has set a new target for efficient use of water resources. Going forward, we will promote water management with theaim of reducing water-related impact in all regions.
The amount of solar power generated increased as a result of the installation of 370-kW-capacity solar power
generation equipment at ULVAC KIKO, Inc. New installations are also planned in China and Taiwan. We will continue topromote environmental management activities throughout the Group.

Material balance (Source: Aggregate data for FY 2022)

Aiming to be a company that continues to contribute to the future of people and the planet, ULVAC is
responding to the above-mentioned changing external environment by conducting various activities in accordancewith the Environmental Philosophy, Environmental Policy, and the Environmental Targets described below.
Environmental Philosophy
The ULVAC Group understands that the conservation of the global environment is one of themost important issues facing humanity. While effectively utilizing resources in all aspects of ouroperations, we take into consideration biodiversity so as to contribute to bringing about a better
living environment and a more prosperous society.
Environmental Policy
Reducing greenhouse gas emissions
We reduce greenhouse gas emissions, a main cause of climate change, through all of our activities.
We are committed to developing products that conserve energy and reduce our environmental footprint.
Preventing environmental contamination
In conducting business, we comply with environmental laws and regulations.
We manage hazardous chemical substances appropriately in our manufacturing processes to prevent
environmental contamination and health hazards.

LPG:
LNG: 
City gas: 

Fuelconsumption

6 kL
Heavy oil:
Kerosene oil: 14 kL
Diesel oil:
140 kL
1,573 thousand m3

Packagingmaterials

1,523 t0Total waste
emissions

Total amount ofwaste recycled:
4,817 tAmount of landfill: 101 t

Final landfill
disposal rate

Group companies overseas(Thousand m3)
2,000

35,202

34,27935,10563,76959,50220182019

55,8292020

Reducegreenhousegas emissions

93,781t-CO2

Water consumption reduction target

by

36,49255,5602021(t)
10,00056,269 educe unit water consumption* to the levelRin 2020 or less

t-CO2

Net zero

7,500

greenhousegas emissions

5,000*Water withdrawal/Net sales (consolidated)

2020

2030

2050

(CY)

2,500

51,2252022 (FY)0

Amount of landfill (t)Final landfill disposal rate (%)

3.6
286
163.9
1,877
2018

Group companies overseas

469

451

442

549

899

964

993

996

1,024

2018

2019

2020

2021

2022

1,000

409

500
0

(FY)

Amount of solar power generated

Total amount of waste recycled (t)Amount of valuable materials recycled (t)6,584Group companies in Japan

1,500

38,181

Waste emissions

40%

1.6%

Water consumption

60,00030,000(Emissions due to consumption ofelectricity, gas, and fuels)

6,223 tWater
consumption

Group companies in Japan

84,906 t
CO2 emissions* For the emission factors, the Emissions Factors 2021 edition published by
the International Energy Agency (IEA) is used.

Greenhouse gas emission reduction targets

ULVAC VALUE REPORT 2023

243 t
658 t
1,402 thousand m3

Gas
consumption

90,000

Environmental Targets

49

167,040 thousand kWh(t-CO2)120,000

Environmental education and information disclosure
Through environmental education, we raise the awareness of each individual and appropriately disclose
environmental information.

Eliminate environmental accidents

OUTPUT

Energy-derived CO2 emissions

Environmental targets and continuous improvement
We establish environmental targets and strive to improve our environmental performance by reviewing
these targets.
In addition, we continuously improve our environmental management system through routine review.

 educe greenhouse gas emissions in 2030 byR
40% as compared with 2020 (Scope 1 and 2)
Achieve net zero greenhouse gas emissions
by 2050

INPUT
Electricity
consumption

2.6
80.1
1.4

4,987
1,173
2019

4,936

1,136

2020

93.9
4,426

101.0
1.4
1,189

2021

1.6
4,817

1,169

2022 (FY)

(%)
4.0

(kWh)
2,000,000

3.0

1,500,000

2.0

1,000,000

1.0

500,000

0.0

01,323,580 1,301,727 1,339,244

1,564,459

583,620

2018

2019

2020

2021

2022

(FY)

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Contribution to a Sustainable Global Environment

Response to the Recommendations of the Task Force on Climate-related
Financial Disclosures (TCFD) and Climate Change Initiatives
ULVAC positions climate change initiatives as one of its key management issues. The ULVAC Group has set
medium- to long-term greenhouse gas emission targets, namely, a 40% reduction in 2030 (compared with 2020)and effectively zero in 2050. We will take action to mitigate climate change by endeavoring to curb greenhousegas emissions throughout our activities, such as by doing our utmost to conserve energy in Japan and overseas,
introducing renewable energy with low greenhouse gas emissions, and developing environmentally friendly products.
We endorse the recommendations of the Task Forceon Climate-related Financial Disclosures (TCFD) andstrive to disclose relevant information. Furthermore,ULVAC has been responding to a survey conducted by
CDP*, an international NGO.
*CDP: A non-governmental organization (NGO) managed by a British charity. CDP sends questionnaires on climate change and other issues to companies and local
governments and assesses and discloses the impact of their activities on the environment. When deciding which companies to invest in, CDP scores are
considered important criteria.

Governance
Under the supervision of the Board of Directors, the Executive Officers in charge of sustainability and theenvironment monitor progress toward targets.
Meetings of the Sustainability Promotion Committee attended by the internal directors, executive officers, anddepartment heads are held twice each year to acknowledge social trends and the Company’s current condition,and discuss measures to address any issues. If significant issues related to management arise, the Management
Council and the Board of Directors deliberate and make management decisions as needed.
Meetings of the Global Environmental Management Committee chaired by the Executive Officer in charge ofthe environment and attended by environmental managers of Group companies are held twice each year. The
committee monitors the setting of targets of each Group company and the progress, checks the status of theinitiatives for achievement of the targets, discusses measures corresponding to the issues, and reports to theManagement Council. The statuses of these initiatives are monitored by the Sustainability Promotion Committee
and reported to the Board of Directors by the Executive Officer in charge of sustainability.

Strategy
Under the scenarios announced by the Intergovernmental Panel on Climate Change (IPCC), the International Energy
Agency (IEA), and others, that “the global average temperature will rise by 4°C or more” and “the global averagetemperature rise will be kept below 2°C (partly up to 1.5°C) as agreed by the Paris Agreement,” we identified businessrisks and opportunities in the medium to long term that will be brought about by climate change. Of these, we
Major risks
Category
MarketElements
Increase in business costs due to changes incustomer behavior

Measures
Introduction of renewable energy and ensuring the implementation ofenergy-saving measures in business activities

Policies and legal

Carbon pricing

Engineering

Replacement of existing products and services
with those with lower emissions

Research and development of products and services such as
manufacturing equipment that contributes to technological innovation invarious fields, and promotion of low-power consumption of products

Acute/chronic

Business continuity risk due to extreme
weather events such as typhoons and torrential
rain

Formulation of business continuity plan for natural disasters andimplementation of countermeasures

Major opportunities
Category
Products andservices

51

Elements
Heightened expectations for equipment
and technology contributing to low-power
consumption devices, power devices andlithium-ion batteries, and increased needs for
low-power-consumption products

ULVAC VALUE REPORT 2023

MeasuresResearch and development of products and services such as
manufacturing equipment that contributes to technological innovation invarious fields, and promotion of low power consumption of products

analyzed risks and opportunities with respect to “carbon pricing,” “business continuity risk due to the occurrenceof disasters caused by typhoons, torrential rain, and other extreme weather events,” and “expansion of market
opportunities for power devices” and evaluated quantitative impacts on our business. Going forward, we will expand
the scope of quantification of impacts on business and further consider specific measures.

Risk Management
The Management Planning Department is designated as the department in charge of all risks that may cause
serious damage to management. The Management Planning Department instructs the relevant internal divisions
and departments and Group companies to identify such risks and formulate countermeasures. In this way, risks are
identified, Group-wide responses are promoted, and the results are reported to the Risk Management Committee.
The Risk Management Committee conducts detailed identification or identification of these risks and considers
business reporting and remedial measures, strives for early detection through monitoring, conducts reporting,and implements remedial measures. Moreover, the Sustainable Management Department is designated as thedepartment in charge of medium- to long-term sustainability risks. The Sustainable Management Department
instructs the relevant internal divisions and departments and Group companies to identify sustainability-relatedrisks and reports the results to the Sustainability Promotion Committee. The Sustainability Promotion Committee
manages the progress of initiatives for medium- and long-term risks. Finally, the Board of Directors receives reports
from these committees and oversees the status of risk management. Through these structures, the Group aims toachieve management stability and sustainable growth.
We have major development and manufacturing sites in Japan, which account for 60% of the Group’s total GHG
emissions in Scope 1 and 2. In addition, sites in South Korea account for 17% of the Group’s total GHG emissionsin Scope 1 and 2, making that country second only to Japan, and they are key sites for the Group’s semiconductorbusiness to which great importance is attached from the viewpoint of management strategy. Therefore, future
introduction of carbon taxes and tightening of emissions trading regulations in Japan and South Korea would havesignificant impacts on costs. Thus, based on the ULVAC Group’s GHG emissions in Japan and South Korea, weestimated and confirmed the amounts of impacts in 2030 under the Announced Pledges Scenario (APS), which
is one of the scenarios presented in the IEA’s World Energy Outlook 2021 and is a scenario that reflects volunteer
countries’ ambitious pledges. Reductions of GHG emissions at these sites are important for achieving the Group’s
goal of carbon neutrality. Therefore, a committee headed by the Executive Officer in charge of the environment andrelated divisions will monitor the risk of energy cost increases and continue to assess this and other risks, for which
purpose it will monitor trends. In addition, we will promote initiatives for further energy saving and introduction ofrenewable energy.
For Scope 3, environmental impacts in the value chain are significant upstream in procurement from suppliersand downstream in the use of products by customers. Therefore, mindful of the importance of providing
environmentally friendly products, we are promoting initiatives to reflect environmental considerations from thedevelopment stage onward.
In formulating a business continuity plan, we assumed the occurrence of disasters caused by typhoons, torrential
rain, and other extreme weather events, and are implementing measures to ensure continuing operation of ourbusiness.

Metrics and Targets
In order to actively address climate issues as a responsible member of society, the ULVAC Group has set mediumto long-term targets for GHG emissions from its business activities, namely, a 40% reduction in 2030 (comparedwith 2020) and effectively zero in 2050. We will take action to mitigate climate change by endeavoring to curb GHG
emissions throughout our activities, such as by doing our utmost to conserve energy in Japan and overseas, installing
solar power generation facilities, introducing
renewable energy, and developing
Reduce greenhouse gas emissions in 2030 by 40% as
environmentally friendly products.

compared with 2020

Achieve net zero greenhouse gas emissions by 2050
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Contribution to a Sustainable Global Environment

Efficient Use of Water
There are concerns worldwide about water risks, such as heavy rainfall, flooding, and water shortages, due to ongoingclimate change.
We assess and confirm the impact of water risks on our business.
We identify sites exposed to water risks by using the WRI Aqueduct, a water risk assessment tool, focusing on thesites with high environmental impact as defined by the Company. We define sites with extremely high or high baselinewater stress as water-stressed areas. The sites exposed to water risks are located in parts of China, South Korea, andThailand, and account for 3% of the ULVAC Group on a consolidated basis. None of them are classified as sites with highenvironmental impact as defined by the Company.
In FY 2023, we have set a new water consumption reduction target for effective use of water resources. In the
future, we will set targets for individual companies and promote specific initiatives in the cleaning and the deposition andcoating businesses, which also have high environmental impacts.

