Chapter 4

Toward Further Growth

Medium- to Long-term Outlook

2020
Societal Trends

Advancement of Digitalization in Society

Society today is facing a variety of challenges,
including prolonged outbreaks of COVID-19,
changes in social conditions due to conflicts
between nations, abnormal weather conditions
and natural disasters caused by climate change,
human rights issues, demographic changes,
stagnation of supply chains, geopolitical risks,cyber-attacks and so forth. Mitigating climatechange and eliminating inequality in human rights
in particular are pressing issues, and global effortsinvolving not only international organizations andnational governments but also by the private
sectors are expected to become more important
going forward.

As digitalization in society accelerates, lifestyles and business models arechanging drastically with the creation of new technologies and services. In
addition, the demand for semiconductors to support these societal trends iscontinuously growing along with technological innovation. The market wasdriven by personal computers in the 1990s and mobile devices such as
smartphones in the 2000s. Today, the spread of IoT, AI, 5G/6G, cloudcomputing, the metaverse and other technologies are further increasing thedemand for semiconductors. Going forward, it is expected that there will be ashift to a world where people are connected with everything in society
through the shift to EVs for automobiles, autonomous driving, developmentof smart cities as well as smarter industries in the plant, agriculture, medicaland energy sectors.

2030

Expansion of IoTtechnologies

To the world where people and societies arelinked all together

Smart Manufacturing

Cloud server

Smart Transport
Diversification

Integration

Smart Health Care

Smart phone

Personal computers

Smart Energy

Future of Computer Technology and Semiconductors
Climate change

Human rights

Demographic changes

As data-driven society progresses rapidly, the computer technology that isresponsible for information processing will also evolve. In addition toconventional bit-based computers such as personal computers and dataservers that perform mathematical processing, new technologies such as
quantum computers and brain-inspired computers that copy the movementsof the human brain are expected to emerge going forward. A variety of services
and products are expected to give color to future society by processing
enormous amount of data at high speeds and with low power consumption inaccordance with the characteristics of each computer technology.
In addition, the semiconductor market that supports computer
technology is also expected to evolve under the three scenarios of Moore’s
Law, Customization and Hyper-Mass.

Customization: As applications and services diversify, there will be demand forsemiconductor devices that are optimized for specific applications. The overall optimizationof technologies such as design and manufacturing technology as well as implementation andsoftware technology as well as goal of maximizing efficiency are expected. In this scenario,
there will be value in quickly providing the best manufacturing method solution to meet therequirements of customers who manufacture semiconductor devices.

tionmiza ologies suchg
otsunrinC
f tech anufactu
tion oizand m
Optim s design aa

Bit-based
computers

Moore’s Law
Improved performance throughscaling and integration

Semiconductor
devices

Moore’s Law: There will continue to be increasing demand for performance improvements
through scaling and integration in the manufacturing of semiconductor devices in order tofurther increase the computational power of computers. In this scenario, there will be value
in introducing innovative technologies as well as controlling manufacturing costs.

Quantum
computers

Hyper-MaUltra
ss-efficien

Braininspired

computerst productivity

Hyper-Mass: There will be demand for an enormous amount of semiconductor devices for high-capacity data communications and their processing and analysis.
Additionally, overwhelming cost reductions will be necessary to realize a world in which everyone can enjoy the benefits of ICT (information andcommunication technology). In this scenario, there will be value in ultra-efficient productivity, including for non-advanced devices. In addition, the provision ofmanufacturing methods that autonomously optimize environmental impact will also be important.

Supply chain

Initiatives to Achieve Further Growh of Tokyo ElectronGeopolitics

Cyber security

63 TOKYO ELECTRON Integrated Report 2022

We achieved the financial model for fiscal 2024 in the previous Medium-termManagement Plan, formulated in May 2019, two fiscal years ahead ofschedule.
In response, we formulated a new Medium-term Management Plan and aVision in June 2022 to achieve further growth. The new Medium-termManagement Plan sets financial targets as well as key indicators including areas
related to ESG such as efforts to reduce greenhouse gas emissions to net zero.
We will put our Corporate Philosophy into practice by promoting TSV (TEL’sShared Value), steadily implementing the new Medium-term Management Plan,and realizing our Vision for mid- to long-term profit expansion and continuous
corporate value enhancement.

