TOKYO ELECTRON ANNUAL REPORT 2017

PAGE3CONTENTSInterview with the CEO
Message from the CFO

Business Overview
and Financial Highlights

To Our Stakeholders

Review of Operations
and Business Outlook

Corporate Governance
CSR-Oriented Operations

Corporate Data

Financial Section

Business Overview and Financial Highlights

Business Overview and Financial Highlights

Semiconductor
Production
Equipment

Coater/Developers
Plasma Etch System
Thermal Processing System

Semiconductor devices are broadly used in mobile devices, suchas smartphones and tablets, as well as the data center serversthat are indispensable for the processing of big data. With thearrival of the internet of things, semiconductor applications will
expand in all fields, from consumer electronics and automobiles
to medicine and healthcare. Tokyo Electron provides a wide
range of semiconductor production equipment used to manufacture such semiconductors along with superior technical support and service. The six main categories of our product lineup
are coater/developers, plasma etch systems, thermal processing
systems, single wafer deposition systems and cleaning systems
used in wafer processing as well as wafer probers used in thewafer testing process. In addition, we also offer such products aselectrochemical deposition systems and wafer bonders/debonders used in advanced packaging processes.

Sales by Region

5.7%
Europe 8.0%

Southeast Asia

Coater/Developers
CLEAN TRACK ™
LITHIUS Pro™ Z

China

12.1%

Japan

12.2%

North America

13.5%

South Korea

18.4%

Taiwan30.1%

ALD System
NT333™

Plasma Etch System
Tactras™

Net Sales
Net Sales
and andGross
Gross
ProfitProfitMarginMargin(Billions (Billionsof yen) of yen)(%)(Billions(Billionsof yen) of yen)(%)

1,000 1,0005050200 200

800 800

40.2 40.2
40.3 40.3
39.6 39.6
4033.0 33.0
31.9 31.9
799.7799.7
663.9663.9
613.1613.1
30
612.2612.2
497.3497.3

400 400

20200 2000

Gross Gross
Profit Profit
MarginMargin

Single Wafer Cleaning System
CELLESTA™ -i

14.4 14.4

30116.8116.8

100 100

88.1 88.1

2050

00 050155.6155.6
15(Billions(Billionsof yen) of yen)
(%)

1580

80(%)

(%)

(Billions (Billionsof yen) of yen)30
115.2115.2

30

120 120

20209090101060

60

0030

30

-10-100077.9 77.9
71.9 71.9

10104040

55 0000-40-40

2.5 2.5
32.2 32.2012.512.5

13 13 14 1415 1516 1617 17
OperatingOperatingMarginMargin

13.0 13.0
11.8 11.8

6.1 1.0
6.1 1.0-3.3 -3.3-19.4-19.4

Japan

19.3%

Overseas

80.7%

Flat panel displays (FPDs) are an essential part of everyday life,
employed in such products as TVs, smartphones and tablets.
Going forward, FPDs are expected to see new growth in demand
for such applications as virtual reality (VR) and augmented reality (AR) head-mounted displays. Tokyo Electron supplies coater/developers and plasma etch/ash systems for manufacturing
FPDs along with solid technical support and service. We alsooffer an inkjet printing system for manufacturing OLED panels
using large-sized substrates to take advantage of the expanding
OLED display market.

FPD Coater/Developers
Exceliner™

118.0118.0

13 13 14 1415 1516 1617 17
Net Income
Attributableto Ownersof Parent
Net Income(Loss)(Loss)
Attributableto Ownersof Parent
ROE ROE

The amounts in this report in hundred millions (0.1 billion unit) of yen, in millions of yen and in thousands of yen, U.S. dollars and shares, as of and for the years ended March 31, 2016 and prior periods arerounded. On the other hand, such amounts including the changes from the previous fiscal year are rounded down as of and for the year ended March 31, 2017, and therefore the totals do not necessarily agreewith the sum of the individual account balances for the corresponding period.

FPD Plasma Etch/Ash System
Impressio™

64.2 64.2
60.4 60.4
33.4 33.4

8.6 8.6

13 13 14 1415 1516 1617 17Free Cash Flow =  Cash flows from operating activities + Cashflows from investing activities (excluding changes in short-term
investments with ­original maturities of less than one year)

Inkjet Printing System for
Manufacturing OLED Panels
Elius™ 2500

Net Income
Net Income(Loss)(Loss)
per Shareper Share

CashCashDividends
Dividends
per Shareper Share

(Yen)

(Yen)

(Yen)

750 750(Yen)

400 400

702.26702.26500 500

19.1 19.1

5.3 5.3

Operating
IncomeOperating
IncomeWafer Prober
Precio™ XLFreeFree
CashCash
FlowFlow

20120 120

FPD Coater/Developers
FPD Plasma Etch/Ash System
Inkjet Printing System for Manufacturing OLED Panels

Sales by Region

Net Income
Net Income(Loss)(Loss)
Attributable
Attributableto Owners
to Ownersof Parentof Parentand andROEROE

17.6 17.6

1013 13 14 1415 1516 1617 17(%)

19.5 19.5
2040150 150

100Net Sales
Net Sales

Single Wafer Deposition System
Triase +™

OperatingOperating
IncomeIncomeand andOperating
OperatingMarginMargin600 600

FPD
Production
Equipment

Single Wafer Deposition System
Cleaning SystemWafer Prober461.10461.10401.08401.0833.91
33.91
0-250 -250

237 237
200 200

250 2500352 352
300 300-108.31-108.31

13 13 14 1415 1516 1617 17143 143
100 100

51051 50

50013 13 14 1415 1516 1617 17