Financial Briefing for the
Fiscal Year Ended
March 31, 2020
April 30, 2020

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AgendaFinancial Report for the Fiscal Year
Ended March 31, 2020
Corporate Director Yukio Saeki

Forecast for the Fiscal Year Ending March 31,
2021 and Initiatives for Future GrowthPresident & Representative Director Atsushi Tokushige

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1

Financial Report

Corporate Director Yukio Saeki

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2

Summary of Financial Results for the Fiscal Year
Ended March 31, 2020
Net sales
Ordinary income
Net income attributable to owners of parent

4.0％ decrease
16.1％ increase
2.2% decrease

Sales were down and income was up compared to forecasts

Sales agent agreement with Broadcom Inc. cancelled (March 1,
2020)
No impact on financial results for the fiscal year ended March
31, 2020
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3

Summary of Financial Results: Comparison with
Prior Year
FY 2019

FY 2020(Million yen)

FY 2020
Forecast

Change141,000

135,394▲5,606

Cost of sales

121,295

115,491▲5,804Gross profit

19,705

19,902

197

16,17916,091

▲88

3,525

3,810

285

103
551

164
401

60
▲150

Ordinary income

3,077

3,573

496

3,500

Net income

2,341

2,288

▲52

2,200

No. of employees

1,210

1,216

6

Net sales

Selling, general &administrative expenses

Operating income
Non-operating income
Non-operating expenses

138,000*Net income is net income attributable to owners of parent
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Summary of Financial Results: Change in Net
Sales
FY 2019
Net Sales

EC Business(Distribution)

EC Business(PB Business)

CN Business▲¥10.3 bill.

+¥800 mill.

＋¥3.9 bill.

FY 2020
Net Sales▲億円¥135.4
Billion,億円¥141.0,億円
Billion*Amounts of change
are rounded 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 (TED Nagasaki) and FAST CORPORATION (FAST).
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5

Sales and Income by Segment••

EC Business: Sales and Income were down due to low demand for semiconductors anddelays in the transfer of some trade rights.
CN Business: Sales and income were up due to strong corporate IT investment(Million yen)
FY 2019
Net Sales

FY 2020

Segment
IncomeNet Sales

ChangeSegment
IncomeChange871▲447Electronic Components(EC) business

119,660

1,319 110,138 ▲9,522

Computer Networks(CN) business

21,340

1,757

3,915

2,701

944

Total

141,000

3,077 135,394 ▲5,606

3,573

496

25,255* Segment income is ordinary income

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Segment Information: EC Business
Sales Component Ratios by Product Category••

Sales of specialized ICs were down in conjunction with decreases in PCs, computer peripheraldevices, and smart phones
Software and circuit boards were up; TED Nagasaki, FAST, and the cloud business contributed
Software,circuit boards

Memory ICs
General purpose ICs

Microprocessors

Specialized ICs

FY 2019

24%

19%

16%

FY 2020

25%

21%

11%

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Opticalcomponents

Custom ICs

24%

10% 3 4

% %9% 4 3% %27%

Segment Information: EC Business
Sales Component Ratios by Application•

Automotive equipment increased in terms of sales and ratio; theexpansion of trade rights also contributed
Computers and peripherals decreased due to effects from economic
slowdown in China
Industrial equipment

Automotive
equipment

Computers andperipherals

Communications
equipment
Consumer
appliances andelectronics

FY 2019

43%

20%

26%

5% 6%

FY 2020

45%

24%

•

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8

21%

5 5

% %

Consolidated Overseas Subsidiaries: Net Sales̶EC
Business• Net sales were down due to the trade friction between the
U.S. and China and economic slowdown in China
FY 2019

FY 2020

Consolidated overseas
subsidiaries net sales(million yen)

35,20528,083

Consolidated overseas
subsidiaries sales ratio

29.4%

25.5%

Consolidated overseas
subsidiaries ($1M)

317

258

Exchange rate (yen)110.92108.70ChangeRate of
Change▲7,122▲20.2%▲59▲18.6%* The consolidated overseas subsidiaries sales ratio is the ratio of net sales in the EC Business
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PB Business: Net Sales̶EC Business•••inrevium: Contracted design and mass production services for industrial equipment
were sluggish
TED Nagasaki: Sales for semiconductor manufacturing equipment were firm
FAST: Contributed during the entire fiscal year (nine months in the prior fiscal year)(Million yen)