World-classoperating margin and ROE

Realization of Vision: “A company
filled with dreams and vitalitythat contributes to technologicalinnovation in semiconductors”

Medium- to long-term
profit expansion

Continuous corporate valueenhancement
Practice of Corporate Philosophy

Previous Medium-term Management Plan → New Medium-term Management PlanTSV

TEL’s Shared ValueTOKYO ELECTRON Integrated Report 2022

64

Chapter 4

Toward Further Growth

Aiming to Be a Company Filled with Dreams and Vitality

The Theworld
is currently
pushing
firmlyahead
withwith
implementing
ICT (informationand andcommunicationtechnology)
as as
world
is currently
pushing
firmlyahead
implementing
ICT (informationcommunicationtechnology)
wellwell
as takingactionto realize
decarbonizationin orderto builda strong
and andresilient
societyin which
economicas taking
actionto realize
decarbonizationin orderto builda strong
resilientsocietyin which
economic
activities
do notunder
any any
circumstances.
activities
do stopnot stop
under
circumstances.
Semiconductors
are growing
evenevenmoremore
importantas social
infrastructure
withwith
increasing
technologicaldemands
suchsuch
Semiconductors
are growing
importantas social
infrastructure
increasing
technologicaldemands

Towardbuilding
a strong
andresilient
societyin whichTowardbuilding
a strong
andresilient
societyin which
economic
activities
dodo
notnotstop
underanyanycircumstances
economic
activities
stop
under
circumstancesas larger
capacity,
higherspeed,
higherreliability
and andlower
power
consumption.
as larger
capacity,
higherspeed,
higherreliability
lower
power
consumption.
Tokyo
Electronwill strive
towardmediumto long-term
profitexpansionand andcontinuous
corporatevalueenhancement
Tokyo
Electronwill strive
towardmediumto long-term
profitexpansion
continuous
corporate
valueenhancementby continuously
creating
high-value-added,
leading-edge
equipment
and andtechnical
services
to applyits expertiseas a as aby continuously
creating
high-value-added,
leading-edge
equipment
technicalservices
to applyits expertisemanufacturerof semiconductor
production
equipment
and andusing
all management
resources,
includingits employees
manufacturerof semiconductor
production
equipment
using
all management
resources,
includingits employees
whowhocreateand andfulfillfulfill
company
values.
createcompany
values.

Developmentof ofDevelopment
a data-driven
societyandanda data-driven
societypreservationof ofpreservation
the theglobalenvironment
globalenvironment
ICT/DX
ICT/DX Decarbonization
Decarbonization

Increasing
importanceof ofIncreasing
importancesemiconductors
semiconductors
as social
infrastructure
as socialinfrastructure

Led Ledby technologicalby technologicalinnovationof semiconductors
innovationof semiconductors
Largercapacity,
higherspeed,
Largercapacity,
higherspeed,
higherreliability
andandhigherreliability
lower
power
consumption
lower
power
consumption

Basedon these
activities,
we willour Vision,which
specifies
our medium-to
long-termbusiness
aspirations
and andBasedon these
activities,
we realize
will realize
our Vision,which
specifies
our medium-to
long-termbusiness
aspirations
the directionof ourfuture;practice
our Corporate
Philosophy,
which
specifies
our mission
in society
and andthe thethe directionof nearour nearfuture;practice
our Corporate
Philosophy,
which
specifies
our mission
in society
purposeof ourand andmeetmeetthe expectationsof allofofallour
purposeof existence;
our existence;the expectationsof stakeholders.
our stakeholders.
We started
our 60th
fiscalfiscal
yearyearin April
2022.
Going
forward,we will
to takeon challenges
and andevolveto betoabe aWe started
our 60thin April
2022.
Going
forward,
we continue
will continue
to takeon challenges
evolvecompany
filledfilledwithwith
dreamsand andvitality
thatthatis loved
and andhighlytrustedby allbystakeholders.
company
dreamsvitality
is loved
highlytrustedall stakeholders.

Createsocialandeconomic
value
byby
continuously
creating
Createsocialandeconomic
value
continuously
creating
high-value-added,
leading-edge
equipment
andtechnical
services
high-value-added,
leading-edge
equipment
andtechnical
servicesto toutilizeexpertiseas asa manufacturer
of ofsemiconductor
utilizeexpertisea manufacturer
semiconductor
production
equipment
andall allmanagementresources
production
equipment
andmanagement
resources
Corporate
Philosophy
Corporate
Philosophy

WeWe
striveto tocontributeto tothethedevelopment
strivecontributedevelopmentof ofa dream-inspiring
societythrougha dream-inspiring
societythroughourourleading-edge
technologies
andreliableleading-edge
technologies
andreliable
serviceandsupport.
serviceandsupport.

65 TOKYO ELECTRON Integrated Report 2022

Mediumto to
long-term
profitexpansionandMediumlong-term
profitexpansionandcontinuous
corporatevalueenhancement
continuous
corporatevalueenhancement

Meetthetheexpectationsof ofall all
stakeholders
surrounding
Meetexpectations
stakeholders
surrounding
thethecompany
byby
realizing
Visionandpracticing
Corporate
Philosophy
company
realizing
Visionandpracticing
Corporate
Philosophy

TOKYO ELECTRON Integrated Report 2022

66