Medium-term Management Plan
28 May, 2019
Toshiki Kawai
Representative Director, President & CEO

CORP IR / May 28, 20191

Forward Looking Statements
 Disclaimer regarding forward-looking statement
Forecast of TEL’s performance and future prospects and other sort of information published are made based on information available
at the time of publication. Actual performance and results may differ significantly from the forecast described here due to changes invarious external and internal factors, including the economic situation, semiconductor/FPD market conditions, intensification of sales
competition, safety and product quality management, and intellectual property-related risks.
 Processing of numbers
For the amount listed, because fractions are rounded down, there may be the cases where the total for certain account titles does notcorrespond to the sum of the respective figures for account titles. Percentages are calculated using full amounts, before rounding.
 Exchange risk
In principle, export sales of Tokyo Electron’s mainstay semiconductor and FPD panel production equipment are denominated in yen.
While some settlements are denominated in dollars, exchange risk is hedged as forward exchange contracts are made individually at
the time of booking. Accordingly, the effect of exchange rates on profits is negligible.

 Disclaimer regarding IHS Markit data (Page 84, 86)
The IHS Markit reports and information referenced herein (the "IHS Markit Materials") are the copyrighted property of IHS Markit Ltd. (“IHS Markit”) and represent data, research,opinions or viewpoints published by IHS Markit, and are not representations of fact. The IHS Markit Materials speak as of the original publication date thereof (and not as of thedate of this offering document). The information and opinions expressed in the IHS Markit Materials are subject to change without notice and IHS Markit has no duty or
responsibility to update the IHS Markit Materials. Moreover, while the IHS Markit Materials reproduced herein are from sources considered reliable, the accuracy andcompleteness thereof are not warranted, nor are the opinions and analyses which are based upon it. To the extent permitted by law, IHS Markit shall not be liable for any errors
or omissions or any loss, damage or expense incurred by reliance on the IHS Markit Materials or any statement contained herein, or resulting from any omission. No portion of
the IHS Markit Materials may be reproduced, reused, or otherwise distributed in any form without the prior written consent of IHS Markit. Content reproduced or redistributed with
IHS Markit’s permission must display IHS Markit’s legal notices and attributions of authorship. IHS Markit and the IHS Markit globe design are trademarks of IHS Markit. Other
trademarks appearing in the IHS Markit Materials are the property of IHS Markit or their respective owners.

 Disclaimer regarding Gartner data (Page 6)
All statements in this presentation attributable to Gartner represent Tokyo Electron’s interpretation of data, research opinion or viewpoints published as part of a
syndicated subscription service by Gartner, Inc., and have not been reviewed by Gartner. Each Gartner publication speaks as o f its original publication date (and not as ofthe date of this presentation). The opinions expressed in Gartner publications are not representations of fact, and are subje ct to change without notice.

CORP IR / May 28, 2019

FPD: Flat panel display

2

Today’s Key Messages
 With the adoption of IoT, AI and 5G the transition to a data society isaccelerating. Amid the expansion of semiconductor applications and demand
for technological innovation enabling this transition, medium- to long-term
growth in both the semiconductor and FPD manufacturing equipment
markets can be expected TEL’s business expansion is progressing well in focus areas. Both sales andprofit outperformed market growth Revised financial model towards further growth. Aim for world-class operating
margin and ROE of over 30% in the medium- to long- term Plan to repurchase 150B yen of own shares based on our confidence infuture profit growth and in light of our current cash position and growthinvestment capital
CORP IR / May 28, 20193

FY2019 (April 2018 – March 2019) Highlights
Net Sales andGross Profit Margin

Operating Income andOperating Margin

Net Income Attributable to
Owners of Parent and ROE
30.0%

Net sales (¥B)
1,200

300

Gross profit margin 42.0% 41.2%

39.6%

40.2%

40.3%

250

800

1,278.2




FY'18

FY'19

248.2

11.8% 13.0%

155.6

116.7

5.0%

88.1

0.0%

0

FY'17

19.1%

204.3

10.0%

100

0



150

19.5%

15.0%
310.5
281.1

663.9

FY'16

Net income attributable to30.1%
owners of parent (¥B)
ROE
29.0%

20.0%
17.6%
14.4%

150

50

FY'15

200

100

799.7
613.1

25.0%

24.9%

1,130.7
400

24.3%

Operating margin

200

250

Operating income (¥B)

