KOKUSAI ELECTRIC GroupCORPORATE REPORT 2023

Introduction

KOKUSAI ELECTRIC GROUP CORPORATE REPORT 2023

KOKUSAI ELECTRIC’s
Value Creation

Sustainability

Governance

Information

01

Introduction

Our Core Technologies for TomorrowⓇ

We always pursue advancing “Technology.”
We innovate by fusing our technologies,refined across multiple fields.
We always value “Tai-wa®.”
We develop the best solutions
by drilling down to the core of each issue while respecting “Tai-wa®.”
We consistently lay the foundation for tomorrowby responding to diverse needs with “Technology” and “Tai-wa®.”

Thin-film forming through
ALD* technology

Creating new technologies through synergy
between deposition and treatment technologies

The Group’s proprietary ALD technology integrating
deposition, hardware, and software technologies enables
the high level of lower-temperature processing andmicrofabrication required for next-generation semiconductor
processing as well as outstanding productivity, benefitting awide range of users and process applications.

In line with the shift to 3D semiconductor devices,
there is growing need for microfabrication anddeposition geared to high-aspect-ratio devices. We
are developing the cutting-edge deposition
technology and equipment that offers uniformity
and is suitable for mass production.
In addition to deposition, we are also a source oftreatment technologies essential for lowtemperature processing in which light, plasma, andother forms of energy are applied.

 LD (Atomic Layer Deposition): We refer to a technique forA
thin-film deposition at an atomic layer level involving a process of cyclical supply of multiple gases as “ALD.”KOKUSAI ELECTRIC GROUP CORPORATE REPORT 2023

Introduction

KOKUSAI ELECTRIC’s
Value Creation

Sustainability

Governance

Information

02

Corporate Philosophy

KOKUSAI ELECTRIC Group’s Corporate Philosophy
The Group has established its Corporate Philosophy, the KOKUSAI ELECTRIC Way, to further deepen “Tai-wa” with stakeholders and express its determination to support the
future through technology. For a future shaped by creativity and innovation, we aim to be the best partner by responding to the diverse needs of a changing world byapplying our accumulated “Technology” and emphasizing “Tai-wa”.

KOKUSAI ELECTRIC Way
Technology & Tai-wa for Tomorrow
Purpose

PurposeThe KOKUSAI ELECTRIC Group supports a future where creativity
and innovation are born out of Technology and Tai-wa.

VisionVisionYour Trusted Partner To Bring Technology
Dreams To Life

Value / Mission
Value /

Materiality

Our Technology

Refine technology
Create technology
Advance technology
Captivate with technology

Our Tai-wa

Tai-wa with cutting-edge technology
Tai-wa with the natural environment
Tai-wa with social issues
Tai-wa with ourselves

MissionKOKUSAI ELECTRIC GROUP CORPORATE REPORT 2023

KOKUSAI ELECTRIC’s

Introduction

Sustainability

Value Creation

Governance

Information

03

Contents
Introduction
01 Our Core Technologies for Tomorrow
02 Corporate Philosophy

KOKUSAI ELECTRIC’s Value Creation
04 Top Commitment
07 Value Creation Process
08 History of Value Creation
10 At a Glance
12 Value Chain
13 Value Creation Cases

Sustainability
15 The Group’s Sustainability Management
17 Materiality
19 Creation of a Sustainable Society and Conservation of
the Global Environment
30 Human Resources Management as a Source of Innovation
37 Respect and Consideration of Human Rights
39 Contribution to Society through Creativity and Innovation
44 Community Contribution Activities and Efforts to Coexist
with Local Communities

Governance46 Strengthening of the Governance System to Realize
Sustainability Management

Information
59 Company Outline, Group Network
60 Sustainability Data
62 Glossary

Editorial Policy
Under the corporate slogan, “Technology & Tai-wa for Tomorrow,” we aim to contribute to achieving the SDGs while concurrently seeking to realize a sustainable society as well as sustainable development of the Group, by pursuing economic value as well as environmental and social value through both business activities and ESG initiatives (resolution of environmental and social issues and strengthening of governance).
The KOKUSAI ELECTRIC Group Corporate Report 2023 presents the Group’s policy and reports initiatives in fiscal 2022.
We believe it is important to promote stakeholders’ understanding of the Group’s initiatives for sustainable development and we also
want this report to serve as an opportunity for purposeful “Tai-wa.” So, we selectively determine the contents and topics for inclusionand ensure the report is readily understandable, to deepen mutual understanding with our stakeholders. We would appreciate it if you
would complete the questionnaire after reading the report to help us enhance the report as a fruitful tool for further “Tai-wa.”

https://www.kokusai-electric.com/en/csr/report/enquete2023
Referenced Guidelines

Scope of This Report

GRI (Global Reporting Initiative) Standards
International Integrated Reporting Council (IIRC)
Integrated Reporting Framework
Ministry of Economy, Trade and Industry Guidance
for Collaborative Value Creation (Guidance forIntegrated Corporate Disclosure and Company-In
vestor Dialogue for Collaborative Value Creation)
ISO (International Organization for Standardization)
26000
Environmental Reporting Guidelines 2018

Period : Fiscal 2022 (from April 1, 2022 to March 31, 2023) (including some
information from fiscal 2023)
Companies : The Company and its Group companies
Publication frequency: Once a year
Publication responsibility and contact:
Sustainability Planning Department, Corporate Strategy Division
KOKUSAI ELECTRIC CORPORATION
Contact : KOKUSAI ELECTRIC CORPORATION (https://www.kokusai-electric.com/en/)https://www.kokusai-electric.com/en/information/
Published: Issued in December 2023 (English version issued in January 2024)
Next publication: September 2024 (plan)Tai-wa in the Corporate Slogan; the product names, AdvancedAce, TSURUGI-C2, MARORA, TANDUO, VERTEX, ZESTONE, QUIXACE, and QUIXACE ULTIMATE;
and the 剱 logo are registered trademarks of KOKUSAI ELECTRIC CORPORATION.

Communication Tools
Important information to facilitate understanding of the Group is compiled and included in this report.
Information on the Group’s business activities, detailed information not included in this report, and content that we want to continuously convey are posted on the Company’s website. Please refer to the website and other communication tools for more details.

WebsiteCorporate information as well as information on sustainability, products, and recruitment is posted on the
Company’s website.
KOKUSAI ELECTRIC

https://www.kokusai-electric.com/en/

Corporate Profile
We have published a Corporate Profile that provides an outline of the Group and posted this on our website.
We will promptly update this if the content changes.

https://www.kokusai-electric.com/sites/default/files/2023-12/KE_Corporateprofile_en_231117.pdf

KOKUSAI ELECTRIC GROUP CORPORATE REPORT 2023

Introduction

KOKUSAI ELECTRIC’s
Value Creation

Sustainability

Governance

Information

04

Top Commitment

As a leader in the field of deposition in the semiconductor manufacturing process, we
respond to diverse needs by leveraging our technological advantages and “Tai-wa”
unique to the Group and support a future shapedby creativity and innovation.
We greatly appreciate your understanding and support for the business activities of the KOKUSAI ELECTRIC Group.
KOKUSAI ELECTRIC CORPORATION became listed on the Prime Market of the Tokyo Stock Exchange
on October 25, 2023. We would like to take this opportunity to express our profound gratitude to all
stakeholders for their support and patronage.
Going forward, we will be more acutely conscious of our social responsibility as a listed company,
and all our executives and employees will make a concerted effort to respond to society’s trust and expectations continually in terms of both business activities and ESG initiatives (initiatives to resolve environmental and social issues and strengthen governance). In all our endeavors, we will greatly appreciate your continued support and understanding.
In fiscal 2022, starting with the establishment of the corporate slogan and the Kokusai Electric Way, we
strengthened the foundation for sustainability management, by forming the Sustainability Committee,
identifying materiality (key issues to be addressed), and participating in the United Nations Global
Compact. We thus transitioned to a phase in which we are enhancing the level of sustainability management throughout the Group.
Although the semiconductor market remains in an adjustment phase, we are vigorously promoting
R&D and capital investment for future growth.
On the other hand, the global economic outlook remains uncertain, due to factors such as the protracted Russia-Ukraine conflict, rising resource prices, supply chain disruptions, shortages of parts andmaterials, and policy rate hikes in various countries to curb inflation. From October 2022 onward, tensions between the U.S. and China have further escalated partly attributed to the U.S. government’s
tightening of restrictions on exports of semiconductor-related products to China. We must continue tomonitor geopolitical risks closely.
Despite the challenging market environment like this, the Group’s revenue for fiscal 2022 amounted
to \245,721 million, up 0.1% year on year, a record high for the third consecutive year, thanks to thesynergy between equipment sales and services.
Moreover, adjusted operating profit*1 decreased from the previous year due to increases in R&D expenses for medium- to long-term growth and selling, general and administrative expenses, such as thelabor cost, however, amounted to \64,251 million, and the adjusted operating profit margin was 26.1%.
As a result of initiatives pursued throughout the year, our batch deposition equipment continues to behighly valued by semiconductor manufacturers worldwide. We once again wish to express our appreciation to all stakeholders.
*1 The Group positions adjusted operating profit, which excludes non-recurring expenses, as a key performance indicator to properly understandthe trend of operating results for the enhancement of corporate value.

Fumiyuki Kanai
Representative Director,
President and Chief
Executive Officer

KOKUSAI ELECTRIC GROUP CORPORATE REPORT 2023

Introduction

KOKUSAI ELECTRIC’s

Sustainability

Value Creation

Governance

05

Information

Top Commitment

Practicing “Technology” and “Tai-wa” for over 70 years
The Group is a specialized manufacturer of semiconductor manufacturing equipment with ahigh share of the global market for batch deposition equipment*2 and treatment (film property improvement) equipment*3, with strengths in deposition in the semiconductor manufacturing process and film property improvement.
The Group’s main customers are the world’s foremost semiconductor manufacturers. We
have been responding to customer needs through “Technology” and “Tai-wa” for more than
70 years, ever since the Company’s foundation in 1949.
Reflecting an accelerating shift of semiconductor devices to more complex three-dimensional structures, demand has been growing for higher-quality, higher-performance, and higher-productivity semiconductor manufacturing equipment. In addition, effective responses tosupply chain risks are strongly demanded.
For us, technology is something that enables us to resolve highly challenging issues and toinnovate through constant pursuit, refinement, and fusion across multiple fields in a rapidlychanging world. We value Tai-wa, which is a Japanese word meaning dialogue. “Tai-wa” is indispensable in order to identify the essence of the various issues of our stakeholders, sincerely engage with them, and conceive of the best possible solutions. “Tai-wa” has become
an integral element of our DNA, the expression of our attitude to everything we do.
We will continue to support a future shaped by creativity and innovation by responding todiverse needs through “Technology” and “Tai-wa”.
*2 Batch deposition equipment: Equipment that performs deposition on a large number of wafers at a time by batch processing.
*3 Treatment equipment: Equipment that improves film properties after deposition by single-wafer processing

Despite the current adjustments, demand for semiconductors to further expand over the medium to long term
Traditionally, the semiconductor device market has been driven by demand for consumer applications such as smartphones and PCs. In recent years, with the addition of demand fromhigh-growth sectors involving data center utilization, such as 5G, AI, IoT, and digital transformation (DX), the market has greatly expanded. Although the market is currently in a demand
adjustment phase due to the deterioration of the global economy, strategic investments insemiconductor device manufacturing are planned in Japan and many other countries. Overthe medium to long term, expansion in demand for semiconductor devices is expected to resume, with a CAGR of approximately 12.1% from 2023 through 2027.
As the demand for semiconductor devices grows, so does the demand for semiconductor
manufacturing equipment, as semiconductor devices are under pressure to achieve higher
performance. In line with the progress of semiconductor devices, the topography of wafer
surfaces becomes more complex, and higher-value-added, higher-quality, and higher-performance semiconductor manufacturing equipment is required to form high-quality thin films.
Therefore, major semiconductor device manufacturers are planning aggressive capital investments, and despite some adjustments at present, the semiconductor manufacturing equipment market is expected to grow at an average annual rate of about 9.3% from 2 0 2 3 to2027.

Semiconductor
device market*4

2010
296.7

2010

2022
613.9

CAGR
6.2%

2015

Semiconductor manufacturing (Billions of US dollars)2027(forecast)equipment market*5(Billions of US dollars)2027(forecast)
861.7

2022
97.7

CAGR
12.1%

2023 (forecast)
546.0

2020

2010
30.5

2025 2027

2010

CAGR
9.3%
2023 (forecast)
94.8

CAGR
10.2%

2015

135.0

2020

2025 2027*4 Source: TechInsights Inc. Semiconductor Forecast (September 2023)*5 Source: TechInsights Inc. “IC Manufacturing Equipment Market History and Forecast (2018 - 2028)” (September 2023)

Expand business centering on batch deposition technology and treatment (film property improvement) technology
In line with the progress of semiconductor devices, device structures have become multilayered, more complex, and three-dimensional, and the wafer surface area that needs to be deposited has increased, requiring more difficult, high-quality deposition. In response, theGroup will emphasize sales expansion and R&D of high-value-added products, leveraging
batch deposition technology, which achieves both complex film deposition and high productivity, and treatment (film property improvement) technology, which improves the propertiesof the thin film formed while maintaining high productivity, so as to expand our business.
Moreover, we will strive to enhance our services attuned to customer needs throughout theequipment life cycle, including maintenance, repair, parts supply, relocation, and modification. Furthermore, we will emphasize the enhancement of production and development systems to respond to increasing demand while also pursuing productivity improvement by utilizing digital transformation.

Complementary relationship between batch deposition technology and ALD*6 technology
Logical solution to achieve both highly difficult deposition and high productivity

Batch deposition technology
High productivity

ALD technology
Time-consuming highly difficult deposition

Batch ALD technology capable of realizing both highly difficult deposition and high productivity
Batch deposition equipment
High Quality & High Performance
Thermal Processing System
TSURUGI-C²® 剱®
High-productivity Batch
Processing System
AdvancedAce® II

 Film deposition performance suitable fornext-generation devices and high productivity Compatible with the latest batch ALD technology
 High-quality film deposition performance and highproductivity Compatible with both batch ALD technology andbatch CVD technology*6 ALD (Atomic Layer Deposition) We refer to a technique for thin-film deposition at an atomic layer level involving a process of cyclical supply of multiple gases as “ALD.”

Introduction

KOKUSAI ELECTRIC GROUP CORPORATE REPORT 2023

KOKUSAI ELECTRIC’s
Value Creation

Sustainability

Governance

Information

06

Top Commitment

Contributing to the development of industry and society brought about by the
progress of semiconductors and the establishment of a sustainable society

Lead the industry with vigorous business reforms

We are promoting sustainability management throughout the Group in accordance with the
KOKUSAI ELECTRIC Way in order to continue to identify optimal solutions and appropriately respond to the rapidly changing business environment, increasingly sophisticated customer needs,
and sustainability-related issues. Specifically, in order to address five key issues identified as materiality, namely, contribution to society through creativity and innovation, creation of a sustainable
society and conservation of the global environment, human resources management as a source ofinnovation, strengthening of the governance system to realize sustainability management, and respect and consideration of human rights, we are executing vigorous investment for growth interms of both business and ESG and pursuing initiatives, while leveraging “Technology” and “Taiwa” unique to the Group. The Sustainability Committee discusses and promotes such initiatives.
The Group’s stakeholder engagement promotes continuous initiatives that contribute to the development of industry and society brought about by the progress of semiconductors and the establishment of a sustainable society. Through participation in international sustainability-related
initiatives such as the United Nations Global Compact (UNGC) and the Task Force on Climate-related Financial Disclosure (TCFD), we are striving to promote sustainability management whilepursuing climate action, work style reform, and strengthening of Group governance. By continuously promoting these initiatives, we will strive to maximize our corporate value.

In order to continue to anticipate and appropriately respond to the rapidly changing business environment and increasingly sophisticated customer needs, it is essential to achieve vigorous business reforms without being bound by conventional concepts. We will continue to lead the industry by always cultivating new ways to collaborate with stakeholders from new perspectives andcreating new value through the Group’s unique “Technology” and “Tai-wa”.
Most recently, we have been promoting the following initiatives as key measures:
R&D of new technologies and new products and establishment of new domains
Enhancement of added value of the equipment business
Enrichment of production and development systems, enhancement of production
efficiency
Further expansion of the service business
Entrenchment and promotion of Group governance
Expansion of the scope of Digital Transformation (DX)
Realization of sustainability management throughout the Group

Priority themes
Priority themes
Reduction ofenvironmental impact
Contribution to theenvironment throughtechnology and products
Promotion of Sustainable
Procurement

Contribution tosociety throughcreativity andinnovation
Creation of asustainable society
and conservationof the global
environment

Creation of new technologies
and new products
Enhancement of customer
satisfaction
Enhancement of economic
performance

Priority themes

Respect andconsideration ofhuman rights

Respect for humanrightsPriority themes
Respect for diversity ofhuman assets
Development of human resources
who learn on their own, think on theirown and act on their own
Maintenance and enhancement ofhealth and safety

Priority themes

Human resourcesmanagement asa source ofinnovation

Strengthening of
the governancesystem to realize
sustainability
management

Strengthening of governanceThorough management ofmajor business risks
Ensuring of managementtransparency*Materiality, priority themes, and activity items remain unchanged as confirmed by the Sustainability Committee, which met in February 2023.

For details, please refer to the Group’s Sustainability Management on P.15-18.

Support a better tomorrow of unceasing creativity and innovation
In addition to R&D of semiconductor manufacturing equipment responding to the increasing density and higher performance of semiconductor devices and improvement of productivity, theGroup will enhance sustainability management, including reduction of greenhouse gas emissions,creation of a workplace conducive to mental and physical wellbeing, and strengthening of Group
governance, thereby contributing to the establishment of a sustainable society.
We believe that sustainability management is essential for sharing initiatives throughout theGroup that are not only for the mitigation ofenvironmental and social issues but for a better tomorrow typified by continuous regeneration and enduring prosperity. The Group will
not hesitate to invest in critically important
types of capital necessary for the enhancement of sustainability management. At thesame time, we will enhance internal and external stakeholder engagement in terms ofboth business and ESG while mounting a
concerted effort to tackle challenges. In allthese endeavors, we will greatly appreciate
your further support and understanding.

Introduction

KOKUSAI ELECTRIC GROUP CORPORATE REPORT 2023

KOKUSAI ELECTRIC’s
Value Creation

Sustainability

Governance

Information

07

Value Creation Process
Our initiatives to realize the KOKUSAI ELECTRIC Way and ESG initiatives (resolution of environmental and social issues and strengthening of corporate governance) constitute the foundationof the Group’s sustainability management. Mindful of the key issues to be addressed (materiality) as the starting point, the Group is committed to contributing to development of industry
and society and establishment of a sustainable society through the semiconductor manufacturing equipment business and ESG initiatives, making effective use of the Group’s management
capital. In order to realize this value creation process, we are endeavoring to offer high-quality, high-performance products and high-value-added services.

Continuous improvements to realize the KOKUSAI ELECTRIC WayINPUTOUTPUTOUTCOME

Important capital x Value/Mission

Value creation, social contribution initiatives

Confirmation of the outcomes of the initiatives

Identification of Materiality
Deliberation by the Management
Meeting and the Sustainability Committee

FY2022 results

FY2022 results

Financial Capital

Expansion of high-val
ue-added products sales
Expansion of R&D
investment
Contribution to society
through creativity andinnovation

Intellectual Capital

Refine technology

Create technology

Some 400 employees
engaged in R&D (in Japan)

Advance technology
Social Capital

21 collaborative projects(with universities, institu
tions, other companies)

Creation of a sustainable society andconservation of the
global environment

Human resources management as a source of innovation
Strengthening of the governance system to realize
sustainability management
Respect and considerationof human rights

Captivate with technology

Natural Capital

Electricity: 28,622 MWh
Fuel oil (heavy oil, kerosene): 160 kL
Gas (city gas, LPG): 72 km3
Water (tap water, industrial water) :161 km3

Human Capital

Number of employees inJapan : 1,273
Number of employees
overseas : 1,156

Manufactured Capital

Global network: Total of 7 companies
consisting of 2 companies in Japanand 5 companies overseas

Tai-wa with cutting-edge
technology
Tai-wa with the naturalenvironment
Tai-wa with social issues

Tai-wa with ourselves

Enhancement of economic performance
Improvement of business results,
investment, etc. and confirmation of the
return on investment
Development of product lines with leading
global market shares

Creation of new technologies and new
products
Development of advanced underlying
technologies and promotion ofcollaborative development with external
institutions
Enhancement of customer satisfaction
Provision of products, technologies, andservices attuned to the voice of thecustomer

Reduction of greenhouse gas emissions
Thorough management of energy
Thorough management of water andwastewater
Reduction of waste
Promotion of sustainable procurement
Strengthening of supply chain
management
Promotion of diversity & inclusion
Work style reforms
Development of global human resources
and securing of excellent human resources
e-learning
Strengthening of occupational health andsafety management
Strengthening of corporate governance
Ensuring of management transparency
Strengthening of governance

Number of products shipped (cumulative) : 17,529 units
Revenues (consolidated) : ¥245.7 billion

P.9

P.10

Adjusted operating profit(consolidated)* : ¥64.3 billion

P.10* The Group positions adjusted operating profit, which excludes non-recurring expenses, as
an important management indicator in order to appropriately understand trends in business performance in order to improve corporate value.

Won the 10 BEST SUPPLIERS and THE BEST SUPPLIERS awards in
TechInsights’s customer satisfaction survey
Won the 10 BEST SUPPLIERS award for the 26th consecutive year
P.42

Earned Intel Corporation’s EPIC Distinguished Supplier Award
P.42

Received the TSMC Excellent Performance Award

Scope1 1,037t-CO2

P.42

Development of industry and society brought
about by progress ofsemiconductors
Enable convenient and affluent
lifestyles through diverse
semiconductor-equipped products
Enhance productivity and service
quality
Create jobs in the semiconductor
and other industries
Enrich environmentally friendly
products and initiatives
Enhance customer satisfaction

P.60

Scope2 19,384t-CO2
Scope3 1,333,351t-CO2

P.60
P.60

Energy use Intensity compared to previous year : 111%

P.24

Waste generation intensity improvement rate : 35%

P.24

New suppliers selected based on environmental criteria : 2 companies

P.29

Percentage of female managers : 3.1%

P.30

Percentage of male employees who took childcare leave : 57%

P.31

Percentage of female employees who took childcare leave : 100%
P.31

Number of e-learning courses : 91 courses
Number of occupational deaths : 0

P.33
P.36

Total number of serious legal violations,fines, charges, litigations, etc. : 0

P.61

Establishment of asustainable society
Reduce greenhouse gas emissions
and realize an energy-savingsociety
Eliminate human rights issues andenvironmental issues throughout
the supply chain
Enhance worker satisfaction(job satisfaction and engagement)
Achieve mutual development andgrowth based on good
relationships with local
communities
Strengthen resilience tovarious risks

Introduction

KOKUSAI ELECTRIC GROUP CORPORATE REPORT 2023

KOKUSAI ELECTRIC’s
Value Creation

Sustainability

Governance08

Information

History of Value Creation

70 years of history shaping the semiconductor manufacturing equipment business
ZESTONE®-III
ZESTONE®-VII

DC-7000 silicon epitaxial
growth system

VERTEX®-V (C)4,000 units®

VERTEX -IIISingle germanium/
silicon crystal puller

1940

1950

1960

VERTEX®-II

Initial model of theDD-1 diffusion
furnace1970

VERTEX®-I

1980

2,000 units

500 units(May 1990)

1990

1991

1,000 units(March 1992)

1,500 units (April 1995)

1992

1993

1994

1995

1990s

1940-1950

1980-1989

1990-1999• Began development of semiconductor manufacturing
equipment• Developed single germanium/silicon crystal puller

1961-1970• Began research on impurity diffusion in semiconductor
manufacturing equipment• Developed the initial model of diffusion furnace (DD-1)•S old the site of Komae Works to the Tokyo Metropolitan
Government and established Hamura Works (Tokyo)(March 1997)

Number of units shipped1980s

1951-1960

3,000 units(March 1994)-1970s• Focused on research of industrial equipment using radio
frequency (1947)• Kokusai Electric Co., Ltd. established (1949)• Developed 150 mm wafer-ready silicon epitaxial growth system(DC-7000)• Developed vertical CVD system (VERTEX®-I)• Implemented a plan to double production output• Implemented the second plan to double production output• Developed 150 mm wafer-ready vertical CVD system (VERTEX®-II)•R
 elocated the production site from Hamura Works to Toyama
Works (Toyama Prefecture) (1989)• Developed 200 mm wafer-ready vertical CVD system (VERTEX®-III)• Developed load-lock system (VERTEX®-V (C)) that suppresses
natural oxide film formation

1996

1997

1998

Socialsituation• Developed CVD system

High economic
growthBoom in home
appliances and carownership

Economic bubble

1999

2000

2001 (year)• Developed 300 mm wafer-ready vertical diffusion/CVD system(ZESTONE®-III)• Developed 300 mm wafer-ready single wafer CVD system(ZESTONE®-VII)• Obtained ISO 9001 certification (1995)• Obtained ISO 14001 certification (1996)

1971-1979

Postwarreconstruction(February 2000)

IT bubble

GlobalizationKOKUSAI ELECTRIC’s

Introduction

KOKUSAI ELECTRIC GROUP CORPORATE REPORT 2023

Value Creation

Sustainability

Governance

09

Information

History of Value Creation

17,529 units(as of March 2023)

15,000 units(March 2021)

14,000 units
13,000 units

16,000 units(January 2020)(December 2021)(September 2018)

11,000 units

TANDUO®

MARORA®

(May 2016)

12,000units(August 2014)(August 2017)(May 2012)

8,000 units(July 2010)

7,000 units
6,000 units

10,000 units
9,000 units

NEW QUIXACE® L/L(QLV2)(June 2007)(November 2005)

5,000 units(April 2003)

TSURUGI-C2Ⓡ 剱ⓇⓇ

QUIXACE

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2000s

2010s

2000-20092010-2019• The company name changed to Hitachi Kokusai Electric Inc.
•D eveloped single wafer plasma nitridation system (MARORA®) suitable fornext-generation process• Developed QUIXACE® incorporating QTAT (quick turnaround time) technology•D eveloped NEW QUIXACE® L/L (QLV2)•A new fab constructed at Toyama Works•D eveloped high-productivity ashing/annealing system (TANDUO®)• Became a consolidated subsidiary of Hitachi, Ltd.
• Obtained OHSAS 18001 certification (Toyama Works) (2001)

Diffusion ofdigital devices

Advent ofsmartphone

AdvancedAceⓇⅡ

AdvancedAce -300

QUIXACE ULTIMATEⓇ

Ⓡ

2002

17,000 units(October 2022)

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023 (year)

2020s-• Developed QUIXACE ULTIMATE®
• Developed AdvancedAce®-300• Developed AdvancedAce® II• Developed TSURUGI-C2® 剱®
• The company name changed to KOKUSAI ELECTRIC CORPORATION following spinoff of the
Deposition Process Solutions business (2018)

Paris Agreement adopted
SDGs adopted

Number of units shipped

Advent of a societyemphasizing
sustainability

2020-• Obtained ISO 45001 certification(Toyama Technology & Manufacturing Center) (2021)• Endorsed the TCFD recommendations (2021)• Introduced a solar power generation system at the
Toyama Technology & Manufacturing Center (2022)• Signed the United Nations Global Compact (UNGC)(2022)• Registered for the TOYAMA SDGs PROJECT (2022)• Participated in SEMI’s Semiconductor Climate Consortium as a founding member (2022)• Disclosed information in accordance with the TCFD
recommendations (2023)

TCFD
recommendations

COVID-19 pandemic
Russia's invasion of Ukraine

Introduction

KOKUSAI ELECTRIC GROUP CORPORATE REPORT 2023

KOKUSAI ELECTRIC’s

Sustainability

Value Creation

Governance

10

Information

At a Glance

Product lines with leading global market shares
Batch deposition equipment

Treatment equipment

Global share

Global share

2

2

NO.