FY 2019

FY 2020

PB business net
sales

10,211

10,972

Net sales ratio

8.5%

10.0%

Change761

Rate of
Change7.5%* The net sales ratio is the ratio is the ratio of net sales in the EC business

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Segment Information: CN Business
Sales Component Ratios by Product Category• Sales of network-related products to manufacturers, data
centers, and public educational institutions increased• Net sales increased in all areas
Network-Related Products

FY 2019

Storage-Related Products

51%

FY 2020

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41%

54%

8%

38%

11

Software, etc.

8%

Segment Information: CN Business
Sales Component Ratios by Sales Format• Equipment sales and maintenance services were strong• Net sales increased in all areas
Sales to system integrators

Sales to end-users

Services

FY 2019

40%

31%

29%

FY 202037%

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36%

12

27%

Balance Sheet
Assets•

Notes and accounts receivables andinventories decreased as a result of lower
net sales

78,352
3,794

36,0960Liabilities & Net Assets•

Interest-bearing liabilities decreased as aresult of repayment of loans through areduction in operating capital

76,539(million yen)

78,352

76,539(million yen)

4,492

Cash & deposits

8,516

9,982

Notes andaccounts payable

25,43819,327

Interest-bearing
liabilities

17,98720,088Other liabilities

26,41027,141

Net assets

2019.3.31

2020.3.31

34,743

Notes and accounts
receivable

25,00722,261Inventories

5,522
7,932

7,171
7,870

Other current assets

2019.3.31

2020.3.31

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Non-current assets

130Statement of Cash Flows(Million yen)
2019.3.31
Balance of
CashOperating
C/F

Investment
C/F

Financial
C/F

Exchangedifferences,etc.

2020.3.31
Balance of
Cash

▲549
▲ 7,479

8,651

61
4,218

3,534

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14

Changes in Orders Received••

EC Business: Recovery since the 1st quarter, firm more recently
CN Business: Strong orders received as a result of expansion of corporate IT
investment demand
EC Bus.

(Million yen)

41,962
4,597

39,75436,792
6,386

31,275
4,591

34,07030,4053Q
FY 2018

4Q

26,683

1Q
FY 2019

7,424

4,716

38,05333,29032,636

6,841

4,932

25,291

26,44827,704

4Q

1Q
FY 2020

2Q

31,4786,186

37,3650

CN Bus.

29,354

2Q

32,3303Q

8,265

29,7883Q

36,1938,436

27,7564Q* TED Nagasaki is included in orders received starting with the 2nd quarter of FY 2018
* FAST is included in orders received starting with the 2nd quarter of FY 2019
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15

Forecast of Financial Results for the
Fiscal Year Ending March 31, 2021 andInitiatives for Future Growth President & Representative
Director Atsushi Tokushige
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Forecast of Financial Results for the
Fiscal Year Ending March 31, 2021

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Assumptions of Business Plan for Fiscal Year Ending
March 31, 2021
Companywide Effects from spreading of COVID-19 infections

EC Business The slowdown in China will continue as a result of the problems
between the U.S. and China

In the first half, there will be effects from the slowdown in economic
activities, but there will be a recovery starting in the second half
after infections peak

 The increased sales effects from capturing new customer trade rights
will be offset by the following items:
Decrease in sales for automotive uses due to the effects of COVID-19
Decrease in sales from cancellation of the agency agreement with
Broadcom

PB Business Investment in semiconductor manufacturing equipment will resume
for the full-scale introduction of 5G services
 Increase in contracted design and mass production business

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Assumptions of Business Plan for Fiscal Year Ending
March 31, 2021
CN Business Increases in data communications volumes will continue andsolid performance will be maintained Introduction of security products will accelerate as a result of
the expansion of teleworking
 Sales will decrease as a result of cancellation of the agency
agreement with Broadcom
 Business with public educational institutions will enter atransitional period

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Forecast of Financial Results for the Fiscal Year Ending
March 31, 2021
FY 2020

FY 2021(Million yen)