FY'15

FY'16

FY'17

FY'18

FY'19

115.2

50

71.8

77.8

FY'15

FY'16

0

FY'17

FY'18

FY'19

Net sales +13% YoY driven by higher competitiveness in the growing SPE*1 market and expanded
share in FPD*2
New record highs for gross profit, operating income and net income attributable to owners of parent
Achieved medium-term ROE target of 30%
CORP IR / May 28, 2019 *1 SPE: Semiconductor production equipment *2 FPD: Flat panel display production equipment

4

CY2018 SPE Makers Top 15
CY2018 sales
1 Applied Materials
2 ASML
10.91
3 Tokyo Electron
10.87
4 Lam Research
4.20
5 KLA-Tencor
2.59
6 Advantest
2.22
7 SCREEN Semiconductor Solutions
1.49
8 Teradyne
1.48
9 Kokusai Electric
1.40
10 Hitachi High-Technologies
1.18
11 ASM Pacific1.17
12 SEMES
0.99
13 ASMI
Source: VLSI Research, March 19, 2019,0.97
14 Daifuku
Total IC Mfg Equipment (Preliminary)
System and Service Sales
0.80
15 Canon

($B)
14.01
12.77

YoY growth
6.5%
30.9%
25.8%
25.8
%
13.7%
14.1%
54.9%
19.5%
-10.3%
25.8%
16.9%
6.7%
-13.2%
18.6%
34.1%
53.3%

Outperformed market growth on steady business expansion
CORP IR / May 28, 2019

5

CY2018 WFE Market Share
Company

1 Applied Materials
2 ASML3 Lam Research
4 Tokyo Electron
5 KLA-Tencor
6 SCREEN Semiconductor Solutions
7 Kokusai Electric
8 Hitachi High-Technologies
9 SEMES
10 Daifuku
Total Market

Revenue ($M) YoY Growth

10,990
9,743
9,001
8,967
3,264
1,799
1,187
1,166
1,129
930
59,442

3%
36%
11%
24%
16%
29%
22%
13%
8%
35%
16%

Share

18.5%
16.4%
15.1%
15.1%
5.5%
3.0%
2.0%
2.0%
1.9%
1.6%
100%

YoY Change-2.4pts
2.4pts-0.8pts
1.0pts0.0pts0.3pts0.1pts-0.1pts-0.2pts
0.2ptsGraph created by TEL based on Gartner Research, Source : Gartner, Market Share: Semiconductor Wafer Fab Equipment, Worldwide, 2018,
Bob Johnson et al., 24 April 2019

Exceeded 15% for the first time on progress in focus areas
CORP IR / May 28, 20196

Growth Over the Past 5 Years
WFE* ($B)

Net sales (¥B) Operating income (¥B)
1,278.2

58.9

1.7x

2.1x

33.7

310.5

3.5x

613.1

88.1

CY'14

CY'18

FY'15

FY'19

FY'15

FY'19

Sales and operating income outperformed market growth on steadyincrease in market share and improvement in productivity
CORP IR / May 28, 2019

* WFE (Wafer fab equipment): The semiconductor production process is divided into front-end production, in which circuits are formedon wafers and inspected, and back-end production, in which wafers are cut into chips, assembled and inspected again.
Wafer fab equipment refers to the production equipment used in front-end production and in wafer-level packaging production.

7

Launch of 5G: First Step to a Future Beyond Imagination
Global data transmission volume

5G
network

1970

1980

1990

2000

2010

Compared to 4G:
100x speed and capacity
1/10th latency
100x simultaneousconnections
2020

2030
5G: 5th generation mobile
communications system

5G will enable transmission of vast amount of data
CORP IR / May 28, 20198

First Year of 8K TV and Foldable

8K OLED TV

Foldable smartphone

Quality is 4x that of 4K• Larger size
• Higher resolution• OLED• Design(Flexible, foldable,
free format)

Technological innovation in displays continues
CORP IR / May 28, 20199

Revision of Financial Model With the adoption of IoT, AI and 5G the transition to a data society isaccelerating. Amid the expansion of semiconductor applications and demand
for technological innovation enabling this transition, medium- to long-term
growth in both the semiconductor and FPD manufacturing equipment
markets can be expected TEL is looking towards future growth, and intends to continue active
investment. Specifically, we intend to conduct 400B yen in R&D investment
over the next 3 years
 Amid increasing uncertainty such as US-China trade friction and Brexit,
we decided to revise the FY2021 financial model announced last year