NO.

(2022)*2(2022)*

1

High Quality & High Performance
Thermal Processing Equipment
TSURUGI-C2® 剱®

High-productivity Batch
Processing System
AdvancedAce® II

Single Wafer Plasma Nitridation/
Oxidation System
MARORA®

As an equipment manufacturer specializing in the deposition process of the front-end semiconductor manufacturing process, the Group has developed batch deposition equipment and treatment
equipment that have high market shares.
*1 Equipment in the “Tube CVD” segment of Gartner’s semiconductor manufacturing equipment (front-end process) classification is defined as “batch deposition equipment.”*2 Equipment in the “RTP and Oxidation/Diffusion” segment of Gartner’s semiconductor manufacturing equipment (front-end process) classification is defined as “treatment equipment.”
Source : “Gartner®, "Market Share: Semiconductor Wafer Fab Equipment, Worldwide, 2022," Bob Johnson, Gaurav Gupta, Menglin Cao, 17 April 2023
Charts/graphics created by KOKUSAI ELECTRIC based on Gartner research. Gartner research. Calculations performed by KOKUSAI ELECTRIC. GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally and is used herein with permission.
All rights reserved. Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner’s
research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.

Revenues by Region (Consolidated)*3
2%
6%■ Equipment

31%¥245.7 59%
billion10%
69%■ Batch deposition equipment■ Treatment equipment■ Services

23%

13%
6%

¥245.7billion

34%

17%
87%

■ Japan■ USA■ China■ Taiwan■ South Korea■ Other Asia
■ Europe and others■ Overseas total

Revenues (Consolidated)¥245.7(billion yen)

200

Adjusted operating profit(Consolidated)*4

¥64.3

250

billionbillionRevenues

Revenues by Business (Consolidated)*3

245.4

245.7

2021

2022 (fiscal year)

178.0

150
100
50
0

2020

During the fiscal year under review, the global economy was confronted by the protracted Russia-Ukraine conflict and rising resource prices, as well as supply chain disruptions and shortages of parts and materials, and policy rate increases by various countries to curb inflation, and consequently the outlook remained uncertain.
Owing in part to the uncertain macroeconomic situation, the tempo of the semiconductor market relevant to the Group slowed, though the market had experienced risingdemand even during the COVID-19 pandemic. Demand for semiconductors, especially memory, declined because of lower demand for smartphones and personal computers, and some device
manufacturers revised their capital investment plans. However, over the medium to long term, growth is anticipated in view of expanding demand for data centers driven by the spread of 5G, AI,
IoT, digital transformation (DX), etc., and the shift to electric vehicles (EVs) as green transformation (GX) progresses underpinned by investment aimed at reducing environmental impacts.

Overview*3 The above figures are for the fiscal year ended March 31, 2023, calculated based on customers’ locations.
*4 The Group positions adjusted operating profit, which excludes non-recurring expenses, as a key performance indicator to properly understand the trend of operating results for the enhancement of corporate value.

Introduction

KOKUSAI ELECTRIC GROUP CORPORATE REPORT 2023

KOKUSAI ELECTRIC’s
Value Creation

Sustainability

Governance

Information

11

At a GlanceGroup network
Japan

Overseas

Global Human Resources (Consolidated)*

Number and Percentage of Personnel
by Region (Consolidated)*
2.1%

4.3%

2

5

companies

47.6

companies

(50)

(105)

■ Japan■ Asia(excluding Japan)

■ USA

%
41.2%
(1,001)

Number of
employees:
2,429■ Europe

52.4%(1,273)as of March 31,
2023*The number of employees of the Company as of March 31, 2023 was 2,429, of which employees working overseas accounted for 47.6%.
*There are no significant changes in the composition of the personnel.

Sites in Japan

Overseas Sites

Kamiichi Works (KSS)●
Toyama Technology &Manufacturing Center●

Kokusai Electric Korea Co., Ltd.(Kook Je Electric Korea Co., Ltd.): ○●◎Head Office, Main Factory
Pyeongtaek Factory

Kitakami◎
Service
Station (KSS)

Kokusai Electric Semiconductor○ ◎Service Inc. (KSS)）
Kokusai Semiconductor Europe GmbH:
Head Office
Ireland Office

Head Office○(KE)

Kokusai Semiconductor
Equipment Corporation:
Head Office

Israel Office

Kanto Center◎(KSS)
Chubu Center (KSS)◎

KE Semiconductor Equipment (Shanghai) Co., Ltd. :Head Office

Hiroshima Center (KSS)◎
Fukuoka Center (KSS)◎

Head Ofﬁce, distribution

Production

Service

Kokusai Electric Asia Pacific Co., Ltd. :Head Office
Singapore Branch

Main Centers for Development, Design, and Production
Toyama Technology & Manufacturing Center

Kamiichi Works of Kokusai Electric Semiconductor Service Inc.

Cheonan-si Head Office and Main Factory of Kokusai Electric Korea Co., Ltd.

Pyeongtaek Factory of Kokusai
Electric Korea Co., Ltd.

Located in Yatsuomachi, Toyama, with aview of the Tateyama mountain range,
this factory has special-purpose clean
rooms where semiconductor manufacturing equipment for next-generation processes is developed, designed, and produced to meet the demanding needs ofmajor users worldwide.

Located amid a rich natural environment in Toyama Prefecture’s Kamiichi Town at the foot of Mt.
Tsurugidake in Japan’s Northern Alps, the factory
develops, designs, and produces ultrasoniccleaning machines and resistivity measurement
systems. It also produces controllers for semiconductor manufacturing equipment. These
products are supplied to users across the world.

Located in Cheonan-si, Chungnam, about
100km south of Seoul, the capital ofSouth Korea, Kokusai Electric Korea Co.,
Ltd. designs, produces, and upgrades
semiconductor manufacturing equipment, supplying products mainly to users
in South Korea.

Pyeongtaek in Gyeonggi Province is located to the south of Seoul, the capital ofSouth Korea. As the service base for South
Korean users, and also developing theevaluation of semiconductor manufacturing equipment, it meets the needs for advanced technologies and products utilizing
local production for local consumption.

KOKUSAI ELECTRIC’s

Introduction

KOKUSAI ELECTRIC GROUP CORPORATE REPORT 2023

Value Creation

Sustainability

Governance

Information

12

Value Chain

Promoting continuous improvements to realize the KOKUSAI ELECTRIC Way
The Group believes that the outcome is to have a positive impact on society through the promotion of continuous improvements to realize the KOKUSAI ELECTRIC Way by effectively utilizing six types of capitalin the value chain. In addition to the research and development of semiconductor manufacturing equipment targeting world-class deposition, including nanometer-scale microfabrication approaching the physical limit, and productivity improvement, we are promoting environmental protection, creation of a rewarding work environment, strengthening of supply chain management, and other socially beneficial initiatives throughout the whole value chain. We will continue our efforts to provide high-quality, high-performance products and services that embody high added value and establish a sustainable society.

Research anddevelopment
As distinct from our underlying
technologies, joint developmentof next-generation high-performance semiconductor technologies as well as deposition andmanufacturing technologies withresearch institutions

Financial Capital
P.5

B usiness expansion through theresearch and development of
new technologies and new products and the establishment of
new business domains
Further enhancement of the service business attuned to customer needs throughout the productlife cycleE nhancement of production anddevelopment systems to respondto increasing demand and productivity improvement utilizing
digital transformation (DX)

DesignProcurement

Implementation of advanced technologies such as 3D CAD-based
design and fluid simulations
Design of equipment tailored tocustomer needs, making the best
possible use of our underlying
technologies

Manufactured Capital
P.13 14

Management at an automatedwarehouse of over 15,000 types ofparts sourced from business partners at various locations

Natural Capital

Manufacture
Manufacturing of a wide variety of
products in a cleanliness class5000 cleanroom
Use of the cell station production
method for unit assembly to further streamline tasks and increase
productivity

Social Capital

P.24

P rovision of technology required
for manufacturing high-performance semiconductor devices
P rovision of high-productivity
manufacturing equipment
P rovision of environmentallyfriendly energy-saving manufacturing equipment

Promotion of initiatives and information disclosure based on TCFD
recommendations about climate-related risks and opportunities
Promotion of activities to improvewater quality in rivers and conserve biodiversityP romotion of review of effluent
treatment methods for waste
acid, which accounts for a substantial proportion of waste

P.28 52

S trengthening of supply chain
management through sharing of
the Sustainable Procurement
Guidelines, commendation of excellent business partners, and implementation of procurement BCP.
Website renewal, launch of the
Global Site, production of a company profile video, enrichment ofnews releases, enrichment of the
Corporate Report, and renewal ofinternal newsletter

Shipment
Strict product inspections and delivery inspections at every phase
Shipment of completed equipment
worldwide using environmentallyfriendly shippingIntellectual Capital
P.40

Equipment installation, assembly, wiring,
testing/tuning, and process launch tasks
according to customer deadlines
Periodic maintenance and proposals of
various functional improvement measuresthat lead to higher quality and productivity through “Tai-wa” with customers

Human Capital
P.32 49

Introduction of smart manufacturing systems in pursuit of innovative manufacturing

U pskilling programs, including
technical skills training, lectures,and presentation skills training

Introduction of online remotetraining in pursuit of safe and efficient operation

Development of global human resources through language training,transfer of human resources between overseas sites, etc.

Utilization of AI in processes andquality management in pursuit ofdata science-based developmentof materials

Reduction of waste and the environmental impact throughout the life cycles of products
1. Promotion of Design for Environment for products and green procurement
2. P romotion of use of sustainable resources and efficient use of resources
3. C
 limate change mitigation and reduction of consumption of electricity andother energy

Installation and setup Servicing and maintenance

4. P rotection of biodiversity and ecosystems andappropriate management of chemical substances
5. P romotion of efficient use of water and reduction ofwater consumption

Awareness survey of executive officers about skills whose degreeof importance and priority will increase in light of the Company’s
management needs

KOKUSAI ELECTRIC GROUP CORPORATE REPORT 2023

Introduction

KOKUSAI ELECTRIC’s
Value Creation

Sustainability

Governance

Information

13

Value Creation Cases
Social Issues Related to the Development of Deposition
and Treatment Technologies
1 vanced technolo-

Semiconductor manufacturing equipment is a source of innovation for the semiconductor industry, enabling the development of high-performance electronic devices and technological innovation in various fields.

2 Creation of jobs

To manufacture semiconductor manufacturing equipment,
we employ engineers with high-caliber technological expertise. We have partnerships with many companies in our supply chain and create jobs in our partners’ industries.

Diffusion of technolo3 gies and promotionof education

We are continuously refining technologies related to product development and manufacturing, thereby providing other parties in theindustry and research institutions, such as universities, with benefits
related to technology diffusion as well as educational opportunities.

Promotion of adgies

Technological Capabilities to Address Social Issues—Thin Film Forming Technology in Semiconductor Process Development—
High-performance semiconductor devices created using our technology contribute to a wide range oftechnological fields, including AI, automation, and high-speed communication.
In line with the higher integration and miniaturization required for semiconductor devices, for athree-dimensional structure with large surface areas and complex patterns, high-quality and conformal
deposition technology is always needed. In these circumstances, we have been responding to customer
needs for various types of film and offering solutions to issues using our batch atomic layer deposition(ALD*) technology.
Conventional batch ALD deposition technology
In order to respond to further changes in semiconductor devices, higher integration, and miniaturization in the future, we have improved the existing batch ALD technology. This has enabled us
to provide deposition technology with good uniformity and step coverage even for special stacked
structures of several hundred layers with a large
New batch ALD deposition technology
device surface area beyond the next generation.
Through our unceasing development of deposition technology, we will continue to support ourcustomers in their development of semiconductor
devices.
* ALD (Atomic Layer Deposition): We refer to a technique for thin-film deposition at an atomic layer level involving a process of cyclical supply of multiple gases as “ALD.”

Case Study
Our molecular simulation team submitted an article on the results of analyses of the gas phase reaction ofchlorosilanes used as raw materials for silicon-based film deposition to the Japanese Journal of Applied Physics.
In line with higher integration and the shift to 3D structures of semiconductor devices, there is a need fortechnology for the deposition of thin films of the order of a few nm in thickness as uniformly as possible on
deep hole and groove structures at the μm level.
To achieve such extremely difficult deposition technology, it is important to optimize the deposition process
based on an understanding of how the feedstock gases used for deposition react in the gas phase and on thesurface.
Since it is difficult to elucidate such reaction behavior using only experimental approaches, we use molecularsimulations (first-principles calculations) as a theoretical approach in collaboration with universities.
This paper describes a method based on first-principles calculations and thermodynamic calculations that is
excellent for predicting andEquilibrium partial pressure
analyzing gas-phase pyrolyReactions in filmof dichlorosilane (SiH2Cl2)
deposition
sis reactions and provides
in the gas phase
Reactions in film deposition
useful insights into our proGas phase
Decomposedcess development.
Pyrolysis
species B
Feedstock
Going forward, utilizing
gas
Decomposed
molecular simulations, we
species A
will elucidate reaction beSurface
havior and contribute to the
Decomposed
By-productspecies A
improvement of process
technology.
Chemisorption
Desorption
Wafer

VOICE

Hidetoshi Mimura
Engineer,
Module Development Department,
System Development Division

Source: Extract from T. Nagahashi et al.,Jpn. J. Appl. Phys. 62, 048002 (2023).

For the past several years, we have been analyzing surface reaction processes in response to temperature and exposure in collaboration with external
institutions. At the Japan Society of Applied Physics (JSAP) Autumn Meetingin 2 0 2 2, I made a presentation on the method of analyzing molecular adsorption states, using machine learning in combination with simulation to assist analysis.
This is an important and challenging field spurring the progress and increasing the efficiency of reaction modeling. Recent results have revealed differences in the controllability of surface reactions and we were able to makea proposal in readiness for a patent application for the combined use of optimization technologies. Although the COVID-19 pandemic slowed the paceof research, I am delighted that we have managed to achieve useful results.
We intend to continue enhancing our modeling methods using simulation,
machine learning, and optimization.

Introduction

KOKUSAI ELECTRIC GROUP CORPORATE REPORT 2023

KOKUSAI ELECTRIC’s
Value Creation

Sustainability

Governance

Information

14

Value Creation: Cases and Topics

Social Issues related to Development ofFilm Forming and Treatment Technologies

1

Promotion ofadvanced
technologies

2 Creation of jobs

For details, see P.13.

3

Diffusion oftechnologies andpromotion of education

Technological Capabilities to Address Social Issues—Treatment Technologies using New Methods—
The trend toward higher integration is accelerating in order to manufacture high-performance semiconductor devices. Also, efforts are underway to enhance device performance.
In order to achieve higher integration, miniaturization is progressing that involves ashift from planar devices to ones with hundreds of vertically stacked layers. Moreover,three-dimensional structures are being adopted to enhance device performance.
We are emphasizing development of not only thin-film forming technology for miniaturized, multilayered and three-dimensionally structured devices, but also treatment
technology to improve film properties.
The latest memory devices have a structure with over 200 layers of memory cells
stacked vertically. In order to provide a processing method with sufficient step coverage even in a structure with penetration depth of numerous layers, we have developed a process enabling abundant supply of reactive species, which has been adopted by major memory manufacturers.

Case Study
In microprocessors, a dozen of wiring layers are stacked to achieve high integration oftransistors. In the figure below, the lighter portions are metal wiring and the darker portions are insulated film. Minimizing the metal wiring resistance leads to more energy-efficient microprocessors. Therefore, after forming each wiring layer, a treatment process isapplied to each wiring layer to lower the resistance.
We supply the treatment equipment to major semiconductor device manufacturers.

Cross-sectional view of advanced microprocessor

VOICE

New
Conventional
technology technology
High-density
reactive species
generator

Conventional
reactive species
generator

Hiroki Kishimoto

Cross-sectionalview of flash
memoryEngineer,
Marora Development Project,
Process Development Division

Magnified memory
cell (upper, middle,
and bottom
portions)

Cross-sectional views ofmemory cell (upper, middle,
and bottom portions)(Electric charges are retained in
the cylindrical portion as data.)
Source: TechInsights Inc

Source: TechInsights Inc

As semiconductor devices progress toward higher integration, thetrend toward miniaturization of devices and multilayering is accelerating. In parallel with greater multilayering, enhancement of device performance is pursued, fueling rising demand for treatment equipmentthat enhances the quality of current films.
As environmental issues have risen to the top of the global agenda
in recent years, it is incumbent on companies to minimize their environmental impacts. CO2 emissions from manufacturing equipment in
the semiconductor industry account for a substantial proportion of
CO2 emissions from industry as a whole, and thus the need to reduce CO2 emissions from such equipment is an issue. For treatment
equipment, in terms of process development, we are emphasizing
improvement of treatment efficiency through the use of novel gases
and optimization of process parameters and recipe steps to shorten
the recipe time and improve process performance, thus reducing
power consumption and consequently CO2 emissions.

Introduction

KOKUSAI ELECTRIC GROUP CORPORATE REPORT 2023

KOKUSAI ELECTRIC’s
Value Creation

Sustainability

Governance

Information

15

The Group’s Sustainability Management

The Group’s Approach to CSR and Sustainability Management
At the KOKUSAI ELECTRIC Group, we believe it is our corporate social responsibility to earn the trust and meet the expectations of society through our business activities.
Based on full awareness of this social responsibility, within the framework of sustainability management, by pursuing economic value as well as environmental and social value through both businessactivities and ESG initiatives (resolution of environmental and social issues and strengthening of governance), we aim to contribute to the achievement of the SDGs while concurrently seeking to realize a sustainable society as well as sustainable development of the Group.
In promoting sustainability management, the Group is strengthening the foundation of its activities by reviewing the Corporate Philisophy, identifying materiality (key issues), establishing a dedicatedcommittee, and participating in international initiatives.
We disclose these activities in this report and on our website with a view to broadly engaging in “Tai-wa” about our sustainability management with stakeholders.

Contribution to the achievement of the SDGs and realization of a sustainable society

Sustainable development of the Group
Technology & Tai-wa for Tomorrow

Corporate Social Responsibility (CSR)
Earn the trust and meet the expectations of society through business activities

AchievebothEnhancement of corporate value

Pursue enhancement of the Group’s corporate value
Environment

Business

Society(Pursuit of environmental value)(Pursuit of economic value)(Pursuit of social value)

Sustainability governanceLeading to sustainable development without compromising corporate value

Brand value(Environmental value and social value)

Economic value

KOKUSAI ELECTRIC GROUP CORPORATE REPORT 2023

Introduction

KOKUSAI ELECTRIC’s
Value Creation

Sustainability

Governance

Information

16

The Group’s Sustainability Management

Sustainability Committee

Participation in International Initiatives

We have established and operate the Sustainability Committee, chaired by the President,
as a dedicated meeting body to drive our sustainability activities.
The Sustainability Committee is composed of members with the expertise necessary toaddress various social and business issues. Matters to be deliberated on by the committee are determined in considerPlan
ation of materiality, external reSupervisionquirements, opinions of external
Board of Directors
consultants, etc. The statuses ofsustainability activities led by thecommittee are regularly reported
ReportSupervision
to the Board of Directors andExecution
ActionDocommunicated to the internal
Sustainability Committee
parties.
Chair (President)
We disclose our sustainability
Secretariat (Sustainability management
activities in this report and onplanning departments)
Committee
members
our website with a view tobroadly engaging in “Tai-wa”
Head of each division + persons appointed by the chair
about our business managementwith stakeholders.
Check

We participate in the following international initiatives in order to keep abreast of social
trends, identify our own issues, and properly promote measures for the resolution of the issues and monitoring of their implementation, and are promoting sustainability management.

Registration for the TOYAMA SDGs PROJECT

In August 2021, we announced our endorsement of the TCFD*. While promoting initiatives
in line with TCFD recommendations on the disclosure of risks and opportunities related toclimate change, we have disclosed information in line with TCFD recommendations.
We also participate in the TCFD Consortium, which is a forum where organizations
that endorse TCFD recommendations engage in further discussion on effective information disclosure, and the Japan Climate Initiative, which is a network of diverse
companies, local governments, organizations,NGOs, and others.

The “TOYAMA SDGs PROJECT” is Toyama Prefecture’s approach to promoting initiatives for
the SDGs. Participating companies and organizations located in Toyama Prefecture declaretheir engagement with the SDGs and disseminate information on their initiatives for the
SDGs by posting the information on the website of Toyama Prefecture. The objective is tomotivate other companies and organizations across Toyama to engage in the SDGs andfacilitate collaboration between companies and organizations and the prefectural and municipal governments. The Group has several sites in Toyama Prefecture. As a group with apresence in the prefecture, the registration for the TOYAMA SDGs PROJECT and dissemination of information have helped us strengthen our awareness of our social responsibility
and leadership role and we will vigorously engage in various activities.
TOYAMA SDGs PROJECT (in Japanese) |https://www.sdgs-toyama.jp/

United Nations Global Compact (UNGC)
We became a signatory to the UNGC*1 in June 2022 and are promoting activities in accordance with the Ten Principles concerning the protection of human rights, the elimination of unfair labor practices, response to environmental problems, and the prevention of corruption.
We are also a member of GCNJ*2, which serves as a contact pointfor UNGC, and are promoting activities.
*1 United Nations Global Compact: In the UNGC, which is the world’s largest corporate sustainability initiative, the United Nations
and the private sector (companies and organizations) collaborate to build a sound global society. It is a voluntary initiative bycompanies and organizations, acting as good members of society, to achieve sustainable growth by demonstrating responsible
leadership.
*2 Global Compact Network Japan: GCNJ is a platform where companies and organizations that have signed and joined the UNGC
promote sustainability together.

Task Force on Climate-related Financial Disclosures (TCFD)*Task Force on Climate-related Financial Disclosures:
Framework for promoting disclosure of information on the impacts of climate change on the operations of companies and institutions and their actions to address these impacts

Disclosure in Line with TCFD Recommendations | KOKUSAI ELECTRIC CORPORATION (https://www.kokusai-electric.com/en/)https://www.kokusai-electric.com/en/csr/environment/tcfd

KOKUSAI ELECTRIC GROUP CORPORATE REPORT 2023

Introduction

KOKUSAI ELECTRIC’s
Value Creation

Sustainability

Governance

Information

17

Materiality

Materiality Identification Process
The Group has identified as materiality those priority issues that are to be addressed in order for the Group to contribute to the achievement of the SDGs and achieve sustainable development. We extracted and organized materiality candidates based on international requirements and the Group’s sustainability management issues, and shortlisted them by identifying itemswith a high degree of importance to both stakeholders and the Group based on matrix evaluation. In fiscal 2022, the Board of Directors confirmed the consistency of those items having ahigh degree of importance with the Company’s initiatives and strategies, and identified five items as materiality and 13 priority themes.
Following the identification of materiality comprising five items, we have specified priority themes and activity items and are managing their progress by setting KPIs. Progress statuses
are monitored by the Sustainability Committee, which meets semiannually, and the Board of Directors. We will vigorously disclose the materiality identification process and the situation ofinternal promotion activities in the Corporate Report as well as on our website and promote “Tai-wa” with our stakeholders.

Identification process (1) : Extract and organize materiality candidates
Organize external requirements
We extract and organize social issues and requirements that may have an impact on the Group’sbusiness activities based on the recommendations of international ESG information disclosure guidelines, the evaluation items of ESG management evaluation bodies, and the advocacy of the SDGs.
Organize the Group’s sustainability management issues
Based on the Group’s business environment, earnings opportunities, and various assumed risks, we
extract and organize issues necessary for strengthening sustainability management.