YoY Change

Full Year

1st Half
Forecast

2nd Half
Forecast

Full Year
Forecast

Net sales

135,394

65,00073,000138,000

2,605

1.9%

EC Business

110,138

54,90060,700115,600

5,461

5.0%

CN Business

25,255

10,10012,30022,400▲2,855▲11.3%

Ordinary
income

3,573

1,100

3,000

4,100

526

14.7%

411

18.0%

(income ratio)

Net income(incomeratio)(2.6%)(1.7%)(4.1%)(3.0%)

2,288

700

2,000

2,700

(1.7%)(1.1%)(2.7%)(2.0%)

ChangeRate of
Change*Net income is net income attributable to owners of parent
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Forecast of Financial Results: Changes in Net
Sales
FY 2020
Net Sales

EC Business(Distribution)+¥4.5 bill.

EC Business（PB Business）

CN Business＋¥1.0 bill.

▲¥2.9 bill.

FY 2021
Net Sales¥138.0 bill.

¥135.4 bill.

*Amounts of change
are rounded off

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21

Measures for the Fiscal Year Ending March 31, 2021:
EC Business
Net Sales

Measures(Million yen)

119,660

60,006110,138

55,855

115,600

 Promote design activities by newtransfer customers
 Pursue highly efficient operations

60,700 2nd Half Promote cloud (fee based) business Promote sales of AMS semiconductors
for automotive use

59,65354,282

54,900FY2019FY2020

FY2021(plan)

1st Half0

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Measures for the Fiscal Year Ending March 31, 2021:
EC Business
Cloud (Fee Based) Business
Microsoft Azure
 Subscription-type business Cloud solution provider program
Microsoft
Azure

Microsoft Azure
customers
441 companies(+136 cos. from prior year)

No. of resellers
154 companies(+42 cos. from prior year)

Secure High Profitability
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23

Measures for the Fiscal Year Ending March 31, 2021:
PB Business (EC Business)
Net Sales

Measures(Million yen)

10,211
5,890
4,321

4,321

10,972
5,626

12,0007,000 2nd Half

5,346

5,346

5,000 1st Half

0
FＹ2019FY2020

FY2021(plan)

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 inrevium (TED)
Reinforce contracted design and mass production
services for the healthcare and pharmaceuticalfieldsDevelop and sell private brand products
 TED Nagasaki
Expand business for semiconductor
manufacturing equipment
Promote sales of electric power system products
Reinforce production structures for TED
contracted mass production projects
 FAST
Expand business for image inspection systems
Promote development of vision robots
24

Measures for the Fiscal Year Ending March 31, 2021:
PB Business (EC Business)
Contracted design and mass production services for the healthcare and pharmaceutical fields
 DMS and ODM for healthcare equipment and specimen testing equipment
 Reinforce production structures compatible with small-lot production of diverse
products (TED Nagasaki)

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Measures for the Fiscal Year Ending March 31,
2021: CN Business
Net Sales

Measures(Million yen)

25,255
21,34014,325
12,229

 Increase sales of security products andenhance SOC services

22,40012,300 2nd Half

9,111

10,93010,100FY2019FY2020

FY2021(plan)

 Reinforce sales of core products Reinforce marketing of AI-related products

1st Half0

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Measures for the Fiscal Year Ending March 31, 2021:
CN Business 111111
Security Solutions
Demand for security measures is increasing in conjunction with the acceleration of
the introduction of teleworking by companies
Safely access internal networks
under a virtual environment

Safe use of cloud services frommobile PCs

Secure Remote
AccessCloud Security

Virtualization Platform

Endpoint Security

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27

Dividends Per ShareFY 2020

Interim¥40¥40 (planned)

Year-End¥50¥68 (planned)

Dividend Payout Ratio

108 (yen)

93
60

FY 202190

 Record high payout amount Target of 40% consolidated
payout ratio

66

 Stable and continuous
dividends have been paid

62.0
0FY2017

41.7

40.3

40.1

FY2018FY2019FY2020

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40.1 (%)
FY2021(planned)

28

0.0%

Initiatives for Future Growth

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29

VISION2020 Medium-Term Management Plan
Numerical targets for the fiscal year ending March 31, 2021
Net sales: ¥200 bill.; Ordinary income ratio: At least 3.5%; ROE: 15%●Even if targets are not achieved, ordinary income and net income will reach record levels
Net sales (¥100 mill.)
Ordinary income ratio

