Management Policies
Shoichi Tosaka
President and Chief Executive Officer
May 9, 2023

What TAIYO YUDEN Aims For
MissionVisionStronger and more sociallyaware through the wonders ofscience

Management
Philosophy
Employee well-being
Betterment of local
communities
Responsibility to provide
returns to shareholders
2Medium-term Management Plan 2025
（From FY2021 to FY2025）

Materiality
Category

Materiality

Economic
Value• Strengthen core technologies to makeour core business growSocial Value• Strengthen measures to address
climate change

E• Use resources effectively andcontribute to creating a recycling
society

Environmental

Social ValueS
SocialSocial ValueG
Governance

SDGs Targets• Create solutions to solve social issues• Achieve health-oriented management
and work style reforms at safety first
workplace• Train and develop human resources
based on the diversity policy• Improve management quality tosupport business growth• Establish and evolve BCM in
preparation for disasters or infectious
diseases4

Priority Measures in Medium-term Management Plan 2025
Aim to enhance corporate value through the combination of economic and social value

Product Strategy
1Further grow the MLCC business and strengthen inductor and communication
device products to turn them into core businesses- Create high value-added electronic components centered on high-end and high-reliability products

Market Strategy
2

Increase the proportion of sales in focus markets, primarily automotive and IT
infrastructure/industrial equipment, to 50%

Financial Strategy
3

1. Continuously expand production capacity to meet increase in demand forelectronic components
2. Aim to increase returns to shareholders and realize a stable dividend payout
ratio of 30%

ESG Initiatives
4

Accelerate our efforts with numerical targets to improve our social value- (E) Response to climate change, (S) Achieve health-oriented management and work style reforms at
safety first workplace, (G) Improve management quality

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KPIs in Medium-term Management Plan 2025

Corporate Value（Economic Value＋Social Value）
Economic Value
Net sales

OperatingmarginROE

ROIC

Social Value
480
billion yen

15%or higher

15%
or higher

10%
or higher※Exchange rate assumption：1US$=¥105

E

GHG emissions

Absolute amount
FY203042% reduction※compared with FY2020

E

Waste
Water usage

Basic unit (production volume)
FY202510% reduction※compared with FY2020

S

Safe & secure
workplace
Optimization of groupbase functions• Creating safe, comfortable andenvironmentally friendly workplaces• Incidence rate of
injuries and illness＜0.016• Accident frequency rate ＜0.08

S• Work engagement
2.5 or higher• Rate of newly recruited
female graduates
30% or higher

Work style reforms
Diversity• Female manager ratio [new addition]
FY2030 10% or higher

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Improving Economic ValueA Future Society Imagined by TAIYO YUDEN ～Towards 2025 - 2030～
The arrival of a connected world
Web 3.0, conversational AI and Metaverse trigger achange in society

Digital twin

Virtual space

Smart societyManagementwith AIManagementwith AI

Construction
IoT
×
site
Healthcare

Smart agriculture
Managementwith AI
Cloud

Smart
maintenance Management

Systems

FintechDetection andprediction ofabnormality

Interconnecting
the senses
Working from home

Wearable terminals

CASE
ADAS

Zero traffic accident society
Development
in technology

with AI

5G 6G

Base station

Smart logistics

Material/production/transport/warehouse/sales/delivery/customer inventory control
Management with AI

Wireless communication between cars and people• Electronic components of semiconductors are indispensable
for all electric devices.
• Fast-growing AI technology, IoT communications and CASE

Optical computing• Sensing solutions are explosively increasing.
Autonomous
driving8

Product development using material and multilayer technologies
Leverage outstanding technological expertise to supply high-end electronic
components that underpin technological evolution in such areas as 5G andelectrification of automobiles
High-capacitanceNielectrodeHighfrequency
circuitdesignMultilayer
ceramic filters

High-frequency

Multilayer ceramic
capacitors＋

Material
technology＋

Multilayer
technology

＋

＋

＋

＋

Piezoelectricmaterial

Solidelectrolytematerial

Actuators

Powergeneration/power
storage devices

CuelectrodeMetalmaterial

Multilayer metal
power inductors

9Sales Composition by Market Sector
Consumerproducts• TV• Game console• Smart watch

Informationequipment• Tablet device• PC• HDD, SSD

Communicationequipment• Smartphone

Targets
Focus Market

50%
Automotive

25%

IT infrastructure/
Industrial equipment
25%▶ Sales ratio ofgrowth market
was expanded

Automotive• ADAS• Meter cluster• ECU

IT infrastructure/
Industrial
equipment• Base station
communication
device• Server• Security camera

Focus
Market52%※Estimated by the Company

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Product Strategy：Capacitors
Focus on high-value-added zones by drawing on industry-leading
technological expertise
Expand production capacity in response tochanges in medium-term demand forecasts
Make some changes to the capacity expansion plan.
Increase supply capacity by accelerating the shift tohigh-reliability and large-sized products
Demand forecast for FY2025 (compared with FY2020)
VolumePrevious forecast