CORP IR / May 28, 201910

R&D Investment
150

113.9

120.0

B yen

B yen

100
97.1

73.2

50

83.8

78.6
71.3

76.2

400.0B yen
3 year total

0

FY'13 FY'14 FY'15 FY'16 FY'17 FY'18 FY'19 FY'20 FY'21 FY'22

400B yen in R&D investment over the next three years.
Realize growth through development of cutting-edge technologies
looking at future generations
CORP IR / May 28, 201911

New Financial Model (within 5 Years)
Changes
1. Eliminate linkage of WFE and financial model, 2. Set timeframe for achievement
within 5 years, 3. Add net sales of 2 trillion yen, operating margin of over 30%,
4. Revise ROE to over 30%

Financial model (within 5 years)
Net sales¥1,500.0B¥1,700.0B¥2,000.0B

Operatingmargin

26.5%

28%

>30%

ROE
CORP IR / May 28, 2019

>30%
12

Semiconductor Technology Roadmap
Demand for ultra-low
power consumption technology
RF analog
for IoT

Power device
for IoTHigh productivity
SPE tool

Future device systems
for HPC/AI/IoT

Low energy
consumption

AI chip (Analog memory)
ReRAM

MRAM

Scaling

HBM>2 Tiers

RF/Analog
3D NAND High dense TSVHigh AR TSVDRAM
Scaling (WL/BL) Higher-k capacitor New architecture

NAND

Face-to-Facebonding

Logic BEOL
eMemory
Logic subLogic BEOL
Logic subInterposer

under
CMOS array>150 layers

WL metal

Low-k>2 Tiers
Capacitor for stable power supply

High density RDL

Logic
BEOL structure

Contact metal

GAA Tr.*Patterning
Ad-SAQP

EUV single

EUV double

Ad-package

Systemize technology by integrating chips- DRAM tower with via- Analog/NAND/Logic by stacking- Built-in AI (Analog memory)- Moore’s Law by package scaling

TEL forecasts
CORP IR / May 28, 2019* Gate-all-around transistor

13Market Heading Towards Diversification

Customization

Moore’s Law

Multi-functionality

Improved performance throughtransistor integrationOS
CPU + Memory
PC/Mobile systems

Communication
systems

Mobility
systems

Healthcare
systems

Robotic
systems

AI system

Hyper-mass
Pursuit of ultra-efficient productivity

Applications increase, production technology diversifies too
CORP IR / May 28, 201914

Maximize Utilization of TEL’s Comprehensive Strengths

Sales
Customer trust

Marketing
Advanced datacollection andanalysis abilities

Broad product coverage
Coater/Developer

FS

Deposition

Etch

R&D
 Strong next generation
product development
 Process integration

CORP IR / May 28, 2019

Cleaning

Test

Manufacturing Largest installedbase in industry:
69,000 units Advanced FS

 High quality
 Robust supply chain15

Continually Pursuing the Best Products and Best Service

Advancedfield solutions

Front-loading

Share roadmap for next several generations with customers

Promote early engagement

Realize maximum yield of customer devices and equipment
availability from early stage of customers’ mass production andreduce burden on the environmentBusiness development leveraging industry’s largest installedbase of 69,000 units

TELeMetrics™ remote maintenancePredictive maintenance with machine learning

Further increase investment in human resources/R&D by raising
operational efficiency and driving higher per-employee productivity

Vision: A truly global company generating high added value and profits in the semiconductor and
FPD industries through innovative technologies and groundbreaking proactive solutions that
16
CORP IR / May 28, 2019
integrate diverse technologies

Increasing Development and Production Capacity
2018

2019

2020

Miyagi plant

Yamanashi plant

Tohoku plant

Completed Sep. 2018

New developmentbuilding
Etch systems

Started construction:
Feb. 2019
Planned completion:
Apr. 2020

New productionbuilding

Started construction:
Oct. 2018
Planned completion:
Nov. 2020

New productionbuilding

Deposition systems, gas chemical etch systems, test systems

Enhancing development and production structures in growth areas
Expect capex of 40-50B yen/year, depreciation of 35-37B yen/year
CORP IR / May 28, 201917

