Interim Financial Briefing for
the Fiscal Year Ending
March 31, 2023
October 31, 2022

Copyright © Tokyo Electron Device LTD. All Rights Reserved.

AgendaFinancial Report
Corporate Director / Senior Executive Vice President
Yukio Saeki

Forecast for the Fiscal Year Ending March 31, 2023
President & Representative Director Atsushi Tokushige

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Financial Report

Corporate Director /Senior Executive Vice President Yukio Saeki
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3

Summary of Interim Financial Results for the
Fiscal Year Ending March 31, 2023
Year-on-Year Comparison: Higher sales and income
Net sales:
35.0% increase
Ordinary income: 109.9% increase
Net income attributable to owners of parent: 35.5% increase
CN Business: While IT investment has been strong, longer
product delivery times and the weak yen have hada negative impact.
EC Business: Strong demand for semiconductor products as wellas the weak yen led to positive results.
PB Business: Design and manufacturing was strong.
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Summary of Financial Results: Comparison with
Prior Year(ｍillion yen)
FY2022 Interim

FY2023 Interim

FY2023 Forecast
Revised Sep. 29

Change82,780111,769

28,98971,517

95,70624,18911,262

16,062

4,800

8,505

9,489

984

2,757

6,573

3,816

137
412

160
1,524

23
1,112

Ordinary income

2,481

5,208

2,726

4,850

Interim net income

2,646

3,584

938

3,350

Number of employees

1,280

1,313

33

Net sales
Cost of sales

Gross profit
Selling, general &administrative expenses

Operating income
Non-operating income
Non-operating
expenses

110,000* Interim net income is quarterly net income attributable to owners of the parent.
Copyright © Tokyo Electron Device LTD. All Rights Reserved.

5Foreign Exchange Losses
Exchange contracts utilized to hedge
foreign exchange risk

Example when the yen weakens
Portion of gross profit
increase as a result of
exchange rate difference

Increase/decrease in gross profit due
to the difference between the rates
on the P/L statement and exchange
contracts

Profit or loss on foreign exchange due
to settlement at the exchange
contract rate

OffsetOffsetExpenses,
etc.
Gross
profitImpact of foreign exchange fluctuations on
ordinary income is negligible
Note: However, interest rate discounts, resulting from the difference
in interest rates between Japan and the US, are exchange
contract costs and are recorded as part of foreign exchange
losses.
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Forex losses

Ordinary
incomeSummary of Financial Results: Change in Net
Sales
FY2022 Interim
Net Sales

CN Business

EC Business(Distribution)+¥24.5 bill.

¥82.8 bill.

EC Business(PB Business)

FY2023 Interim
Net Sales+¥1.8 bill.

¥111.8 bill.

+¥2.7 bill.

*Amounts arerounded off
In the segment categories, the PB Business is included in the EC Business.
PB is an abbreviation of “Private Brand;” the title was changed from In-House Brand Business, which was used in the past.
The PB Business includes Tokyo Electron Device Nagasaki Limited and FAST CORPORATION.
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Sales and Income by Segment•

CN Business: Despite longer delivery times for IT equipment, net sales increased for both product sales and services.
Income decreased due to the weak yen and increased SG&A expenses resulting from an increase in employees.

•

EC Business: Strong demand for semiconductors despite the continuing supply problems. Net sales and income bothincreased in part due to the impact of the weak yen.

(million yen)
FY2022 Interim
Net Sales

FY2023 Interim

Segment
IncomeNet Sales

ChangeSegment
IncomeChangeComputer Networks (CN)business

10,002918

12,670

2,668

903

▲15

Electronic Components(EC) business

72,777

1,563

99,09826,320

4,305

2,742

Total

82,7802,481 111,769

28,989

5,208

2,726

*Segment income is ordinary income*In the segment categories, the PB Business is included in the EC Business
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Segment Information: CN Business (1/2)
Sales Component Ratios by Product Category•••

Sales of network-related products to system integrators and enterprises were strong
Sales of security-related products grew for cloud security and endpoint security
Sales of maintenance and monitoring services were strong
Storage-Related
Products
Network-Related Products

FY2022
Interim

FY2023
Interim

30%

16%

Security-Related Products

Maintenance & Monitoring Services

10

44%

%

30%

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17%

13%

9

40%

Segment Information: CN Business (2/2)
Sales Component Ratios by Field•••

Sales to system integrators were strong in all categories
Sales of network- and security-related products to enterprises were strong
Sales to data centers decreased due to the impact of longer delivery times

System Integrators

FY2022
Interim46%

FY2023
InterimCopyright © Tokyo Electron Device LTD. All Rights Reserved.