“ULVAC Green Products” Certification Program for Environmentally
Friendly Products
In recent years, climate change and other global issues have become starkly evident and are posing a risk to our lives,
let alone business. For companies, it is becoming increasingly important to take environmental considerations into
account in order to realize a sustainable society. We have established the ULVAC Green Products certification program
to promote environmentally friendly products that make efficient use of resources and are environmentally conscious
from every perspective, including the impact of each product life cycle. This program certifies products that satisfy one
or more of the evaluation criteria concerning environmentally friendly design that we have independently establishedand that satisfy the applicable standards. We will continue to release ULVAC Green Products so that our products cancontribute to bringing about a better living environment and a more prosperous society.
Evaluation Items
Environmental friendliness elements

Items

Management of Chemical Substances

Reduced parts countPrior to the use of chemical substances in the manufacturing
process, we conduct risk assessment, in which the amount of thesubstance to be used and the protective equipment necessary are
confirmed, in an effort to ensure worker safety and minimize theenvironmental impact. Moreover, in order to ensure compliancewith the environmental regulations of various countries concerning
products, a cross-organizational team whose members are drawn
from quality assurance, procurement, and environmental divisions
is playing a central role in establishing a structure for managementof chemical substances contained in products, thus ensuring
Briefing on chemical substances contained in products by an external
provision of environmentally friendly products. Furthermore,lecturer is held for each division
we collect information in order to appropriately respond toenvironmental laws and regulations, which undergo frequent
revisions, and conduct in-house education on chemical substances contained in products for which external lecturers
are invited, thus supporting manufacturing in compliance with environmental regulations. This education is not limited to
ULVAC’s business divisions but also covers our business partners. We are promoting establishment of a management
structure covering the entire supply chain.

Selection of environmentally friendly materials

Space-saving, compact, lightweight, and simplified

REDUCE
Resource
conservation andrecycling

Easy-to-assemble, easy-to-disassemble structure
Reduced maintenance frequency
Reduced packaging materials
Reduced consumption of water resources, such as industrial water
Longer service life

REUSE
RECYCLE
Reduction of electricity
consumption
Climate action

Reduced consumption ofenergy other than electricity

Other

Active use of reused and recycled items
Design for recycling
No use of hazardous chemicals
Reduced electricity consumption
Reduced consumption of cooling water, nitrogen, etc.
Use of alternatives to greenhouse gases used in the process andreduced use of greenhouse gases
Reduced noise

Participation in the Reforestation Partner System
Based on a strategy for sustainable business, ULVAC is vigorously promoting environmental initiatives. With anemphasis on harmony with the local community, we focus on protecting the ecosystem in the vicinity of our head
office and factory located in Kanagawa Prefecture.
Specifically, for the past two years we have been actively participating in the “Reforestation Partner” systempromoted by Kanagawa Prefecture to contribute to the protection of local water source forests. Through thispartnership, we conduct forest conservation activities three times
a year. In particular, in July, we conducted activities in the Yadoriki
water source forest located in Ashigarakami-gun, Kanagawa
Prefecture. Participants cleared undergrowth and learned about
the environment through observation of aquatic life in a rich naturalenvironment in the depths of the forest.
ULVAC’s goal for 2050 is to be a company that continues tocontribute to creation of a sustainable, environmentally friendly
society. To realize this goal, we will promote management thattakes the global environment into consideration, and furthermore,
we will protect and nurture the ecosystems of local communities so
as to fulfill our responsibility to pass on flourishing forests to future
generations.
ULVAC’s signboard has been installed nearby

53

ULVAC VALUE REPORT 2023

Example of Green ProductsuGmni-200

Combined deposition and etch modules’ system of cluster typefor advanced electronics
Relevant
items

Space-saving, compact, lightweight, and simplified
Easy-to-assemble, easy-to-disassemble structureuGmni-200 is a film deposition system combining several different
process modules for sputtering, etching, ashing, and CVD on the sametransfer core based on the concept of the use of common parts. As a result of improvement of assembly navigationand layout optimization, the time required for equipment assembly was reduced by over 10% compared with the caseof conventional equipment. In future development, we aim to reduce both the footprint and the number of parts. In
addition to environmental friendliness, we will promote value engineering (VE) to develop of high-value-added productsthat facilitate introduction by customers.

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Corporate Governance
Basic Corporate Governance Policy and Structure

Overview of Meeting Bodies

Under its Basic Corporate Philosophy that “the ULVAC Group aims to contribute to the development of industries
and science by comprehensively utilizing its vacuum and peripheral technologies through the mutual cooperation andcollaboration of the Group companies,” ULVAC endeavors to improve its corporate governance with a view toward
increasing its corporate value over the medium to long term. From the aforementioned standpoint, the Company
values competitive and efficient management by ensuring strict compliance with corporate ethics as well as laws
and regulations, while respecting the interests of all stakeholders related to its business activities, including not only
shareholders, but also business partners, local communities, and employees.

Composition Two internal directors, four
independent external directors
Chairperson President
Meeting
Once a month (ad hoc meetings
frequency
as necessary)

Board of Directors
It is a decision-making body for important management issues. The Board
holds regular meetings once a month, as well as ad hoc meetings asnecessary to ensure flexibility. Independent external directors constitutea majority of the Board. The Company is not only able to make swift andefficient judgments concerning important management issues, but is also
to achieve fair, impartial, and highly transparent deliberation as well as
operational supervision.
Main agenda id-term management plan, plan for a single fiscal year, financial
M
results (including dividends)• Sustainability, risk management, compliance•

Overview of the Design of Institutional Structures
Company with a board of corporate auditors
 articularly important institutional structures include the Board of Directors, the Management Council,P
the Board of Corporate Auditors, and the Committee for Appointment and Remuneration, etc.
Introduced an executive officer system

Committee for Appointment and Remuneration, etc.
Composition One internal directors, four
independent external directors,
two independent external auditors
Chairperson External director
Meeting
Six times a year
frequency

It is a voluntary advisory body for the Board of Directors to discuss
important matters that require objective determination in particular, suchas the appointment and remunerations, etc. of directors and executive
officers. By having such an advisory body for the Board of Directors, wehave achieved fair, impartial, and highly transparent deliberations withregard to especially important management decisions and increase theeffectiveness of the Board of Directors.
Main agenda
 ppointment/dismissal of directors and executive officers,A
remuneration (including evaluation of individuals)• 
President succession planning

Corporate Governance Structure•

General Meeting of Shareholders
Appointment/Dismissal

Board of Directors

Audit

Board of Corporate Auditors
Appointment/Dismissal

Appointment/Dismissal
Collaboration
Board ofCorporate Auditors

Independent
AuditorComposition Two full-time auditors, two
independent external auditors
Chairperson Full-time auditor
Meeting
Once a month
frequency

Recommendation
Accounting audit

Audit

Committee for Appointment
and Remuneration, etc.

It performs auditing and supervision of management decision-making andbusiness operations. We ensure full auditing and supervisory functions
through close cooperation between auditors and the Internal Auditing
Department and the independent auditor, whose independence isensured, as well as attendance and statement of opinions by auditors atimportant meetings, such as meetings of the Board of Directors and theManagement Council, and regular meetings with the President and Chief
Executive Officer. By virtue of this structure, each auditor obtains sufficient
information and fulfills rigorous, fair, impartial, and transparent auditing andsupervisory functions.

Management Council
Risk Management
Committee

Compliance Committee

President andChief Executive Officer

Collaboration

Management Council

Collaboration

Comprising of internal directors and executive officers, the Management
Council deliberates on important matters related to business execution
based on the management policies decided by the Board of Directors.
It holds regular meetings once a month, as well as ad hoc meetings asnecessary.

Risk Management Committee
Chairperson President
Meeting
Twice a year
frequency

Sustainability Promotion
Committee
Divisions of the Company

Group companies

Composition Two internal directors,
16 executive officers
Chairperson President
Meeting
Once a month (ad hoc meetings
frequency
as necessary)

Audit

Internal Auditing
Department

Chaired by the President and consisting of risk control offices designatedaccording to risk classifications, the Risk Management Committee sharesinformation and verifies the operation of the risk management system. It
holds regular meetings twice a year.

Compliance Committee
Chairperson President
Meeting
Twice a year (ad hoc meetings as
frequency
necessary)

Chaired by the President, the Compliance Committee considers measures
to prevent compliance violations and to respond to whistleblowing. It holds
regular meetings twice a year, as well as ad hoc meetings as necessary.

Sustainability Promotion Committee
Chairperson Executive Officer in charge ofsustainability
Meeting
Twice a year
frequency
55

ULVAC VALUE REPORT 2023

Chaired by the Executive Officer in charge of sustainability and consistingof internal directors, executive officers, and department heads, theSustainability Promotion Committee sets sustainability targets, manages
progress, considers policies, and discusses initiatives on key themes.
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Corporate GovernancePrincipal Activities of External Directors and Auditors in FY 2022

Directors’ Remuneration
The Company’s policy on determining the individual
remuneration, etc. of directors is that the determinationof the remuneration of each director should take into
consideration the responsibility of that director not only
for the Company’s non-consolidated business results
for a single fiscal year, but also for the sustainableenhancement of the corporate value of the ULVACGroup. In addition, multiple remuneration elements
are evaluated in combination in order to appropriatelyreflect the contributions of each director according totheir respective responsibilities, whereby it is ensured
that the remuneration, etc. of each director is at an
objectively appropriate level.
As described above, the Committee for Appointment
and Remuneration, etc. comprehensively examines andreviews the proposals concerning the remuneration
standards and evaluations of individual internal directors
submitted by the Board of Directors in light of theCompany’s policy on determining the content of
remuneration, etc. of individual directors, and submits
recommendations to the Board of Directors, whichthen determines the amounts of remuneration, etc. of
individual directors while according due respect to thecommittee’s recommendations. Therefore, the Company
believes that remuneration, etc. of individual directors is
in line with the determination policy.

Basic remuneration
Fixed remuneration paid in a fixed amount every monthbased on the remuneration standards set for each
executive position

Name of external
director/auditor

Reasons for selection as an external
director/auditor

Hiroyuki Nishi

To receive valuable opinions based on
his extensive experience and broad
insight, primarily in risk management

Attended all 13 meetings of the Board of Directors held during the fiscal
year and provided opinions concerning deliberation of the agenda asnecessary, based on his extensive experience and sophisticated insight asa corporate manager of other companies both in Japan and overseas.

Norio UchidaTo receive valuable opinions based on
his extensive experience and broad
insight, primarily in international sales
activities

Attended all 13 meetings of the Board of Directors held during the fiscal
year and provided opinions concerning deliberation of the agenda asnecessary, based on his extensive experience and sophisticated insight asa corporate manager of other companies both in Japan and overseas.

