TOKYO ELECTRON ANNUAL REPORT 2014

PAGE8CONTENTSCONTENTS

Financial Highlights

Business Overview

Talking about
Tokyo Electron

Top Message

Review of Operations
and Business Outlook

Corporate GovernanceCorporate Citizenship

R&D / Intellectual Property

Financial Section

Corporate Data

Talking about Tokyo Electron

Talking about Tokyo Electron

Talking about Tokyo Electron
Corporate Culture:
Key to Tokyo Electron’s Growth

Tetsuo Tsuneishi
Vice Chairman of the Board,
Assistant to the CEO,Corporate Strategy, IR

Since its founding, Tokyo Electron
has held firmly to the management
philosophy of providing cutting-edge
products and excellent service. We’re
proud of the contributions Tokyo
Electron has made to the development of the electronics industry byoffering high added value.
So why has Tokyo Electron beenable to achieve such growth, andhow did we reach this current point,where the Company is now, once
again, able to aim for further growth
going forward? There are a few key
factors behind this trajectory.
One such factor is the desire
shared throughout the Company tobecome number one in the industry. Another is the corporate culture that we have nurtured since
our founding. Understanding thereasons the Company exists,always putting customers first andsetting high performance targets—these are all of course important.
But what really powers Tokyo
Electron’s growth lies elsewhere:
we aim for a personnel system thatis fair, just and rigorous in evaluating the performance and true abilities of each employee, aworkplace atmosphere that is rooted in honesty and integrity while
frank and open, and a work environment that allows all employees
to challenge themselves andengage their work with vigor. I
believe that this corporate culture
is what has made the Company’s
growth possible.
Our strong corporate culture not
only enabled past management
and employees to expand into new
business areas, but also enabled
the adoption of progressive corporate governance. Tokyo Electronuses an audit & supervisory board
system and has furthermore established a Compensation Committee,
Nomination Committee and Ethics
Director within the Board ofDirectors. The Company was oneof the first in Japan to disclose
individual remuneration of representative directors. In these ways,
we maintain highly independent,
transparent operations.
Today, with new opportunities
ahead, we will continue nurturing ourexemplary corporate culture andcorporate governance as we aim to
use the planned merger with Applied
Materials to increase corporate
value, recognizing the return of value
to all stakeholders as our mission.

A Trusted Brand Built evolving. To continue growing, wemust utilize teamwork. With teamon Quality Products work, we can move quickly andBy squarely facing the demands ofthe market and our customers,
Tokyo Electron has achieved leadership in the semiconductor production equipment industry.
Moreover, everyone in theCompany—from manufacturing tosales to service—trusts eachother, takes individual responsibility and works with conviction toexceed customer expectations.
Nor can we forget the contributions of our partner companies todevelopment and manufacturing;working together, we have createdhigh quality products and inspired
one another to push our technologies and capabilities further.
These values have been Tokyo
Electron’s strength from thebeginning. They support ourbrand. They are why customers
trust Tokyo Electron to always
meet their expectations.
In terms of manufacturing, webegan implementing TPM* in theearly 2000s as part of efforts toachieve innovation in manufacturing. From the development anddesign stages, we build QCD** in.
We seek to leverage the advantagesof our existing integrated development and manufacturing whilesteadily improving production processes. The true value of such
efforts will be proven at the new
Miyagi plant, where we commenced
operations in 2011 with the aim ofmaking it the world’s top semiconductor production equipment plant.
The industries that Tokyo
Electron serves are constantly

maximize the impact of each individual’s creativity and ourstrengths in fundamental technologies. With teamwork, we can create and maximize the value weprovide our customers. In theupcoming merger with Applied
Materials, we will need to adapt tosucceed, even as we sustain
existing competitive strengths.
Both will be crucial. By learningfrom each other and working to
combine our strengths, I am surethat we can break new ground in
manufacturing.
*	TPM: Total productive management, an
approach that involves all personnel to reduce
waste and promote efficiency in manufacturing and production.
**	QCD: Quality, cost and delivery, three key priorities in production management.

Hirofumi Kitayama
Representative Director,
Senior Executive Vice President,
Business Ethics, CSR Promotion,
Production and Technology,
System Development Division, IT,General Manager, Production
Division (Quality)

Blazing the Trail withOur Customers
Tokyo Electron has grown andevolved focusing on the semiconductor production equipment business. Last year marked theCompany’s 50th anniversary.
I believe the source of ourgrowth lies in the principle of putting customers first, which hasenabled us to pursue added value
from a customer perspective, as
well as our corporate culture,
which has allowed Tokyo Electron
to consistently lead the way inadapting to evolving needs, fearlessly taking on new challenges.
In the Company’s earliest days,
we served as a distributor ofimported products with full rangeof technological support, a business area in which few other companies were involved at the time.
As the level of technological challenges rose, Tokyo Electron
evolved from trading company tomanufacturer, and has sinceearned the trust and satisfaction ofcustomers by making furtherimprovements in technology andquality. Today, our global operations span 16 countries. Tokyo
Electron deals in more than 20product categories and holds thetop market share in many of these.
We have received numerous supplier awards and the highest praise
as a partner company from ourcustomers, who rely on close collaboration with Tokyo Electron for

Hikaru Ito
Corporate Director,
Executive Vice President, SPE,
Senior General Manager,
SPE Sales Division &General Manager, ESBU

future technological development.
Further growth is expected in
the semiconductor industry as it
expands from its roots in IT applications into automobiles, medicalcare and infrastructure. These
broadening applications provide
Tokyo Electron with abundant
opportunity. To meet evolving market demands and solve emerging
challenges, we will work closelywith customers from the development and design stage of theirproducts. I am confident that we
can achieve further growth andcontinue to contribute to thedevelopment of the industry.