9.5%

ROE

3.2%

6.8%
4.2%

4.3%
1,598

1,116

1.2%

8.8%

10.0%

1,178

1.4%

1,318

1.0%

1.7%

1,410

2.2%

1,353

1,380

2.6%

3.0%

0

0.0%
FY2015FY2016

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FY2017FY2018FY2019FY2020

FY2021(planned)* ROE for FY2021 is an estimated value based on forecast results
30Initiatives for Future Growth
Promote comprehensive system development
contracting
Reinforce private brand product development
by leveraging our technological assets
Introduce new products and establish atechnical service framework
Accelerate the IoT business in the industrial
sectorCopyright © Tokyo Electron Device LTD. All Rights Reserved.

31

Promote comprehensive system development
contracting
RIKENʼs MDGRAPE-4A supercomputer for pharmaceutical applications
 Special-purpose supercomputer for highspeed molecule simulations
 TED developed board with specialpurpose LSI and designed andmanufactured the supercomputer The computer is being used to perform
simulations of the virus that causes
COVID-19 novel coronavirus infections.
The data was released to pharmaceuticalresearchers in March 2020

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32

Reinforce private brand product development byleveraging our technological assets
Maintenance

Enhance the functions of the CX-M
series of machines for predictive
maintenance AI generation

CX-M

Inspection

Incorporate TED and FAST
technologies into new products
according to customer needs

Processing

Develop robotic vision systems

TV-Counter

TriMath
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33

Introduce new products and establish a technicalservice framework
CS-1 Ultra-High-Speed Deep Learning System December 2019
Sales agent agreement signed with Cerebras
Systems
Handling of CS-1 AI special-purpose machine starts
Deep learning greatly shortens learning times
 There are also plans to develop the service business

WSE, a 21.5 cm square large semiconductor
mounted in the CS-1

Cerebras Systemsʼ CS-1
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34

The Future Image TED Seeks
MissionDRIVING DIGITAL TRANSFORMATION
Provide products and services that achieve a digitaltransformation and contribute to the sustainable developmentof a high-efficiency smart society

VisionBecome a manufacturer withtechnology trading company
functions
Medium-Term Management Plan for the Next Term
To be announced in the first quarter of this 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 Companyʼs actual future
results may differ from those indicated in this document due to various factors thathave direct and indirect impacts on the Companyʼs 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 thisdocument are the trademarks or registered trademarks of their respective holders.
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36

Supplementary Materials

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DeviceDevice
LTD. All
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EC Business: Sales Component Ratios by ProductCategory
Optical components Custom ICs
General purpose ICs

Micro Processors

FY 201924%

19%

FY 2020

25%

Product
General purpose
ICs
Micro processors

Rate of
ChangeCancellation of Linear Technology agency
Automotive and base stations increased;

2.0% POS decreased

Storage, projectors, and smart phones▲17.9% decreased

Industrial equipment (FA equipment)

8.5% Automotive increased▲17.3% Industrial equipment decreased
5.0%

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24%

4%
3%

27%

9%

▲3.9% agreement; all fields decreased

Opticalcomponents

Software andcircuit boards

11%

Industrial equipment increased; TED
Nagasaki and FAST contributed; cloudbusiness increased
38

Software and circuit boards

10% 3%4%

Main Causes▲39.3% decreased

Custom ICs

16%

21%

Specialized ICs

Memory ICs

Specialized ICs Memory ICs

Main Suppliers
TI, NXP
TI, NXP, Intel, Cypress (including
Spansion)
TI, Pixelworks, Excelitas,
NXP, Inrevium
Broadcom (Avago Technologies)
Cypress (including Spansion)Lattice, Socionext, Inrevium
Microsoft, Intel, SanDisk, Inrevium

EC Business: Sales Composition Ratios by Application
Industrial Equipment

Automotive
Equipment

FY 2019

43%20%

FY 2020

45%

Application

Rate of
Change24%

Communications Devices
Computers andConsumer
Peripheral Devices
Devices

26%
21%

5% 6%
5% 5%

Main Uses

TED Trends

Industrial
equipment▲3.1%

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

Decreases in optical components andcustom ICs; contributions by TED Nagasaki
and FAST