Dr. Kozo Ishida

To receive valuable opinions based on
his extensive experience and broad
insight, primarily in research anddevelopment

Attended all 13 meetings of the Board of Directors held during the fiscal
year and provided opinions concerning deliberation of the agenda asnecessary, based on his extensive experience and technical expertise as acorporate manager of other companies both in Japan and overseas.

Yoshimi Nakajima

To receive valuable opinions based onher extensive experience and broad
insight, primarily in international sales
activities

Attended all 13 meetings of the Board of Directors held during the fiscal
year and provided opinions concerning deliberation of the agenda asnecessary, based on her extensive experience and sophisticated insight asa corporate manager of other companies both in Japan and overseas.

Senshu AsadaTo receive valuable opinions basedon his extensive experience andexpertise as an attorney

Attended all 13 meetings of the Board of Directors and all 19 meetings ofthe Board of Corporate Auditors held during the fiscal year and provided
opinions concerning deliberation of the agenda as necessary, mainly froma specialist perspective as an attorney.

Isao
Utsunomiya

To receive valuable opinions basedon his extensive experience andexpertise as a certified public tax
accountant

Attended all 13 meetings of the Board of Directors and all 19 meetings ofthe Board of Corporate Auditors held during the fiscal year and provided
opinions concerning deliberation of the agenda as necessary, mainly froma specialist perspective as a certified public tax accountant.

Annual performance-linked remuneration
Primarily in order to motivate each internal director to work
harder to improve the performance in each fiscal year, thisremuneration is determined based on criteria determinedwith reference to performance indicators such as theCompany’s non-consolidated operating profit margin,
taking into account an evaluation of each internal director’s
degree of contribution and achievement of duties.

Stock-based remuneration
Primarily in order to motivate each internal director tocontribute more to the performance and increase of
corporate value of the ULVAC Group over the medium tolong term, this remuneration is determined with reference
to the standards set for each executive position, basedon the degree of achievement of performance targets interms of consolidated operating profit for a single fiscal
year covered under the mid-term management plan as a
calculation indicator.

Attendance and principal activities

Evaluation of the Effectiveness of the Board of Directors

Initiatives to Ensure the Effectiveness of Audit

In an effort to enhance the functions of the Board of Directors and thus ultimately to increase our corporate value,
we ask individual directors and auditors to assess the Board’s effectiveness annually by themselves, in which eachdirector and auditor directly gives replies to an external organization to ensure anonymity.
The Board of Directors carries out an analysis and evaluation based on the aggregated results reported by theexternal organization.
While we determined that, as a result of the analysis and evaluation of the effectiveness of the Board of Directors
in FY 2022, the Board’s effectiveness has been maintained, we will continuously strive to improve the Board’s
effectiveness by taking into account the recommendations about the enhancement of deliberations on businessportfolio, etc.

The Board of Corporate Auditors held a total of 19 meetings during FY 2022, at which important audit-related
matters including agendas for meetings of the Board of Directors were reported and discussed. Based on thediscussions at meetings of the Board of Corporate Auditors and the expertise of individual auditors, auditors provide
recommendations to directors of the Company as appropriate and necessary, including at meetings of the Board of
Directors. In addition, the Company secures opportunities for auditors to regularly exchange opinions with directors,
the Internal Auditing Department, and the independent auditor on wide-ranging matters such as compliance and thestatus of establishment of internal control. The Company ensures that auditors are provided with the informationnecessary to carry out audits, and that they attend meetings that it is necessary for them to attend from theperspective of ensuring the acquisition of such information.

Policy on Selection of External Directors and Auditors

Training Policy for Directors and Auditors

ULVAC gives consideration to the desirable balance and diversity of the knowledge, experience, and skills of themembers of the Board of Directors, as well as appropriateness of its size, with a view to enhancing its effectivenessthrough multifaceted deliberations. Candidates for directors are carefully selected by the Board of Directors inconsideration of the aforementioned aspects. The Company also gives consideration to optimizing the board size forspeedy decision-making.

The Company appropriately provides its directors and auditors with opportunities for training that is deemednecessary for them to fully and appropriately fulfill the roles and responsibilities that are expected of them.
Newly appointed external directors receive explanations regarding management strategy, financial standing,management issues, and other important matters, and are given opportunities to acquire knowledge and insight
through tours, etc. of business sites, as appropriate, for the purpose of obtaining a deeper understanding of the
ULVAC Group.
For newly appointed auditors, the Company provides training opportunities equivalent to those for newly appointed
directors upon the request of the auditors. After they take office as directors and auditors, the Board of Directors
provides them with opportunities to receive explanations regarding business strategies, management issues, andrelated matters of each business every year. The Company also provides them with financial support for trainings thatare deemed necessary for them to fulfill their duties and encourages them to enhance their expertise. These training
opportunities are continually reviewed and updated, as necessary.

Selection Criteria
for External
Directors andAuditors

57

Composition of remunerationof internal directors

The Company’s selection criteria for external directors and external auditors are notlimited to those stipulated by laws and regulations but also emphasize the attributes thatcan be expected to enable external directors/auditors to provide useful opinions, such as
experience as corporate managers and expertise in law and accounting, etc. In addition,from the perspective of fairness, the Company comprehensively considers whether there
is any conflict of interest with the Company. Moreover, in order to ensure the fairness ofthe opinions of the independent outside directors, the Company applies the independence
criteria determined by the Company.

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External Directors Roundtable Discussion

Based on a Sure Grasp of the Issues, SupportingULVAC’s Growth from an External Perspective

Hiroyuki Nishi

Norio Uchida

Yoshimi Nakajima

Kozo Ishida

External Director

External Director

External Director

External Director

Having completed the previous mid-term management plan, which was launched in FY 2020, ULVAC
has launched a new plan targeting new growth. What did ULVAC achieve, what issues are left
unresolved, and what has changed in the past three years?

Hiroyuki Nishi External Director
Became an External Director of the Company in September 2020 after
serving as Director of Nippon Life Insurance Company, President andChief Executive Officer of Nissay Asset Management Corporation, andPresident and Chief Executive Officer of Nissay Credit Guarantee Co., Ltd.

Looking back on the previous mid-term
management plan, what is your takeon the achievements? Also, what are
the issues that remain to be addressed
under the new mid-term management
plan?
59

ULVAC VALUE REPORT 2023

Nishi: ULVAC achieved gratifying results until
the second year of the previous mid-term
management plan, although the profit target
for the final year was not achieved. Meanwhile,
ULVAC formulated Vision 2032, clearly plotting
its long-term trajectory, which is noteworthy.
I think the ability to get the job done (ability
to execute) was insufficient. In terms of theirmentality, ULVAC Group companies should
be predisposed to share their respective
problems, risks, strengths, etc. throughout
the Group. “Visualization” of quantitative
management of initiatives is necessary so thatdepartments and employees take ownership.
In terms of risk awareness, the impactof longer parts delivery lead times was
already evident two years ago. ULVAC shouldhave been more acutely aware of this andtaken action earlier. As for global businessdevelopment, it would be prudent to recognize
the need to mitigate geopolitical risks.
Given the continuing U.S.-China economic
confrontation, overdependence on business in
China should be avoided.

However, while these matters do require
attention and improvement, looking to the
future, there is plenty of room for growth.
During the three years of the new mid-term
management plan, I expect ULVAC to undergo
a transition and strike out in new ways as it
advances to the next phase.
Uchida: During the three years of theprevious mid-term management plan, thedirection in which ULVAC should proceed has
been clarified through a top-down approach.
Although a “corporate culture of thinking” hasbeen inculcated, issues remain in terms ofexecution capabilities. I think ULVAC needs tocultivate a “corporate culture of getting things
done.”
New businesses such as equipment for EV
batteries have achieved growth. ULVAC has
engaged in several joint research projects with
universities and battery manufacturers while
maximizing the use of its internal resources.
Joint development and alliances with external
parties should be expanded in various forms
worldwide. I want ULVAC to maintain a longterm perspective and continue to create
innovation.
ULVAC’s financial constitution is sound.
However, I believe “visualization throughquantitative management” is necessary inorder to grasp the progress of initiatives,
such as those to strengthen manufacturing
capabilities, in fine-grained detail.
Moreover, marketing will become
increasingly important amid accelerating global
business development. So, there is an urgent
need to develop and acquire global humanresources capable of envisioning scenarios
from a broad perspective.
Ishida: I completely agree with both of you.
ULVAC now has a good grasp of the various
issues it needs to address. Firstly, it iscommendable that ULVAC achieved the initial
target for net sales under the previous midterm management plan through its tenacious
efforts. Looking at the three-year performance,
not just the final year, we can say that ULVAC’s
results were quite good. In the past, poor
performance of a particular division would havea major impact, undermining the performanceof the company as a whole. This is no longer
the case. Indeed, ULVAC’s management has
become more resilient.
Secondly, ULVAC made steady progresswith regard to investment in development.
In FY 2022, R&D cost amounted to ¥13.8

billion (6.1% of net sales) and R&D capital
investment was ¥11.9 billion (5.2% of net
sales). Together they accounted for more than
10% of net sales. Concentration of resourceson the semiconductor-related business, which
is a growth driver, has been yielding goodresults.

Norio Uchida External Director
Became an External Director of the Company in September 2015 after
serving as Representative Director, President & CEO of TOPCONCORPORATION.

Thirdly, I think ULVAC’s absorption-typemerger of two Japanese manufacturingsubsidiaries is an astute move. As “ONEULVAC,” a sense of unity has been createdthroughout the company. I would like to see
ULVAC’s initiatives link this momentum toproductivity improvement of manufacturing
operations in Japan.
On the other hand, ULVAC is still oriented
toward Japan and the global perspective is
weak. Regarding optimization of production,
it will be increasingly necessary to adopt a
global perspective, which means tackling
optimization of not only Japanese sites but
also overseas sites. I feel ULVAC is not up to
speed when it comes to integrating production
systems and sharing data across the Group,
including overseas sites. Faster action isdesirable to transform the portfolio of the
FPD production equipment business and to
improve productivity of the electronic device
production equipment operation.
Nakajima: Several unexpected developments
occurred over the past three years. It isregrettable that ULVAC’s responses to them
have been inadequate.
Everyone has focused on the ability to
execute. Likewise, I also want to see ULVAC
adopt a “get it done” attitude. The numbers
show the results of initiatives. ULVAC should
enforce targets as yardsticks of progress andULVAC VALUE REPORT 2023

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About ULVACULVAC’s Vision

ULVAC’s Strategy

Corporate
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Financial Data/
Corporate Information

Based on a Sure Grasp of the Issues, Supporting ULVAC’s Growthfrom an External Perspective
tackle them by setting priorities. Althoughinitiatives are diligently carried out, analysisof reasons for the achievement or nonachievement of plans seems to be insufficient.
To deal with this, management’s mindset must
be changed. I believe the corporate culture
will change if leaders speak up, expressing
themselves in their own words, and encourage
dialogue among organizations. ULVAC has
just become aware of such internal problems.
In order to facilitate proactive change, both
personnel and organizational approaches will
be necessary. This is an area in which I havehigh hopes that the HQ system will prove tobe effective.