Data Centers &Cloud Business
Operators

Telecommunications CarriersEnterprises & Others

22%

46%

19%

14%

10

13%

33%

7%

Segment Information: EC Business (1/2)
Sales Component Ratios by Product Category•••

Analog ICs: Sales increased for industrial equipment
Logic ICs: Sales increased for industrial equipment and communication base stations
Sales of boards, electronic components, etc.,
Boards, Electronic
to communication base stations increased significantly
Components, etc.

Memory ICs

FY2022
Interim

FY2023
Interim

Analog ICs

Micro Processors

37%

22%

PB

Logic ICs

15% 4 11%35%

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Software & services

19%

%

5 6
%%

18%

4
%

11

14%

4 6
% %

Segment Information: EC Business (2/2)
Sales Component Ratios by Application•••

Sales increased across all product categories
For industrial equipment, analog ICs, processors, and design and manufacturing increased
For communications equipment, sales of electronic components
and logic ICs to communications base stations increased
Computers and Peripherals

FY2022
InterimIndustrial Equipment

Automotive
Equipment

40%

23%

FY2023
InterimCommunications
Equipment

19%

45%

20%

9

8 1

%

%%

15%

Consumer Appliances andElectronics
Others

12%

7 1
% %

*The categorization for Sales Component Ratios by Application for the EC Business has been changed.
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Consolidated Overseas Subsidiaries: Net Sales—
EC Business• Strong sales for industrial equipment• Sales for computers and peripherals were weak
• Impacted by the weak yen

Consolidated overseas
subsidiaries net sales(million yen)
Consolidated overseas
subsidiaries net sales
ratio
Consolidated overseas
subsidiaries net sales($1M)
Exchange rate (yen)FY2022 Interim

FY2023 Interim

20,931

25,985

28.8%

26.2%

190

193

109.81134.03Rate of
ChangeChange

5,053

24.1%

3

1.7%

*The net sales ratio is the ratio to EC Business net sales.
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PB Business: Net Sales—EC Business• Design & Manufacturing Services : Sales for medical equipment andsemiconductor manufacturing equipment were strong• TED Nagasaki: Strong sales for semiconductor manufacturing equipment• FAST: Imaging-related products are on a recovery trend(million yen)

FY2022 Interim

FY2023 Interim

PB business net
sales

4,261

6,088

Net sales ratio

5.9%

6.1%

Change1,826

Rate of
Change42.9%*The net sales ratio is the ratio to EC Business net sales.

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Balance Sheet
Assets••Liabilities & Net Assets

Notes and accounts receivable and inventories increased
due to strong orders and sales
Prepaid expenses increased due to increased
maintenance and subscription business

107,801••

107,801130,336 (million yen)
4,975

Notes and Accounts
receivable

50,4490Inventories

15,545
8,906

17,892
8,797

Other Current Assets

3/31/2022

9/30/2022

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17,744

Notes andAccounts Payable

42,093

Interest-Bearing
Liabilities

34,891Other Liabilities

32,01835,606

Net Assets

3/31/2022

9/30/2022

15,43429,32538,994

27,766130,336 (million yen)

Cash & Deposits

5,134
59,676

Notes and accounts payable increased in conjunction
with increased orders placed
Interest-bearing liabilities increased due to demand forworking capital

31,023

Non-Current Assets

015Statement of Cash Flows
2022.3.31
Balance of
CashOperating
C/F

5,028

▲11,532

Investment
C/F

▲32

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Financial
C/F

Exchangedifferences,etc.

2022.9.30
Balance ofCash

11,290133

4,887(Million yen)

Changes in Orders Received• CN Business: In FY2023, there was an increase in long-term delivery orders,
and large orders in 1Q• EC Business: Proceeding toward normalization from 4Q of FY2022(million yen)
EC Business

76,983

CN Business
66,82760,5407,955

81,125
11,60579,76770,925

12,92680,096
7,086

8,412

6,090

6,404

43,96537,03029,282

6,973

7,668
54,136

5,059
24,2230

1Q
FY2021

29,362

2Q

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60,73669,027

69,5202Q

3Q

62,512

66,84173,01036,992

3Q

4Q

1Q
FY202217

4Q

1Q
FY20232Q

Forecast for the Fiscal Year Ending
March 31, 2023
President & Representative
Director Atsushi Tokushige
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Assumptions of Business Plan for the Second Halfof the Fiscal Year Ending March 31, 2023 (1/2)
Forecast at FY Start (Full year)

Revised Forecast (2 nd half)

Exchange rate
trend

・The yen will remain weak(compared to previous FY)

・Weaker yen than initial
forecast

Semiconductor
supply anddemand trend

・Tight supplies will continue
in the first half, but turn
hopeful in the second half・Continued tight supply formain products

Russia–Ukraine
issue

COVID-19 trend

Copyright © Tokyo Electron Device LTD. All Rights Reserved.