Matrix evaluation (image)
Degree of importancefor stakeholders

Shortlistingof materiality
candidates

Identification process (2) : Evaluate the degree of importance of materiality candidates (prioritization)
For the materiality candidates extracted and organized in the identification process (1), we score thedegree of importance from both subjective and objective evaluations, and prioritize them using matrix evaluation, shortlisting the items with a high degree of importance as materiality of the Group.

Identification process (3) : Confirm validity and identify materiality
For the items shortlisted as materiality in the identification process (2), the Sustainability Committee
and the Board of Directors confirm the consistency with the Company’s initiatives and strategies andidentify materiality.
Under the corporate slogan “Technology & Tai-wa for Tomorrow,” the Group aims to contribute to theachievement of the SDGs while concurrently seeking to realize a sustainable society as well as sustainable development of the Group, by pursuing economic value as well as environmental and social
value through both business and ESG initiatives (resolution of environmental and social issues andstrengthening of governance).
Accordingly, we identified five key issues as materiality.

Degree of importancefor the GroupKOKUSAI ELECTRIC GROUP CORPORATE REPORT 2023

Introduction

KOKUSAI ELECTRIC’s
Value Creation

Sustainability

Governance

Information

18

Materiality

KOKUSAI ELECTRIC’s Five Key Issues (Materiality)
Materiality

Contribution to society throughcreativity and innovation

Priority themes

Activity items

Creation of new technologies and new products

Development of advanced underlying technologies andpromotion of joint development with external institutions

Enhancement of customer satisfaction
Enhancement of economic performance

Provision of products, technologies, and services attuned to the VOC*
*VOC: Voice Of Customer

Improvement of business results, investment, etc., andconfirmation of the return on investment
Reduction of greenhouse gas emissions

Creation of a sustainable society
and conservation of the global
environment

Human resources management asa source of innovation

Reduction of environmental impact

Contribution to the environment throughtechnology and products

Development of environmentally friendly products

Promotion of sustainable procurement

Strengthening of supply chain management

Respect for diversity of human assets

Promotion of Diversity & Inclusion

Development of human resources who learn on theirown, think on their own, and act on their own

Development of global human resources and securingof excellent human resources

Maintenance and enhancement of health andsafetyStrengthening of occupational health and safety
management
Strengthening of corporate governanceThorough compliance
Strengthening of SCR*/CR risk countermeasures and BCP

Thorough management of major business risks

Ensuring of management transparency

Respect and consideration of human rights

Thorough management of waste and hazardous substances
Thorough management of water and wastewater

Strengthening of governance

Strengthening of the governancesystem to realize sustainability
management

Thorough management of energy

Respect for human rights*Materiality, priority themes, and activity items remain unchanged as confirmed by the Sustainability Committee, which met in February 2023.

*SCR: Super Clean RoomStrengthening of information security risk
countermeasures and BCP
Timely and appropriate disclosure to internal andexternal parties
Promotion of the understanding and awareness of
employees about human rights

KOKUSAI ELECTRIC GROUP CORPORATE REPORT 2023

Introduction

KOKUSAI ELECTRIC’s
Value Creation

Sustainability

Governance

Information

19

Environmental

Creation of a Sustainable Society and Conservation of the Global Environment
The greenhouse gases generated by the Group’s business activities, as well as the energy and resources the Group uses, may have a serious impact on the global environment. We have a
responsibility to be more environmentally conscious in order to pass on a beautiful natural environment to future generations.
We are promoting the creation of a sustainable society and conservation of the global environment by maintaining and improving our environmental management systems (ISO 14001) inaccordance with the Action Guidelines for Environmental Conservation. The Group’s initiatives for the environment are also disclosed on our website.
Initiatives for the environment | https://www.kokusai-electric.com/en/csr/environment

Eco-mindset and Global Environmental Management
KOKUSAI ELECTRIC Group Action Guidelines for Environmental Conservation
These are action guidelines for tackling environmental conservation in the course of business activities in accordance with the KOKUSAI ELECTRIC Way. The guidelines
apply to all operations conducted by all executives, employees, etc. of the Company and its Group companies.

PurposeIn order to realize an environmentally harmonious and sustainable society through the provision of products and services, the KOKUSAI ELECTRIC Group is committed
to meeting its social responsibilities by promoting globally applicable Monozukuri aimed at reducing the environmental impacts of products throughout their entire life
cycles, thereby ensuring global environmental conservation.

Action Guidelines ecognizing environmental conservation to be an important issue for all of humanity, weRwill fulfill our social responsibilities by working to realize an environmentally harmonious
and sustainable society as a top business priority.
We will accurately identify needs related to preventing global warming, recycling and reusing resources, and preserving ecosystems, and strive to contribute to society by developing
sophisticated and highly reliable technology and products that meet those needs.
The executive officer responsible for production will drive forward appropriate environmental conservation activities. The executive officer responsible for production will instruct the
departments he/she oversees to establish relevant rules and set targets to reduce environmental impacts and facilitate environmental conservation activities. He/she will confirm
that the said activities are being properly carried out and make every effort to maintainand improve them.
We will operate a global manufacturing system that aims to identify and reduce environmental impacts throughout the life cycle — from product R&D and design to production,
distribution, sales, usage, and disposal.
We will research and review the impact our manufacturing activities have on the environment, and implement measures to reduce environmental impacts, such as the introductionof technology and materials with properties that contribute greatly to protecting the environment, including energy saving, conservation of resources, recycling, management ofchemical substances, and consideration of ecosystems.

Wewill work to protect the environment by not only complying with international environmental regulations and the environmental regulations of individual countries and local governments, but also by formulating our own standards as needed.
When carrying out global manufacturing activities, we will consider the impact on each region’s environment and strive to meet the needs of the community.
We will educate our executives and employees on compliance with environmental laws,
raising their environmental awareness, and environmental conservation activities from a
broad perspective with an eye to society at large, and encourage them to translate that
into action.
We will assess the risk of the occurrence of environmental problems and work to prevent
such occurrences. In the event an environmental problem does occur, we will take appropriate measures to minimize its impact on the environment.
We will make every effort to disclose information and proactively communicate with stakeholders about our environmental conservation activities, and work to enhance mutual understanding and cooperation.
In order to achieve the objectives specified above, the Group shall establish, maintain, andimprove environmental management systems (ISO 14001, etc.).
KOKUSAI ELECTRIC shall provide appropriate education and guidance to ensure that theGroup will conduct all activities in accordance with the guidelines.

KOKUSAI ELECTRIC GROUP CORPORATE REPORT 2023

Introduction

KOKUSAI ELECTRIC’s
Value Creation

Sustainability

Governance

Information

Environmental

ISO 14001 Certification
KOKUSAI ELECTRIC has established an environmental management system based on theinternational standard ISO 14001 to contribute to mitigating environmental impacts andprotecting the environment. Through this system, we have put in place an organizational
structure to facilitate environmental activities, provide environmental education, set objectives and targets for specific activities, work to achieve them, and make continuous improvements to activities by following a PDCA cycle.

Environmental Management System
Environmental supervisor
Environmental manager
Environmental Committee

Certifying organization: Management Systems Sector, Japan Quality Assurance
Organization (JQA)
Registration number of the certifying organization: JQA-EM7390
Specific information on ISO certification of the Group’s individual sites in Japan can befound on the website (“Search for certified organizations”) of the Japan Accreditation
Board (JAB).
Japan Accreditation Board | https://www.jab.or.jp/en/

Biannual meeting

Environmental secretariat

KOKUSAI ELECTRIC
Head Office and Toyama Technology &Manufacturing Center

Group companies

Promotion and Evaluation of Environmental Management
Promotion of Environmental Management
We have established an environmental management system in accordance with the
KOKUSAI ELECTRIC Group Action Guidelines for Environmental Conservation, and work
to cultivate an “eco-mindset.”

Environmental Management System
The environmental supervisor sets the environmental policies, and the environmental
committee composed of the environmental supervisor, environmental manager, and theheads of each division promotes environmental conservation activities across the Group.
Environmental activities comprise three categories, consisting mainly of the following
activities.
Eco-management : Promotion of environmental education, improvement activities
conducted under the departments’ environmental management programs, and environmental volunteer activities
Eco-product : Compliance with Japanese and overseas product-related laws and regulations, management of chemical substances contained in products, and practice of
Design for the Environment
Eco-factory : Reduction of energy use and waste generation

Evaluation of Environmental Management
Toyama Prefecture Recycling Certification System
The Toyama Technology & Manufacturing Center was granted an Eco Business Certificate from Toyama Prefecture in
March 2020. The certificate is valid until March 31, 2025. An“Eco Business” is defined as a “place of business that proactively engages in efforts such as curbing the generation ofwaste, recycling, and environmentally friendly business activities.” The center has been granted the certificate continuously since 2010.
We believe this certification is in recognition of our 3Rs
waste management efforts to reduce the final waste disposal
volume, gaining of ISO 1 4 0 0 1 Environmental Management
System certification, and environmentally friendly businessactivities such as reducing CO2 in transportation to and fromour business sites in Japan.

20

Introduction

KOKUSAI ELECTRIC GROUP CORPORATE REPORT 2023

KOKUSAI ELECTRIC’s
Value Creation

Sustainability

Governance

21

Information

Environmental

Environment Action Targets and Results for Fiscal 2022 (Toyama Technology & Manufacturing Center)
The results and evaluation of the environmental action plan for fiscal 2022 are as follows.
Fiscal 2022 was the first year of the medium-term plan with targets for the period from fiscal 2022 to fiscal 2024.
Evaluation criteria

Category

Action goal

Nurture an environmental mindset inall employees

Eco-management

SDGs

Achieved 100%

Achieved 80% or more

Achieved less than 80%

Fiscal 2022

Index

TargetResult100%

100%

Development of “eco people*1”

71

88

New

Implementation

4

4

Ongoing

Ongoing
activities

27

23

3

3

100%

100%

Participation rate in environmental education

Number ofactivities
implemented

Ecosystem
Preservation

Number of ecosystem preservation
activities implemented

Collaboration with
Stakeholders for
the Environment

Number of environment-related social
contribution activities implemented*2

Number of activities implemented

Environmental design assessment

Assessment rate

Improve energy use intensity

Rate of energy use intensity(compared to previous year or
5-year average)

99% orbelow

94%

Reduce transportation energy intensity
improvement

Transportation energy intensity(production base) (reference
year 2019)15% orabove

22%

Waste and valuables generation
intensity

Waste and valuables generation intensity improvement rate
(reference year 2019)25% orabove

35%

Eco-product

Global Warming
Prevention

Eco-factory
Effective Use of
Resources*1 Person who passed the Certification Test for Environmental Specialists (Eco Test) of the Tokyo Chamber of Commerce and Industry*2 Number of activities implemented in such areas as environmental education, information exchange, community contribution through cleanup projects, etc., lights-off campaigns, and community energy-saving activities.

Evaluation

Introduction

KOKUSAI ELECTRIC GROUP CORPORATE REPORT 2023

KOKUSAI ELECTRIC’s
Value Creation

Sustainability

Governance

Information

22

Environmental

Reduction of Environmental Impact
Reduction of greenhouse gas emissions
Approach to Address Climate Change
To cope with global warming, a two-pronged approach is required. One prong is mitigation, which
involves reducing greenhouse gas emissions, the principal causative agent of global warming. The
other is adaptation, which involves reducing the adverse impact of climate change by adjusting
natural ecosystems and social and economic systems in response to climate change.
For mitigation, we are promoting the use of renewable energy, in addition to the reduction ofenergy used in production (reduction of electricity consumption, energy saving, etc.), which wehave been promoting. A solar power generation system has been in operation at the Toyama
Technology & Manufacturing Center since April 2022. We will continue with the installation of facilities and the procurement of renewable energy.
Scope 1 and 2 emissions: Absolute value
Regarding adaptation, it would be better if the(t-CO )
20,000adverse impact of climate change could be avoid16,517 16,104
15,701 15,309
15,201
ed, but if it cannot be avoided even with maxi16,000
14,926 14,553
13,69813,42912,823
12,253
mum mitigation, it is necessary to minimize the
12,006
12,000
10,185
9,238
damage. This involves implementing measures to
8,000
reduce the occurrence of natural disasters andensure business continuity in any eventuality. We
4,000
will promote initiatives in cooperation with our020052014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
2030
supply chain, in addition to our own efforts.
Reference year
2

Scope 1 and 2 emissions

Efforts to Address Climate Change
The 2015 Paris Agreement set out long-term, concrete initiatives to address global warming.
Recently in August 2021, the IPCC*1 announced its prediction that the global average temperature increase will reach 1.5°C above pre-industrial levels between 2021 and 2040. It is important that countries and companies around the world strengthen their initiatives to address
climate change and balance anthropogenic greenhouse gas (GHG) emissions and absorption in
the second half of this century.
We have been implementing initiatives designed to achieve progress toward a low-carbon
society. However, we recognize the need for further initiatives and will promote environmental
investment as part of our social responsibility.
Having announced our endorsement of the TCFD*2 in August 2021, we are promoting initiatives in line with TCFD recommendations on disclosures of risks and opportunities related toclimate change and are continuing information disclosure. We received a “B-” rating for the
CDP*3 Climate Change 2022 and aim to further improve our rating.
We are also considering setting science-based reduction targets for GHG emissions (SBT*4).
We will set our long-term and medium-term targets based on methods widely used internationally to promote GHG reduction activities.
*1 IPCC: Intergovernmental Panel on Climate Change*2 TCFD: Task Force on Climate-related Financial Disclosures*3 CDP: Formerly the Carbon Disclosure Project, CDP is a non-profit organization operated collaboratively by institutional investors.
*4 SBT: Science Based Targets (Science-based GHG emissions reduction targets)

Status of Response to TCFD Recommendations
Having announced our endorsement of the TCFD in August 2021, we are promoting initiatives in line with TCFD recommendations on disclosures of risks and opportunities related
to climate change and are continuing information disclosure.
Governance
The Sustainability Committee, which is chaired by the President and meets regularly, discusses, decides, and reports on activities to address climate change to the Board of Directors. The Board of Directors ensures the effectiveness of the process by overseeing the execution based on reports by the Sustainability Committee.
Strategy
For scenario analysis in line with TCFD recommendations, we refer to the Shared Socioeconomic Pathways (SSP) 1-1.9 and SSP 5-8.5 of the Sixth Assessment Report of the Intergovernmental Panel on Climate Change (IPCC) and the data in the World Energy Outlook
2020 of the International Energy Agency (IEA), and use them in forecasting. In considering
the 1.5oC scenario and the 4oC scenario, we identify the risks expected to arise by 2050
that could have particularly major financial impacts on business, including the value chain.
Risk management
We identify risk factors that could have a major impact on business management andconsider countermeasures. We analyze and assess urgent risks related to climate change
and possible future risk factors, determine measures to mitigate the risks, and incorporate
them into our business plans.
Metrics and targets
In addition to promoting energy saving and the introduction of renewable energy, we operate a system that certifies products that excel in reducing environmental impact as environmentally acceptable products. We endeavor to achieve the following targets in order
to contribute to the reduction of CO2 emissions in society.
Reduction target for CO2 emissions as a result of own energy use (Scope 1 & 2 targets)
Target: 5 0% reduction of CO2 emissions by the end of fiscal 2030 (compared with fiscal 2021)
Reduction target for CO2 emissions through products and services (Scope 3 target)
Target: 3
 0% reduction of CO2 emissions per wafer by the end of fiscal 2030 (comparedwith fiscal 2021)
Reference: Disclosure in Line with TCFD Recommendations | https://www.kokusai-electric.com/en/csr/environment/tcfd

KOKUSAI ELECTRIC’s

Introduction

KOKUSAI ELECTRIC GROUP CORPORATE REPORT 2023

Value Creation

Sustainability

Governance

23

Information

Environmental

Thorough Energy Management / Waste and Hazardous Substance Management
The values in parentheses show the change from fiscal 2021.

Approach to Save Resources
Despite progress in sorting and recycling, the impact ofwaste on the environment has not been eliminated. We
conduct a detailed check to ensure proper disposal methods that mitigate the impact on the environment as muchas possible and strive for more effective use of resources.
We are also working on activities to reduce landfill
waste in order to achieve zero emissions and promoting
recycling of waste at the final disposal stage. Based on
the recognition that proper sorting of waste is an effective
approach, we provide education for all employees on theissue of waste twice a year to raise every employee’s
awareness of the importance of waste reduction and efficient use of resources.

Business Activities and Environmental
ImpactThe Toyama Technology & Manufacturing Center emits
CO2 and waste as a consequence of expending resourcesand energy in order to make and provide products. It
monitors their input and output, and works to reduce theuse of hazardous chemical substances in R&D and increase energy efficiency.
For information on efforts to reduce the environmental
impact of products, see the “Provision of Environmentally
Friendly Products” page.

Outputactivities at the Toyama Technology &Input Business
Manufacturing Center ⇒ Products/Services

EnergyElectricity

28,622 MWh (＋4%)[

Fuel oil(heavy oil, kerosene)[

277,455

151 km³[(－3%)

6,098 GJ ]Gas (city gas, LPG)(－1%)

Raw materials

6,818 ｔPackaging materials
628ｔ
Paper
12.2 ｔ
0.4 ｔ

SOx

(－5%)

Amount released(－9%)

Final disposal

161 km³

Tap water

11 km³150 km³

596 ｔ (＋13%)
1.98 ｔ (±0%)

Chemical substances(＋7%)

Release, transfer andrecycling of PRTR-specified
chemical substances

Wastewater

Tap water,industrial water

0.0 m³ (±0%)
194 m³ (－3%)(－21%)

Water

Industrial water

883 ｔ
15,342 ｔ
Scope 3 CO2 emissions 1,333,351 ｔ
Scope 2 CO2 emissions

Waste and valuables

Chemical substances
PRTR*1-specified chemical
substances handled

1,349,576 ｔ (-9%)

NOx

7,652 GJ ]Materials and parts

CO2 emissions*2

Scope 1 CO2 emissions

GJ ]160 kL

Exhaust gas(＋6%)

Wastewater discharge

0.24ｔ (＋93%)
161 km³ (＋6%)

Discharged to rivers after purification 161 km³

BOD

0.62 ｔ(＋2%)*1 PRTR: Pollutant Release and Transfer Register*2 CO2 emissions: Emissions were calculated based on the 2005 emission coefficients for electric power by country published by the International Energy Agency (IEA).

KOKUSAI ELECTRIC GROUP CORPORATE REPORT 2023

Introduction

KOKUSAI ELECTRIC’s
Value Creation

Sustainability

Governance

24

Information

Environmental

Energy use intensity compared to the previous year

Energy use

Waste and valuables generation and intensity improvement rate
(t)

35
25
13

1,000
800

(%)

40
20

0

0

600
400
200
0

2019

2020

2021

2022

(fiscal year)

Waste and valuables generation intensity improvement rate

Much of the energy consumed by the Toyama Technology & Manufacturing Center is used
for operating the evaluation equipment used for process development. Therefore, in orderto lower the environmental impact of the equipment, we make every effort to use electricity more efficiently, such as reducing wasted electricity.
To save energy used by facilities, we carry out regular replacement of equipment, which
includes upgrading to environmentally friendly air-conditioning equipment and switching
to LED lighting. We also promote the use of renewable energy through solar power generation (solar panels).
Since October 2022, the Center has been utilizing the electricity generated by the hydroelectric power stations operated by Toyama Prefecture (Toyama Mizuno Sato Denki).
The CO2 emission factor corresponding to the use of hydroelectric power is zero. Although hydroelectric power accounts for 10% of the electricity purchased at present, we
intend to increase the proportion.
With regard to operations, in support of preventing global warming, we implement“Cool Biz” and “Warm Biz”
campaigns to promote com- Energy use and intensity compared to the previous year
f o r t a n d e n v i ro n m e n t a l(%)(kL/year)friendliness. Furthermore,
12,000
120
112
111
110
twice per year we have a
10,000100
93“lights-off” day where we
81
76
turn off the lights in the Toya8,000
80ma Technology & Manufac75
6,000
60
turing Center for a certain
period of time so employees
4,000
40
can gain a renewed understanding of the importance
2,000
20of the environment and ex00perience first-hand the path
2016
2017
2018
2019
2020
2021
2022 (fiscal year)
toward achieving a low carbon society.

ways to reduce the amountof waste generated, including
through the company-wide
reuse of waste such as packaging materials for productparts and materials procured.
As a result, the waste generation intensity improvement
rate has been constantly improving. It was 3 5% in fiscal
2 0 2 2 relative to fiscal 2 0 19
(reference year).

Waste and valuables generation

Prevention of Global Warming and Energy Saving

Proper Disposal of Waste
The Toyama Technology & Manufacturing Center recycles much of the waste it discharges. Previously most plastic waste packaging materials underwent thermal recycling, but
thanks to enhancing material and color sorting, we can now carry out material recyclingof a portion of that waste. Wafers are also recycled after being polished and wafers thatcannot be reprocessed or that are cracked are used as additives for aluminum ingots.
We also make it a rule to visit the sites of waste treatment companies to confirm that
our waste, which includes industrial waste, general waste, and waste sold as valuables, istreated appropriately throughout the process from collection and transportation to disposal. Besides legal compliance, we also view environmental conservation as a priority
and make every effort to ensure environmental pollution does not occur due to improper
disposal.
Previously

After improvement

Most plastic waste was usedas solid fuel.

After sorting, much of the plastic waste is recycled as plastic raw materials.
To overseas

Processed
into powders

Recycled as plastic
raw materials

Reduction of Waste
The amount of waste and valuables generation has been increasing along with the expansion of our operations. We are implementing various measures to curb waste and valuables generation. Waste acid, which accounts for a substantial proportion of the waste,
was reduced by reviewing effluent treatment methods. We are constantly considering

Only non-recyclable plastic waste is used as solid fuel.

Introduction

KOKUSAI ELECTRIC GROUP CORPORATE REPORT 2023

KOKUSAI ELECTRIC’s
Value Creation

Sustainability

Governance

Information

25

Environmental

Assessment of Water Risk

Management of Air Pollutants
Sources of NOx, SOx, and soot are two small boilers for heating.
After periodic inspections of the small boilers, we measure NOx, SOx, and soot.
Measurements and calculations are outsourced to specialist companies.
Results
Unit

Fiscal 2020

Fiscal 2021

Fiscal 2022

SOx

m3/year

0

0

0

NOx

m3/year

313

200

194

Soot and dustt/year0

0

0

Thorough Management of Water and Discharge
Management of Water
Water Resource Conservation Initiatives
Water, the source of life and essential to our business activities, is a vitally important resource. Today, climate change due to global warming, urbanization, changes in industrial
structure, deforestation, and other factors are causing changes in the water cycle, resulting
in various problems such as drought, water pollution, and degradation of the ecosystem.
There is a need to maintain and restore good water circulation in rivers.
As part of our environmental and CSR activities, we will continue to participate in local
activities such as river cleanups to improve the water quality of rivers, which are a sourceof water, and biodiversity while striving to improve the environmental mindset of our employees.

Climate change is causing droughts and regional heavy rainfall around the world. If temperatures further increase from now on, extreme climate events and water shortages will
be exacerbated. To grasp the status of water risk, we first conducted a water risk assessment of all the Group’s business sites using the Aqueduct water risk assessment tool provided by the World Resources Institute (WRI). As a result, we confirmed that the level ofwater stress, sinking risk, and flood risk are at the “low” or “low to medium” risk level.
Nevertheless, we recognize the importance of reducing water consumption globally.
The Toyama Technology & Manufacturing Center believes that setting a target for reducing water consumption and making continuous efforts will lead to the conservation ofrivers, which are a source of water. Moreover, we strive to improve the efficiency of water
use throughout the entire life cycle (procurement, manufacturing, use, etc.) in product development.
Appropriate Wastewater Treatment
Toyama Technology & Manufacturing Center has an abundant source of water, namely,
snowmelt from the Northern Alps, which is high-quality, uncontaminated water inswift-flowing rivers. Special gases and chemical substances are used in the process evaluation of our products. Industrial water used for waste gas treatment for detoxifying andwafer cleaning is properly treated at effluent treatment facilities. Tap water used in thecafeteria and sanitation facilities is treated as domestic wastewater in a septic tank anddischarged into the river. The Center has facilities specified by the Water Pollution Prevention Act, and the team responsible for the facilities is dedicated to their proper operationand management, and inspection. Moreover, the Center has established a pollution prevention organization that monitors wastewater measurements. To ensure that wastewater
does not exceed the maximum permissible levels stipulated in the national and local
standards for the area set by water-related laws and regulations, we have establishedstricter voluntary standards and conduct regular monitoring to ensure the appropriate discharge of wastewater. The measurement results are regularly reported to the local government, and we also respond to annual on-site inspections by the local government to ensure compliance with such laws and regulations.

Introduction

KOKUSAI ELECTRIC GROUP CORPORATE REPORT 2023

KOKUSAI ELECTRIC’s

Sustainability

Value Creation

Governance

Information

26

Environmental

Water Withdrawal and Drainage
Amount of water withdrawal = Amount of drainage for management purposes
Water withdrawal:	Total of tap water (waterworks bureau) and industrial
water (contract within the Toyama Yatsuo Core
Industrial Park)
Drainage:	Total of domestic drainage + drainage frommanufacturing processes + other wastewaterIndustrial water, which is part of water withdrawal, is supplied by Yatsuo-machi (within theindustrial park). The industrial water is stored in a water tank within the Company’s site before use. There is a limit to the total supply of this water and excess use is not possible.
Wastewater from manufacturing processes is managed based on the amount of effluent
treated and discharged, domestic wastewater is managed based on septic tank wastewater pumping capacity and operating hours, and other wastewater is managed based on
the subtraction of wastewater from manufacturing processes and domestic water fromthe water withdrawal.