Yoshimi Nakajima External Director
Became an External Director of the Company in September 2018 after
serving as Vice President of Citibank, N.A., Senior General Manager ofSociete Generale Securities Services, and President and Representative
Director of American Express Japan Co., Ltd.

So, what points should we keep in mind
in order to maximize the effectiveness ofthe HQ system introduced in FY 2023?
Nakajima: The HQ system introduced fromthe current fiscal year will be an effective
organizational strategy, only if authority
and responsibility are clarified and the skills
required of human resources are also clarified.
I think we must not lose sight of theseprerequisites for success.
Nishi: I have great expectations of the switch
to the HQ system that is designed to facilitatecross-organizational initiatives.
I believe ULVAC has established a system tofirmly implement the PDCA cycle. Of course,
as Ms. Nakajima pointed out, care should betaken to ensure that the reorganization doesn’t
become simply a matter of form. At the sametime, it will be necessary to “visualize” theinitiatives and share them throughout the61

ULVAC VALUE REPORT 2023

company. The new mid-term management
plan continues several of the themes of theprevious mid-term management plan. In otherwords, the next three years will be a period
in which ULVAC will once again take on thechallenge of capturing growth opportunities
and improving the profit margin, and the entire
Group is urged to “get it done.” In regard to
the introduction of the HQ system, as well as
the timing of this move, President Iwashita’s
determination to make it a resounding success
was impressive.
Ishida: The introduction of the HQ system
is highly significant in terms of expanding
product fields and responding to global
business development. I have highexpectations of the HQ system. I would
like to see smooth collaboration amongorganizations to achieve results. “People”
are the key to success. Human resourcesmust be secured and deployed to maximum
effect. It is also important to promotemutual understanding and cooperation
among organizations based on priority
management for the entire Group. In orderto implement the planned production that
ULVAC is working on under the new midterm management plan, the system needs
to be restructured, including the approach
to inventory management. I would like to
see ULVAC strengthen collaboration among
Group companies and HQs, and to designand establish a production system capableof contributing to further enhancement of
ULVAC’s corporate value.
Uchida: Success in putting this organizational
theory into practice hinges on speedy
management decision-making and information
sharing. And as Dr. Ishida commented, ULVAC
has to get this done worldwide, not just inJapan. ULVAC should select and deploy humanresources who have what it takes to manage
the business, although this is easier said thandone.
Ishida: ULVAC needs to think about
deployment of global human resources.
Uchida: Developing human resources,
especially people who can handle marketingand global management, is a very timeconsuming endeavor. In my opinion, ULVAC
should vigorously promote excellent global
human resources to key positions and givethem room to demonstrate their full potential
in achieving an effective future-orientedorganization.

Nakajima: For those who have neverexperienced global management, I thinkit tends to be pie in the sky. Negotiations
between organizations based on priority
management are also very different from how
things are typically done in Japan.
Nishi: Going forward, there is an urgent
need for a break with the past as regards
assignment and development of humanresources.

to learn about the business and the corporate
culture by putting myself in the shoes of those
who work at ULVAC.
So, more opportunities for communication
with people in the company would be
welcome. I would like to vigorously exchange
opinions and offer advice with my interlocutors
to support the execution of the new mid-term
management plan.

As an external director, what
contribution do you hope to make to
ULVAC’s future growth?
Nakajima: In our roles as external directors,
I believe the four of us are deepening
discussion at the Board of Directors bydrawing on our respective expertise.
As indicated on the skills matrix, my
expertise as an external director centers on“corporate management,” “global,” and “sales
and marketing.” I often express my opinions
on human resources systems, evaluation,and succession planning, and I also serve as
chairman of the Committee for Appointment
and Remuneration, etc. In addition, I havebeen encouraging ULVAC on diversity,
including the active participation of women,
and will continue to do so.
Nishi: As well as experience in management,
I have expertise in risk management gainedat an insurance group, including in asset
management. I would like to contribute to
execution of the new mid-term management
plan by offering advice based on myexperience and expertise. I have a particularinterest in identifying and managing risk andin the connection between risk and businessresults. That is the perspective from which I
intend to offer my opinions, rather than simply
being risk-averse.
Focusing on the PDCA cycle of initiatives,
I would like to make myself useful byhelping to identify the reasons why plans
remain unfulfilled and problems arise, and in
implementing measures to deal with theseissues.
Ishida: Concerning the stance of external
directors, I don’t think they should beconstrained by their formal role of “monitoring
management as a representative of
stakeholders.” Rather, by having as much
two-way communication as possible, I want

Dr. Kozo Ishida External Director
Became an External Director of the Company in September 2016 after
serving as Vice Chairman and Representative Director of HORIBA, Ltd.

Uchida: Many listed companies appoint
lawyers, accountants, university professors,
and the like as external directors, but all four ofus, who serve as ULVAC’s external directors,
have experience as corporate managers, which
is very unusual. This may be one reason why
in-depth discussion of management issues
is the norm at ULVAC’s Board of Directors
meetings and why those meetings are sovaluable, interesting, and meaningful.
I have experience in conducting M&A,
centering on overseas deals, as CEO of
a company. Mr. Nishi, Dr. Ishida, and Ms.
Nakajima also have extensive experienceand knowledge. As ULVAC moves forwardwith its initiatives under the new mid-term
management plan, I think we can support
ULVAC by offering a good advice.
We can also offer advice on complianceand corporate governance, making timely
interventions to confirm that all is as it shouldbe. Each of us is committed to fulfilling our
responsibilities as an external director, aiming
to be someone whom the younger generation,
the future leaders of ULVAC, will consult andseek advice from.

ULVAC VALUE REPORT 2023

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Message to Our
Readers

About ULVACULVAC’s VisionCorporate
Governance

ULVAC’s Strategy

Financial Data/
Corporate Information

Management Structure
Directors

Auditors
Setsuo Iwashita

Dr. Choong Ryul Paik

Kazuya Saito

Yuji Morijiri

President and Chief Executive Officer

Senior Managing Director

Auditor

AuditorExpertise/
experience

March 1984
August 1992
September 1995
July 1998
March 2006
October 2006
September 2011
July 2012
September 2013
July 2015
July 2016
September 2016
July 2017
January 2019
July 2020

July 2011
March 2014
March 2017
March 2018
March 2018
March 2020
April 2020
September 2020

April 1991
September 1999
September 2000
September 2012
July 2015
September 2016
July 2018
September 2018
July 2019
July 2020
July 2021
July 2022

Corporate
management

Global

R&D/technology/
manufacturing

Joined the Company
Joined ULVAC KOREA, Ltd. as Senior Director
President of ULVAC KOREA, Ltd.
Executive Officer of the Company
Managing Executive Officer
Chairman of ULVAC KOREA, Ltd. (current position)
Managing Executive Officer, Senior General Manager of R&D Headquarters of
the Company
Director and Managing Executive Officer, Senior General Manager of R&D
Headquarters
Director and Managing Executive Officer, General Manager of Innovation Centerof Excellence
Senior Managing Director (in charge of Innovation) of the Company; President
and Chief Executive Officer of ULVAC-PHI, Inc.
Senior Managing Director (in charge of Innovation) of the Company; Chairmanof ULVAC-PHI, Inc.
Senior Managing Director (in charge of Innovation) of the Company (current
position)

Expertise/
experience

April 1983
July 1996
October 2000
July 2005
September 2009
July 2012
September 2013
July 2018
July 2021
September 2022

R&D/technology/
manufacturing

Expertise/
experience

Joined the Company
Manager of Vacuum Materials Laboratory, Tsukuba Institute for Super Materials
Senior Manager of No. 3 Research Department, Chiba Institute for Super
Materials
General Manager of Chiba Institute for Super Materials
Director, General Manager of Chiba Institute for Super Materials
Director and Executive Officer, General Manager of Technology Planning
Department
Executive Officer, General Manager of Technology Planning Department,
General Manager of Institute for Super Materials
Senior Executive Officer, General Manager of Institute for Semiconductor andElectronic Technology
Officer, Assigned to Strategic Planning Department
Full-time Auditor (current position)

April 1990
March 2012
March 2017
March 2019
April 2023
September 2023

Finance/accounting

Joined Nippon Life Insurance Company
General Manager of 2nd Tokai Corporate Relations Management Department
General Manager of Group Annuities Department
General Manager of 1st Corporate Relations Management Department
Joined the Company
Senior Manager, Assigned to Management Planning Department
Full-time Auditor (current position)

Norio Uchida

Isao Utsunomiya

Soya Honda

Director

Auditor

AuditorIndependent

Corporate
management

External

GlobalLegal affairs/riskmanagement

Joined Nippon Life Insurance Company
General Manager of International Planning & Operations Dept. and General
Manager of China Office
Executive Officer, General Manager of Europe, Deputy Director-General andGeneral Manager of London Representative OfficeDirector and Executive Officer, General Manager of the Americas, General
Manager of Europe, Deputy Director-General, and General Manager of New
York Representative OfficeDirector and Managing Executive Officer, General Manager of International
Planning & Operations Dept., General Manager of the Americas, General
Manager of Europe, and General Manager of Asia
Director and Senior Managing Executive Officer, General Manager of theAmericas, General Manager of Europe, and General Manager of Asia
Director
President and Chief Executive Officer of Nissay Asset Management Corporation
Advisor of Nissay Credit Guarantee Co., Ltd.
President and Chief Executive Officer (current position)
External Director of the Company (current position)

Expertise/
experience

April 1973
June 1980
February 1989
October 1994
July 1999
June 2003
July 2003
June 2005
June 2007
June 2010
June 2011
June 2013
June 2015
September 2015

Independent

Corporate
management

Yoshimi Nakajima

Director

Director
Independent

Corporate
management

External

Global

R&D/technology/
manufacturing

Joined HORIBA, Ltd.
General Manager of Product Department I, Development and Sales Division
President and Director of HORIBA Europe GmbH (Germany)
Director of HORIBA, Ltd.
Managing Director
Senior Managing Director
President and Director (CEO) of ABX, S.A. (currently HORIBA ABX SAS) (France)
Vice President and Director of HORIBA, Ltd.
Executive Vice President and Representative Director
Director and Advisor of HORIBA STEC Co., Ltd.
Vice Chairman and Representative Director of HORIBA, Ltd.
Senior Advisor
External Director of the Company (current position)
External Director of Seiko Electric Co., Ltd. (current position)
Fellow of HORIBA, Ltd.