Automotive
equipment

navigation systems, car audio equipment,
13.2% Car
auto body-related products

Increases in micro processors and memory

Multifunctional printers, projectors, officeComputers andperipherals▲25.8% equipment, storage, PCs and peripheral

Communications
Devicesphones, routers, transmission▲7.1% Smartequipment, base stations

Consumer
Devices

devices, POS terminals▲32.5%

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

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39

Decreases in specialized ICs for storage,
specialized ICs for projectors, POS
processors
Decrease in specialized ICs for smart
phonesDecrease in specialized ICs

CN Business: Sales Composition Ratios by Product Type
Network-Related Products

Storage-Related Products

Software,other

FY 2019

51%

41%

8%

FY 2020

54%

38%

8%

Product

Rate of
ChangeMain Causes

Main Customers

Network-Related
Products

Strong sales of network switches tomanufacturing industries and data centers
25.3%
Increased sales to public educational
institutions

Arista Networks
F5 Networks

Storage-Related
Products

Strong sales of flash storage and SAN
7.4% switches to communications businesses andsystem integrators

Broadcom
DELL EMC
Pure Storage

Software, other

30.9% Increase in virtualization platforms

Nutanix

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40

Product Categories
Category
General purpose ICs

EC
Business

Functions

Analog ICs, logic ICs

ICs used in common in various applications

Micro processors

CPUs, DSPs

Brains of electronic devices, calculation and control
functions

Specialized ICs

Image processing ICs
Communications and network
ICs

Specialized ICs made for specific applications

Optical components

LEDs, photo couplers

Electronic components used to convert electricity
into light

Memory ICs

SRAM, FRAM, MRAM
Flash memory

Memory ICs for specific ICs. Readable/writable ICs
and read-only ICs are available

Custom ICs

ASIC, PLD

Made according to customer specs

Software, boards,
Power supplies, connectors

Software embedded in industrial equipment forenterprises and products (circuit boards) equippedwith ICs, power supplies, connectors and othercomponents on printed-wiring assembles

Software and circuitboardsCN
Business

Main Products

Network-related
products

Network load distribution devices
Security related devices

Storage-related
products

SAN switches
Flash storage

Connect to and store large volumes of data at highspeed

Software, etc.

Virtualization platforms

Database management, cloud environment
management

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Distribute Internet connection loads, bolster
network security

VISION 2020 REVIEW (Backup Materials)
year）

Growth(36th term/30th term)

Corrected
TargetDegree ofAchievementof Target¥135.4 bill.

¥138.0 bill.

23.7% increase¥200.0 bill.

69%

1.2%

2.6%

3.0%

1.8 point increase

3.5%△0.5 points

3.1%

8.8%

10.0%

6.9 point increase

15.0%△5.0 points

Ordinary income¥1.36 bill.

¥3.57 bill.

¥4.10 bill.

3.0 timesーー

Net income¥720 mill.

¥2.29 bill.

¥2.70 bill.

3.8 timesーー

Net income ratio

0.6%

1.7%

2.0%

1.4 point increaseーー

Dividends per share

¥60

¥90

¥106

¥46 increaseーー

30th Term

35th Term

36th Term（final¥111.6 bill.

Ordinary income
ratio

ROE

(base year)

Net sales

Performance Records Since Listing
Net sales¥159.8 bill. 33rd term（2018/3）
Ordinary income ratio 3.4%
23rd term（2008/3）
ROE
15.7%
18th term（2003/3）
Ordinary income amt. ¥3.85 bill. 23rd term（2008/3）
Net income amt.
¥2.34 bill. 34th term（2019/3）
Net income ratio
2.1%
26th term（2011/3)

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36th term Internal Budget
Net sales¥147.0 bill.
Ordinary income ¥4.2 bill.
(2.9%)Net income¥2.8 bill.

36th Term Announced/35th Term Results Growth Rate
Net sales
1.9%increase
Ordinary income 14.8% increase (0.4 point increase)
Net income
17.9% increase (0.3 point increase)(1.9%)

35th Term/34th Term Growth Rate
Net sales
4.0% decrease
Ordinary income 15.9% increase (0.4 point increase)
Net income
2.1% decrease (±0 points)

42