Contribution to the Environment
through Technology and Products
Environmentally Friendly Products
Approach to Development of Environmentally Friendly Products
In order to realize an environmentally harmonious and sustainable society through the provision of products and services, the Company strives to reduce the environmental impacts ofproducts throughout their entire life cycles and promote efficient use of finite resources,
thereby contributing to environmental conservation and providing customers with environmentally friendly products. When developing new products and whenever there are changes in production activities and laws and regulations, we conduct a Design for the Environment assessment comprising environmental design assessment and life cycle assessment.
With the aim of enhancing our employees’ capabilities to conduct Design for the Environment assessment, we provided e-learning for which a 100% attendance rate was achieved.
Structure of Design for the Environment Assessment

Results

INPUT
Unit
Tap water

Water
withdrawal

m3/
year

Industrial
water
Total
Domestic
wastewater

Wastewater from manWastewater ufacturing processes
discharge
Other
wastewater
Total

m3/
year

Fiscal 2020

Fiscal 2021

Fiscal 2022

11,768

12,116

10,958135,031

140,423

150,036

146,799

152,539

160,994

13,81914,752

15,167

98,185

104,385

111,058

34,79533,402

34,769146,799

152,539

160,994

Basic data of new products
and conventional products· Materials/raw materials · Transportation volume· Disposal/recycling · Energy use · Packaging materials, etc.

Design for the Environment assessment
OUTPUT
Environmental design assessment
Confirm whether there are changes in environmental impacts and the orientation related
to environmental considerations in the design process.
Life cycle assessment
Calculate environmental impacts (CO2 emissions, resource consumption) by aggregating
basic data. Products that satisfy certain criteria are designated as “environmentally friendly products.”
Calculation of GHG Protocol Scope 3* emissions
We calculate and report the environmental impacts of Scope 3 (raw materials, productuse, product disposal, etc.) emissions for each fiscal year.
*GHG Protocol: International standards for calculating and reporting greenhouse gas emissions
Scope 1: Direct GHG emissions that occur from sources that are controlled or owned by an organization
Scope 2: Indirect GHG emissions associated with the use of electricity and heat purchased from other companies
Scope 3: Indirect GHG emissions other than Scope 1 and 2

KOKUSAI ELECTRIC GROUP CORPORATE REPORT 2023

KOKUSAI ELECTRIC’s

Introduction

Value Creation

Sustainability

Governance

27

Information

Environmental

Appropriate Management of Chemical Substances Contained in Products

Contribution to a Clean World by Enhancing Product Quality

Compliance with Laws and Regulations
Throughout the Group, we strive to properly manage chemical substances contained in
our products in compliance with Japanese and overseas environmental laws and regulations related to products in order to prevent environmental contamination caused by the
products we ship.
We share information on environmental laws and regulations related to our products
throughout our business sites and with our business partners, and report on the status ofcompliance at biannual meetings attended by the general managers of business sites. No
issues have arisen in fiscal 2022 with respect to compliance with laws and regulations.
Regarding harmful chemical substances, we have identified banned and restricted substances based on laws and regulations and confirmed that the chemical substances contained in our products satisfy the criteria of the respective laws and regulations. Moreover,from January 5, 2021, the EU Waste Framework Directive requires companies to register
SVHCs*1 on the SCIP database, and we have registered our product information accordingly.
Management of Purchased Items

Reducing Energy Use in Transportation
For the physical distribution of our products in Japan, we have been continuing a modal
shift. We have also been working to improve various distribution methods to further reduce environmental impacts.
Monitoring of CO2 emissions reduction
Implementation of measures to reduce energy use in transportation and calculation andcutback of the rate of transportation energy intensity improvement rate
Stacking of truck cargo
Effective use of the empty space above cargo where items previously could not be
stacked due to differences in size and number of pieces
Modal shift
Greater shift from truck transportation we have used so far to coastal shipping and railtransportation
Overseas shipments of products
Switch to the use of nearby ports of entry and airports to cut costs and shorten distancesin transportation
Use of returnable boxes
Use of returnable boxes for some parts when shipping to customers in Japan
Cardboard packaging
Switch from wooden crate packaging to simple packaging made with light and high-quality
corrugated cardboard

We make every effort to manage chemical substances contained in purchased parts. As atool for surveying chemical substances contained in items purchased from business partners, we use chemSHERPA®*2 (a scheme for communicating information on chemical substances contained in products) to collect information on chemical substances containedin products and obtain certificates declaring that a product does not contain banned substances.
For the management of processed products, a system to mitigate the risk of processed
products containing banned or restricted substances is in place. We research the chemical substances of auxiliary materials used in the manufacturing processes of our business
partners through the chemical substance management certification program.

Example of modal shift from truck transportation to rail and marine transportation(overseas customer)
CO emissions*1 SVHC (substances of very high concern) are substances in the Candidate List for eventual inclusion in Annex XIV of the REACH
regulation.
*2 c hemSHERPA is a registered trademark of the Japan Environmental Management Association for Industry (JEMAI).

Toyama

2

B

C

Truck

Truck

Truck

HigashiToyamaStation

Rail

Osaka
South
Port

Ship (coastal)

A Truck only B Truck and rail C Truck and ship

CloseststationShinmoji
Port

Truck

Truck

Port/airport

KOKUSAIELECTRIC’s
business siteA

Customer

Introduction

KOKUSAI ELECTRIC GROUP CORPORATE REPORT 2023

KOKUSAI ELECTRIC’s
Value Creation

Sustainability

Governance

Information

28

Environmental

Promotion of Sustainable Procurement
Strengthening of supply chain management
Approach to Promotion of Sustainable Procurement
For supply chain management, we have established the Procurement Policy and the Sustainable Procurement Guidelines in compliance with the international code of conduct to ensurecompliance with respect to labor, occupational health and safety, the environment, ethics, etc., thereby benefiting society. We are working with our business partners to take steps to entrench sustainable procurement activities.

KOKUSAI ELECTRIC Group Procurement Policy
The KOKUSAI ELECTRIC Group is committed to supply chain
management with sustainability in mind under the slogan“Technology & Tai-wa for Tomorrow” as stated in the KOKUSAI ELECTRIC Way, the Group’s Corporate Philisophy. This
policy expresses the Group’s basic policy on supply chain
management and standards of conduct to be observed insupply chain management. The objective is to ensure compliance throughout the supply chain and to achieve sustainableprocurement activities in cooperation with suppliers, thereby
contributing to society through business activities and fulfilling the Group’s social responsibility.
	Compliance with laws and regulations, social norms, andother requirements
The Group shall comply with the laws and regulations ofcountries and regions, the Group’s Corporate Philisophy,
rules and regulations, social norms, and other requirements, and conduct procurement activities with integrity
based on corporate ethics. Moreover, having established
the KOKUSAI ELECTRIC Group Sustainable Procurement
Guidelines in accordance with the Code of Conduct of the
Responsible Business Alliance (RBA), we request that our
suppliers comply with such supply-chain-related laws andregulations, social norms, and other requirements.
	Prioritization of the environment
The Group shall conduct procurement activities with fullconsideration for the conservation of the global environment and reduction of environmental impact in order torealize a sustainable society in harmony with the environment through business activities. In accordance with theGroup’s Sustainable Procurement Guidelines and the Green
Procurement Guidelines, we request that our suppliers

make efforts to protect the environment, including throughthe use and production of parts and materials with lessenvironmental impact.
	Partnerships
We believe that emphasizing sustainability in business activities will foster the mutual prosperity of both our suppliers and the Group. Based on that belief, to build better
partnerships and strong relationships of trust with all our
suppliers, we shall deepen mutual understanding through“Tai-wa” and implement initiatives including the following.
We shall deal fairly with all our suppliers and will nottreat any particular supplier favorably or unfavorably.
We shall respect fair business relationships with our suppliers and not impose disadvantages on them through actions that are unfair in light of normal business practices.
We shall strictly manage the trade secrets of our suppliers obtained in the course of business transactions andendeavor to maintain confidentiality.
	Open door
We shall conduct the best possible and fair business transactions, both in Japan and overseas, based on the principles of free competition with respect to all transactions.
We shall respond in good faith to requests for new business transactions and disclose information on transaction
items, etc. Suppliers will be selected after a thorough assessment based on appropriate procedures in terms of
quality, prices, delivery dates, reliability of management,
technological development capabilities, and fulfillment ofsocial responsibility (fair and transparent information disclosure, compliance with laws and regulations and social
norms, respect for human rights, elimination of discrimination in employment and occupational matters, eliminationof child labor and forced labor, environmental conservation
activities, social contribution activities, creation of a comfortable workplace, and sharing of awareness about social

responsibility with suppliers, etc.). Moreover, regarding ongoing transactions, we shall periodically review the assessment of our suppliers.
Responsible procurement of minerals
The Group shall engage in responsible procurement activities to avoid procuring parts and materials containing conflict minerals (tin, tantalum, tungsten, and gold), cobalt,
and other minerals that may be implicated in the supportof armed groups, child labor and other human rights abuses, corruption, and environmental degradation in conflictareas and high-risk areas.
Specifically, we shall strive to understand social issues in
the countries of origin of minerals and the roles expectedof companies. Moreover, respecting the Organization for
Economic Cooperation and Development (OECD) Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas, we shallcontinue investigating our supply chain and pursuing initiatives based on the OECD Guidance. We also request that
our suppliers survey their supply chains, including identification of the country of origin of minerals and the locations of smelters, by using internationally recognized tools,
such as the Conflict Minerals Reporting Template (CMRT)
provided by the Responsible Minerals Initiative (RMI). We
also request that they procure from Responsible Minerals
Assurance Process (RMAP) conformant smelters.
	Provision of information and maintenance of confidentiality
The Group shall respond in good faith to all suppliers’
requests and do its utmost to provide them with the information deemed necessary for transactions. At thesame time, the Group requests suppliers to provide useful information deemed necessary for achieving sustainable procurement activities. The Group shall, on its own
responsibility, strictly manage such information provided
by suppliers and maintain confidentiality.

KOKUSAI ELECTRIC’s

Introduction

KOKUSAI ELECTRIC GROUP CORPORATE REPORT 2023

Value Creation

Sustainability

Governance

29

Information

Environmental

CSR-Oriented Procurement Activities

Promotion of Globalization

We are strengthening supply chain management based on the RBA* Code of Conduct
and aim to share CSR awareness with our business partners. We request each of our business partners to confirm its adherence to the Group’s Procurement Policy and Sustainable
Procurement Guidelines, in addition to the Green Procurement Guidelines*2, in order toensure their thorough implementation throughout the supply chain.
1*1 Responsible Business Alliance: An international initiative. RBA proposes a code of conduct to which RBA members and their
supply chains should commit.
*2 R equests to be shared about the Group’s approach to green procurement, survey of chemical substances and high-risk minerals
contained in deliverables, list of substances under voluntary control, and other policies.

KOKUSAI ELECTRIC Group Sustainable Procurement Guidelines |https://www.kokusai-electric.com/en/csr/social/supply-chain

Reinforcement of Partnerships
The Company held business partner meetings (BPMs) and the New Year reception evenduring the COVID-19 pandemic, albeit in an online format, to reinforce partnerships. At
the New Year reception, we shared our medium- and long-term business policies with ourbusiness partners, and commended excellent partners. In BPMs, we brief attendees on
our business policies and trends as well as our procurement, production, quality, and CSR
measures. Through these opportunities, we strive to strengthen mutually beneficial “winwin” relationships with our business partners. In response to global supply chain disruptions, we have doubled the frequency of BPMs to four times a year to strengthen collaboration with our business partners.
VOICE

Mr. Tsuguhiro Nomoto
Tokyo Technological Labo
Co., Ltd.
President andRepresentative Director

We would like to express our profound gratitude for the precious
Best Business Partner of the Year award. We deeply appreciate thesupport and guidance that we have received from KOKUSAI ELECTRIC, other business partners, and many other parties.
At the start of transactions, we lacked sufficient production capacity to fully satisfy your company’s production volume. However,thanks to the dispatch of advisers and the comprehensive guidance we received as part of KOKUSAI ELECTRIC’s initiatives tostrengthen partnerships with suppliers, we were able to establish astable supply system.
Moreover, the sharing of information through periodic partner
meetings and regular individual meetings with your Procurement
Department has enabled us to procure parts and materials basedon forecasts and ensure stable supply.
Going forward, we will work with redoubled efforts, and we will
greatly appreciate your continuing support.

We share procurement strategies with our overseas production bases to strengthen the
procurement capabilities of the entire Group. We will work to standardize rules and management to strengthen control of integrated global procurement.

Deployment of Procurement BCP*
We are strengthening the deployment of procurement BCP in view of the impact of supply
chain disruptions caused by earthquakes, meteorological disasters, and regional conflicts.
*Procurement BCP: Procurement Business Continuity Plan. We have formulated and put in place a procurement BCP, including thorough promotion of standardization, consideration of alternative materials, creation of a database of production bases for procurement items, vigorous promotion of multi-sourcing, etc.

Measures against the Issue of Conflict Minerals*
Regarding conflict minerals, we are strengthening initiatives by promoting information sharing with our business partners in order to ensure that our procurement activities acrossour supply chain do not benefit armed groups that violate human rights.
*Conflict minerals: Tin, tantalum, tungsten, gold (collectively “3TG”) as well as cobalt from the Democratic Republic of the Congo(DRC) and adjoining countries are designated as conflict minerals.

Selection of New Suppliers based on Environmental Criteria
Before engaging in business with new suppliers, we ensure they are aware of our environmental policy and screen them using the environmental management assessment questionnaire. The questionnaire consists of 1 0 items, including ownership of facilities with
pollution loads, record of administrative guidance, and status of environmental management system certification. In fiscal 2022, two new suppliers of production goods responded to the questionnaire, and no suppliers were identified as posing significant environmental risks.
Results
Fiscal 2020

Fiscal 2021

Fiscal 2022

Number of suppliers assessed

4 suppliers

3 suppliers

2 suppliers

Cumulative number of
new suppliers

559 suppliers

575 suppliers

568 suppliers

KOKUSAI ELECTRIC GROUP CORPORATE REPORT 2023

Introduction

KOKUSAI ELECTRIC’s
Value Creation

Sustainability

Governance

Information

30

SocialHuman Resources Management as a Source of Innovation
We recognize that people are the source of the Group’s business activities. Diversification of human resources and work styles, individuals’ growth through daily efforts, and maintenance andimprovement of health and safety are essential for the sustainable development of a company.
We will continue to promote initiatives for diversity & inclusion, the development of human resources capable of coping with the rapid pace of globalization, and health & productivity management to strengthen the foundation for innovation.

Securing Diverse Human Resources
Promotion of Diversity & Inclusion
Approach to Diversity & Inclusion
The social environment is changing drastically due to factors such as a rapidly declining
birthrate and population aging. For us to achieve sustainable growth and development,
we need to create new value by leveraging the diversity of our employees. In order to advance boldly in the global arena, we will make full use of the diversity of our employees,
who have different backgrounds, perspectives, and values, and link it to corporate growth,thus cultivating an environment in which motivated employees can enjoy taking on challenges and becoming increasingly active on the world stage.

Promoting Employment of Diverse Human Resources
The Company actively hires global human resources and people with disabilities to create
a diverse workforce. In particular, since a large proportion of job-seekers with disabilities
seek employment in the Kanto area, we consider additional departments to which we
can assign them, depending on the type of work, to promote the assignment of employees with disabilities to the head office.

Efforts to Promote Female Empowerment in the Workplace
The Company’s basic policy is to Number of female managers
promote the active participation (the Company, as of June 1 of each year)of people in the workplace withEngineer Leads, Assistant Managers
out gender bias. We will faciliManagers(persons)(%)
Percentage of female managers
tate corporate growth by secur- 20
518
ing employees with different
17
16
16
4
15
backgrounds, points of view, and 15
14
3.6
3.1
values without bias and taking
3
full advantage of diversity. With 10
10
2.3
2.1
1.9
1.9
8
regard to empowering women,
255
we have formulated an action
5441plan as one aspect of affirmative
action (proactive measures to
0
0
2018
2019
2020
2021
2022
2023 (fiscal year)
correct inequality) to promote
female empowerment in theworkplace.
In fiscal 2022, we vigorously hired female employees, signed the Women’s Empowerment Principles (WEPs),* and provided female employees with opportunities inside andoutside the Company to think about their career development through exchanges of opinions. Going forward, we plan to offer various career models to support and promote theactive participation of individual female employees.
*A set of seven principles established by the United Nations Global Compact and the United Nations Development Fund for Women (UNIFEM), which is currently the United Nations Entity for Gender Equality and the Empowerment of Women (UN Women).

KOKUSAI ELECTRIC GROUP CORPORATE REPORT 2023

Introduction

KOKUSAI ELECTRIC’s
Value Creation

Sustainability

Governance

Information

31

SocialConsultation Counter for Persons with Disabilities
Based on the Revised Act on the Promotion of the Employment of Disabled Persons andthe subsequent partial revision, we have established a system for supporting both employees with disabilities and their workplaces, setting up a consultation counter in orderto respond appropriately to their needs and concerns. The consultation counter responds
to various inquiries from employees with disabilities and workplaces and also provides
advice to workplaces regarding reasonable accommodations to meet their needs.

“Tai-wa” with the Union
The Company has concluded an agreement with the KOKUSAI ELECTRIC Labor Union,
under which labor-management conferences are held regularly to discuss labor conditions and personnel systems, how to activate employees, and other issues. Throughthese conferences, labor and management work together to establish disciplinary rules
for the workplace and maintain and improve the workplace environment. The labor
agreement specifies that the Company and union hold such labor-management conferences regularly to facilitate communication, ensure smooth business operations andgrowth, and improve the working conditions of employees. In this way, labor and management exchange opinions constructively in regard to various issues such as “management policies” and business operations, thereby establishing healthy and stable relations
between workers and management.
VOICE

Masamichi Yachi
Executive Chairperson,
KOKUSAI ELECTRIC Labor Union<Career summary at the union>
Fiscal 2012
Executive member of Toyama Branch
Fiscal 2013-2015
General Secretary of Toyama Branch
Fiscal 2016-2019
Vice Chairperson, KE Branch, Toyama
Fiscal 2020-2022
Executive Chairperson, KE Labor Union

At labor-management conferences, which are held once
every six months of each fiscal year, the heads of divisions
and members of the union’s executive committee engage
in a dialogue with management to create a desirable
workplace. At the meetings, we confirm workloads andstaffing based on the forecasts of financial results andeach division’s budget.
In addition, the Long Overtime Reduction Committee
has found out from departments that have employeeswith overtime exceeding 60 hours per month the reasonsfor exceeding 6 0 hours, the prospective workload andmeasures for balancing the workload, and the state of annual leave consumption. Moreover, the meetings of union
executives discuss the state of annual leave consumption
and questions, opinions, and requests from workplaces,
which are shared between labor and management, andhow to make improvements.
Every year, the union conducts a questionnaire survey ofthe living conditions of workers, and the results of the survey are shared between labor and management throughwage negotiations. Labor and management exchange
opinions on how to improve the workplace environmentand discuss revisions to the collective agreement.

Work Style Reforms
Approach for Work-life Balance
As Japan faces a declining birthrate and population aging, the needs of people who balance work with family responsibilities such as child-rearing and nursing care have become
more diverse. Thus, establishing an environment that expands work opportunities and enables workers to fully realize their ambitions and utilize their skills to improve productivity
and achieve work-life balance has become an important issue for companies. The Company supports a work-life balance with various measures.

Support for Balancing Work and Family Life
Recognizing the importance Number of employees who took childcare and nursingof achieving a good balance care leave and the percentage of employees who took
between rewarding and ful- childcare leavefilling work and a sound andNumber of male employees who took childcare and nursing care leave
comfortable life, the CompaNumber of female employees who took childcare and nursing care leave
Percentage of male employees who took childcare leave
ny has been working to de- (persons)(%)
Percentage of female employees who took childcare leavevelop and enrich programs 15
100
100
100
100
100
100
that help workers realize a12good balance between work75
and family responsibilities 10
57
such as child-rearing and7
750
nursing care. The CEO con25
6
veys a message about our
5
5
5
4
9
efforts to address the Act on
525
44Advancement of Measures2
1
1
to Support Raising Next-Gen00eration Children. We also
2018
2019
2020
2021
2022 (fiscal year)
share information on childcare leave for male employees by posting examples in internal newsletters and on the intranet. In addition, we implement e-learning for managers in accordance with the revisionof the Act on Childcare Leave, Caregiver Leave, and Other Measures for the Welfare ofWorkers Caring for Children or Other Family Members to deepen understanding at workplaces. As a result, the percentage of male employees who took childcare leave increased
to 57% in fiscal 2022.

Introduction

KOKUSAI ELECTRIC GROUP CORPORATE REPORT 2023

KOKUSAI ELECTRIC’s
Value Creation

Sustainability

Governance

Information

32

SocialAllowance for Balancing Childcare and Work Program
As part of efforts to create an environment where employees rearing children can continue to make a full contribution at work, the Company introduced the “Allowance forBalancing Childcare and Work” program on April 1, 2017. This program provides employees who are raising a child or children before completion of the third grade of elementary school, whether in a dual-income household or as a single parent, with financial assistance to cover childrearing expenses, such as preschool fees and fees for after-school
childcare facilities.
Moreover, in fiscal 2022, the eligibility for sick/injured child care leave was extended
from preschool children to children before graduation from elementary school. The Company also discussed working from home for childcare and nursing care reasons and established a system for working from home in April 2023.
Systems for supporting childcare and nursing careChildcare Support System
Available to female employees

Pregnancy

Available to male employees

Leave for seeing a doctor
Leave due to pregnancy-related disorders
Reduced-hours work system
for reducing commuting
stress, etc.

Nursingcare leave

ChildbirthMaternity leave(8 weeks before and afterchildbirth)ChildcareleaveChildcare leave(Up to a total of three years; available until the child finishes
the first grade of elementary school)

Return to

Reduced hours work
(The employee can optionally choose their work hours: 4, 5,
6, 6.5, or 7 hours a day until the child graduates fromelementary school)
Flextime system (until the child graduates from elementary
school)Sick/injured child care leave, Family care leave
Paid half-day leave (not limited)
A system of leave when a spouse is transferred overseas
Allowance for Balancing Childcare and Workwork

Nursing Care Support System

Paternity leave(5 days in total)

Return towork

Nursing care leave(1 year in total; can betaken intermittently)

Reduced hours work
Sick/injured childcare
leave
Family care leave
Annual nursing careleave(can be taken in hourly
increments)
Paid half-day leave

Development of Human Resources Who “Learn on
Their Own, Think on Their Own and Act on Their Own”
Development of global human resources and securing of
excellent human resources
Approach for Development of Next-generation Human Resources
Our philosophy for human resources development is to develop human resources who“learn on their own, think on their own and act on their own.” We provide training programs for employees, regardless of whether they are new graduates or mid-career hires,to help them improve their knowledge and skills and for their career development fromthe time they join KOKUSAI ELECTRIC. The programs we offer include training by instructors from within and outside the Company that enable trainees to master the necessary
technology and gain the necessary knowledge for work, technical lectures on open innovation, language training to develop global human resources, and presentation training including practical tips for effective presentations. In particular, with regard to the development of global human resources, we are taking measures such as strengthening
language training programs, dispatching employees to overseas sites from the perspective of long-term human resources development, and providing cross-cultural management training. From the viewpoint of human resources development at overseas sites,
we have also established a system to promote transfers between sites.
The Company conducts interviews for evaluation of management by objective with all
employees twice a year, and gender has no bearing on the evaluation.
Main education and training
Category
Basic technology
Advanced Technology and
New Fields
Position-based education

Company-wide Education(Underlining indicates where the content of a system or a system itself exceeds the legal obligations.)

SafetyName
Basic Technology Course
Technical Lectures
Training for Newly Appointed Technicians
Training for Newly Appointed Monthly Salaried Workers
Patent Training (beginner and intermediate level)
Presentation Training
Compliance
Quality Incident Case Study
Mental HealthHigh-pressure Gas Safety Training
Safe Driving Training

Introduction

KOKUSAI ELECTRIC GROUP CORPORATE REPORT 2023

KOKUSAI ELECTRIC’s
Value Creation

Sustainability

Governance

Information

33

SocialDevelopment of eco people

e-learning

Toward the realization of an environmentally harmonious and sustainable society throughthe provision of products and services, we are developing eco people* to deepen the basic knowledge and understanding of the concepts necessary for all employees.
* Persons who passed the Certification Test for Environmental Specialists (Eco Test) of the Tokyo Chamber of Commerce and Industry

Percentage of employees who obtained the eco people certification
Results(%)

100

The Group regularly offers various e-learning programs. In fiscal 2022, 91 e-learning programs were offered to improve specialized skills required in business operations and ESG
literacy. We are also expanding e-learning content, such as the use of animation, to encourage trainees to take ownership of each topic.
Examples of major e-learning programs for all employees
Program name

Target100

Occupational safety

Monthly

QualityMonthly

Specialized Technology

Monthly

Information Security
50

24

28

15
0

–2020

–2021

2022

2025

(fiscal year)

Frequency

Every six-months

Environmental Laws and Regulations Related to Products

Once a year

Waste

Once a year

Eco-mindOnce a year

Encouragement to Take Childcare Leave

Once a year

Appropriate Forms of Dispatch and Contracting

Once a year

Harassment

Once a year

Compliance

Once a year

Import Customs Clearance

Once a year

Sustainability

Once a year

KOKUSAI ELECTRIC GROUP CORPORATE REPORT 2023

Introduction

KOKUSAI ELECTRIC’s
Value Creation

Sustainability

Governance

34

Information

SocialMaintenance and Enhancement of Health and Safety
Strengthening Occupational Health and Safety Management
Health & Productivity Management Declaration
In order to realize the corporate slogan, “Technology & Tai-wa for Tomorrow,” the
KOKUSAI ELECTRIC Group’s unchanging basic principle is to prioritize health andsafety in all of our business activities. In line with this principle, we declare that wewill create workplaces where every employee can work with ambition and vigor
without mental or physical anxiety, and actively work to improve the health of ouremployees and their families.
July 28, 2023 Fumiyuki Kanai

Mental healthAs part of efforts to early detect and respond to employees with mental health issues, we
conduct training of supervisors by an industrial physician (psychiatrist) and engage in efforts to improve the workplace environment based on the results of group analyses of
employee stress checks.
Moreover, industrial physicians, public health nurses, and nurses collaborate to conduct
regular counseling sessions between an industrial physician and employees with mental
health issues and to help employees on leave recuperate and return to work without anxiety.