ULVAC VALUE REPORT 2023

Expertise/
experience

April 1980
February 1982
May 1997
June 2000
April 2002
August 2011
February 2014
April 2014
June 2017
June 2018
September 2018
April 2021

External

GlobalSales/
marketing

Joined Tokyo Optical Co., Ltd. (currently TOPCON CORPORATION)
General Manager of Topcon Singapore Pte. Ltd.
President of Topcon Australia Pty Ltd.
Senior Vice President of Topcon Laser Systems, Inc. (currently Topcon
Positioning Systems, Inc.)
President of Topcon Laser Systems Japan, Inc.
Executive Officer of TOPCON CORPORATION
Director and President of Topcon Sales Corporation (currently TOPCON SOKKIAPOSITIONING JAPAN CO., LTD.)
Director and Executive Officer of TOPCON CORPORATION
Director and Managing Executive Officer
Director and Senior Managing Executive Officer
Representative Director, President & CEO
Advisor to the Board
External Director of Nabtesco Corporation
External Director of the Company (current position)

Dr. Kozo Ishida

Expertise/
experience

63

Expertise/
experience

Director

External

March 1970
June 1982
March 1985
June 1988
June 1991
June 1996
July 2001
June 2002
June 2005
March 2011
March 2014
March 2016
September 2016
March 2017
April 2018

Sales/
marketing

Hiroyuki Nishi

Expertise/
experience

March 2010

GlobalJoined the Company
Manager of Beijing Business Office and Shanghai Business Office, Overseas
Operation Division
Director and Chief Executive Officer of ULVAC (NINGBO) CO., Ltd.
General Manager of Chinese Region, Asia Division of the Company
Director and Chief Executive Officer of ULVAC (CHINA) HOLDING CO., LTD.
Chairman of ULVAC (Shanghai) Trading Co., Ltd.; Chairman of ULVAC (SUZHOU) CO., LTD.
Director of the Company
Director and Executive Officer
Managing Executive Officer
Senior Managing Executive Officer of the Company; Chairman of ULVAC(CHINA) HOLDING CO., LTD.
Senior Managing Executive Officer and Senior Manager of Management
Planning Department of the Company
Director and Senior Managing Executive Officer, Senior Manager ofManagement Planning Department
President and Chief Executive Officer
President and Chief Executive Officer and General Manager of Human Resource Center
President and Chief Executive Officer (current position)

External

April 1983
March 2007

Corporate
management

Expertise/
experience

April 1997
July 1999
June 2011
June 2012
June 2013
June 2015
June 2017
September 2017
June 2019

Independent

Finance/accounting

Expertise/
experience

Registered as Certified Public Tax Accountant
Opened Isao Utsunomiya Certified Public Tax Accountant Office
Manager of Welfare Department of Kyobashi Branch, Tokyo Certified Public Tax
Accountants’ Association
Representative Partner of Tsukiji Accounting Tax Corporation (current position)
Director of Tokyo Certified Public Tax Accountants’ Association
Director and Deputy Manager of General Administration Department
Manager of General Administration Department of Kyobashi Branch
External Auditor of the Company (current position)
Deputy General Manager of Kyobashi Branch, Tokyo Certified Public Tax
Accountants’ Association (current position)

December 2007
April 2008
April 2012
April 2016
September 2016
November 2021
April 2022
September 2023

Position

Sales/
marketing

Joined The Yasuda Trust and Banking Co., Ltd. (currently Mizuho Trust &Banking
Co., Ltd.)
Joined AVON PRODUCTS CO., LTD.
Joined Citibank, N. A. as Vice President
Joined Societe Generale Securities Services as Senior General Manager
Joined American Express International, Inc. as Vice President in charge of
Global Traveler’s Check & Prepaid Card Service, Japan Branch
Country Manager in Singapore (President)
Senior Vice President of Japan BranchPresident and Representative Director of American Express Japan Co., Ltd.
External Director of Yamaha Corporation; External Director of AEON Financial
Service Co., Ltd. (current position)
External Director of Japan Freight Railway Company (current position)
External Director of the Company (current position)
Outside Director of Sekisui House, Ltd. (current position)
Specially-Appointed Professor of the Graduate School of Project Design (current
position)

Legal affairs/riskmanagement

Registered as an attorney
External assistant teacher of Chuo Law School (current position)
Auditor of Tokyo Judo Federation (current position)
Secretary-General of Certification and Evaluation Department of Japan Law
Foundation
External Corporate Auditor of bBreak Systems Co., Ltd. (current position)
External Corporate Auditor of Ides Co., Ltd. (current position)
Founder and Director of Soya Honda Law Office (current position)
External Auditor of the Company (current position)

Composition of key organizations

GlobalIndependent

Composition of Key Organizations and Skills Matrix

Name

Independent

Corporate
management

External

President and Chief
Executive Officer

Setsuo Iwashita

Senior Managing
DirectorDr. Choong Ryul Paik

External Director

Hiroyuki Nishi

External Director

Norio Uchida

External Director

Dr. Kozo Ishida

External Director

Yoshimi Nakajima

Full-time Auditor

Kazuya Saito

Full-time Auditor

Yuji Morijiri

External Auditor

Isao Utsunomiya

External Auditor

Soya Honda

Board ofDirectors

Board ofCorporate
AuditorsCommittee for
Appointment
Management
andCouncil*1
Remuneration,etc.

Expertise/experience*2
Corporate
management

GlobalSales/
marketingR&D/
technology/
manufacturing

Finance/accounting

Legalaffairs/riskmanagement

Chairperson
Chairperson
Observer*1 In addition to the above, executive officers are members of the Management Council.
*2 M
 ain expertise and experience of each director and auditor are indicated. The above table summarizes the areas regarding which the Company has particular
expectations, and is not a description of all their expertise and experience.

ULVAC VALUE REPORT 2023

64

Inherited
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Corporate Governance

Message to Our
Readers

About ULVACULVAC’s VisionCorporate
Governance

ULVAC’s Strategy

Financial Data/
Corporate Information

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

Management of Risks
Principal risks are identified that may have a significant impact on financial position, business results, andcash flows and are described below. ULVAC examines measures to reduce these risks and utilize them asopportunities through discussion at a decision-making body such as the Management Council.
Recognized Risks in Business, etc.

Risk Management System

Market fluctuation

We have established rules concerning the risk management system, classifying a broad range of risks from various
perspectives, and designated the control offices primarily responsible for risk management according to theclassification of risks. Furthermore, these risk control offices identify more specific risks and respond to them. We
work to ensure that these offices efficiently gather information that is important for operating the risk management
system. In addition, in order to share and evaluate information concerning the operation of the risk management
system on a company-wide basis, we have a Risk Management Committee, which is chaired by the president,
and mainly comprises representatives of the risk control offices with primary responsibility for risk management.
The Risk Management Committee holds regular meetings as an umbrella organization for risk management, andit determines company-wide basic policies, monitors the state of management and administration, and considers
any improvements that can be made, etc. Furthermore, initiatives at ULVAC, Inc. are implemented at ULVAC Group
companies as appropriate for the scale and business type of the company in question.

Supply chain

Risk Management System

ULVAC, Inc.

ULVAC Group companies

Research and development

Laws and regulations

Intellectual property rights

SafetyQuality

Global competitive environment
Fund procurement

Securing of human resources

Information security

Environmental regulations, response to climate change

Currency fluctuations
Other

Market Fluctuation
The Group has acquired its market share and achieved growth by developing unique technologies and introducing
them in the field of vacuum equipment used, in particular, in FPD, semiconductor, and electronic device production
processes. On the other hand, if a great reduction in capital investment occurs or customers’ financial conditions
deteriorate owing to change in the market conditions of FPD manufacturers, or semiconductor and electronic device
manufacturers, who are the Group’s customers, the Group’s business results and financial position may be adversely
affected.
In the mid-term management plan launched in July 2023, the Group set a twofold basic policy: “Creating Social
Value through Vacuum Technology” and “Enhancing Profit and Capital Efficiency Oriented Management” Under thebasic policy, even in the case of market fluctuation, we aim to improve profitability by enhancing productivity andachieve sustainable growth by focusing on development in growth fields. Our diverse products are used in a wide
range of fields. We will enhance our ability to respond to market fluctuations by building a stable revenue basecentering on the semiconductor and electronic component fields.

Research and Development

Chief Risk Officer =President and CEO

Chief Risk Officer =President and CEO

Reporting andinstructionsfor
improvement

Risk Management Committee

Risk Management Committee

By maintaining vigorous R&D investment, the Group has continued to introduce a stream of new products thatincorporate the latest technologies. However, if development is significantly delayed for a compelling reason, resulting
in delay in introduction of new products to the market, the Group’s business results and financial position may be
adversely affected.
The Group is accelerating development, which is necessary for growth, through selection and concentration of
investment. At the same time, periodic monitoring is implemented for progress management in order to prevent
significant delay in development.

Global Competitive Environment

Risk control
officeRisk control
officeRisk control
officeRisk control
officeRisk control
officeRisk control
officeThe Group operates business globally and provides products to customers in various countries and regions, butcompetitors also operate globally, and it is a competitive environment with new entrants. In such an environment,competition is intensifying not only in terms of product performance but also price, and the Group’s business results
and financial position may be adversely affected.
The Group is striving to maintain competitiveness by sharing its technology and product roadmap with customers
and launching products using cutting-edge technologies at the appropriate time.

Securing of Human Resources
 isk control offices are designated according to risk classifications and they implement risk management throughR
a PDCA cycle.
Each Group company decides whether it is necessary to establish a Risk Management Committee in consideration of
the size of the company in question and other factors.

65

ULVAC VALUE REPORT 2023

The Group considers the securing of human resources to be the most important factor determining the Group’s
ability to continue to grow in the global business environment. If the Group is unable to continue to secure the humanresources necessary for business growth, competitiveness will decline, and the Group’s business results and financial
position may be adversely affected.
The Group views human resources as “human assets” and strives to create opportunities for diverse humanresources to continue to take on challenges. We secure the necessary human resources by promoting developmentof human resources and health and productivity management and other measures to ensure that diverse humanresources in excellent physical and mental health and good spirits can demonstrate their abilities to the fullest.

ULVAC VALUE REPORT 2023

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Inherited
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Corporate Governance

About ULVACULVAC’s Vision

ULVAC’s Strategy

Financial Data/
Corporate Information

Corporate
GovernanceComplianceWith Our Stakeholders

We emphasize not only compliance with laws and regulations but also compliance with internal codes andethical codes. As well as conducting awareness-raising activities so that each person in the ULVAC Group actswith a spirit of compliance, we have established and are operating a range of institutions and regulations toensure thorough compliance.

In order to resolve social issues and co-create sustainable corporate value, we vigorously engage in dialogue
with stakeholders and respond in a timely manner to changes in the market and business environment in which
ULVAC operates.

Corporate Code of Conduct
In order to further promote fair and highly transparent corporate management, ULVAC
has established the Corporate Code of Conduct, to which all officers and employees
are required to adhere, and conducts education. In addition, booklets are distributed toGroup companies to raise awareness about the importance of compliance. We use thisCorporate Code of Conduct as guidelines for asking ourselves whether our businessconduct is “in the best interest of our customers,” “correct in light of laws and social
ethics,” and “does not infringe human rights.”

We conduct company-wide education on compliance, prevention of insider trading,prevention of harassment, prevention of misconduct in research activities, etc., for all
employees of ULVAC, Inc. every year and the attendance rate is 100%. The education
is designed to raise awareness not only in terms of knowledge but also to enable our
employees to act appropriately.