・It is difficult to predict the
impact on our business(not incorporated into businessplan)

・No change

・Reduced impact on economic
activity
・No change(minimal impact on businessperformance)
19

Assumptions of Business Plan for the Second Halfof the Fiscal Year Ending March 31, 2023 (1/2)
CN Business⚫ A strong environment for IT-related investment⚫ Partial recovery of longer delivery times for IT
equipment

EC Business⚫ Strong demand primarily for industrial andautomotive equipment⚫ Tight supply and demand continues primarily formain products

PB Business⚫ Strong demand primarily for industrial and medical
equipment⚫ Increasing expenses for parts and materials

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Forecast of Financial Results for the Fiscal YearEnding March 31, 2023
FY2022

FY2023(Million yen)

YoY Change

Full year

1st Half
Actual

2nd Half
Forecast

Full Year
Forecast

Change179,907

111,769

118,230

230,000

50,09227.8%

CN Business

23,46012,67014,22926,900

3,439

14.7%

EC Business(consolidated)

156,446

99,098104,001

203,100

46,65329.8%

EC Business

146,229

93,01097,189190,200

43,97030.1%

PB Business

10,217

6,088

6,811

12,900

2,682

26.3%

Ordinary income(income ratio)

7,318

5,208

5,791

11,000

3,681

50.3%

7,600

2,514

49.5%

Net sales

Net income(income ratio)(4.1%)(4.7%)(4.9%)

5,085

3,584

4,015

(2.8%)(3.2%)(3.4%)(4.8%)(3.3%)

Rate of
Change*Net income is net income attributable to owners of the parent
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Shareholder return
Dividends Per Share(yen)

Dividends / Dividend Payout Ratio

FY2023
FY2021

FY2022Beginningof term

Interim

40

105

105

145

Year-End

85

100

135

165

Dividend Payout Ratio（％）

10/28
Revised

■

40.3%

40.1%

Dividends Per Share（yen）

40.0%

40.1%

40.5%

45.0%

40.0%

Full-year

125

205

240

310

400

310

35.0%

30.0%

Dividend policy

25.0%

205
200

⚫ Dividend payout ratio: 40%

93⚫ Stable, continuous dividends

90

165

125

15.0%

10.0%

145
FY2019
22

5.0%

0.0%

0

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20.0%

F2020

FY2021

FY2022

FY2023(planned)

Promotion of Promising Businesses for Profitable
Growth (1/4)
Strengthening service
business⚫ Security products and services⚫ AI services (AI evaluation and verification)⚫ Cloud services

Strengthening
manufacturer
functions⚫ ODM (medical and specimen testing equipment)⚫ Overseas development of manufacturingsystems⚫ Improved functionality of robot vision⚫ Design and Manufacturing services
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Promotion of Promising Businesses for Profitable
Growth (2/4)
Strengthening Service Businesses

Promotion through Synergy
Software &IT systems
・Cloud services
・Security
・AI

Maintenance,
operations &monitoring⚫ Differentiation and providing highadded value

・SOC
・NOC

⚫ Accumulation of stock business⚫ Expansion of sales opportunities

ITequipment
・Networks
・Storage
Notes: SOC (Security Operation Center), NOC (Network Operation Center)
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Promotion of Promising Businesses for Profitable
Growth (3/4)
Strengthening manufacturer functions

Integrated services from planning todevelopment and manufacturing

Profitability(ODM and private brand products)

Providing assembled products
based on customer specifications(Design and Manufacturing Services)
Substrate (board)

ModuleODM products

Private brand products*ODM (Original Design Manufacturing)
Business that offers products developed andmanufactured independently under another company’s
brandTechnological Domain Needed
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Promotion of Promising Businesses for Profitable
Growth (4/4)
Strengthening manufacturer functions

Deploying Manufacturing
Systems Outside Japan

Increasing the Functionalityof Robot Vision⚫ Partnerships with local trading
companies⚫ Enhancing the practical level of picking⚫ Promoting the development ofapplications for industrial equipment⚫ We plan to begin accepting orders
from next fiscal year