1.6 times(as of May 2021)

Strengthen the product appeal of highly
reliable multilayer ceramic capacitors(MLCCs)Develop products that meet the needs of automobiles,
IT infrastructure/industrial equipment
Apply elemental technologies developed in highend products• small-sized particle of dielectric materials + hightemperature compatibility and high reliability• small-sized internal electrode powder and highcontinuity↓
Forecast this time 1.4 times(as of May 2023)•

Accelerated increase in highly reliable products andlarge-sized products•

Decelerating growth in consumer and small products

Average unit price
Average unit prices rose due to an increase in
the proportion of large-sized products

External electrode technology
to meet customer needs•

Ni electrode, Cu electrode,
Ni/Cu electrode + resin

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Product Strategy：Inductors
Increase competitive advantage in power inductors
and improve profitability by improving item mix
An extensive lineup of power inductors
built on advanced elemental technologies

Improve product mix and shift to amore profitable structure

Diversify our markets and customer base by
expanding into the fields of smartphones, IoT,
automotive, and IT infrastructure/industrial equipment.
Structure
Material

Metal(MCOILTM)

FerriteMultilayer

Wire-wound

Smartphone
Smart watch
PC・Tablets

Smartphone
PC・Tablets
HDD・SSD

Smaller products by our
original metal andmultilayer technology
Expand into ADAS

Expand product line-up
for automobiles↑（Shift to metal）

Automotive
IT infrastructure/
Industrial equipment
Expand sales in highreliability market* “MCOIL” is a registered trademark or a trademark of TAIYO YUDEN CO., LTD. in Japan and other countries.

12

Product Strategy：Integrated Modules & Devices
Improve profitability
through selection and concentration

Pursue high-value-added businesses
by making use of original technologies
Communication devices

Devices for mobile communications(FBAR/SAW), multilayer ceramic filters

Expand sales for automobiles and IT infrastructure/industrial equipment

・Ensure excellent high-reliability characteristics with element material
technology and robust package structure

・Expand adoption in telematics, M2M, and IoT
Connected car
e-Call (automatedemergency call system), etc.

Smart
meter

Securityequipment

Circuit modules

Energy regeneration assist system
Developed an in-house system to be
mounted on electric-assisted bicycles that
contributes to the realization of a smart
mobility society

POS
system

New technology “TLSAW™” “HPDP”
Meet the need for high level technology which is indispensable to 5G
evolution

・TLSAW™（Element technology)…Low loss, wide band, and steep

・HPDP（Packaging technology)…Low profile and high reliability

Diversification of sales channel
Aim to expand into module applications in addition to discrete sales to
set makers* “TLSAW” is a registered trademark or a trademark of TAIYO YUDEN
CO., LTD. in Japan and other countries.

Other module business to betransferred, scaled down orwithdrawn
Reallocate resources by transferring thewireless module business to othercompanies and reducing or withdrawing fromthe power module business13

Product Strategy：Conductive Polymer Hybrid Aluminum Electrolytic
Capacitors

Expand sales in high-value-added markets, especially automobiles※Product classification：Others

Meet customer needs with a wide range of
product lineup• High reliability, large current, and low noise• A wide range of large-sized and high-capacity products
Com
pany

Com
pany

Com
pany

(ELNA)A

BC

Φ5 x 5.8✓✓

Φ6.3 x 5.8✓✓

case size

TAIYO
YUDEN

✓
✓

Increase production capacity to meet growing
demand in automotive market• Demand for automobiles is growing rapidly due to theadoption of xEVs, electrification of powertrains, andadvancement of ADAS
• Build an efficient integrated domestic system from productdevelopment to production to increase production capacity

Demand forecast for conductive polymer hybrid
aluminum electrolytic capacitors（Volume）✓

Φ6.3 x 7.7

✓

✓

✓

✓

Φ8 x 8.7✓

Φ8 x 10

✓

✓

✓

✓

Φ10 x 8.7✓

Φ10 x 10

✓

✓

✓

✓

Φ10 x 12.5

✓

✓

✓

✓

Φ10 x 16.5✓✓

Φ12.5 x 13.5✓

Φ12.5 x 16.5✓

Approx.
5.1 times

6.0
4.0
2.0

✓

0.0
2020

2025
Forecast

2030
Forecast※Estimated by the Company

14

Product Strategy：Solution Development/New Business

Develop solutions to social issues by combining our original technology
and outside technical resources
Protect people withdisasterprevention/mitigation

River water levelmonitoring system

Create a Safe, Secure,
Comfortable andConvenient Society with
IoT

IoT engine“soliotTM ”

Started offering services
to local governments
Monitor river water levels andconditions. Introduced in Fukuyama
City, Hiroshima Prefecture, andOizumi Town, Gunma Prefecture.