Continually Pursuing the Best Service
Field solutions
sales

400

288.2B yen

300

251.0
200

largest in industry

Used
equipment
Parts

208.0
170.0

Global installed base380.0B yen

185.0

100

69,000units

Servicecontracts

Repairs

Modifications- TELeMetrics™ remote maintenance0

Target for

FY'15 FY'16 FY'17 FY'18 FY'19 5 years hence- Predictive maintenance withmachine learning

Field solutions sales are included in SPE and FPD sales.
Numbers from FY’15 to FY’17 are approximate.

Support customers with the latest technology tomaximize uptime and increase yield
CORP IR / May 28, 201918

Towards Further Raising Corporate Value

OffenceAchieve world-classoperating margin and
ROE of over 30%
Measures
1. Front-loading
2. Advanced FS
Product
competitiveness
HigherResponsivenessproductivity
to customers＆

Offence
Defense Safety first Compliance Quality
 Engagement
Business

攻め

ESG
Indispensable to business sustainability

CORP IR / May 28, 201919

Contributing to the Environment

Reducing semiconductors’ energy consumption
is a major issue in an era of big data
Contribution via TEL’s
business activities

SDGs

TEL’s product initiatives

Equipment with low
power consumption, highavailability, high yield

Make semiconductors
more energy efficientTokyo Electron supports the SDGs

TEL is realizing a better society through its technological solutions
CORP IR / May 28, 2019

20

21

Establish Environmental Medium-term Targets for 2030
Equipment

30%
Reduce per-wafer
CO2 emissions (vs 2013)

Facilities

20%
Total CO2 emissions (vs 2018)

1%

Reduce energy consumption ateach facility (per-unit basis)(annual target, YoY)

Long-term goal (2050)
As a leading corporation in environmental management, Tokyo Electron works actively toconserve the global environment.
We strive to contribute to the development of a dream-inspiring society by proactively
promoting the reduction of environmental burden of both our facilities and products, andat the same time, providing evolutionary manufacturing technologies that effectively
reduce the power consumption of electronic products.
CORP IR / May 28, 201921

Share Repurchase Plan

Plan to implement share repurchase of up to 150B yen• Type of shares to be acquired:
Shares of common stock• Total number of shares to be acquired: Up to 14 million shares(Equivalent to 8.5% of outstanding shares
excluding treasury stock)• Total cost of acquisition:
Up to 150 billion yen• Period of acquisition:
From May 28, 2019 to December 31, 2019

We will continue to manage our balance sheet flexibly
while considering our ability to generate cash, necessary
cash on hand and growth investment capital
CORP IR / May 28, 201922

Summary Revised financial model with aim of further growth TEL is looking towards future growth, and intends to continue stable
investment. We intend to conduct 400B yen in R&D investment over the
next 3 years
 Aim for operating margin and ROE of over 30% in the medium- to longterm by continually pursuing the best products and best service

 Plan to repurchase 150B yen of own shares based on our confidence infuture profit growth

Aim for sustained growth in corporate value througha management base with global-standard strength
CORP IR / May 28, 201923

The Big Picture: Future of the Electronics Industry
May 28, 2019
Akihisa Sekiguchi, Ph.D.
Device Technology GM, Corporate Marketing

CORP IR / May 28, 201924

Outline Introduction: Medium to long term outlook
 Process technology challenges for major device types
Scaling:
Lithography and 3D device structures
Process complexity: State-of-the arts semiconductor device fabrication flows
AI:
Introduction to the paradigm shift Summary

CORP IR / May 28, 201925

Evolution of Computational Power Per Fixed Cost

Moore’s Law (5th Generation)
Semiconductor density has been
doubling roughly every 18 months.
Becoming more powerful, efficientand affordable.