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Cautionary Notes Regarding this Document
The forward-looking projections in this document were developed based on information
available at this time. Please note that the Company’s actual future results may differ fromthose indicated in this document due to various factors that have direct and indirect
impacts on the Company’s results.
If any material changes are made, the Company will announce them at that time. The
company names, product names, service names, and logos used in this document are thetrademarks or registered trademarks of their respective holders.
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27

Supplementary Materials

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LTD. AllLTD.
RightsReserved.
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28

List of Supplementary Materials⚫ Revision to the FY2023 Full Year Consolidated Results Forecast⚫ Medium-Term Management Plan VISION2025

P30
P31-P34⚫ CN Business: Sales Component Ratios by Product Category

P35⚫ EC Business: Sales Component Ratios by Product Category

P36⚫ EC Business: Sales Component Ratios by Application

P37⚫ Product Categories

P38⚫ Change in Balance of Orders Received

P39

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29

Revision to the FY2023 Full Year Consolidated Results
Forecast(Oct. 28, 2022)(million yen)

FY2023
FY2022

A: Previously
Announced
Forecast

B: This Revised
Forecast

Difference(B – A)(Apr. 26, 2022)

Net sales

179,907200,000

230,000

30,000Ordinary
income

7,318

8,500

11,0002,500

Net income

5,085

5,900

7,600

1,700

Note: Net income is net income attributable to owners of the parent.

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30

Medium-Term Management Plan VISION 2025
BUSINESS ENVIRONMENTOUR MISSION

Society 5.0 to Arrive

DRIVING DIGITAL TRANSFORMATION

Highly efficient smart society amid
Slow Economic Growth

Providing products and services that canachieve digital transformation,
thus contributing to the sustainable
development of a highly efficient smart society

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31

OUR VISION
To become a manufacturer with technology trading
company functions
Evolving technology
trading company functions⚫

⚫

⚫

The kind of manufacturer
we want to be

Business model that will generate
profits from data, service, and stockbusinesses
Maintain and expand customer basethat contributes toward growth ofbusiness as a manufacturer
Build a base for stable income

Copyright © Tokyo Electron Device LTD. All Rights Reserved.

⚫
⚫
⚫
⚫

32

Manufacturing system manufacturer
Original design manufacturer (ODM)
Design development division based onproviding solutions to issue
Highly efficient smart factories

VISION 2025 Financial Model
Pursuing Sustainable Growth with Profit and Revenue
Growth (Profit Growth Outpacing Revenue Growth)Fiscal 2025

¥200.0 billion ±10%⚫ Ordinary income ratio
>5％
⚫ ROE
>15 %
⚫ Net sales

Percentage of
total sales

Ordinary income ratio

CN Business20 %＞ 13 %EC Business

70 %

＞ 2%

PB Business

10 %

＞10 %

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33

Medium-Term Management Plan: Results and Plan
VISION2020

VISION2025
23.0%

Net sales (\100 mill.)

17.2%

Ordinary income ratio

ROE:(¥100M)

ROE(Shareholders’ equity)
9.5%

11.4%

2,300

8.8%

1,116

1.2%

4.2%

1,799

4.3%
1,598

1,178

1.4%

1,318

1.0%

More than 15.0%

Net sales:
2,000 ±10％

6.8%
3.2%

Shareholders’ equity

1.7%

1,410

2.2%

1,353

1,432

3.2%

2.6%

4.1%

Ordinary income
ratio:
More than 5.0%

4.8%

0

0.0%

FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

FY2022

FY2023(Forecast)

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34

・・・

FY2025(Forecast)CN Business: Sales Component Ratios by ProductCategory
Network-Related Products

Storage-Related
Products

FY2022
Interim30%

16%

FY2023
Interim30%

17%

Product

Rate of
ChangeSecurity-Related Products

Maintenance & Monitoring Services

10%

44%

13%

40%

Main Causes

Main Suppliers

Network-related
products

Strong equipment sales to system
27.8%
integrators and enterprises

F5
Arista Networks
Extreme Networks

Storage-related
products

42.3%

Large flash storage deal for system
integrator

Pure Storage
Dell Technologies

Security-related
products

Growth in both cloud security for system
53.6% integrators and endpoint security forenterprises

Nutanix
Netskope

Maintenance &monitoring services

14.3% Increase in storage product maintenance

TED

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EC Business: Sales Component Ratios by ProductCategory

Boards, Electronic
Components, etc. Software & Services

Analog ICs

FY2022
Interim37%

FY2023
Interim35%

Product

Rate of
ChangeMicro Processors

Logic ICs

22%
19%

Memory ICs

15%
18%

4%
4%

Main Causes

PB

11%

5% 6%

14%

4% 6%

Main Suppliers

Analog ICs

26.6%

Increase in all categories due to higher demands.