Participated indemonstration experimentof one-coin flood sensor
by MLIT*

River

Basin

Towards a carbon-freesociety through smart
mobility

Regenerative electric
assist systemfor electric assisted bicycle

Small size, long life and low cost.
Public-private collaboration toassess watershed flooding.
* the Ministry of Land, Infrastructure, Transport andTourism

Build efficient societal
infrastructure

Cellular LPWA modules
for smart meters“soliot” is a registered trademark or a trademark of TAIYO YUDEN CO., LTD. in Japan.

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KPIs (Economic Value)(¥ in billion)

Net sales

Operating margin

Target480.0 billion yen

Target15% or higher

ROE

ROIC

Target15% or higher

Target
10% or higher

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Improving Social ValueESG Initiatives ～E：Environmental～
GHG emissions"ZEB Ready" certification obtained

Reduce GHG emissions by 42%

The materials building of the Yawatabara Plant, which wascompleted in January 2023, has achieved significant energy
savings through its advanced architectural design and theintroduction of highly efficient equipment.

In the business-as-usual (BAU) scenario, nearly
triples due to production increases（absolute amount）

Yawatabara Plant Materials Building(Takasaki-City, Gunma Prefecture)

Selected for inclusion in CDP’s “Climate
Change A List”
Received the highest rating from CDP, theinternational environmental NPO, for excellencein climate change-related measures, strategy
and information disclosure.

Work on TCFD recommendations
Promote manufacturing thatconsiders energy conservation,energy creation and renewableenergy to realize a carbon-freesociety, and expand information
disclosure.

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ESG Initiatives ～S：Social～
Work style reforms/Diversity

Safe & secure workplace
One of the safest work environment in
manufacturing industry

Promote healthoriented management through“Focus5”

Diet

Stress

Sleep

Focus5

Improve work-lifebalance by work system reform

Nonsmoking

Exercise

Revise the childcare leave system to create a work
environment that makes it easier for both men andwomen to balance work and childcare

AFR =Number of the victims of occupational injury(at least one workday lost)
Total actual number of hours worked by registered workers

×1,000,000

Build a safer workplace through 5Ms
MachineImplementation of basic educationand creation of a “safe workplace” culture
Raise the level of equipment safety design
among designers

MethodStandardization of procedures for safe work

Material

Minimization of toxicity and danger ofchemical substancesMan

Measurement Strengthening of checking system

Expand employee training, including
management training and anti-harassment
training
Analyze responses to employee questionnaires andprovide training tailored to issues at each location andposition

Improvement of work engagement
Aim to be a company where employees
work with vitality in good health
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KPIs (Social Value)
GHG emissions
Target for FY2030
Reduce absoluteamount by 42%*As of April 1

Waste, Water usage(on a single-yearbasis(4.2)% equivalent)

Incidence rate of injuries and illness
Accident frequency rate
Targets
Incident rate (A) <0.016
Accident frequency rate (B) <0.08

Target for FY2025 (on a single-year
Reduce by 10% basis(2.0)% equivalent)(basic unit)※Change basic unit from sales volume
to production volume and retroactively
change fiscal 2021 figures

(B)

Waste
(A)
Water
usage

Work engagement

Rate of newly recruited female graduates*

Female manager ratio*

Target2.5 or higher

Target30% or higher

Target for FY2030
10% or higher

20

Capital Allocation Policy

Capital Allocation PolicyPlan to implement capital investments of ¥300 billion in total over five
years to meet increase in demand of electronic components
Medium-term
management plan 2025
(FY2021～FY2025)
IN

OUT

Capital investment plan
Concentrate investment in MLCC
• Launch of new plants (in Japan, Malaysia, andChina)(¥ in billion)• Plan annual capacity increase of 10%-15%(equipment load base)Previous medium-term
management plan

Expand production capacity of metal
power inductors and conductive polymer
hybrid aluminum electrolytic capacitors(FY2018～FY2020)
IN

OUT

Invest in environmental measures, IT,
and safe/comfortable workplace creation（approx. 10% of investment funds）

Shareholder return policy
Realize a stable dividend payout ratio of30%
Shareholder returns
16.0

Strengthening financial base
25.6

Implement share buybacks as necessary
22

Shareholder Return Policy
Aim to realize a stable dividend payout ratio of 30% as a medium-termtarget. Implement share buybacks as necessary

Annual cash dividends per
share (yen)

20

20

21

26

40

80

90

90

Basic earnings per share (yen)46.08

138.80189.93143.04227.99433.46186.3264.20

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Forward-looking statements
This document contains information about the plans, business results, andstrategies of TAIYO YUDEN CO., LTD. and the TAIYO YUDEN Group.
These forward-looking statements other than historical facts represent
judgments made by the Company based on information available atpresent and are inherently subject to a variety of uncertainties. TAIYOYUDEN cannot provide any guarantee as to the attainment of certain
figures in the future. The Company’s actual activities and business results
could differ significantly due to changes including, but not limited to,changes in the electronics market in which the Company’s businessactivities are centered. Readers should not overly rely on the information
contained in this document.

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