Whistleblowing System
In addition to a whistleblowing system operated via the Manager of the Internal Auditing Department for which
independence is secured in accordance with the Whistleblower Protection Act, we have also established an external
whistleblowing contact. The system is structured such that confidentiality is ensured throughout the process ofinvestigating the content of reports. By putting in place a whistleblowing system that allows whistleblowers to feelsecure in their reporting, we aim to detect any misconduct early and take appropriate corrective action.
After a whistleblower report has been received, the initial response is for the Compliance Committee of ULVAC,
Inc. to conduct an investigation in order to establish the facts. This investigation is particularly mindful of fairness,and is conducted judiciously and thoroughly. If necessary, assistance may be sought from external specialists, andthorough interviews that are as wide-ranging as necessary are conducted and analyzed.
The president chairs the Compliance Committee and the members of the Committee observe a strict duty ofconfidentiality in carrying out their duties.

Handling of Violations
In the event that, based on the results of an investigation by the Compliance Committee, it is deemed that a violationof laws or regulations has been committed, then the opinion of an external specialists, such as a lawyer, may besought as necessary, steps will be taken to ensure that the violation ceases with immediate effect and improvement
measures will be implemented, and those involved in the violation will be dealt with after deliberation by theappropriate bodies. In addition, the root causes of the violation are also investigated in order to formulate effective
measures for preventing recurrence.
Corporate Code of Conduct
1

Excellent Products, Services, and Safety

10

Assurance of Safe and Healthy Work Environment

2

Sound, Corporate Association with Business Partners
and Affiliated Companies

11

Compliance with Laws or Ordinances

3

Promotion of Maintenance of Fair and Free Competition

12

Insulation from Anti-Social Forces

4

Protection of Intellectual Property Rights

13

Disclosure of Information

5

Corporate Secrets

14

Global Environmental Protection

6

Client Information

15

Local Contribution

7

Respect for Employees’ Personality and Individuality

16

Global Business Activities

8

Respect for Privacy

17

Thorough Implementation of Corporate Ethics

9

Respect for Human Rights and Nondiscriminatory
Treatment

18

Pronouncements by Individuals

ULVAC VALUE REPORT 2023

Dialogue with Employees
At the start of a new fiscal year and at the New Year’s reception, video messages from the ULVAC president andsenior management are distributed to all Group companies in order to share ULVAC’s status and policies with
employees, including those overseas. A questionnaire survey is conducted coinciding with each such video message
to check the level of employees’ understanding and collect their opinions, which are then fed back to management
and reflected in the planning of the next video project.

Collaboration with Business Partners
Through various briefings and information exchanges, we strive to share information relevant to business and request
our business partners for their understanding and cooperation in enhancing communication on CSR procurement.

Compliance Education

67

Message to Our
Readers

For details

P.47 Procurement

For Customer Satisfaction
In order to enhance customer satisfaction, we strive to improve the quality of our products and services based on thequality management system in accordance with the ISO 9001 standard. ULVAC’s 31 Group companies obtained ISO
9001:2015 certification for the integrated management system. Quality management is promoted by way of thoroughanalysis of nonconformities that occurred at a process within the process, implementation of recurrence prevention
measures, feedback of findings, implementation of preventive measures, and process standardization activities.
Furthermore, in order to achieve customer satisfaction in all phases from product delivery to disposal, we are working
to reduce running costs, shorten lead times, and provide prompt, high-quality customer support.
For details

Website >> Sustainability > Quality Assurance and Product Safety

For details

P.20 Customer Support

Dialogue with Shareholders and Investors
We strive to provide our shareholders and investors with timely, fair, and easy-to-understand information about theGroup’s mid-term management plan, growth strategy, and financial condition, in order to facilitate their understanding.
Regarding investor relations, in addition to quarterly financial results briefings, we actively offer opportunities for
dialogue by organizing technical seminars, taking part in conferences sponsored by securities companies both inJapan and overseas as well as seminars for individual investors, and holding road shows overseas, plant tours, andpersonal interviews.
We disclose financial results briefing materials and summaries of Q&A sessions, integrated reports, fact sheets,
etc. on our website. We strive to enrich disclosure information and for swifter disclosure. From the viewpoint of fairdisclosure, we disclose information in Japanese and in English simultaneously to the extent possible.
Evaluations and opinions obtained through dialogue with shareholders, investors, and analysts are collected andsummarized on a regular basis and are reported to the
IR activities
Results in FY 2022
Board of Directors and at the Management Council
Financial briefing
4 times
to share them with management, depending on theIRinterviews
withinstitutional
investors
importance and nature of such opinions, so as to reflect
Approx. 690 persons
and analysts
them in improvement of management measures, etc.
Participation in conferences for overseas
28 conferences
We will continue our efforts to strengthen
institutional investors
communication with shareholders and investors throughIR interviews on road shows overseas
20 interviews
Plant tours
9 timesvigorous IR activities, with the aim of realizing soundSeminars for individual investors
3 times
corporate management and maximizing corporate value.

Dialogue with Local Communities
In addition to contributing to society through our core business, we strive to make social contributions that
benefit local communities, focusing on “Local Communities,” “Environment” and “Education Support for the Next
Generation.”
For details

Website >> Sustainability > Social Contribution Activities

ULVAC VALUE REPORT 2023

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11-year Financial and Non-financial Data
(Unit)FY2012FY2013

FY2014FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

FY2022

2013.62014.62015.62016.62017.62018.62019.62020.62021.62022.62023.6

Financial Data
Key financial results
Net sales*1

Millions of yen

163,351

173,878

179,174

192,437

231,831249,271

220,721

185,402

183,011

241,260

227,528

Operating profit

Millions of yen

6,115

11,996

11,132

17,86429,46835,351

23,82815,95817,19730,061

19,946

Ordinary profit

Millions of yen

6,264

13,384

12,475

18,37329,71636,90725,57518,052

17,96632,20022,880

Profit attributable to owners of parent*2

Millions of yen(3,807)

11,538

8,874

16,69824,46935,904

18,665

10,76914,83020,211

14,169Net assets

Millions of yen

59,436

72,23884,92878,032

104,917

154,069

157,588

161,093

173,699

196,484

204,853

Total assets

Millions of yen

243,289

230,791

242,348

219,561

245,306

297,418

282,302282,350

292,761354,304

353,474

Cash flows from operating activities

Millions of yen

22,35732,213

21,992

23,70837,81819,086

18,282

18,73825,52033,931

1,011

Cash flows from investing activities

Millions of yen(4,506)(3,023)(4,055)(5,593)(13,713)(1,564)(9,448)(4,143)(6,925)(7,432)(15,673)

Cash flows from financing activities

Millions of yen(3,619)(16,881)(14,895)(32,448)(22,580)(10,734)(5,844)

7,455(16,061)(6,445)(5,438)Cash and cash equivalents at end of period

Millions of yen

44,20457,012

61,67044,86247,55554,34855,85977,94883,061

107,106

87,317

Net assets per shareYen

806.381,040.23

1,398.66

1,477.29

2,002.90

2,994.12

3,062.39

3,132.22

3,388.87

3,837.17

4,024.72

Earnings per share

Yen(87.79)223.18172.73338.37496.35728.68378.78218.54301.12410.37287.70Shareholders’ equity ratio

%

22.7

29.2

32.8

33.2

40.2

49.5

53.5

54.6

57.0

53.3

56.1

ROE (return on equity)*

%

—

18.8

12.1

21.9

28.5

29.2

12.5

7.1

9.2

11.4

7.3

%

2.5

5.6

5.3

8.0

12.8

13.6

8.8

6.4

6.2

10.0

6.5

Times

—

9.66

10.91

9.21

10.88

5.82

9.02

14.23

18.70

11.26

21.17

Capital expenditureBillions of yen

6.8

6.2

6.7

7.0

8.3

12.9

12.9

10.3

10.0

11.0

19.7

R&D cost

Billions of yen

5.0

5.2

5.6

6.3

6.9

8.3

9.2

8.4

8.4

10.3

13.8

Interest-bearing debt

Billions of yen

Key performance indicators

3

Ordinary profit to total assets ratio
Price-earnings ratio*4
Other indicators

106.1

89.6

82.6

62.7

42.7

35.7

35.6

49.8

39.5

39.5

42.0

Yen

—

—

10.0

30.0

50.0

95.0

105.0

80.0

95.0

124.0

109.00

Dividend payout ratio

%

—

—

5.8

8.9

10.1

13.0

27.7

36.6

31.5

30.2

37.9

Number of employees

Persons

6,579

5,971

5,904

5,886

6,072

6,439

6,424

6,370

6,063

6,235

6,264

Dividends

Non-financial Data
Rate of lost-work-time injuries*5

%

—

—

—

—

—

0.37

0.00

0.00

0.76

0.39

0.56

Voluntary retirement rate*

%

—

—

—

—

—

1.06

2.21

1.98

1.97

3.16

2.90

Localization ratio of presidents ofoverseas subsidiaries

%

—

—

—

—

—

87.8

82.4

79.4

83.8

87.1

83.3

Ratio of women in managerial positions

%

—

—

—

—

—

—

—

—

6.6

7.7

9.0

5

CO2 emissions
Total

t-CO2

—

—

—

—

—

96,65398.971

93,78190.93492.052

89,406

Group companies in Japan

t-CO2

—

—

—

—

—

61,557

63.,769

59,50255.82955,56051,225

Group companies overseas

t-CO2

—

—

—

—

—

35,09635,202

34,27935,10536,492

38,181

Amount of valuable materials
recycled

t

—

—

—

—

—

1,767

1,877

1,173

1,136

1,189

1,169

Amount of landfill

t

—

—

—

—

—

289

286

163

80

93

101

Total amount of waste recycled

t

—

—

—

—

—

6,504

6,584

4,987

4,936

4,426

4,817

Final landfill disposal rate

%

—

—

—

—

—

3.6

3.6

2.6

1.4

1.4

1.6

Waste emissions*1 Net sales do not include consumption taxes.
*2 The Company applies the “Revised Accounting Standard for Business Combinations” (ASBJ Statement No. 21, September 13, 2013) and “profit attributable to ownersof parent” is presented instead of “profit.”*3 The ROE (return on equity) figure for FY2012 is not presented because the Company recorded a net loss for the period.
*4 The price-earnings ratio for FY2012 is not presented because the Company recorded a net loss for the period.
*5 ULVAC, Inc. on a non-consolidated basis

69

ULVAC VALUE REPORT 2023

ULVAC VALUE REPORT 2023

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Financial Overview
Forward-looking statements contained in this document are based on the current assumptions and beliefs of the ULVAC Group
in light of the information available to it as of September 28, 2023.