Representative Director, President and Chief Executive Officer

Number of employees taking leave for mental illness (domestic Group employees)
Number of those who were absent for seven or more days per month

Health & Productivity Management
Promoting health & productivity management
In order to promote a workplace where every employee is motivated and works with vitality without mental or physical anxiety, we are strengthening initiatives for “physicalhealth,” “mental health,” and “creating a rewarding working environment.”
Physical healthAs part of efforts to prevent and ameliorate lifestyle-related diseases, we are implementing preventive and remedial measures using a health management system, such as supporting employees to receive health checkups, recommending additional examinations,and providing health guidance.
We are also strengthening initiatives to raise health awareness and change behavior byholding events related to dietary habits and offering education that encourages smokers
to quit smoking.

If the same employee takes multiple leaves of absence within the fiscal year, they are counted as one person.
(persons)

Number of
employees taking
leave

Fiscal 2019

Fiscal 2020

Fiscal 2022

Fiscal 2022

Domestic Group
total

11

8

14

23

Creating a Rewarding Working Environment
We measure the degree of employee satisfaction by category through regular employee satisfaction surveys, including those of employees of Group companies in Japanand overseas. Based on the results, each department formulates and implements anaction plan for improvement. Moreover, we engage in efforts to vitalize workplaces,such as by creating opportunities for dialogue among employees, throughout theGroup.

KOKUSAI ELECTRIC GROUP CORPORATE REPORT 2023

Introduction

KOKUSAI ELECTRIC’s

Sustainability

Value Creation

Governance

35

Information

SocialPhilosophy on Safe Workplace Environments
The Toyama Technology & Manufacturing Center, our production base in Japan, and Kokusai Electric Korea Co., Ltd., have acquired ISO 45001, which specifies requirements for an
occupational health and safety management system. Both are working to build and maintain workplace environments where employees and customers can work safely worldwide. Regarding the prevention of infectious diseases, our main objective is to prevent
clusters of cases from occurring within the Company, and our efforts are designed to keep
employees safe and healthy.

Health and Safety Management Organizational Structure
General Manager, Toyama Technology & •General health and safety manager•Fire prevention managing authority
Manufacturing Center•Facilities maintenancemanager•General health and safety supervisor•Fire prevention manager

The Group’s Occupational
Health and Safety
Committee

Occupational Health and Safety Policy
Based on the Corporate Philisophy, “The KOKUSAI ELECTRIC Group strives to create
value through “Technology” and “Tai-wa” to realize a sustainable society that is safe,
comfortable and vibrant,” our unchanging basic principle is to prioritize health andsafety in all of our business activities. In line with this principle, the Group is working to create safe and healthy workplaces.
	Positioning health and safety as one of the most important management issues, we will
engage in health and safety activities with a concerted effort by the entire Group to attain a higher level.
	We will comply with applicable laws and regulations as well as our voluntary standards
and carry out health and safety activities in accordance with fundamental principles.
	Each employee will vigorously engage in health and safety activities, making a concerted
effort to create a comfortable workplace and foster a culture of safety.
	We will strive to strengthen collaboration with affiliated companies, etc., and work toensure the health and safety of everyone involved in our business activities.
	We will contribute to the realization of a safe and comfortable society in the course of
all our business activities, which are based on our basic philosophy that gives the highest priority to health and safety.

Health and Safety Management
Regarding the Company’s health and safety management systems, each organization has
established a system and engages in safety activities. At our main site, Toyama Technology & Manufacturing Center, individual organizations collaborate and manage health andsafety under the leadership of the General Manager of the Center.
The main cause of work accidents (accidents with no lost time) in fiscal 2022 was
COVID-19 infection during overseas business trips. There were also work accidents involving backache and cuts. The Occupational Health and Safety Committee investigates the cause and implements corrective measures and monitors their effectiveness.

Director and General Manager,
Corporate Administration Department

Industrial
physicianSafetymanager

Healthmanager

Safetydrivingsupervisor<Safety Meister>
Clean room (CR)Super clean room (SCR)
Receiving and shipping yards
Customers
Kamiichi Works

Director and General Manager,
Production Engineering Department

Specific highpressure gas
operation chief

Facilities Safety
Certification
Committee

Cold evaporator(CE) safety
supervisor

Facilities
maintenancesupervisor

Hazardous
materials
storagemanager

Chemical
substances
storagemanager

In-house firebrigadeSuper clean room
(SCR)
Super Clean Room (SCR) Daily
Operation Subcommittee
Facilities Introduction
Subcommittee
Departments using Super
Clean Room (SCR)

Each department: director and general manager, manager, work chief, safety chief, health chief, fire door lock chief,
traffic safety committee member, etc.

Health and Safety InitiativesM easures to eliminate work accidents
1. On-site risk management•R isk identification and corrective measuresthrough safety patrols•R isk management and risk level reduction
measures through risk assessment
2. Review of work procedure manual
3. Implementation of safety education
 afety training for new workers, change of•S
personnel, and reminders

Enhancement of safety awareness1. M easures for employees with lessthan 3 years of work experience•A ppointment as a safety patrol
member to enhance safety
awareness
Legal compliance
1. Responding to legal revisions
2. C onfirmation of compliance withlegal requirements

KOKUSAI ELECTRIC’s

Introduction

KOKUSAI ELECTRIC GROUP CORPORATE REPORT 2023

Value Creation

Sustainability

Governance

Information

36

SocialNumber of work accidents (domestic Group employees and temporary workers)

VOICE

Lost-time work accidents: 4 or more days of missed work *Excluding commuting accidents(persons)

Calendar year

2020

2021

2022

No lost time

3

6

16

Lost time

1

0

1

Total

4

6

17

Yoshitaka
KamidaFrequency rate of work accidents (domestic Group employees and temporary workers)
Number of work accidents resulting in one or more lost days of work / Total number of working hours x 1 million
hours *Excluding commuting accidents

Calendar year

2020

2021

2022

0.09

0.00

0.27

Manager,
Corporate Administration
Department,
Human Resources & Corporate
Administration Division

Protecting the health and safety of our employees is our top priority. The Toyama Technology & Manufacturing Center has obtained
ISO 45001 certification for its occupational health and safety management systems, and the Occupational Health and Safety Committee is stepping up efforts to achieve the goal of eliminating losttime accidents (eliminating rule violations and similar accidents).
As part of our measures to eliminate work accidents, we havecreated a safety risk management schedule. This includes education to enhance safety awareness of employees with less than
three years of work experience, education on compliance withsafety-related laws and regulations for all employees, including
those at Group companies, and regular physical exercise sessions.
In addition, we have established and put into practice the “Ten
Safety Rules,” and departments, such as those responsible for theclean room (CR) and the shipping and receiving yards, have alsoestablished their own “Five rules for Safe Work” and are executing
safety activities.

Ten Safety Rules (common edition)

Number of occupational deaths (the Group, by region)(persons)

Calendar year

2020

2021

2022

Japan

0

0

0

Asia
(excluding Japan)

0

0

0

Americas, Europe,and others

0

0

0

Total

0

0

0

	Dress properly.
<Wear footwear that protects your toes and heels and wear footwear properly without
stepping on the shoe heels.>
Greet and do radio exercises.
Confirm health and safety by calling out to co-workers.
<Check one another first thing in the morning.>
Comply with on-site traffic rules.
<Walk on the right side of the aisles. Do not walk with both hands occupied withburden, with your hands in your pockets, or while using a mobile phone.>
Pay attention to your feet and head when walking or working<Wear appropriate protective equipment when working and observe expiration dates.>
Follow safety rules established for each operation and area.
	
Do not make judgments about things you don’t understand. Report, Communication, andConsultation.
Warn each other about any unsafe actions or rule violations.
Proactively make suggestions about near-miss cases.
10 C
 heck actions to be taken in the event of an emergency in advance and prepare for disasters.

KOKUSAI ELECTRIC GROUP CORPORATE REPORT 2023

Introduction

KOKUSAI ELECTRIC’s
Value Creation

Sustainability

Governance

Information

37

SocialRespect and Consideration of Human Rights
In order to build a society in which people can enjoy a safe, secure, and happy life, all human rights must be respected and none infringed.
As well as raising awareness of our employees about human rights, as a signatory to the United Nations Global Compact, we are striving to resolve issues concerning human rights and labor
practices at a higher level to fulfill our responsibility to respect human rights.

Respect for Human Rights
Promotion of the Understanding and Awareness of Employees about Human Rights
Training to Increase Awareness about Human Rights
In addition to a program designed to raise employees’ human rights awareness in order to prevent discrimination, we provide training on respect for the human rights ofall people.
We provide employees with harassment prevention education, using sexual harassment, abuse of authority, and pregnancy discrimination as examples. The program isdesigned to ensure trainees are aware of the nature of harassment defined in law andthe importance of preventing harassment and understanding the types of conduct that
may constitute harassment, and how to behave and prepare oneself so as not to engage in harassment, not to let others do so, and not to overlook it.

Participation in the United Nations Global Compact
In June 2022, we joined the UN Global Compact as well as the Global Compact Network Japan, which is comprised of Japanese signatories to the UN Global Compact.
Signatories to the UN Global Compact are required to commit to complying with
the Ten Principles covering four fields, namely, human rights, labor practices, the environment, and anti-corruption, and implementing those principles. As a signatory to thisinternational initiative, we will strive to resolve issues in the human rights and labor
fields at a higher level.

KOKUSAI ELECTRIC GROUP CORPORATE REPORT 2023

Introduction

KOKUSAI ELECTRIC’s
Value Creation

Sustainability

Governance

Information

38

SocialHuman Rights Policy
In order to build a society in which people can enjoy a safe, secure, and happy life, all human rights must be respected and none infringed.
As well as raising awareness of our employees about human rights, as a signatory to the United Nations Global Compact, we are striving to resolve issues concerning human rights and labor
practices at a higher level to fulfill our responsibility to respect human rights.

The KOKUSAI ELECTRIC Group is helping to realize a society where human rights are respected in its efforts tocreate value through “Technology” and “Tai-wa” for tomorrow to realize a sustainable society that is safe, comfortable and vibrant. As a precondition for this, the Group
strives to fulfill its responsibility to respect human rights.

Responsibility to Respect Human Rights

The Group strives to meet its responsibility to respecthuman rights by not infringing on human rights and addressing negative human rights impacts with which theGroup may be involved through its operations and business relationships.
In particular, we consider the following items of human rights material.
•	Prohibition of child labor, forced labor, and humantrafficking
We shall never tolerate any form of child labor, forcedlabor, or human trafficking.
•	Prohibition of discrimination and equal opportunity
We shall never discriminate based on ethnicity, religion, gender, age, sexual orientation, disability, nationality nor on any other grounds. Furthermore, we shallnever engage in any harassment or any other conductthat offends individual dignity.
•	Equal pay for equal work
We shall respect and observe applicable local laws
and regulations regarding equal pay for equal work.
•	Freedom of association
We shall respect the right of our employees to freely
form and join associations. We shall also respect theright of our employees to engage in voluntary discussions and negotiations about their relationships with
their employers, and the right of our employees to refrain from those activities.
Responsibility to respect human rights applies to all
officers and employees of the Group. We shall also require all our suppliers and business partners to observe
this policy. Furthermore, even if the Group is not directly
contributing to negative human rights impacts, theGroup expects its business partners and other parties
whose own impacts may be directly linked to theGroup's operations, products, or services to respect andnot infringe upon human rights, and will respond appropriately where they are not respecting human rights.

Relationship to the Group's values and policies

The Group's is aware that as a business enterprise it is amember of society and can contribute to creating anenvironment in which human rights are respected. We
believe that meeting the responsibility to respect humanrights is key to operating as a responsible business, andshould be expected of all companies. This human rights
policy is an expression of our commitment to fulfillingthese responsibilities based on KE’s Corporate Philisophy, the KOKUSAI ELECTRIC Way, and Guidelines andCommitments.

E xercising the Responsibility to Respect
Human Rights

The Group is committed to meeting the responsibility torespect human rights through implementing the United

Nations Guiding Principles on Business and Human Rights.
Moreover, we shall support and respect human rights
codes of conduct as defined by the International Bill of
Human Rights, the ILO Declaration on Fundamental Principles and Rights at Work, the Convention on the Rightsof the Child, the OECD Guidelines for Multinational Enterprises, The Responsible Business Alliance (RBA), and Ten
Principles of the United Nations Global Compact.
To this end, KE has established a human rights due
diligence internal system based on the United Nations
Guiding Principles on Businesses and Human Rights,
continues to implement and improve this system byidentifying and assessing potential and actual impacts
on human rights, and takes appropriate measures toprevent or mitigate risks. Where the Group identifies
that it has caused or contributed to a negative humanrights impact, it will carry out appropriate internal andexternal processes to provide remediation.
The Group adheres to national law and regulation in eachmarket in which it operates. Where the Group faces conflicts between internationally recognized human rights andnational laws, the KOKUSAI ELECTRIC Group will pursue
ways to respect the principles of international human rights.
The KOKUSAI ELECTRIC Group will provide appropriate
training and capacity building in order to embed this policy commitment throughout the Group. The Group is committed to engaging in “Tai-wa” with relevant external stakeholders and consulting with them to determine how best
to address potential and actual human rights impacts. The
Group will disclose its efforts to respect human rights on
its website and by other means of communication.

KOKUSAI ELECTRIC GROUP CORPORATE REPORT 2023

Introduction

KOKUSAI ELECTRIC’s
Value Creation

Sustainability

Governance

39

Information

SocialContribution to Society through Creativity and Innovation
We believe that a wonderful future will emerge through creativity and innovation around the world, shaped by people’s dreams, ideals, expectations, and needs. Semiconductors are an integral
part of a scene that brings about such creativity and innovation.
We will continue to create and innovate through our semiconductor manufacturing equipment business so that higher quality semiconductor devices and groundbreaking applications using
semiconductors will be created and a wonderful future will emerge.

Creation of New Technologies and New Products
R&D Policy
The Company develops semiconductor manufacturing equipment leveraging the top
deposition technologies in the world.
In addition to providing underlying deposition technology, we are striving to overcome physical limitations with miniaturization through joint development with research institutes, universities, raw material manufacturers, and device manufacturers.
We are also vigorously promoting the development of advanced elements that adapt
to changes in device structures and materials. Our deposition technology and treatment technology are used by the world’s top device manufacturers, and greatly improve the functionality and performance of semiconductors. Through digital transformation and the use of IT tools, we are accelerating development to provide superior
deposition technology to our customers. Semiconductors that utilize our deposition
technology are found in electronic devices around the globe and contribute to making people’s lives safer and more comfortable.

R&D System
Semiconductor device development is advancing around the globe. We have research institutes in Japan and overseas and have established a comprehensive research system.
Since it requires technology from a wide range of fields — including machinery, electronics,
heating, fluids, physics, chemistry, AI, and machine learning — we have assembled a teamof experts representing each one. Our aim is to create an R&D system that can continue
to overcome difficult problems by leveraging our own technology and collaborating withconsortiums, universities, and development partners around the world.

Organizational Structure
Executive officer responsible for technology development
and product development

System development
departments

Process development
departments

New product projects

Securing Safety of Products and Services
The development and design of the Company’s semiconductor manufacturing equipment
comply with the SEMI standards.
To ensure compliance with the SEMI standards, design and quality assurance departments conduct checks from the platform planning phase through the detailed design ofeach unit and component based on a checklist. Ultimately, we only provide products thathave undergone SEMI testing by external certification bodies and have been certified forconformity, thereby ensuring the safety of products and services required by the world’s
leading device manufacturers.
Check by design and quality assurance
departments

Testing by external certification body
Conformity

Platform conceptual
designDetailed design

Assembly andadjustment

Shipment
Nonconformity

KOKUSAI ELECTRIC’s

Introduction

KOKUSAI ELECTRIC GROUP CORPORATE REPORT 2023

Value Creation

Sustainability

Governance

40

Information

SocialPromoting Digital Transformation (DX)

Enhancement of Customer Satisfaction
Product Marketing
In order to improve our products and provide high value to customers, our engineeringand sales departments and local staff engage in “Tai-wa” with customers and share customers’ views within the company. We also strive to create new value Group-wide by
driving forward proposals that lead to new technological developments and corporate
strategies, through an initiative called “intellectual property landscape” (IPL) that provides
an overview and comprehensive analysis of academic association information, patents,and market information.

Marketinformation

Patents
Academic association presentations

Semiconductor
manufacturing
equipment

Customers

In the pursuit of core business reengineering that makes full use of advanced digital technology and the development of high-value-added products and services, we aim toachieve differentiation through digital transformation (DX). While striving to achieve sustainable growth in the drastically changing semiconductor equipment industry throughDX, we will provide products and services offering a high degree of customer satisfaction.
Our DX initiatives include the establishment of global IT infrastructure and business
control, productivity improvement through smart production SFX*1, Digital Twin Simulation*2 without actual equipment, and pursuit of data science and Process Informatics*3
by applying AI and machine learning.

IT x DX = FutureCore businessreengineering

OutsideSmart production
SFX*1“Tai-wa”

Engineering and sales departments
Local staff
IPL

New value

Present

Global IT infrastructure

Product MarketingTechnological development & corporate strategies

Digital Twin Simulation*2

High-value-added
products and services

Data science
Process Informatics*3

FutureInside*1 SFX: Smart Factory Transformation
	It refers to the transformation of manufacturing to enhance productivity and safety by applying digital technology. SFX pursues
unprecedented innovative manufacturing by introducing IoT sensors and robotics into parts transport and supply, assembly testing, assembly position information, and worker movement.
*2 Digital Twin Simulation
	By integrating virtual and real space using digital technology, a digital twin (virtual equipment) allows the simulation of safe andefficient operation without actual equipment (semiconductor manufacturing equipment).
*3 Process Informatics
	It refers to data science technology (a method introduced to materials development (semiconductor deposition process development)) that synthesizes previously unattainable semiconductor materials and derives deposition procedures and deposition
conditions for semiconductor materials.

Pursuing Quality
In accordance with the Quality Policy and the spirit of “Technology” and “Tai-wa,” we arecommitted to establishing technologies helpful for solving issues of our business partners
and society and offering top-level quality that supports them. In doing so, we aim to realize
an environmentally harmonious and sustainable society and earn the trust and confidenceof our customers. To this end, we are engaged in business process transformation and product and service quality reform throughout the Group.

Introduction

KOKUSAI ELECTRIC GROUP CORPORATE REPORT 2023

KOKUSAI ELECTRIC’s
Value Creation

Sustainability

Governance

Information

41

SocialQuality Policy
To accurately grasp customers’ expectations and implement quality assurance activities toachieve quality that satisfies customers, we formulated the Quality Policy.

Quality Policy
The Group aims to be the top company in customer satisfaction by developing andproducing equipment that exceeds customers’ expectations and contributes to customers’ profits.
(1) Achieve quality that earns customer trust and satisfaction.
(2) Provide competitive products and services to our customers on time.
To this end, all employees shall perform their duties with sincerity, in accordancewith the basics and ethics, and shall think and act on their own initiative from customers’ viewpoints and strive for continuous improvement.

Moreover, we hold the Quality Meeting where responsible departments share information with management and relevant departments so that recurrence preventive measuresand preventive measures are thoroughly communicated to improve quality.
Furthermore, with the aim of improving the quality and reliability of our products andservices, we are working with our design and manufacturing departments and externalbusiness partners to further improve the degree of completion of equipment by strengthening the verification of quality risks at each manufacturing process.
Approach to Quality Management
We promote internal audits to maintain, manage, and improve the quality management
system (QMS).
We also monitor the occurrence of external accidents and internal defects, analyzing
them using statistical methods to detect abnormalities at an early stage, and minimize unevenness in quality.
In addition, we provide case study training on quality to all employees and plan various
initiatives to raise quality awareness.
Approach to Parts Quality

Ensuring Quality

We check parts and units delivered to us to ensure that no parts or units that should be
rejected are incorporated into our products. We also evaluate the quality aspects of suppliers with the aim of improving built-in quality. We conduct quality audits and provide
guidance to suppliers that manufacture critical parts and units.

Quality Assurance System
Senior Management
Executive officer responsiblefor quality assurance

Approach to Product Quality
Quality manager

Quality Assurance Department

Quality Control Section
Parts Quality Assurance Section

Quality Management
Quality information sharing
and horizontal deployment

Product Quality Assurance Section
Engineering Quality Assurance Section

KOKUSAI ELECTRIC’s business site

Group companies

Each department

Each department

Policy to Address Quality Problems
When a defect is discovered, in addition to corrective actions and horizontal deployment
based on investigation of the direct technological cause, we cooperate with the relevant
departments to identify the motivational factor that lies behind it. As such, we take more
effective preventive measures.

To ensure product quality, we inspect, check, and maintain records of all processes fromthe manufacturing of products in-house through shipping and delivery to customers.
Approach to Design Quality
To ensure that any defects are eradicated in product development and design, the personnel responsible for quality assurance participate in design reviews and other activities,
point out quality issues, etc., and confirm the effectiveness of measures implemented.
Moreover, as an effort to improve quality, we use FMEA*1 to predict and identify potential accidents and failures at the design phase to prevent damage.
*1 FMEA: Failure Mode and Effects Analysis. FMEA is a technique for analyzing the failure modes of components and their effects on
items at higher levels by evaluating possible failures in products and potential risks in the manufacturing process up to the completion of products. It is a method to mitigate risks.

ISO 9001 Certification and Establishment and Maintenance of
Quality Management System
The Group’s production sites have acquired ISO 9001 certification. We have built a quality
management system (QMS) based on a PDCA cycle using a process approach, and continuously make improvements.

KOKUSAI ELECTRIC GROUP CORPORATE REPORT 2023

Introduction

KOKUSAI ELECTRIC’s
Value Creation

Sustainability

Governance

Information

42

SocialEnhancement of Customer Satisfaction (CS) Worldwide
We have been conducting our own annual CS survey on our products and services covering customers worldwide, jointly with Group companies. After the responses are compiled and analyzed, the results are conveyed internally and shared with Group companies to make improvements and enhance customer satisfaction.
We strive to promptly analyze customer complaints and requests (voice of customer), share them internally, and respond to them.
Awarded “10 BEST Suppliers” and “THE BEST Suppliers” in the TechInsights Customer Satisfaction Survey: “10 BEST Suppliers” Award Achieved for the 26th Consecutive Year
We have received two titles in the TechInsights 2023 Customer Satisfaction Survey: the“1 0 BEST Suppliers” and “THE BEST Suppliers” awards. TechInsights Inc. (hereinafter referred to as “TechInsights”), which conducted this survey, is engaged in consulting ontechnology and intellectual property in the microelectronics industry. The “10 BEST Suppliers” awards*1 acknowledge the top 10 semiconductor production equipment suppliers
highly rated by their customers, and “THE BEST Suppliers” awards*2 pay tribute to outstanding semiconductor production equipment suppliers categorized by product type.
We are proud to have won the “10 BEST Suppliers” award for the 26th consecutive year.
This year’s TechInsights Customer Satisfaction Survey received 25,489 responses,
representing over 60% of the chip market and 66% of the subsystem customers. Participants were asked to rate equipment suppliers based on three key factors: supplier performance, customer service, and product performance. Our group has beenhighly rated for exceptional product performance and uptime, which has secured
our position as one of “THE BEST Suppliers.” By delivering excellent product performance and uptime tailored to customer requirements, we have significantly contributed to enhancing productivity, culminating in this award.
Based on our corporate slogan “Technology & Tai-wa for Tomorrow,” we will continue to pursue economic value and environmental and social values from bothbusiness and ESG initiatives (resolution of environmental and social issues andstrengthening of governance) perspectives, thereby contributing to the achievementof the SDGs as well as achieving both a sustainable society and sustainable growth of our Group.
*1 The “10 BEST Suppliers” awards acknowledge the top 10 semiconductor
production equipment suppliers that have received high ratings from theircustomers, regardless of product type.
*2 “THE BEST Suppliers” awards acknowledge semiconductor production
equipment suppliers, categorized by product type such as production andtest equipment, which have received high ratings from their customers.