TI / NXP

Micro processors

15.9%

Increase in computer peripheral equipment andindustrial equipment. POS sluggish.

NXP / TI / Intel / Infineon

Logic ICs

60.0%

Increase for industrial equipment and base stations.
Increase for automotive equipment due to acquisitionof commercial rights.

TI / NXP / Lattice / Infineon / MaxLinear /Realtek / Socionext

Memory ICs

46.9%

Increase for automotive and industrial equipment.

Infineon

Boards, electronic
components, etc.

78.2%

Increased sales for communications base stations.
Increased sales for PC storage.

NXP / PFU / Hagiwara Solutions /ams / Western Digital / Intel

Software & services

20.0%

Increase in cloud business.

Microsoft / DELL / McAfee

PB

42.9%

Increased Design & Manufacturing Services, TED
Nagasaki, FAST

TED / TED Nagasaki / FAST

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36

EC Business: Sales Component Ratios by
Application
Automotive
Equipment

Industrial Equipment

FY2022
Interim40%

FY2023
Interim
Application

23%

45%
Rate of
Change20%
Main Uses

Communications Devices
OthersComputers andConsumer
Peripherals
Devices

19%

9%

8% 1%

15%

12%

7% 1%

TED Trends
Increase in analog IC processors due toincreased inventories of parts and materials
Increase in boards for semiconductor
manufacturing equipment and medical
equipment

Industrial equipment

53.0%

Medical equipment, broadcasting equipment,
surveillance cameras, FA equipment, measuring
equipment, industrial robots, machine tools,
semiconductor manufacturing equipment, inverters

Automotive
equipment

19.2%

Car navigation systems, car audio equipment,
autobody-related products

Increase in analog IC processors due toincreased inventories of parts and materials

Multifunctional printers, projectors, office equipment,
storage, servers, PCs and peripheral devices, POS
terminals

Large decrease in processors for POS terminals
Increase in processors for PC services and PC
storage due to increased inventories of partsand materials

Computers andperipherals

1.7%

Communications
Devices

90.8%

Routers, transmission equipment, base stations

Increase in electronic components, processors,and logic ICs for base stations

26.7%

Digital cameras, digital video cameras, TVs/DVD/AV
equipment, home gaming consoles, remote controls,
major home appliances

Increase in analog ICs for electronic musicalinstruments

Consumer Devices

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37

Product Categories
Category
Network-related
products

CN
Business

Functions

Network load distribution devices
Ethernet switches

Distribute Internet connection loads
Switching hubs

Storage-related products

Flash storage

Connect to and store large volumes of data at highspeed

Security-related products

End points, networks, cloudProtect computer systems, networks, data, etc. fromattacks, damage, and unauthorized access

Maintenance & monitoring
services

Device maintenance services and security
monitoring services

Analog ICs

Analog ICs

ICs used in common in various applications

Micro processors

CPUs, DSPs

Brains of electronic devices, calculation and control
functions

Image processing ICs Communications andnetwork applications ICs
ASIC, PLD

ICs with packaged logic circuits, special-purpose ICs
made for particular applications, special ICs madeaccording to customer specifications

SRAM, FRAM, MRAM
Flash memory

Memory ICs, readable/writable memory products, readonly products

Boards, power supplies, optical components

ICs on printed circuit boards, power supplies, productswith mounted connectors and other components(boards)

Software, cloud services

Software embedded in industrial equipment forenterprises
Provision of subscription services

Design and mass production contract
services, private brand products

Design, development and mass production of boards
according to customer specifications
Devices for manufacturing industries

Logic ICsEC
Business

Main Products

Memory ICs
Boards, electronic components,
etc.
Software & services

PB
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38

Change in Balance of Orders Received(million yen)

226,862

EC Business

CN Business

207,857
178,767
159,857
123,843

88,631

66,083049,70439,35642,943

14,637

16,982

24,71825,96030,8151Q
FY2021

2Q

3Q

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18,88949,2304Q

34,60427,08526,653

20,525

18,117133,203

16,852

34,427

151,682

173,253

192,435

103,318
70,513

1Q
FY2022
39

2Q

3Q

4Q

1Q
FY2023

2Q