Management’s Recognition, Analysis and Discussion of Financial Position and Operating Results

Financial Position

For the fiscal year ended June 30, 2023 (FY 2022), net sales amounted to ¥227,528 million, a decrease of 5.7% year
on year. Regarding semiconductor and electronic device production equipment, in addition to contributions frominvestment in logic, there was more active investment in power devices and optical devices and investment aimed
at shifting to domestic electronics production in China. However, within the semiconductor production equipment
field, capital investment by semiconductor manufacturers is slowing in the short term, in line with the deceleration indemand for items such as smartphones and personal computers and semiconductor memory inventory adjustment.
Regarding FPD production equipment, investment in LCDs for IT panels declined following the previous fiscal year’sheightened activity. These factors contributed to lower net sales.
Operating profit margin was 8.8%, down 3.7 percentage points from the previous fiscal year. This was mainly
attributable to a decrease in net sales for FPD production equipment and an increase in semiconductor-related R&D
cost , which is an upfront investment.
R&D cost totaled ¥13,766 million, an increase of ¥3,425 million from the previous fiscal year. The ratio of R&D costto net sales was 6.1%, an increase of 1.8 percentage points from the previous fiscal year. Strengthening research anddevelopment capabilities is one of the main initiatives in the mid-term management plan, and the ULVAC Group is
continuing to emphasize investment with a view to future growth.
Regarding objective indicators for evaluating the degree of achievement of the management policies, management
strategies, and management objectives, we have formulated a mid-term management plan covering three years
from the fiscal year ending June 30, 2024. The mid-term management plan’s basic policies are: “creating social
value through vacuum technology” and “enhancing profit and capital efficiency-oriented management.” Under thesepolicies, the ULVAC Group will use net sales, gross profit margin, operating profit margin, operating cash flow, andreturn on equity (ROE), as key performance indicators of the mid-term management plan.
Quantitative targets are net sales of ¥300.0 billion, gross profit margin of 35%, operating profit margin of 16%,
operating cash flow of ¥63.0 billion (cumulative total for three years), and ROE of 14%. The Group aims to achieve
further growth from a medium- to long-term perspective by implementing specific initiatives to attain the targets ofthe mid-term management plan.

Total assets at the end of FY 2022 amounted to ¥353,474 million, having decreased ¥830 million compared withthe figure at the previous fiscal year-end. The main factors were an increase of ¥12,522 million in inventories partly
due to a measure to deal with longer lead time for parts delivery and an increase of ¥4,593 million in property, plantand equipment due to capital investment, and a decrease of ¥19,641 million in cash and deposits in line with theseincreases.
Total liabilities amounted to ¥148,620 million, having decreased ¥9,199 million compared with the figure at theprevious fiscal year-end. The main factors were a decrease of ¥7,694 million in notes and accounts payable - trade anda decrease of ¥2,560 million in contract liabilities.
Net assets amounted to ¥204,853 million, having increased ¥8,369 million compared with the figure at theprevious fiscal year-end. The main factors were an increase of ¥8,049 million in retained earnings mainly due to therecording of profit attributable to owners of parent. As a result, the shareholders’ equity ratio at the end of FY 2022
was 56.1%. We will continue to strengthen cash flow management and other measures to further strengthen thefinancial base.

Management’s recognition, analysis and discussion of operating results by business segment are as follows.

Cash Flows from Investing Activities

Vacuum Equipment Business
Segment net sales decreased 7.7% year on year to ¥184,760 million. This was mainly attributable to year-on-year
decreases in orders received and net sales for FPD production equipment due to the decline in investment in
LCDs for IT panels following the previous fiscal year’s heightened activity, although orders received and net sales
for semiconductor and electronic device production equipment both increased year on year owing to more active
investment in power devices and optical devices and investment aimed at shifting to domestic electronics productionin China, in addition to contributions from investment in logic.
Segment profit margin deteriorated from 13.6% for the previous fiscal year to 9.0% for the fiscal year underreview. This was mainly attributable to the decrease in net sales of FPD production equipment and the increase in
semiconductor-related R&D cost.
Vacuum Application Business
Segment net sales increased 3.9% year on year to ¥42,768 million. Higher segment net sales were attributable tobrisk sales related to surface analyzers and mask blanks for high-definition and high-performance displays, which werehigher than the previous fiscal year. On the other hand, net sales of materials decreased year on year because oflower utilization rates at customer plants related to FPDs.
Segment profit margin improved from 7.1% for the previous fiscal year to 7.8% for the fiscal year under review. Thiswas mainly attributable to an increase in net sales of highly profitable products.

71

ULVAC VALUE REPORT 2023

Cash Flows
Cash and cash equivalents at the end of FY 2022 amounted to ¥87,317 million, having decreased ¥19,788 million
compared with the figure at the previous fiscal year-end. The status of cash flows from operating, investing andfinancing activities and major contributing factors were as follows.

Cash Flows from Operating Activities
While working capital increased in order to deal with longer lead times for parts delivery, net cash provided byoperating activities amounted to ¥1,011 million owing to the recording of profit before income taxes, depreciation andothers. We will continue efforts to further strengthen cash flow management to achieve operating cash flow of ¥63.0
billion (cumulative total for three years to the fiscal year ending June 30, 2026), which is the target of the mid-term
management plan.

Net cash used in investing activities amounted to ¥15,673 million. Factors for cash outflow included purchase ofproperty, plant and equipment and intangible assets.
As a result, free cash flow was negative at ¥14,662 million.

Cash Flows from Financing Activities
Net cash used in financing activities amounted to ¥5,438 million, which was mainly used for the payment of cash
dividends based on the performance-linked payout ratio.

Financial Resources and Liquidity
The ULVAC Group’s funding needs are principally for R&D investment and capital investment, which will underpin a
new growth strategy, and for working capital for business operations. The Group intends to expand investment fordevelopment in the semiconductor and electronic device fields to strengthen growing businesses. Such demand
for funds is satisfied by cash flows from operating activities and borrowings from financial institutions. In fundprocurement, the Group endeavors to level the annual amount of repayment in order to reduce refinancing risk andthe repayment burden.
While the outlook of the market environment is increasingly unclear owing to the deterioration of U.S.-China
relations and economic slowdowns in the U.S., China, etc., the Group has secured sufficient liquidity in hand inorder to ensure preparedness for contingencies. The Group has also put in place a system that enables it to secure
additional funds by concluding commitment-line contracts. Thus, the Group is capable of stable operation for thetime being. The Group will maintain the system that ensures timely access to necessary funds so as to be capable ofresponding to rapid change in the business environment.

ULVAC VALUE REPORT 2023

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Consolidated Financial Statements
Consolidated Balance Sheet(Millions of yen)

FY2021

FY2022

FY2021

FY2022(As of June 30, 2022)(As of June 30, 2023)(As of June 30, 2022)(As of June 30, 2023)

AssetsLiabilities

Current assets

Current liabilities

Cash and deposits

118,040

98,399Notes and accounts payable, trade55,03047,336

Notes and accounts receivable, trade and contract assets

86,331

83,538

Short-term borrowings

9,618

11,878Merchandise and finished goods

4,500

6,140

Lease liabilities

679

898

Work in process

29,09036,485

Income taxes payable

3,813

2,328

Raw materials and supplies

15,84919,335Contract liabilities

25,24522,685

Other

10,562

11,903

Provision for bonuses

5,918

5,072

(525)

(521)

404

368

263,847

255,280

1,387

1,726

16

313

Other

14,65114,149Total current liabilities

116,762

106,754

Long-term borrowings

29,91030,080

Lease liabilities

2,562

3,037

128

195

7,400

7,414

Provision for share awards for directors (and other officers)

272

311

Asset retirement obligations

416

409

Other

368

420

41,05741,867

157,820

148,620

Share capital

20,873

20,873

Capital surplus

3,912

3,912

152,514160,563

(344)

(345)

176,955

185,003

Valuation difference on available-for-sale securities

1,440

2,036

Foreign currency translation adjustment

12,282

12,721Remeasurements of defined benefit plans(1,700)(1,547)

Total accumulated other comprehensive income

12,022

13,209

7,508

6,641

Allowance for doubtful accounts
Total current assets
Non-current assets

Buildings and structures

Provision for bonuses for directors (and other officers)
Provision for product warranties
Provision for loss on orders received

Property, plant and equipment
85,82187,062

Accumulated depreciation(58,939)(61,146)

Buildings and structures, net

26,88325,915

Machinery, equipment and vehicles

78,272

84,162

Accumulated depreciation(62,537)(63,763)

Machinery, equipment and vehicles, net

15,735

20,399Tools, furniture and fixtures

14,682

14,840

Accumulated depreciation(12,908)(13,099)

1,774

1,741

Land

8,360

8,245

Leased assets

5,079

5,981

Accumulated depreciation(1,922)(2,311)

Leased assets, net

3,157

3,670

Construction in progress

9,087

9,617

Total property, plant and equipment

64,99569,58827

23

Software

1,603

1,746

Other

2,085

2,568

Total intangible assets

3,715

4,336

6,882

10,151

536

940

Deferred tax assets

6,990

6,245

Other

9,332

8,962

Allowance for doubtful accounts(1,995)(2,030)Total investments and other assets

21,74624,26990,457

98,193

Total net assets

196,484

204,853354,304

353,474

Total liabilities and net assets

354,304

353,474

Tools, furniture and fixtures, net

Intangible assets
Leased assets

Investments and other assets
Investment securities
Retirement benefit asset

Total non-current assets
Total assets

73(Millions of yen)

ULVAC VALUE REPORT 2023

Non-current liabilities

Deferred tax liabilities
Retirement benefit liability

Total non-current liabilities

Total liabilities

Net Assets
Shareholders’ equity

Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income

Non-controlling interests

ULVAC VALUE REPORT 2023

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Consolidated Financial Statements
Consolidated Statements of Income(Millions of yen)

(Millions of yen)

FY2021

FY2022

FY2021

FY2022(July 1, 2021-June 30, 2022)(July 1, 2022-June 30, 2023)(July 1, 2021-June 30, 2022)(July 1, 2022-June 30, 2023)

Net sales

241,260

227,528

Cost of sales
Gross profit

167,517160,366

Profit before income taxes

29,28020,72273,743

67,162

Depreciation

8,587

8,245

Impairment losses

3,090

2,311

Selling, general and administrative expenses
Selling expenses

Cash flows from operating activities

17,89329,324

Increase (decrease) in allowance for doubtful accounts

General and administrative expenses

18,03625,646

Total selling, general and administrative expenses

43,682

47,21730,061

19,946

Operating profit
Non-operating income

203

36

2,593

(869)

Increase (decrease) in retirement benefit liability

(38)

238

Increase (decrease) in provision for share awards for
directors (and other officers)

75

39

67

328

Increase (decrease) in provision for bonuses

Interest income

248

394

Increase (decrease) in provision for product warranties

Dividend income

745

429

Increase (decrease) in provision for loss on orders received

(906)

297

Foreign exchange gains

571—

Interest and dividend income

(993)

(822)

Share of profit of entities accounted for using equity method

861

2,661

Interest expenses

410

441

Other

1,312

1,579

Loss (gain) on sale of investment securities

(343)

—

Total non-operating income

3,736

5,063

Loss (gain) on sale of shares of subsidiaries and associates

(797)

—

Loss (gain) on sale of non-current assets

(59)

(153)

(861)

(2,661)Non-operating expenses
Interest expenses

410

441

Foreign exchange losses—

574

Share of loss (profit) of entities accounted for using equity
methodCommission for syndicated loans

195

287

Decrease (increase) in trade receivables(16,971)

3,629

Other

994

826

Decrease (increase) in inventories(11,348)(12,530)

Total non-operating expenses

1,598

2,128

Increase (decrease) in trade payables

15,544(8,418)32,20022,880

Increase (decrease) in net contract liabilities

10,788(2,725)

Increase (decrease) in accrued consumption taxes

594

(913)

Gain on sales of investment securities

343

—

Other

(850)