KOKUSAI ELECTRIC CORPORATION Earns Intel’s 2023 EPIC Distinguished Supplier Award -KOKUSAI ELECTRIC is one of only 22 Distinguished Award recipients
across Intel’s global supply chainIt has earned Intel’s EPIC Distinguished Supplier Award. Through its dedication to Excellence, Partnership, Inclusion, and Continuous (EPIC) quality improvement, KOKUSAI ELEC-TRIC has achieved a level of performance that consistently exceeds Intel’s expectations.
“As one of only 22 Distinguished Supplier Award recipients across the Intel global
supply chain, KOKUSAI ELECTRIC stands out among suppliers in the semiconductor
industry,” said Keyvan Esfarjani, chief global operations officer at Intel. “Their customer orientation and commitment to excellence is a testament to their dedicationand serves as a global benchmark for others to follow.”
The Intel EPIC Distinguished Supplier Award recognizes a consistent level of strong
performance across all performance criteria. Of the thousands of Intel suppliers
around the world, only a few hundred qualify to participate in the EPIC Supplier Program. The EPIC Distinguished Award is the second-highest honor a supplier canachieve. In 2023, only 22 suppliers in the Intel supply chain network earned this award.
To qualify for an Intel EPIC DistinguishedSupplier Award, suppliers must exceed expectations, meet aggressive performancegoals, and score 80 percent or higher in performance assessments throughout the year.
Suppliers must also meet 80 percent or moreof their improvement plan deliverables anddemonstrate formidable quality and business systems.
Received the 2022 TSMC Excellent Performance Award
We were received the Excellent Performance Award by Taiwan Semiconductor Manufacturing Co., Ltd. (hereinafter referred to as “TSMC”).
The Excellent Performance Award is presented to suppliers which have madegreat contributions to TSMC’s business through the supply of equipment, facilities
services, and raw materials. Among the 18 suppliers that won the 2022 Excellent
Performance Award, we received the “Excellent Production Support” award.
We were commended for providing semiconductor manufacturing equipment andsupply chain management which meet the need of producing cutting-edge semiconductors with higher density and performance, as well as timely and proactive
technical support for TSMC’s production and development.
Under the corporate slogan: “Technology & Tai-wa for Tomorrow,” the KOKUSAI
ELECTRIC Group will continue to strive to maintain a trustworthy relationship withcustomers and business partners, enhance the quality and performance of products
and expand services, and realize a safe, comfortable, vibrant and sustainable society from both business and ESG aspects.

Introduction

KOKUSAI ELECTRIC GROUP CORPORATE REPORT 2023

KOKUSAI ELECTRIC’s
Value Creation

Sustainability

Governance

Information

43

SocialLabeling related to Safety etc. of Products and Services
We comply with laws and regulations and various standards from the product design anddevelopment phase onward and ensure thorough compliance.
In particular, we design products in accordance with SEMI S2 (Environmental, Health,and Safety Guideline for Semiconductor Manufacturing Equipment), the safety guidelines
established by SEMI*1, to ensure the safety of our products and enable customers to operate them with a sense of security. Moreover, our products have safety labels in compliance with SEMI S1 (Safety Guideline for Equipment Safety Labels).
We also comply with the safety performance standards required by export destination
countries, and display labels such as Europe’s CE Marking*2 and South Korea’s KC Mark*3
and KCs Mark*4 certifications.
Furthermore, in order to protect the global environment, when shipping equipment, weapply the International Standard for Phytosanitary Measures (ISPM)*5 No.15 and use packaging materials that are stamped with the IPPC*6 mark.
We have confirmed that such labeling is implemented and operated correctly in our
quality management system.
Order reception
Customer requirements

We have strengthened the training of engineers of overseas Group companies and promoted standardization of work certification standards. In 2022, almost 90% of delivery
and setup was performed by engineers of overseas Group companies.
In addition, we have established a defect database for sharing information on past troubles and deployed it globally to enhance support for engineers.

Service Support
The Group ensures a stable supply of spare parts and technical services by our experienced field engineers so that customers can use our equipment with a sense of security.
Maintenance
As a consequence of device miniaturization, the structure of our equipment is becoming
more complex. We offer service package plans that cover all of the troublesome partsprocurement and maintenance work. Please take advantage of the package plans.
Upgrading
We offer options such as upgrade kits and energy-saving parts that suit customers’ operating methods. Please feel free to contact us with any questions you may have.

Laws and regulations
Internal standards/external standards

Used equipment/renovation
Sales
Specifications

DesignManufacturing

Drawings, documented
work instructions

Procedure manual

Inspection
Inspection checklist*1 SEMI standards: Standards established by SEMI (Semiconductor Equipment and Materials International), an international industry
association for semiconductor manufacturing equipment manufacturers, material manufacturers, etc., with the aim of unifying international industrial standards for the semiconductor industry.
*2 CE Marking: Marking affixed to products that satisfy the standards of all European Union (EU) member countries.
*3 KC Mark: Mark affixed to products certified by a certification body designated by the Korean Agency for Technology and Standards (KATS) for electrical and electronic equipment, household products, wireless equipment, broadcasting equipment, information equipment, industrial equipment, etc. used in South Korea.
*4 KCs Mark: A compulsory certification system operated by the Korea Occupational Safety and Health Agency (KOSHA) for 11 typesof industrial machinery used in South Korea.
*5 ISPM (International Standards for Phytosanitary Measures): Regulatory guidelines for wooden packaging materials in international trade*6 IPPC (International Plant Protection Convention): IPPC’s activities include the development of ISPM, implementation of technicalcooperation, and exchange of information on pests and diseases.

Efforts to Enhance the Global Network
We are working on a global level to improve the skills of field engineers who visit our customers’ factories to provide support for installation, setup, maintenance, and service.

We handle used equipment of various models and process film types.
We also offer renovation plans for customers who have been using the equipment for along time and wish to replace it with the latest unit.

Training CenterWith the spread of COVID-19, we have been expanding online training. We are applying
virtual training that utilizes the latest digital technologies (xR, smart glasses, etc.) to moreequipment models and enhance the contents. Training materials and methods are sharedwith our overseas training centers, and we constantly strive to improve the content andquality of the training we offer.
The second training center in the UnitedStates was opened in 2023. As a result, we now
have 1 0 training centers around the world andare increasing the number of trainers and upskilling them.
We will continue to provide high-quality training to ensure customers use our equipment
safely, securely, and effectively.

KOKUSAI ELECTRIC GROUP CORPORATE REPORT 2023

Introduction

KOKUSAI ELECTRIC’s
Value Creation

Sustainability

Governance

Information

44

Community Contribution Activities and Efforts to Coexist with Local Communities

Contributing to the development of local communities to achieve mutual growthby cherishing the environment and people.
Having good relationships with society and local communities is indispensable for our business activities. Our awareness that values connections with local communities has become even stronger.
We will vigorously engage in various activities so that we can continue to develop and grow in harmony with the natural environment and the residents of all the communities where we operate.

Support for Traditional Performing Arts
Every year the Toyama Technology & Manufacturing Center donates to the Owara Kaze-noBon and Hikiyama festivals to maintain friendly
relations with the community where the center
is located and help promote the community.
Owara Kaze-no-Bon is a festival held every
year from September 1 to 3 in the town of Yatsuo, located in Toyama City, Toyama. Eleven ©Toyama Tourism Organization (a public interest incorporated association)neighborhoods in the center of Yatsuo participate, each one performing dances to the mournful
tune of the folk song “Ecchu Owara Bushi.”
The Hikiyama Festival is held every year on May 3 in Yatsuo. A spring festival of Yatsuo Hachiman Shrine dating back to the middle of the Edo Period, it consists of participants moving six lavishly decorated wooden floats through the hilly streets of the town. Crowds gather from all overto see the festival.
These festivals were canceled or scaled down during the COVID-19 pandemic from 2 0 2 0 to
2022, but in 2023 they resumed their pre-COVID-19 style, with tourists once again coming to enjoy the festivals. They are the biggest festivals in Toyama Prefecture. A portion of the donations isused to help bequeath the prefecture’s traditional culture to the next generation.

Sponsor of KATALLER TOYAMAThe Company has concluded an official partner agreement with
Toyama-based KATALLER TOYAMA, a member of the J3 League of
the Japan Professional Football League, for the fifth consecutive
year since 2 0 1 9. Since we share KATALLER TOYAMA’s philosophy
expressed in its “Making Toyama a thriving city” management policy, we are contributing to the sustainable development of Toyama
Prefecture and regional revitalization through sports.

Sponsorship of Kids Sports Camp in Toyama
An annual sports camp featuring top athletes has been held inToyama Prefecture for elementary school children. The Company
endorses the camp’s theme, “All people involved grow together,”and has been sponsoring the camp since 2022, thereby contributing
to the sustainable development of Toyama Prefecture and regional
revitalization through sports.

Cleanup Activities on the Banks of the Ida River
Forty people—comprising employees of the Toyama Technology & Manufacturing Center and Group
companies as well as family members—participated in the Ida Riverbank Cleanup Campaign on June4, 2022, organized by the Yatsuo/Yasuuchi District
Community Development Association. This was
the first participation in the cleanup after a twoyear gap due to the COVID-19 pandemic.
It was pleasant doing the cleanup in the refreshing early morning air.
Through these activities, we are raising employees’ awareness of the importance of community
contributions and promoting harmony with the local environment and people.

TABLE FOR TWO (TFT) Activities
In an endorsement of the activities of the non-profit organization TABLE FOR TWO International,
the Toyama Technology & Manufacturing Center offers a different TFT menu each day at its canteen, Mountain View Cafeteria. A donation of 20 yen is raised for each TFT meal bought to provide school meals for children in developing countries. Items on the TFT menu are healthy,
low-calorie, and well-balanced, so employees understand that it contributes both to eliminating
hunger in developing countries and obesity in developed countries.
As part of the TFT program, the Company has installed a total of eight beverage vending machines in the Group’s premises such as its head office and the Toyama Technology & Manufacturing Center. These efforts in 2022 led to the Company’s recent certification as a 2023 Silver Partner.
The Toyama Technology & Manufacturing Center introduced the TFT program in 2015.

Green Fund Vending Machines
The Toyama Technology & Manufacturing Center endorses the Toyama Afforestation Promotion
Organization’s Green Fund campaign whose objective is to promote forest maintenance and afforestation in order to contribute to the conservation of Toyama Prefecture’s land blessed with waterand greenery, enrichment of prefectural residents’ lives, and prefectural administration and international cooperation. Thus, the Center has installed charity vending machines. In addition, the Center has installed several donation-type vending machines to support various organizations such as
TFT, Pink Ribbon, and Gold Ribbon.

KOKUSAI ELECTRIC GROUP CORPORATE REPORT 2023

Introduction

KOKUSAI ELECTRIC’s
Value Creation

Sustainability

Governance

Information

45

Community Contribution Activities and Efforts to Coexist with Local Communities

Support for the Navigator Dash Campaign
Kokusai Semiconductor Equipment Corporation (KSEC) in
the U.S. donated 1,0 0 0 US dollars to Columbia Valley Elementary School on March 3, 2023.
The donation will help support more than 4 0 0 children
from the kindergarten to the fifth grade. This is part of theschool’s annual Navigator Dash campaign. All the donations
will be used for classroom materials, PE equipment, librarybooks, music supplies, after-school activities, and free family
events. We at KSEC are delighted to be supporting children
in the local community.

Fire Scene Restoration Support
Eight employees of Kokusai Electric Korea Co., Ltd. (Kook Je Electric Korea Co., Ltd.) in
South Korea participated in the fire scene restoration support organized by SEPAS, a voluntary service organization of a partner company of Kokusai Electric Korea’s customer (Samsung) on December 10, 2 0 2 2. A fire at a multi-household residence in Suwon, Gyeonggi-do on September 1, 2022, caused fatalities and, in the aftermath of the fire, vulnerable
people continued to live there in a poor environment with debris and garbage. Some 40
participants, including employees of Kokusai Electric Korea and members of a voluntary
service organization, removed various types of garbage, including plywood, lumber, roof
tiles, wallpaper, and household waste, and cleaned up the residence. We pray that the affected people will overcome the hardship caused by the fire and resume their normal lives
as soon as possible.

Work Experience and Internship Programs for Students
Kokusai Electric Asia Pacific Co., Ltd. (KAP) in Taiwan offered a practical training programon October 3 and October 11, 2022, to support university students in their job search andto help them improve their career development skills, competitiveness in the workplace,and ability to integrate smoothly into the workplace. At the same time, through this project, Kokusai Electric Asia Pacific has concluded an agreement with a university on student
internship programs to diversify recruitment.
Introduction of the company andthe industry

Date: October 3 and October 11, 2022
Lecturers: Michael Hou, Vice President,
Equipment Sales Dept.
Leo Liu, Senior Manager, Human Resources &General Affairs Dept.
Location: Chung Hua University

Students’ Work Experience

Date: From January 13 to February 10, 2023
Participating departments and persons:Engineering Dept.: 2 persons
Administration Dept.: 1 person
Place: KAP

Participating in a Customer’s Voluntary Environmental
Protection Activity
Date: March 9, 2023	   Participants: 13 Place: Nankan River

Employee volunteers of Kokusai Electric Asia
Pacific Co., Ltd. (Taiwan) participated in a customer’s voluntary environmental protection
activity on March 9, 2023. They picked up garbage along the Nankan River to protect theriver’s ecosystem from garbage flowing into it.
Through this activity, the participants deepened their understanding of the impact thathumans can have on the environment. Garbage not only pollutes rivers but is also likely
to be swept away and end up in the ocean by typhoons, heavy rains, and floods, affecting
the entire marine ecosystem. Through these activities, KAP is deepening employees’ understanding of the importance of environmental protection.

Introduction

KOKUSAI ELECTRIC GROUP CORPORATE REPORT 2023

KOKUSAI ELECTRIC’s
Value Creation

Governance

Sustainability

Information

46

Governance

Strengthening of the Governance System to Realize Sustainability Management
By pursuing the enhancement of corporate value through business activities and ESG initiatives, our sustainability management aims to contribute to the achievement of the SDGs while
seeking to realize a sustainable society as well as sustainable development of the Group.
To achieve sustainability management, we have established a robust governance structure to ensure the sustainable development of the Group without compromising the Group’s corporate value and aim to remain a clean enterprise that earns the trust of society.

Strengthening of Governance
Enhancement of governance

2018

June
Succeeded to the Deposition Process Solutions business of Hitachi Kokusai ElectricInc. by a company split and changed thecompany name to KOKUSAI ELECTRICCORPORATION

2021

AugustIntroduced a compliance whistleblower system

DecemberAppointed an Independent Auditor

January ransitioned to a comT
pany with a board ofauditors

MarchAppointed a female
Outside DirectorApril stablished the ComE
pliance CommitteeCompany with a board of directors and aboard of auditors
Introduced an executive officer system

2021

June
Transitioned to a company with an audit
and supervisory committee(Outside Directors constituting a majority)
 stablished the Nomination and ComE
pensation Committee and the Transactions with Controlling Shareholders Committee as consultation organizations for
the Board of Directors

2022

July
Changed the Compliance Committee
to the Risk-Compliance Committee

OctoberAppointed a shareholder registry administrator

April stablished the CorE
porate Slogan
Evaluated the effectiveness of the Boardof Directors for fiscal
2021

July
Established the Sustainability Committee

December stablished theE
KOKUSAI ELECTRIC
Way
I dentified materiality(key issues to beaddressed)

KOKUSAI ELECTRIC’s

Introduction

KOKUSAI ELECTRIC GROUP CORPORATE REPORT 2023

Sustainability

Value Creation

Governance

Information

47

Governance

Basic Approach to Corporate Governancesolved by the Board of Directors. In this way, management’s supervisory function and executive function are segregated to the extent possible. Moreover, from the viewpoint of
ensuring the effectiveness of corporate governance and transparency of procedures, decisions on the appointment and dismissal of Directors and executive officers, succession
planning, and compensation require consultation in advance with the Nomination andCompensation Committee, the majority of whose members are independent Outside
Directors. Furthermore, transactions with controlling shareholders and other parties require consultation in advance with the Transactions with Controlling Shareholders Committee, whose members consist solely of independent Outside Directors, in order toconfirm in advance the appropriateness of such transactions.

In accordance with the Corporate Philisophy, “supporting a future where creativity andinnovation are born out of Technology and Tai-wa,” the Group is continuously working toenhance corporate governance enabling fast and decisive decision-making based on appropriate risk-taking in order to enhance the trust of stakeholders, including shareholders, investors, business partners, and employees. To strengthen the supervisory functionof the Board of Directors and ensure flexible decision-making by the management team,
the Company has adopted a company with an audit and supervisory committee system.
In addition, half of the members of the Board of Directors are independent Outside Directors with extensive expertise, and Executive officers, who constitute the management
team, execute business in accordance with the basic policies and other matters re-Organizations required
under the Companies
Act in Japan
Voluntarily establishedorganizations

General Meeting of Shareholders

Transactions with Controlling
Shareholders Committee

Consultation
Recommendation

Election/
Removal<Board of Directors><Audit and Supervisory
Committee>

Directors (excluding Directors who are
Audit and Supervisory Committee Members)

Audit

Directors (Audit and Supervisory
Committee Members)

Election/
RemovalCooperation

Consultation
Recommendation

Supervision

Audit<Business Execution/Internal Control>

Sustainability Committee

Cooperation

Management Meeting

Business Execution DivisionInternal
audit

Audit Office

Accounting
audit

Cooperation

Independent Auditor

Nomination andCompensation Committee

Election/
RemovalKOKUSAI ELECTRIC GROUP CORPORATE REPORT 2023

Introduction

KOKUSAI ELECTRIC’s
Value Creation

Sustainability

Governance

Information

48

Governance

Board of Directors
The Company’s Board of Directors comprises ten Directors: Fumiyuki Kanai (Representative Director, President and Chief Executive Officer) as chair, with Yuji Kamiya (Director, Executive Vice President and Executive Officer), Unryu Ogawa (Director, Executive Vice President and Executive Officer), Masaki Nakamura (Director), Noriko Sakai (Outside Director), Masaaki Tsuruta (Outside
Director), Hirofumi Hirano (Outside Director), Toshiyuki Uchino (Audit and Supervisory Committee
Member), Hitoshi Kumagai (Audit and Supervisory Committee Member, Outside Director), and Hirohito Nakada (Audit and Supervisory Committee Member, Outside Director). To ensure decision-making from a wider viewpoint and the objective supervision of business execution, half ofthe members of the Board of Directors are Outside Directors. In principle, the Board of Directors
meets at least once a month and at other times as necessary. The Board of Directors deliberates
and determines matters prescribed by laws and the articles of incorporation as well as importantmatters specified by the Board of Directors Regulations, such as the basic policy on Group management, basic strategies, and the medium-term management plan. Moreover, the Board of Directors supervises the execution of duties by executive officers in accordance with the basic policy
and the basic strategies determined by the Board of Directors. We analyze and evaluate the effectiveness of the Board of Directors every fiscal year in order to improve its functions. Such evaluation and analysis are conducted regarding the composition of the Board of Directors, its functions,and discussions based on self-evaluation by all Directors and evaluation by an external third party
with expertise. It is judged that the effectiveness of the Board of Directors has been ensured in fiscal 2022. The Company will continue striving to continuously enhance the effectiveness of theBoard of Directors by addressing the issues identified in such evaluation and analysis.

Audit and Supervisory Committee
The Audit and Supervisory Committee comprises three Directors who are Audit and Supervisory Committee Members (of which two are Outside Directors) including full-time member Toshiyuki Uchino (Director) as chair, and Hitoshi Kumagai (Outside Director) and Hirohito Nakada(Outside Director). In principle, the Audit and Supervisory Committee meets at least once amonth and at other times as necessary. The Audit and Supervisory Committee, comprised ofthese Directors who are Audit and Supervisory Committee Members, cooperates with the Independent Auditor and the Audit Office and strives to ensure the integrity of management.

Executive Officer System and Management Meeting
The Company has introduced an executive officer system and the Representative Director,
President and Chief Executive Officer controls the operations as the chief person responsible
for business execution. The Management Meeting comprises the Representative Director,
President and Chief Executive Officer as chair and all executive officers. In principle, the Management Meeting meets at least twice a month. The Management Meeting deliberates anddetermines important matters concerning business execution in accordance with laws, articles of incorporation, and internal rules and regulations.

Outside Directors/Independent Directors
The Company’s Board of Directors comprises ten Directors including one female Director,of whom five Directors have extensive experience and advanced expertise as well as being
knowledgeable about semiconductor-related businesses, and five Directors are Outside Directors, including Independent Directors who support and supervise management from an
objective standpoint. Outside Director Hirofumi Hirano has been involved in investment
proposals and alliance business in multiple business areas over many years, and he has
contributed his opinions and suggestions on expansion of the Company’s business areas.
Four Directors meet the independence criteria of the Companies Act, the Regulation for
Enforcement of the Companies Act, and the Tokyo Stock Exchange. These are Independent Directors Noriko Sakai (Lawyer), Masaaki Tsuruta (former Representative Director of
Samsung Japan Corporation), and Audit and Supervisory Committee Members Hitoshi Kumagai (Certified Public Accountant) and Hirohito Nakada (Lawyer). They provide honest andlively constructive opinions at the Board of Directors based on their respective extensive
knowledge and experience in various fields such as in corporate management from a fairand neutral standpoint. They fulfill their role and obligations as Independent Directors.

Nomination and Compensation Committee
The Company voluntarily established the Nomination and Compensation Committee inJune 2021 to clarify the Company’s policy on executive assignment and compensation andto ensure transparency in the decision-making process. The committee is chaired by an
Outside Director and consists of three Outside Directors and two Internal Directors for a
total of five members. Regarding nomination, the committee deliberates on the basic policy on the nomination of candidates for Representative Directors, Directors, and executive
officers (hereinafter “Executives of the Company”), proposals for their appointment anddismissal, training for the Executives of the Company, successor development planning,and other matters. Regarding compensation, the committee deliberates on the policy on
the determination of the details of compensation, etc. for individual Executives of theCompany (excluding Directors who are Audit and Supervisory Committee Members), as
well as on the details thereof. The results of deliberations by the Nomination and Compensation Committee are reported to the Board of Directors, which makes the final decision. In fiscal 2022, the committee met eight times, and all committee members, including
Outside Directors, attended all meetings.

Introduction

KOKUSAI ELECTRIC GROUP CORPORATE REPORT 2023

KOKUSAI ELECTRIC’s
Value Creation

Sustainability

Governance

Information

49

Governance

Skills Matrix

Outside : Outside Director

Directors (Audit and Supervisory
Committee Members)

Directors
Fumiyuki
Kanai

Yuji
Kamiya

Unryu
Ogawa

MasakiNakamura

NorikoSakai

MasaakiTsuruta

Hirofumi
HiranoOutside Independent

Outside Independent

OutsideToshiyuki
UchinoHitoshi
Kumagai

Hirohito
NakadaOutside Independent

Outside Independent

Independent : Independent Directors

Executive Officers
Hidehiro
Yanagawa

Kazunori
TsukadaMasayuki Yoshitaka
Kenji
Naotoshi
Masami
Yamada Kawakami Kanayama Yamamine Miyamoto

Corporate management

Finance/accounting
Enhancementof corporate
value

Internal control/corporate
governance
Legal affairs/risk management

Human resources
Knowledge of thesemiconductor industry
R&D/design
Company’s
sustainablegrowthGlobalBusiness strategy

Service strategy
Production/quality assurance/
supply chain management
Business
promotion

Sales

DX/IT

Reasons for Selection of Skills Matrix Items
The Company conducted an awareness survey of executive officers regarding the skills whose importance and priority for the Company’s management are considered to increase inview of the Company’s organizational and functional structure. The survey results were organized in terms of “enhancement of corporate value,” “the Company’s sustainable growth,”and “business promotion,” and the knowledge, experience, and abilities required and expected of each Director and executive officer are listed in the skills matrix.

KOKUSAI ELECTRIC GROUP CORPORATE REPORT 2023

Introduction

KOKUSAI ELECTRIC’s
Value Creation

Sustainability

Governance

Information

50

Governance

Promotion of Group GovernanceWe launched the Group Governance Project in fiscal 2022. In order to achieve Group governance, Group Functional Teams (GFTs), which are Group-wide teams organized according to functions, are developing rules and regulations, have set key performance indicators(KPIs) for Group activities, and are following up progress. Going forward, the framework
will be modified in order to ensure compliance and achieve Group governance so as tocontribute to the improvement of the financial performance of the Group as a whole.

Internal Controls
The Group strives to maintain its internal control system by establishing the Basic Policy on
Internal Control Systems, improving the system to ensure appropriate execution of theGroup’s operations, while also establishing an Internal Control Committee (which convenes
twice a year) chaired by an executive officer responsible for finance and accounting.
The Audit Office, under the direct control of the President, conducts internal audits ofall departments including subsidiaries in Japan and overseas, and evaluates matters suchas the effectiveness of management and operations, compliance, and the reliability of financial reports from a standpoint that is independent from business execution. The results of the audit are reported to the President, with a regular exchange of opinions with
the Audit and Supervisory Committee and the external auditors. We strive to increase
the effectiveness of monitoring activities in the respective roles.

Compliance
The Group recognizes its approach to compliance that ensuring compliance with laws
and regulations and the Articles of Incorporation is mandatory and indispensable. Accordingly, we are demonstrating our commitment to acting properly in light of corporate
ethics as an enterprise and as individuals who earn the trust of society.
The Group considers compliance initiatives as an important measure and has established the Compliance Standards, the Basic Rules for Compliance, and the Compliance
Committee Rules, as well as the Compliance Committee, in accordance with theserules. The Compliance Committee monitors various types of compliance related to theCompany’s business, and discusses and implements policies and measures, such as
training programs for compliance.
In fiscal 2023, the Group began operating a whistleblower system available to all stakeholders of the Group, and has conducted compliance training in local languages and inaccordance with revised laws in order to raise the compliance awareness of executives
and employees of the Group.

Tax Policy
The Group complies with the laws and regulations of countries and regions, and properly
files tax returns and pays taxes in accordance with the standards issued by internationalorganizations, such as the OECD Transfer Pricing Guidelines*1 and the BEPS Action Plan*2.
In addition, the Group shall strengthen tax-related governance and ensure tax transparency by fair and timely disclosure of financial conditions. Furthermore, by enhancing
transparency, we strive to establish, maintain, and develop sincere and sound cooperative relationships with tax authorities of countries and regions.
*1 OECD Transfer Pricing Guidelines: Guidance on transfer pricing for multinational enterprises and tax administrations*2 BEPS : The abbreviation of Base Erosion and Profit Shifting.

Anti-corruption
In order to ensure compliance throughout the Group, the Company has established the
KOKUSAI ELECTRIC Group Anti-corruption Policy to be observed by all executives, employees,
etc. of the Group, and has declared that we will not, under any circumstances, engage in any
conduct that violates the laws and regulations of the country in question, the Group’s rules
and regulations, social norms, and corporate ethics, or in any corrupt practices, etc. (including
all improper conduct that may fall within the scope of these items) in connection with ourbusiness activities. Based on this policy, the Company regularly conducts e-learning and othereducational programs in multiple languages on the prevention of corrupt practices, etc. for executives involved in business execution and employees of the Group. In addition, the Company conducts compliance-related training, including on the prevention of corrupt practices, etc.,
for all executives of the Company. Furthermore, in order to reduce the risk of corrupt practices, etc. in the Group’s business activities, the Company screens all new business partners foroverall risks, including corrupt practices, etc., before commencing business with them.

Initiatives for Security Export Control
1. Ensure compliance with applicable laws and regulations
In Japan, the Foreign Exchange and the Foreign Trade Act (FEFTA) and various laws andregulations based on FEFTA have been established to regulate exports detrimental to themaintenance of international peace and security. The law requires exporters to implement
appropriate control. Given that the majority of our customers are located overseas andthat some of the products and parts we export include regulated items, we have made it
our corporate policy to ensure compliance with the above laws and regulations and are
implementing this policy. Specifically, the Company has established an export control organization in which the President serves as the Chief Export Control Officer and the executive
officer in charge of legal affairs serves as the Transaction Screening Officer. The Company

KOKUSAI ELECTRIC GROUP CORPORATE REPORT 2023

KOKUSAI ELECTRIC’s

Introduction

Governance

Sustainability

Value Creation

51

Information

Governancehas also established internal rules and determined division of roles regarding proceduresfor classification and transaction screening and is implementing the procedures.
Moreover, the Company has described such internal export control system in the
Company’s rules and notified the Ministry of Economy, Trade and Industry.

VOICE

Since obtaining ISO 9001 certification in 1995, we have conductedinternal audits of management systems at least once a year. The
46th internal quality audit was conducted in 2023. Some of the employees have been engaged in internal audits for a long time. In recent years, with an emphasis on refreshing the knowledge and improving the competence of internal auditors, we have held training
to review the standards and seminars on auditing methods (process,approach, etc.) with the participation of invited external lecturers.
We are also training new internal auditors and working to increase
the number of those who have a detailed understanding of management systems.
The objectives of internal audits are not limited to confirming
compliance with the requirements of ISO standards and making improvements based on findings. Internal auditors can gain knowledge
through involvement in audits of other departments and reflect bestpractices in improvement activities of their own departments, thereby promoting continuous improvement.

2. Implement appropriate self-control
The Group operates business in cooperation with Group companies located in various regions of the world, and these Group companies also export to customers and other Group
companies on a daily basis. Exporting from foreign countries is primarily governed by the export control laws and regulations of the countries in question. While ensuring compliancewith these laws and regulations, we have established separate global rules applicable to all
Group companies in order to ensure that the required standards stipulated by Japanese laws
and regulations are satisfied. Moreover, a person in charge of export control is assigned toeach Group company and Group companies are implementing export control on their own
initiatives. As export control is an important matter directly related to international security,
in view of the legislative spirit behind such laws and regulations, our global rules include
control items in addition to the contents stipulated in Japanese laws and regulations in orderto prevent any actions that may result in a loss of confidence in our corporate brand.

SatomiMatenokoji
Senior Manager, Quality
Assurance Department

Relations of Management Systems

Implementation of ISO Governance and Management Standards
Approach to ISO Governance
The Group’s production sites, Toyama Technology & Manufacturing Center and theCheonan Factory of Kook Je Electric Korea Co., Ltd. (Kokusai Electric Korea Co., Ltd.),
shall maintain ISO 9001 (quality), ISO 14001 (environment), and ISO 45001 (occupational health and safety) certifications. Each of them shall provide highly reliable, safe,and environmentally friendly products and services incorporating cutting-edge technology through total management based on the linkage of management systems.
Continuous improvement in equipment development, sales activities, and overall
processes from design to manufacturing, installation and setup, and after-sales service shall be pursued not only to ensure compliance with the requirements of eachstandard but also to improve effectiveness.
Internal auditors with qualifications for three types of management systems (quality, environment, and occupational health and safety) shall be fostered. Internal auditsof the management systems, which are conducted once a year, shall be performed
jointly by the internal auditors with the qualifications for the three types of management systems. Audit findings and correction details shall be shared and efforts shallbe made to achieve total optimization rather than improvement of individual items.

Eco-management
Eco-product(Design for the Environment, etc.)
Eco-factory(environmental conservation)

Quality
ISO 9001

Provision of products and services required by customers
Improvement of product quality
Maintenance of product safety

Total management of
products and services
Occupational
Health and Safety
ISO 45001

Environment
ISO 14001

Overview

Safe and healthy workplaceenvironment
Prevention of occupational
accidents and diseases
Enhancement of occupational
health and safety performance

Management strategy
Products

Market trend

Medium- to long-term plan

Customerrequirements

Annual plan, Management systems targets

Laws and regulations/
government

ProfitSales

Shareholders/
employees
Business partners

Services

DesignProcurement Manufacture

Setup

Servicing

Quality assurance

Customersatisfaction
Environmental
performance

QMS

EMS

OHSMS

Occupational health andsafety performanceIntroduction

KOKUSAI ELECTRIC GROUP CORPORATE REPORT 2023

KOKUSAI ELECTRIC’s
Value Creation

Sustainability

Governance

Information

52

GovernanceThorough Management of Major Business Risks
Risk Management

Information Security

As well as reviewing the impact of each identified risk on business continuity and the effectiveness of countermeasures, we conduct regular risk assessments in all departments to
identify new risks that may arise as social situations and the business environment change.
The results of risk assessments are discussed by the Sustainability Committee, which reports its findings to the Board of Directors. We are continuously striving to strengthen risk
countermeasures and business continuity plans to ensure that they are thorough.
Major risks and countermeasures
Risk
No.
classification
1

2

Possible situation

Politics andeconomyRestrictions on business activities due to theimpact of policies of countries and regions on
economy, industry, security, etc.

Pandemics

Stagnation of business activities due to clusters
of infections within the Company, travel restrictions to other countries and regions, etc.

Long-term market stagnation or poor financial
performance of the Company due to inability
to keep up with rapid changes (increase or
decrease) in demand
Failures of customers’ products due to defects
Products and of the Company’s products; deterioration of
4
qualitytrust due to the occurrence of safety or environmental incidents·Infringement of the Group’s intellectual propIntellectual erty rights by third parties
5·Infringement of intellectual property rights ofproperty
third parties·Deterioration of social credibility due to the occurResponse to rence of environmental contamination incidents
6 environmental ·Stagnation due to inadequate compliance withenvironmental laws and regulations of countries
issuesand regions
Procurement Stagnation of production activities and delivery de7
lays, cancellation of orders received, etc. due to deandproduction lays or stoppages of the supply of procured parts
Decline in product competitiveness and poor finan8
R&D
cial performance due to the inability to lead or keep
up with competition in technological development
Administrative penalties due to non-compliancewith laws and regulations of countries and regions,
9 Complianceneed to pay compensation for damage, and deterioration of reputation and trust in society
Stagnation in securing and developing human reHumansources; decline in competitiveness due to out10
resources
flow (retirement) of excellent human resources
3

Marketneeds

11Large-scaledisaster

12

Information
security

Initiatives for risks·Monitoring of information on policies of countries and regions·Prior consideration of alternative measures for sales, production, import/export, services, etc., and division of labor
to ensure preparedness for various possible restrictions·Operation of a countermeasure council chaired by the President·Thorough implementation of infection prevention measures at each business site·Consideration of alternative measures to ensure preparedness for possible restrictions on business activities·Identification of market and customer trends·Periodic review and consideration of countermeasures
at executive meetings, etc.
·Investigation of causes of defects and thorough implementation of activities to prevent recurrence·Promotion of product safety design and product quality
improvement measures
Collaboration among various departments led by the intellectual property strategy department and with external experts and responses·Thorough management, inspection, etc. based on ISO
14001·Grasping of laws, regulations, and ordinances of countries and regions
Preparation of alternative measures by strengthening
daily collaboration with customers and business partners; shift to procurement from multiple vendors·Aggressive and effective R&D investment·Promotion of joint research with external research institutions
Regular monitoring by the Compliance Committee andinternal audits, etc.; establishment of points of contact
for consultation with external experts·Promotion of creation of safe and mentally and physically rewarding workplaces and health & productivity management·Expansion of in-house training programs·Formulation of production BCP and a manual for largeStagnation of production and parts supply
scale disaster countermeasuresdue to damage to the Group’s production·Establishment of alternative production systems andsites and business partners
strengthening of collaboration with suppliers
System shutdown and information leakage
Continuous improvement led by the Information Security
due to cyber-attacks and unauthorized acCommittee in terms of both employee awareness andcess, resulting in business stagnation and decountermeasures for systems
terioration of social credibility

In order to contribute to a digital society that is sustainable
and rich in diversity and creativity, the Group will upgrade
its information security measures in pursuit of both thepromotion of data utilizationand data security measures.
We believe that it is our social mission to handle information assets securely and appropriately and we act accordingly.
Moreover, in order to protect theentire global business environment from cyber-attacks, we willreinforce vulnerability countermeasures through multi-layered
defense.

Establishment of internal rules and guidelines

Rules andstandards

Information Security Committee
Implementation of
global common measures

Promotion
structure

Reporting of incidents,
minimization of incidents
Investigation of causes,
prevention of recurrence

Information
security

Human
resources
education andtraining
Information security
education and training
Information security audit

Response toincidents

Systemmeasures
Introduction of advanced
cyber-attack countermeasures
Integrated security monitoring operation

Cleanrooms
Flooding, including typhoons and torrential rain, has accounted for the majority of natural disasters in recent years, in terms of the number of natural disasters. However, in considering BCP measures, earthquakes are significant in terms of the degree of damage
because of the risk of equipment collapse and fires occurring at the same time. BCP
measures include strengthening the resistance of equipment and facilities in cleanrooms
and implementing measures for energy supply facilities from the viewpoint of early recovery in the event of such natural disasters. We will implement concrete measures tominimize damage caused by natural disasters and resume production and R&D as soon
as possible.

KOKUSAI ELECTRIC GROUP CORPORATE REPORT 2023

Introduction

KOKUSAI ELECTRIC’s
Value Creation

Sustainability

Governance

Information

53

Governance“Tai-wa” with Stakeholders
Collaboration with Stakeholders
The Group promotes vigorous collaboration with all stakeholders, including customers, builds relationships based on mutual trust, and engages them in value creation to the greatest
extent possible.
Collaboration with stakeholders (examples)
Stakeholders

Our commitment to stakeholders

Collaboration and departments in charge (examples)

Customers

Create value to contribute to the resolution of social issues jointly with customers

Technology exchange meetings, joint development projects, customer satisfaction surveys, various negotiations and meetings

Sales departments, Design/development departments, Field
engineering departments, Quality assurance departments

Employees

Give opportunities for further training and growth and provide a mentally and physically rewarding, safe and healthy
work environment

Various training, labor-management conferences, occupational
health and safety committee, employee survey, stress checks,
health guidance, internal communication, awareness raising

Human resources and corporate administration departments,
Public relations & IR departments

Business
partners

Engage in fair and free competition, appropriate business
transactions that are legally compliant and consistent withsocial norms, and responsible procurement activities

Business partner meetings, various business negotiations andmeetings

Procurement departments

Communities

Engage in communities proactively to contribute to theirdevelopment

Support for maintaining and developing traditional arts, participation in volunteering activities, sponsorship of professional soccer
team, direct exchanges with local residents and companies in theneighborhood

Sustainability planning department, Human resources andcorporate administration departments, Environmental management departments

Shareholders/
Investors

Engage in constructive “Tai-wa” with stakeholders basedon vigorous dissemination of information and share theirviews in the company for the creation and expansion of
corporate value

Dissemination of information and response to inquiries through thewebsite etc.; response to interviews with institutional investors, securities firms, and the press; General Meeting of Shareholders

Public relations & IR departments, Legal departments, Finance & accounting departments

Relevant organizationsof which the Company
is a member

Collaborate with various organizations and continue ourefforts to resolve issues related to human rights, labor, theenvironment, anti-corruption, and business

Vigorous participation in events organized by the organizations ofwhich the Company is a member; disclosure of information on our
initiatives through the website, corporate report, and other media

Business planning departments, Sustainability planning departments, Environmental management departments

Introduction

KOKUSAI ELECTRIC GROUP CORPORATE REPORT 2023

KOKUSAI ELECTRIC’s
Value Creation

Sustainability

Governance

Information Disclosure to Stakeholders

News releases

As an enterprise involved in semiconductors, which are indispensable to society, theGroup considers enhancing management transparency to be one of its most important
responsibilities. Based on this belief, we disclose corporate information to our stakeholders in a fair, impartial, timely, and appropriate manner and vigorously engage in dialogue with stakeholders to ensure highly transparent and reliable management and fulfill
our corporate social responsibility.

Society
Customers“Tai-wa”

Communities
The Group

Website, Global Site

Business
partners

CORPORATE REPORT

Related ministries,
agencies, andorganizations

Company profile video

Internal newsletters, One Kokusai News

Governance

Information

54

Introduction

KOKUSAI ELECTRIC GROUP CORPORATE REPORT 2023

KOKUSAI ELECTRIC’s
Value Creation

Sustainability

Governance

Information

55

GovernanceRoundtable talk between Outside Directors

KOKUSAI ELECTRIC’s Governance System:
Preparing to Go Public
KOKUSAI ELECTRIC is promoting corporate governance reforms for sustainable growth and value creation in preparation for going public and is vigorously incorporating objective external perspectives
into management. Two Outside Directors discuss KOKUSAI ELECTRIC’s current situation, issues, andfuture direction.

Noriko Sakai

Masaaki Tsuruta

Outside Director (Chairperson of theNomination and Compensation Committee)

Outside Director (Member of theNomination and Compensation Committee)

Q. Board of Directors meetings with frank and lively discussions
Sakai As a lawyer at law firms in Japan and overseas, I have dealt with diverse issues mainly
corporate legal affairs. In 2021, I heard that KOKUSAI ELECTRIC was introducing an outside director system. In an interview with KOKUSAI ELECTRIC’s management team, we had a frank exchange of opinions. Having listened to their explanation of the Company’s policy of respecting
the opinions of Outside Directors, I decided to take the position.
Tsuruta In the course of more than 30 years working for an electronics manufacturer, I was responsible for system development for consumer-use video cameras, televisions, games, and other products. This involved the development of key custom semiconductors as well as the associated software, and enabled me to cultivate enduring relationships in the semiconductor industry
and acquire knowledge. Subsequently, I served as the president of a Japanese subsidiary of aforeign semiconductor company. Similar to you I had an interview with KOKUSAI ELECTRIC’s executive team when the Company was promoting corporate governance reforms with the aim ofgoing public. I was appointed to the position of Outside Director in 2021.
Sakai I was impressed by KOKUSAI ELECTRIC’s evident seriousness and sincerity. At Board of
Directors meetings where we, Outside Directors, speak frankly and freely, the management teamalways listens to our opinions attentively and respectfully.
Tsuruta I completely agree. I think those qualities are also reflected in KOKUSAI ELECTRIC’s management policies. In terms of the focus of top management, whereas Japanese companies generally emphasize revenue, foreign companies tend to pursue profit. I recognize the difference between Japanese and foreign companies regarding the setting of profit margins for products, efforts
to increase profit, negotiations, and so on. Considering how foreign companies operate, I often
feel that KOKUSAI ELECTRIC could publicize more, given its technological capabilities. Nevertheless, my impression is that simplicity and fortitude have taken root and are reflected in the Company’s management and that the employees are committed to modesty, integrity, and resilience.

Nomination and Compensation Committee steadily
Q. Thecontributing to the development of the governance system
Tsuruta I think you as a lawyer, naturally speaks primarily from a legal perspective. As for me, I
tend to state opinions drawing on information and observations rooted in my knowledge ofsemiconductors and the relationships I have cultivated over the years, as well as my managerial
experience at a foreign company. I have also been endeavoring to ensure that my comments
contribute to substantive discussions at Board of Directors meetings. In light of these discussions, identified areas of improvement and correction are being continually addressed. Indeed, it
is evident to me that the Company’s governance functions have been enhanced.
Sakai I fundamentally feel the same way. Although my background is quite different from that ofyou I believe that opinions and questions should be expressed from different perspectives when
considering the role of the Board of Directors, and it is noteworthy that this is what is happening. The Company is responding promptly to our requests, such as for early distribution of meeting materials, expressed in responses to the questionnaire survey on the effectiveness of theBoard of Directors conducted by the Company.
Tsuruta Yes. In order for us Outside Directors to express our opinions and point out issues in
the limited time available at Board of Directors meetings, we wanted to have meeting materials
in advance so that we could be prepared. Discussions at the Nomination and Compensation
Committee have also steadily produced results.
Sakai That’s true. We are proceeding with our deliberations on nomination and compensation,
respectively, step by step. As regards nomination, CEO succession planning is the topic of our
discussion. We are also using external consultants and identifying the human resources needed
and the training that candidates for executive positions require. On compensation, we had discussions, taking into consideration performance and the market, and from the perspective ofwhether the compensation scheme can maintain competitiveness globally. The results of these
discussions are reflected in the compensation plan.

Introduction

KOKUSAI ELECTRIC GROUP CORPORATE REPORT 2023

KOKUSAI ELECTRIC’s
Value Creation

Sustainability

Governance

Information

56

GovernanceRoundtable talk between Outside Directors
Tsuruta Though operating globally, KOKUSAI ELECTRIC
may not need personnel evaluation standards as stringent
as those of foreign companies. But as the Company intends to go public, it would be a good idea to improve thesystem, including a review of the personnel compensation
system. If the Company is going to introduce a personnel
compensation system and an evaluation system, similar to
those of foreign companies, I am ready to provide various
data, drawing on my experience at a foreign company.
Sakai I think your advice is always illuminating. Please
continue to give us useful advice.

Established the corporate slogan

Q. suggesting a future

Sakai KOKUSAI ELECTRIC has established the corporate
slogan, “Technology & Tai-wa for Tomorrow.” I think thisslogan is succinct, deep, and powerful, combining “Technology,” “Tai-wa,” and “Tomorrow.” The
Company develops, manufactures, and sells semiconductor manufacturing equipment, and at
the core is “Technology.” Positioning “Tai-wa” with a significance equal to that of “Technology,”
the Company clearly states that it is engaged in a holistic dialogue comprising “Tai-wa with cutting-edge technology,” “Tai-wa with the natural environment,” “Tai-wa with social issues,” and “Taiwa with ourselves.” These values are incorporated in the corporate slogan articulating the Company’s determination to be a vital member of the sustainable society of the future.
Tsuruta I agree. The corporate slogan was created in-house based on “Technology” and “Tai-wa.”
Ultimately, the Board of Directors passed the resolution on the corporate slogan unanimously.
Initial ideas for the corporate slogan were rather abstract. As it prepares to go public, the Company now has a corporate slogan that conveys the corporate identity and its ambitions as acommercial enterprise. The Company’s materiality identified also has a holistic appeal. In identifying materiality, the awards the Company has been receiving every year and environmental factors were also taken into consideration.
Sakai That’s true. The linkage of materiality to the realization of the corporate slogan has also
been clarified. Participation in international initiatives, such as joining the United Nations Global
Compact and endorsing the TCFD, as well as gaining certification as a 2023 Silver Partner of TABLE FOR TWO International, are concrete metrics of sustainability activities concerning materiality. In terms of disclosure to stakeholders, I think the goal of the Company’s sustainability activities also became very clear.
Tsuruta For environmental management, top-down and bottom-up approaches have both beenworking effectively. The Company adopted a top-down approach to chart a course as an enterprise that emphasizes ESG initiatives. Based on this policy, specific activities, for example, which
departments should get involved in which awards and initiatives, were proposed and determinedthrough a bottom-up approach. In this way, company-wide ESG initiatives are being implemented.

Q. Becoming an industry leader
Sakai KOKUSAI ELECTRIC has made progress with investment in human capital, as indicated byrecognition as a 2 0 2 3 Certified Health & Productivity Management Outstanding Organizationand signing the Women’s Empowerment Principles (WEPs). Signing the WEPs is noteworthy as
an expression of the Company’s commitment to helping accelerate women’s advancement.
Tsuruta Basically, I believe there should be no distinction or discrimination regarding employees. Japanese companies tend to have fewer female managers and female executives compared
to foreign companies. I don’t think just barely keeping up with the standards set by the government is appropriate. In fact, I would like KOKUSAI ELECTRIC to be proactive in disseminating information about gender equality. I would like to see the Company move ahead of the rest of theindustry in proactively communicating information about diversity, equity, and inclusion, including for people with disabilities and all demographics.
Sakai I agree. As a manufacturer of semiconductor manufacturing equipment, it will be essential
for KOKUSAI ELECTRIC to develop technologies and new products in response to the frequent
generational changes in semiconductors. No matter what industry you are in, new product development comes with risks. In order to develop a system that can take such risks, it is important tohave a firm foundation consisting of sufficient human capital and sound governance. With this inmind, I think an important mission for us as Outside Directors is to create a system that enables
monitoring, while making necessary improvements to the current system launched in 2021.
Tsuruta I have been involved in the semiconductor industry for a long time. So I will provide informationon technology and product trends and offer my opinions and advice, reflecting my experience at a foreign company, with a focus on schemes and points to bear in mind to improve management efficiency.
Sakai Globally, stakeholders are increasingly paying attention to non-financial aspects. Overseas,
there are cases in which messages and information disclosed on companies’ websites related to
non-financial aspects have led to lawsuits as well as a decline in stock prices in the event of a scandal. I would like toshare this understanding with the management team as well.
Tsuruta That is an excellent suggestion. I think KOKUSAI
ELECTRIC is one of the leading companies in the semiconductor manufacturing equipment industry. Personally, I believe that the Company should also aspire to a leadingrole in the industry. For the time being, we should focus
our efforts on clearing the big hurdle of going public, but
after that, I think the Company should also be vigorously
involved in the various issues facing the semiconductor industry. By combining my experience in the semiconductor
industry and your knowledge of international legal affairs,
we will be able to provide the Board of Directors with advice that will help KOKUSAI ELECTRIC’s management steer
the Company toward the attainment of its aspirations. I
look forward to continuing to work with you.
Sakai I fully reciprocate your generous sentiment.