2,179

Gain on sale of shares of subsidiaries and associates

797—

Subtotal

38,067

9,373

Gain on sales of non-current assets

59

153

Interest and dividends received

1,573

1,026

1,199

153

Interest paid

(407)

(400)

Income taxes paid

(5,302)(8.987)33,931

1,011

Ordinary profit
Extraordinary income

Total extraordinary income
Extraordinary losses
Impairment losses

3,090

2,311

Cash flows from operating activities

Expenses for COVID-19 measures

1,028

—

Cash flows from investing activities

Total extraordinary losses

4,118

2,311

Payments into time deposits(20,656)(25,578)

Profit before income taxes

29,28020,722

Proceeds from withdrawal of time deposits

18,90825,495

Income taxes - current

7,549

6,100

Income taxes - deferred

290

542

Purchase of property, plant and equipment and intangible
assets(7,344)(16,311)

Proceeds from sale of property, plant and equipment andintangible assets

224

435

391

—

Total income taxes

7,839

6,642

Profit21,441

14,080

Profit (loss) attributable to non-controlling interests

1,231

(89)

Profit attributable to owners of parent

20,211

14,169ProfitProceeds from sale of investment securities
Proceeds from sale of shares of subsidiaries and associates

1,200

—

Other

(155)

285

(7,432)(15,673)

331

1,483

Cash flows from investing activities

Consolidated Statements of Comprehensive Income(Millions of yen)

FY2022(July 1, 2022-June 30, 2023)

21,441

Cash flows from financing activities
Net increase (decrease) in short-term borrowings

FY2021(July 1, 2021-June 30, 2022)

14,080

Other comprehensive income
Valuation difference on available-for-sale securities

(738)

602

Foreign currency translation adjustment

8,015

639

Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of entities accounted
for using equity method
Total other comprehensive income

(279)

154

624

(59)

Proceeds from long-term borrowings

5,400

7,300

Repayments of long-term borrowings(5,685)(6,368)

Repayments of lease liabilities
Dividends paid
Purchase of treasury shares
Dividends paid to non-controlling interests
Other
Cash flows from financing activities

(741)

(879)

(4,684)(6,115)(0)(1)(1,065)

(858)

—

0

(6,445)(5,438)

7,622

1,336

Effect of exchange rate change on cash and cash equivalents

3,991

312

29,063

15,415

Net increase (decrease) in cash and cash equivalents

24,044(19,788)

Cash and cash equivalents at beginning of period

83,061

107,106

Comprehensive income attributable to owners of parent

27,34815,357

Cash and cash equivalents at end of period

107,106

87,317

Comprehensive income attributable to non-controlling interests

1,714

59

Comprehensive income
Comprehensive income attributable to75

Consolidated Statements of Cash FlowsULVAC VALUE REPORT 2023

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Company Data/Stock Information
Company Profile As of June 30, 2023

Directors, Auditors and Executive Officers As of September 29, 2023

Name

ULVAC, Inc.

TrademarkULVAC

Head office2500 Hagisono, Chigasaki,
Kanagawa Prefecture, Japan

Established

August 23, 1952

Capital¥20,873,042,500

Number of
employees

Non-consolidated 1,710
Consolidated 6,264

President and Chief
Executive Officer
Senior Managing
Director
External Director
External Director
External Director
External Director
Auditor
AuditorExternal Auditor
External Auditor
Managing Executive
OfficerManaging Executive
OfficerManaging Executive
Officer

Stock Information

As of June 30, 2023

Total number of sharesauthorized������������������������������� 100,000,000
Total number of shares issued���� 49,355,938
Total number of shareholders���������� 12,463

Senior Executive
Officer
Senior Executive
Officer
Senior Executive
Officer
Senior Executive
Officer
Senior Executive
Officer
Senior Executive
Officer
Executive Officer
Executive Officer
Executive Officer
Executive Officer
Executive Officer
Executive Officer
Executive Officer

Setsuo Iwashita
Dr. Choong Ryul Paik
Hiroyuki Nishi
Norio Uchida
Dr. Kozo Ishida
Yoshimi Nakajima
Kazuya Saito
Yuji Morijiri
Isao Utsunomiya
Soya Honda
Tetsuya Shimada
Sadao Aoki
Yasuo Shimizu

ULVAC Group Companies As of September 30, 2023

Shigemitsu Sato

Japan

China

EuropeULVAC TECHNO, Ltd.
• ULVAC KIKO, Inc.
• ULVAC EQUIPMENT SALES, Inc.
• ULVAC CRYOGENICS
INCORPORATED• ULVAC-PHI, Inc.
• TIGOLD CORPORATION• ULVAC COATING CORPORATION• NISSIN SEIGYO Co., LTD.
• FINE SURFACE TECHNOLOGYCO., LTD.
• SHOWA SHINKU CO., LTD.

•ULVAC (CHINA) HOLDING CO., LTD.
• ULVAC (NINGBO) CO., LTD.
• ULVAC (SUZHOU) CO., LTD.
• ULVAC Orient (Chengdu) Co., Ltd.
• ULVAC ORIENT TEST AND MEASUREMENTTECHNOLOGY (CHENGDU) CO., LTD.
• ULVAC Automation Technology (Shanghai)
Corporation• ULVAC Tianma Electric (Jingjiang) Co., Ltd.
• ULVAC (Shenyang) Co., Ltd.
• ULVAC (Shanghai) Trading Co., Ltd.
• ULVAC Materials (Suzhou) Co., Ltd• ULVAC CRYOGENICS (NINGBO) INCORPORATED• ULVAC Research Center SUZHOU Co., Ltd.
• Hong Kong ULVAC Co., Ltd.
• ULVAC VACUUM EQUIPMENT (SHANGHAI)
CO., LTD.
• ULVAC Coating Technology (HEFEI) Co., Ltd.

••Tomoyasu Kondo
Takeshi Haginouchi
Seigou Kinugawa
Dr. Ju Hoon Shin
Junya Kiyota
Yu Jer Tsai
Dr. Koukou Suu
Shinji Takahashi
Kenji Yamaguchi
Sun-Gil Kim
Tadashi Oka
Yasuhiro Hara

South Korea
ULVAC KOREA, Ltd.
Pure Surface Technology, Ltd.
• ULVAC CRYOGENICS KOREA INCORPORATED

Number of Shares Held by Shareholder Type

Major Shareholders
NumberShareholdingof shares
ratio (%)
(Thousands)
7,569
15.34

Shareholder’s name
The Master Trust Bank of Japan, Ltd.
Custody Bank of Japan, Ltd.

3,734

7.57

Nippon Life Insurance Company

3,242

6.57

BBH (LUX) FOR FIDELITY FUNDS-GLOBALTECHNOLOGY POOL

3,188

6.50

TAIYO FUND, L.P.

2,477

5.02

JPMorgan Securities Japan Co., Ltd.

1,212

2.46

TAIYO HANEI FUND, L.P.

1,170

2.37

STATE STREET BANK AND TRUST COMPANY 505227

1,031

2.09

BNP PARIBAS LUXEMBOURG/2S JASDEC
SECURITIES/UCITS ASSETS

994

2.01

STATE STREET BANK AND TRUST COMPANY 505038

796

1.61

Individuals
and Other
5,062,492 shares
10.26%••ULVAC Technologies, Inc.
Physical Electronics USA, Inc.

TaiwanULVAC TAIWAN INC.
ULTRA CLEAN PRECISION TECHNOLOGIES CORP.
• ULCOAT TAIWAN, Inc.
• ULVAC AUTOMATION TAIWAN Inc.
• ULVAC SOFTWARE CREATIVE TECHNOLOGY, Co., Ltd.
• ULVAC Materials Taiwan, Inc.
••Southeast AsiaULVAC SINGAPORE PTE LTDULVAC MALAYSIA SDN. BHD.
• ULVAC (THAILAND) LTD.
•••

Treasury Stock
4,140 shares
0.01%

Participation in External Initiatives

Total
49,355,938 shares

Financial
Institutions
18,084,060 shares
36.64%

Note: Treasury stock (4,140 shares) is excluded from the calculation of shareholding ratios.

North America•

Securities Corporations
2,993,748 shares
6.07%

Domestic Corporations
1,781,351 shares
3.61%

ULVAC GmbH

Foreign Corporations
21,430,147 shares
43.42%

Signing the United Nations Global
Compact

Share Price* and Trading Volume
ULVAC, Inc.

TOPIX

(Index)Endorsing the Task Force on Climaterelated Financial Disclosures (TCFD)
Recommendations

Participating in the Semiconductor
Climate Consortium (SCC)

Trading volume(Thousand shares)

25,000

1,200
1,100
1,000

20,000900

External Recognition

800
700

15,000MSCI Japan ESG Select Leaders Index

10,000THE INCLUSION OF ULVAC, INC. IN ANY MSCI INDEX, AND THE USE OF MSCI LOGOS, TRADEMARKS, SERVICE MARKS OR
INDEX NAMES HEREIN, DO NOT CONSTITUTE A SPONSORSHIP, ENDORSEMENT OR PROMOTION OF ULVAC, INC. BY MSCI OR
ANY OF ITS AFFILIATES. THE MSCI INDEXES ARE THE EXCLUSIVE PROPERTY OF MSCI. MSCI AND THE MSCI INDEX NAMESAND LOGOS ARE TRADEMARKS OR SERVICE MARKS OF MSCI OR ITS AFFILIATES.

600
500
400
300

5,000

200
100
0

2013/6

2014/6

2015/6

2016/62017/62018/6

2019/62020/62021/62022/62023/60

FTSE Blossom Japan Sector Relative Index
FTSE Russell (Registered trademark of FTSE International Limited and Frank Russell Company) hereby certifies that ULVAC, Inc. has
qualified for inclusion in the FTSE Blossom Japan Sector Relative Index as a result of independent research. The FTSE Blossom Japan
Sector Relative Index is widely used to create and evaluate sustainable investment funds and other financial products.

*The Company’s share price and the TOPIX index indicated by line graphs as of June 30, 2013 are 100.

S&P/JPX Carbon Efficient Index

TSR (Total Shareholder Return)*
Annualized TSR
Shareholding
periodULVAC, Inc.
TOPIX

77

3 years

5 years

10 years

206.4%
157.8%

155.8%
149.3%

863.9%
252.4%ULVAC VALUE REPORT 2023

*TSR is the overall yield for shareholders that takes into account both capital gains
and dividends.
By referring to the formula prescribed by the Cabinet Office Ordinances, the yieldfor each shareholding period at the end of FY 2022 is calculated.
The closing price at the end of FY 2019, at the end of FY 2017, and at the end of FY
2012 is used as the base stock price at the start of investment for each investment
period of 3 years, 5 years, and 10 years, respectively.

The S&P/JPX Carbon Efficient Index developed by S&P Dow Jones Indices and the Tokyo Stock Exchange is designed to measure theperformance of companies in the Tokyo Stock Price Index (TOPIX), while overweighting or underweighting those companies that havelower or higher levels of carbon emissions per unit of revenue and based on their environment-related disclosure.

For details
Website >>Sustainability > ULVAC’s Sustainable Management > ULVAC’s Sustainability

ULVAC VALUE REPORT 2023

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