Introduction

KOKUSAI ELECTRIC GROUP CORPORATE REPORT 2023

KOKUSAI ELECTRIC’s
Value Creation

Sustainability

Governance

Information

57

Governance

Executives
Directors (Excluding Directors who are Audit and Supervisory Committee Members)

Fumiyuki Kanai

Yuji Kamiya

Unryu Ogawa

Masaki Nakamura

Noriko Sakai

Representative Director

Director

Director

Director

Outside Director

Career Summary
April 1981 Hitachi, Ltd.
April 2003 Renesas Technology Corp. (Now,
Renesas Electronics Corporation)
April 2016 Senior Vice President and Executive
Officer and General Manager,
Semiconductor Process Engineering
Division, Hitachi Kokusai Electric Inc.
June 2018
Representative Director, President andChief Executive Officer, the Company(Current position)

Career Summary
April 1981 Hitachi, Ltd.
June 2015
Executive Officer and General
Manager of Finance & Accounting
Division, Hitachi Kokusai Electric Inc.
June 2018
Director, Executive Vice President andExecutive Officer, the Company(Current position)

Career Summary
April 1997 Kokusai Electric Co., Ltd. (Now, Hitachi
Kokusai Electric Inc.)
April 2016 Executive Officer and Deputy General
Manager, Semiconductor Process Engineering
Division, Hitachi Kokusai Electric Inc.
June 2018
Senior Vice President and Executive
Officer, the Company
April 2021 Executive Vice President andExecutive Officer, the Company
June 2022
Director, Executive Vice President andExecutive Officer, the Company(Current position)

Career Summary
April 2010
February 2014
February 2017
December 2017
January 2021
January 2024

McKinsey & Company
KKR Capstone Japan Limited
Director, HKE Holdings LLC
Director, HKE Holdings Co., Ltd.
(Now, the Company) (Current
position)
Director, KKR Japan Limited
Managing Director, KKR Japan
Limited (Current position)

Career Summary
April 1997
Nagashima & Ohno (Now,
Nagashima Ohno & Tsunematsu)
December 2005 O’Melveny & Myers gaikokuho
kyodojigyo horitsujimushoPartner, O’Melveny & Myers
February 2008
gaikokuho kyodojigyo horitsujimusho
January 2017
Partner, Hirakawa International
Law Office (Current position)
March 2021
Outside Director, the Company(Current position)

Directors who are Audit and Supervisory Committee Members

Masaaki Tsuruta

Hirofumi Hirano

Toshiyuki Uchino

Hitoshi Kumagai

Hirohito Nakada

Outside Director

Outside Director

Director (Full-time Audit and Supervisory Committee Member)

Outside Director (Audit and Supervisory Committee Member)

Outside Director (Audit and Supervisory Committee Member)

Career Summary
April 1979
Sony Corporation
January 2013 Representative Director, Samsung
Japan Corporation
January 2019 Representative Director andPresident, Future Domain Co., Ltd.
(Current position)
June 2021
Outside Director, the Company(Current position)

Career Summary
April 1983
The Nikko Securities Co., Ltd.
January 2010 Japan Representative, AlixPartners
Asia LLC
April 2013
Chief Executive Officer, KKR Japan
Limited (Current position)
March 2021
Outside Director, the Company(Current position)
April 2022
Part-time Director, KJR Management (Current position)

Career Summary
April 1984
Hitachi, Ltd.
April 2003
Renesas Technology Corp. (Now,
Renesas Electronics Corporation)
Corporate Officer, General Manager June 2018
Global Services Unit, the Company
January 2021 Corporate Auditor, the Company
June 2021
Director (Full-time Audit andSupervisory Committee Member),the Company (Current position)

Career Summary

Career Summary
December 2001 Nagashima Ohno & Tsunematsu
July 2007
Kirkland & Ellis LLP (Chicago)
February 2014
Co-founder and partner, Shibata,Suzuki & Nakada (Current position)
March 2021
Outside Corporate Auditor, theCompany
June 2021
Outside Director (Audit andSupervisory Committee Member),the Company (Current position)

December 1997 New York Office, KPMG Peat
Marwick LLP (Now, KPMG LLP)
October 2002
KPMG FAS Co., Ltd.
October 2006
Representative Director, Integrated
Advisory Co., Ltd. (Now, Trustees
FAS Co., Ltd.) (Current position)
January 2021
Outside Corporate Auditor, theCompany
Outside Director (Audit andJune 2021
Supervisory Committee Member),the Company (Current position)KOKUSAI ELECTRIC GROUP CORPORATE REPORT 2023

Introduction

KOKUSAI ELECTRIC’s
Value Creation

Sustainability

Governance

Information

58

Governance

Executive Officers

Fumiyuki Kanai

Yuji Kamiya

Unryu Ogawa

Hidehiro Yanagawa

Kazunori Tsukada

Representative Director, President and Chief Executive Officer

Director, Executive Vice President and Executive Officer

Director, Executive Vice President and Executive Officer

Executive Vice President and Executive Officer

Senior Vice President and Executive Officer

Career Summary
April 1981 Hitachi, Ltd.
April 2003 Renesas Technology Corp. (Now,
Renesas Electronics Corporation)
April 2016 Senior Vice President and Executive
Officer and General Manager,
Semiconductor Process Engineering
Division, Hitachi Kokusai Electric Inc.
June 2018
Representative Director, President
and Chief Executive Officer, the Company (Current position)

Career Summary
April 1981 Hitachi, Ltd.
June 2015
Executive Officer and General
Manager of Finance & Accounting
Division, Hitachi Kokusai Electric Inc.
June 2018
Director, Executive Vice President
and Executive Officer, the Company(Current position)

Career Summary
April 1997 Kokusai Electric Co., Ltd. (Now,
Hitachi Kokusai Electric Inc.)
April 2016 Executive Officer and Deputy General
Manager, Semiconductor Process Engineering
Division, Hitachi Kokusai Electric Inc.
June 2018
Senior Vice President and Executive
Officer, the Company
April 2021 Executive Vice President andExecutive Officer, the Company
June 2022
Director, Executive Vice President
and Executive Officer, the Company(Current position)

Career Summary
April 1988 Kokusai Electric Co., Ltd. (Now,
Hitachi Kokusai Electric Inc.)
April 2018 Executive Officer and General Manager Volume Manufacturing & Engineering
Unit, Semiconductor Process Engineering
Division, Hitachi Kokusai Electric Inc.
June 2018
Corporate Vice President and Executive Officer,
Vice President - Volume Manufacturing &Engineering Unit; Vice President - Volume
Manufacturing Design Division, the Company
April 2021 Senior Vice President and Executive
Officer, the Company
April 2023 Executive Vice President and Executive
Officer, the Company (Current position)

Career Summary
April 1986 Kokusai Electric Co., Ltd. (Now,
Hitachi Kokusai Electric Inc.)
June 2018
Corporate Officer, Vice President,
Sales Division, the Company
April 2019 Corporate Vice President andExecutive Officer, Vice President,
Sales Division, the Company
April 2022 Senior Vice President and Executive
Officer, the Company (Current
position)

Masayuki Yamada

Yoshitaka Kawakami

Kenji Kanayama

Naotoshi Yamamine

Masami Miyamoto

Senior Vice President and Executive Officer

Corporate Vice President and Executive Officer

Corporate Vice President and Executive Officer

Corporate Vice President and Executive Officer

Corporate Vice President and Executive Officer

Career Summary
April 1983 Kokusai Electric Co., Ltd. (Now,
Hitachi Kokusai Electric Inc.)
June 2018
Corporate Officer, Vice President,
Production Division, Volume Manufacturing& Engineering Unit, the Company
April 2021 Corporate Vice President andExecutive Officer, Vice President,
Production Division, the Company
April 2022 Senior Vice President and Executive
Officer, Vice President, Production
Division, the Company (Current position)

Career Summary

Career Summary
November 1991 Kokusai Electric Co., Ltd. (Now,
Hitachi Kokusai Electric Inc.)
June 2018
Corporate Officer, Vice President,
Technology Development
Division, Strategic Business
Development Unit, the Company
April 2022
Corporate Vice President andExecutive Officer, Vice President,
Process Development Division,
the Company (Current position)

Career Summary
April 1990 Kokusai Electric Co., Ltd. (Now,
Hitachi Kokusai Electric Inc.)
June 2018
Vice President, Strategic Service Business Development Division, Global
Services Unit, the Company
April 2022 Corporate Vice President andExecutive Officer, Vice President,
Global Services Division, theCompany (Current position)

Career Summary
April 1990 Kokusai Electric Co., Ltd. (Now,
Hitachi Kokusai Electric Inc.)
June 2018
Director and General Manager, North
America & Europe Sales Department,
Sales Division, the Company
April 2021 Vice President, Sales Division, theCompany
April 2023 Corporate Vice President and Executive
Officer, Vice President, Sales Division,
the Company (Current position)

November 1988 Kokusai Electric Co., Ltd. (Now,
Hitachi Kokusai Electric Inc.)
June 2018
Director and General Manager,
Finance & Accounting Department,
Corporate Management Division, theCompany
April 2022
Corporate Vice President andExecutive Officer, Vice President,
Finance & Accounting Division, theCompany (Current position)

Introduction

KOKUSAI ELECTRIC GROUP CORPORATE REPORT 2023

KOKUSAI ELECTRIC’s
Value Creation

Sustainability

Governance

59

Information

Information
Company Outline (as of March 31, 2023)
Company Name

KOKUSAI ELECTRIC CORPORATION

Address of Head Office	
3-4 Kandakaji-cho, Chiyoda-ku, Tokyo 101-0045, Japan

EstablishedFebruary 2, 2017

Paid-in Capital¥10.005 billion

Group Network (as of April 1, 2023)
Kokusai Semiconductor Europe GmbH:https://kokusai-se.com
Georg Birkmaier

Yong-Sung Park

President & Managing Director

President & CEO

Career Summary

Career SummaryJan

Mar 1990 Samsung Electronics co., Ltd
Aug 1993 Kokusai Electric Korea co., Ltd
Apr 2016 Senior Vice president, Design &Manufacturing Division
Apr 2023 President & CEO (Current position)

1986 Siemens Semiconductor Munich.
Equipment Engineer PVD and Metal CVD
Dec 1988 Applied Materials; Vacuum Engineer/
Endura PVD Design Team,Account Manager
Central Europe, Business Development Manager
Metal Deposition, Product Manager Electro Plating,Mar 2001 Wind River, Regional Director EMEA
Mar 2004 Novellus Systems,
President Europe Operations
Oct 2018 GlobalFoundries, Managing Director,
Region Head EMEA Sales
Apr 2022 Kokusai Semiconductor Europe GmbH,
President & Managing Director (Current position)

Head Office
Ireland Office
Israel Office

Yi-Ming Wu

Dale Jones
President & CEO
Career Summary
Jan 1984 U.S. Naval Officer
Dec 1988 KLA-Tencor:
GM Micron Strategic BusinessNov 2015 Applied Materials: VP N.A.
Field Operations
Jan 2022 Kokusai Semiconductor Equipment
Corporation, Vice President
Apr 2022 President & COO
Apr 2023 President & CEO (Current position)

Head Office

KE Semiconductor Equipment (Shanghai) Co., Ltd.:

President & CEO

Career Summary
Jun 1995
Apr 2016
Oct 2018
Apr 2021

Kokusai Electric Asia Pacific Co., Ltd
Director, Technical Dept.
Director, Logistics Dept.
Director, Logistics and Accountant andHuman Resource & General Affairs Dept.
Jan 2022 Vice President,
Logistics and Accountant and Human Resource &General Affairs Dept.
Oct 2022 President
Apr 2023 Chairman & President (Current position)

Head Office
Singapore Branch

Ruosong Xu

Career Summary

Chairman & President

July 1983 Shinmeidaikogyo Inc.
July 2012 Kokusai Electric Semiconductor
Service Inc. Deputy General Manager,
Applied Electronics Division
April 2013 General Manager, Applied Electronics
Division
April 2018 Director (Current position), General
Manager, Applied Electronics Division
April 2022 President & CEO(Current position)

Head Office / Kamiichi Works

Servicehttps://www.ksec.com/

KOKUSAI ELECTRIC CORPORATION:
Head OfficeToyama Technology & Manufacturing Center

Minoru Tanaka

Chairman & President

Production

Kokusai Semiconductor
Equipment Corporation:

Head Office , Main Factory
Pyeongtaek Factory

Kokusai Electric
Semiconductor Service Inc.:https://www.kokusai-electric.com/kss/global/

Kokusai Electric Asia Pacific Co., Ltd.:
https://www.kap.com.tw/

Head Office, distribution

Kokusai Electric Korea Co., Ltd. (Kook Je Electric Korea Co., Ltd.):
https://www.kekorea.co.kr/eng/

Career Summary
Jul 1997 Baosteel GroupJan 2001 Applied Materials
May 2017 Chairman and GM, Cymer(an ASML company) China
May 2022 KE Semiconductor Equipment (Shanghai)Co., Ltd., President
Apr 2023 Chairman & President (Current position)

Head Office

KOKUSAI ELECTRIC CORPORATION (the Company) Group companies: 6 in total with 1 in Japan and 5 overseas. In addition to the above, each company operates several business bases with a focus on services.
*For more information on group companies such as details of business bases not shown on the map, please see their individual websites.

KOKUSAI ELECTRIC’s

Introduction

KOKUSAI ELECTRIC GROUP CORPORATE REPORT 2023

Sustainability

Value Creation

60

Information

Governance

Information

Sustainability Data
1. The State of KOKUSAI ELECTRIC(fiscal year)

Category

Scope
KOKUSAI ELECTRIC Group(including outside Japan)*2

Revenues*1
Employees

Number and percentage of personnel by region

Unit

2018

2019

2020

2021

2022

Billion yen

160.9

132.6

178.0

245.4

245.7

3

Group companies in Japan*

Persons

1,102

1,108

1,152

1,200

1,273

Overseas group companies*4

Persons

786

827

883

902

1,156

Japan

%

58.4

57.3

56.6

53.4

52.4

Asia (excluding Japan)

%

33.6

35.1

36.5

40.2

41.2

USA

%

5.2

4.8

4.4

4.2

4.3

Europe

%

2.8

2.8

2.5

2.3

2.1

2. Environment

Input(fiscal year)

Category

Scope

Unit

Electricity use

Toyama Technology & Manufacturing Center*5MWh26,46427,546

28,622

Heavy oil and kerosene use

Toyama Technology & Manufacturing Center*5

kL

173

164

160

City gas and LPG use

Toyama Technology & Manufacturing Center*5

km3

139

152

151

Materials and parts use

Toyama Technology & Manufacturing Center*5

t

4,581

7,144

6,818

Packaging materials use

Toyama Technology & Manufacturing Center*5

t

515

691

628

Paper consumption

Toyama Technology & Manufacturing Center*5

t

17.0

16.0

12.2
0.4

Toyama Technology & Manufacturing Center*5

t

0.3

0.4

Toyama Technology & Manufacturing Center*5

km3

12

12

11

Industrial water use

Toyama Technology & Manufacturing Center*5

km3

135

140

150

GHG emissions (Scope 1)*6

KOKUSAI ELECTRIC Group(including outside Japan)*2

t-CO2

969

1,029

1,037

GHG emissions (Scope 2)*6 Market-based

KOKUSAI ELECTRIC Group(including outside Japan)*2

t-CO2

18,682

18,781

19,384GHG emissions (Scope 2)*6 Location-based

KOKUSAI ELECTRIC Group(including outside Japan)*2

t-CO2

17,04917,732

18,321

Toyama Technology & Manufacturing Center*5

t-CO2

1,171,047

1,460,452

1,333,351

SOx emissions

Toyama Technology & Manufacturing Center*5

m3

0.0

0.0

0.0

NOx emissions

Toyama Technology & Manufacturing Center*5

m3

313

200

194

Particulate matterToyama Technology & Manufacturing Center*5

t

0.0

0.0

0.0

Waste and valuables

Toyama Technology & Manufacturing Center*5

t

577

682

596

Final disposal

Toyama Technology & Manufacturing Center*5

t

2

2

1.98
0.24

Release, transfer and recycling of PRTR-speciﬁed
chemical substances

Toyama Technology & Manufacturing Center*

t

0.2

0.1

DrainageToyama Technology & Manufacturing Center*5

km3

147

153

161

BOD

Toyama Technology & Manufacturing Center*5

t

0.48

0.61

0.62

Category

Waste and valuables generation
Water use

2022

Tap water use

GHG emissions (Scope 3)*

Energy use

2021

PRTR-specified chemical use

6

Output

2020

5

Scope

Unit

Crude oil equivalent

Toyama Technology & Manufacturing Center*5

kL/year

Intensity compared to previous year

Toyama Technology & Manufacturing Center*5

Waste and valuables generation intensity
improvement rate *10
Water use intensity improvement rate*

7

2020

2021

2022

6,975

7,252

7,513

%

81

76

111

Toyama Technology & Manufacturing Center*5

%

13

25

35

5

%

—

—

4.5

Toyama Technology & Manufacturing Center*

KOKUSAI ELECTRIC GROUP CORPORATE REPORT 2023

Introduction

KOKUSAI ELECTRIC’s

Sustainability

Value Creation

Governance

61

Information

Information

3. Social and Governance(fiscal year)

Category
Number of female managers

Scope

Unit

2018

2019

2020

2021

2022
16

Engineer Leads, Assistant Managers

Group companies in Japan*3

Persons

14

15

16

18

Managers and those in equivalent or higher positions

Group companies in Japan*3

Persons

4

4

5

5

8

Group companies in Japan*3

%

1.9

1.9

2.3

2.1

3.1
12

Percentage of female managers
Number of employees who tookchildcare and nursing care leave

Men

Group companies in Japan*3

Persons

1

2

1

7

Women

Group companies in Japan*3

Persons

7

5

4

5

6

Percentage of employees who
took childcare leave

Men

Group companies in Japan*3

%

4

9

5

25

57
100

Group companies in Japan*3

%

100

100

100

100

Percentage of employees who obtained the eco people certification

Group companies in Japan*3

%

—

—

15

24

28

Number of employees taking leave for mental illness*8

Group companies in Japan*3

Persons

—*9

11

8

14

23

No lost timeGroup companies in Japan*3

Cases

—*9

4

3

6

16

Lost timeGroup companies in Japan*3

Cases

—*9

1

1

0

1

Frequency rate of work accidents*8Group companies in Japan*3

Cases

—*9

0.51

0.09

0.00

0.27

Number of occupational deaths*8

Group companies in Japan*3

Persons

—*9

0

0

0

0

Environment

KOKUSAI ELECTRIC Group(including outside Japan)*2

Cases

0

0

0

0

0

Occupational health and safety

Group companies in Japan*3

Cases

0

0

0

0

0

Human rights

Group companies in Japan*3

Cases

0

0

0

0

0

Corruption

KOKUSAI ELECTRIC Group(including outside Japan)*2

Cases

0

0

0

0

0

Information security

KOKUSAI ELECTRIC Group(including outside Japan)*2

Cases

0

0

0

0

0

Tax

Group companies in Japan*3

Cases

0

0

0

0

0

Antisocial behavior, antitrust, monopolistic practices

KOKUSAI ELECTRIC Group(including outside Japan)*2

Cases

0

0

0

0

0

Number of work accidents*8

Total number of serious
legal violations, fines,
charges, litigations, etc.

Women

3

Discrimination, harassment

Group companies in Japan*

Cases

0

0

0

0

0

Product/service information and labeling

KOKUSAI ELECTRIC Group(including outside Japan)*2

Cases

0

0

0

0

0

Marketing and communication(e.g., advertising, publicity, sponsorship activities)

KOKUSAI ELECTRIC Group(including outside Japan)*2

Cases

0

0

0

0

0

Customer privacy violations, loss of customer data

KOKUSAI ELECTRIC Group(including outside Japan)*2

Cases

0

0

0

0

0

Political donations

3

Group companies in Japan*

Million yen

0

0

0

0

0

Financial assistance from the government (including tax exemptions)Group companies in Japan*3

Million yen

48

156

20

1,136

1,341

*1 Revenues: Calculated and notated in accordance with International Financial Reporting Standards (IFRS). Values presented are reference values before auditing.
*2	KOKUSAI ELECTRIC Group (including outside Japan): KOKUSAI ELECTRIC CORPORATION, Kokusai Electric Semiconductor Service Inc., Kokusai Semiconductor Equipment Corporation, Kokusai Semiconductor Europe GmbH, KE Semiconductor Equipment (Shanghai) Co.,
Ltd., Kokusai Electric Asia Pacific Co., Ltd., Kook Je Electric Korea Co., Ltd. (Kokusai Electric Korea Co., Ltd.)
Kokusai Semiconductor Europe GmbH, KE Semiconductor Equipment (Shanghai) Co., Ltd., Kokusai Electric Asia Pacific Co., Ltd.
Kook Je Electric Korea Co., Ltd. (Kokusai Electric Korea Co., Ltd.)*3 KOKUSAI ELECTRIC Group companies in Japan: KOKUSAI ELECTRIC CORPORATION, Kokusai Electric Semiconductor Service Inc.
*4	KOKUSAI ELECTRIC Group companies overseas: Kokusai Semiconductor Equipment Corporation, Kokusai Semiconductor Europe GmbH, KE Semiconductor Equipment (Shanghai) Co., Ltd., Kokusai Electric Asia Pacific Co., Ltd., Kook Je Electric Korea Co., Ltd. (Kokusai
Electric Korea Co., Ltd.)
Kook Je Electric Korea Co., Ltd. (Kokusai Electric Korea Co., Ltd.)*5 Toyama Technology & Manufacturing Center: Limited to business activities at Toyama Technology & Manufacturing Center, among Group companies in Japan*6 Referred to the Ministry of the Environment’s “Basic Guidelines on Accounting for Greenhouse Gas Emissions Throughout the Supply Chain”•Electricity emission factor in Japan: Uses the Ministry of the Environment’s emission factor by electric utility operator (for calculating GHG emissions of specified emitters)•Electricity emission factor for Group overseas companies: Uses emission factor released by relevant country or grid emission factor by country released by IGES
*7 water use intensity improvement rate: Reference year 2021 (2005 baseline up to last year revised in 2022)*8 Number of work accidents, frequency rate of work accidents, and number of occupational deaths: calculated from Jan. 1 - Dec. 31*9	2018 data for number of employees taking leave for mental illness, number of work accidents, frequency rate of work accidents, and number of occupational deaths: Data for 2018 have not been calculated as it is difficult to calculate the data accurately due to splitting
off from the Hitachi Kokusai Electric Group (June 1, 2018).
*10 Waste and valuables generation intensity improvement rate: Reference year 2019

KOKUSAI ELECTRIC GROUP CORPORATE REPORT 2023

Introduction

KOKUSAI ELECTRIC’s
Value Creation

Sustainability

Governance

62

Information

Glossary
Terms related to technology
TermExplanation

Page

Batch deposition equipment

Equipment that performs film deposition by batch processing of a large number of wafers

P.4

Treatment equipment

Equipment that improves film properties after deposition by single-wafer processing

P.5

CVD

Abbreviation of Chemical Vapor Deposition

P.5

Terms related to products
Term®

Explanation

Page

Name of a short cycle batch cluster (SCBC) platform. Equipped with two furnaces for deposition of 25-50 wafers

P.5

High-throughput equipment for thermal process

P.5

Name of our equipment for sub-200 mm wafers. Named “Vertex,” meaning the highest point, expressing the wish that this series will sell well worldwide

P.8

ZESTONE

Equipment for 300 mm wafers

P.8

MARORA®

Name of a single wafer plasma nitridation/oxidation system. MARORA is a word coined from the modified magnetron type (MMT) plasma generation method and aurora, aplasma phenomenon that occurs in nature.

P.9

QUIXACE®

Name of a vertical batch thermal processing system offering quick turnaround time (Q-TAT). QUIXACE employs comprehensively upgraded core technologies, including
temperature control, wafer handling, replacement, cooling, and deposition.

P.9

QUIXACE ULTIMATE®

Platform with high productivity, energy-saving control, and improved process quality in view of the cost of ownership.

P.9

The successor to our Lambda series of single wafer dry resist strip systems. TANDUO is a word coined from “tandem” and “duo.”

P.9

TSURUGI-C²®

AdvancedAce®

VERTEX®

®

TANDUOFor details

Product information | https://www.kokusai-electric.com/en/products/

Terms related to sustainability
Term

Explanation

Page

United Nations Global
Compact (UNGC)

In the UNGC, which is the world’s largest corporate sustainability initiative, the United Nations and the private sector (companies and organizations) collaborate to build asound global society. It is a voluntary initiative by companies and organizations, acting as good members of society, to achieve sustainable growth by demonstrating
responsible leadershipP.4

eco people

Persons who passed the Certification Test for Environmental Specialists (Eco Test) of the Tokyo Chamber of Commerce and Industry

P.21

IPCC

Abbreviation of Intergovernmental Panel on Climate Change.
Intergovernmental body that provides assessments by international experts of research findings on climate change in the scientific papers that it gathers.

P.22

GHG Protocol

International standards for calculating and reporting greenhouse gas emissions

P.26

SVHC

Abbreviation of Substances of Very High Concern. Substances in the Candidate List for eventual inclusion in Annex XIV of the REACH regulation

P.27

chemSHERPA®

Common scheme for information handling for appropriate management of chemical substances in products in order to continuously respond to expanding regulations.
chemSHERPA is a registered trademark of the Japan Environmental Management Association for Industry (JEMAI).

P.27

KOKUSAI ELECTRIC GROUP CORPORATE REPORT 2023

Introduction

KOKUSAI ELECTRIC’s
Value Creation

Sustainability

Governance

63

Information

Glossary

Term

Explanation

Page

TCFD

Abbreviation of Task Force on Climate-related Financial Disclosures.
Framework for disclosure of financial information on companies’ actions to mitigate climate change and their impacts

P.6

Diversity & inclusion

Empowering people by respecting and appreciating individuals’ differences

P.7

TechInsights
customer satisfaction survey

Questionnaire survey covering the chip market and subsystems customers. The survey participants were asked to rate equipment suppliers in 14 categories based on 3 key
factors: supplier performance, customer service, and product performance.

P.7

BCP

Abbreviation of Business Continuity Plan.
BCPs are plans that define how to minimize damage such as business interruption and achieve quick recovery and ensure business continuity in the event that business
continuity is jeopardized, such as by a large-scale natural disaster or an outbreak of infectious disease.

P.12

CDP

Formerly known as the Carbon Disclosure Project, CDP is a non-governmental organization (NGO). CDP conducts questionnaire surveys of companies and municipalities on
their actions regarding climate change, water resources, and deforestation, and publishes the scoring results.

P.22

SBT

Abbreviation of Science Based Targets (Science-based greenhouse gas emissions reduction targets).
The Science Based Targets initiative (SBTi) assists companies in the setting of science-based greenhouse gas emissions reduction targets and their achievement with the aimof limiting global warming to well below 2°C above pre-industrial levels.

P.22

PRTR

Abbreviation of Pollutant Release and Transfer Register.
The PRTR system requires businesses handling chemical substances potentially hazardous to human health and the ecosystem to monitor and report the amounts ofchemical substances released into the environment and transferred in waste to the government, which then compiles the amounts released and transferred based on reports
from businesses and estimates made using statistical data and makes the results public.

P.23

Thermal recycling

Recycling method to recover and utilize the thermal energy generated when incinerating waste

P.24

Material recycling

Method to reuse waste as materials for new products

P.24

RBA Code of Conduct

Abbreviation of Responsible Business Alliance. A set of standards for the electronics industry and other industries to ensure throughout the supply chain that the working
environment is safe, workers are treated with respect and dignity, the manufacturing process is responsible for its environmental impact, and so on.

P.28

Conflict minerals

Tin, tantalum, tungsten, gold (collectively “3TG”) as well as cobalt from the Democratic Republic of the Congo (DRC) and adjoining countries.
Minerals that may be used to finance armed groups involved in civil wars and conflicts that cause major human rights abuses.

P.28

TABLE FOR TWO Activities

Under this program, for each meal purchased in a developed country, a donation is made to provide one meal in a developing country. This program contributes both toeliminating hunger in developing countries and obesity in developed countries.

P.44

OECD Transfer Pricing
Guidelines

Guidance on transfer pricing for multinational enterprises and tax authorities

P.50

BEPS Action Plan.

BEPS is an abbreviation of Base Erosion and Profit Shifting. An action plan to address base erosion and profit shifting.

P.50

Certified Health & Productivity
Management Outstanding
Organizations Recognition
ProgramThis program recognizes outstanding large enterprises and small and medium-sized enterprises implementing health & productivity management based on initiatives attuned
to regional health issues and health-promoting initiatives of the Nippon Kenko Kaigi. The aim is to develop an environment in which such enterprises are able to gain
enhanced recognition in society as enterprises strategically implementing initiatives that lead to maintenance and promotion of health of employees from a business
management perspective.

P.56

WEPs

Abbreviation of Women’s Empowerment Principles

P.56
For details

Sustainability | https://www.kokusai-electric.com/en/csr/
News Room | https://www.kokusai-electric.com/en/news/

KOKUSAI ELECTRIC CORPORATION
https://www.kokusai-electric.com/