Today’s key phrase is PPAC (Power Performance Area Cost)
CORP IR / May 28, 201926

Technology Landscape
Neuromorphic
devices
MobileConnected
devices

AR/MR/VRPC

CORP IR / May 28, 2019

AI/ML

Cloud
Network

FinTechMedical/DNA
technology

Quantum
Computing

Robotics
RPA

Autonomous
Driving

New application is creating enormous
amounts of data through synergy

27

Mobile Phone Full of Leading-edge Devices
Interconnects

Memory: DRAM
Working memory

Contact

Logic/MPU
Data processing

Interconnects

Capacitor

Contact
Gate

STI
Buried gate

BitlineMemory: NAND
Storage memory

CIS VisualWord line isolation (Slit)

Image sensor
Contact

Staircase

Gate

ChannelSTI

Fin
Micro lensColorfilterGate
Interconnects

Photodiode

Pixel isolation

Evolution towards a portable cognitive device with AI chip on board
CORP IR / May 28, 201928

Outline Introduction: Medium to long term outlook
 Process technology challenges for major device types
Scaling:
Lithography and 3D device structures
Process complexity: State-of-the arts semiconductor device fabrication flows
AI:
Introduction to the paradigm shift Summary

CORP IR / May 28, 201929

Scaling Lead by Lithography Tools

Planar FET

(nm)
1000

KrF
100

i-line

180

ArF
130

110

i-ArF
90

65

45

32

10

Wavelength
Technology node Planar NAND
1
1990

1993

1996

1999

22

EUV
14
10

Scaling

7

5

Planar FET
2002

2005

2008

2011

2014

2017

2020

Device evolution has been supported for a long time but…
CORP IR / May 28, 201930

Material and Structural Innovation
3D NAND large stack
3D NAND
Planar FET

High AR of DRAM

3D architecture
FinFETGAA FET

New material and 3D devices have also contributed to performance gains
CORP IR / May 28, 201931

Performance Enhancement through Scaling, Material Development
and 3D Structures
3D NAND large stack

3D NAND
Planar FET

High AR of DRAM

3D architecture
FinFET

(nm)
1000

KrF
100

i-line180

GAA FET

ArF
130

110

i-ArF
90

65

45

32

10

Wavelength
Technology node Planar NAND
1
1990

1993

1996

1999

22

EUV
14
10

Scaling

7

5

Planar FET
2002

2005

2008

2011

2014

2017

2020

Architecture, design, process are also being actively investigated
CORP IR / May 28, 201932

The Real Meaning of Scaling
Min. metal linewidth (atoms)

212.5
N22

170
127.5

N14

Process
control

85

N10
N7

N5

42.5

Stochastic
effects

0
0

42.5
85
127.5 170 212.5
Patterned gate length (atoms)

Traditional thinking
CORP IR / May 28, 201933

Traditional View of Scaling
Traditional diagram

Min. metal linewidth (atoms)

212.5
N22

170
127.5

N14

Process
control

85

N10
N7

N5

42.5

Stochastic
effects

0
0

42.5
85
127.5 170 212.5
Patterned gate length (atoms)

Nanowire example: HfO2 used for gate oxide is about 140Å3…
CORP IR / May 28, 201934

The Impact of Scaling to Process
In reality

Min. metal linewidth (atoms)

212.5
N22

170
127.5

N14

Process
control

85

N10
N7

N5

42.5

Stochastic
effects

0
0

42.5
85
127.5 170 212.5
Patterned gate length (atoms)

High volume manufacturing requires ±10% range process control
CORP IR / May 28, 201935

Next Generation Gate-All-Around Transistor (GAA FET)
Fabrication flowof GAA FETFinFET

Nanowire FET

Nanosheet FET

Source: imec

Leading-edge process enables formation of even complex 3D structures
CORP IR / May 28, 201936

Fabrication Flows of DRAM, 3D NAND and Logic Device
Video

DRAM
CORP IR / May 28, 2019

3D NAND

Logic
37

Rising Added-value in SPE
WFE investment (100k WSPM*, greenfield/TEL estimates)
DRAM

1X

1Y

1Z

~$20B

~$8B

~$7B

2Z

Logic

3D NAND

4X

6/7X

9X

12X

14/16nm

10nm

7nm

5nm

Expanding business opportunities for SPE manufacturers on arrivalof new applications and rising level of technological difficulty
CORP IR / May 28, 2019

* WSPM: Wafer starts per month38

Outline Introduction: Medium to long term outlook
 Process technology challenges for major device types
Scaling:
Lithography and 3D device structures
Process complexity: State-of-the arts semiconductor device fabrication flows
AI:
Introduction to the paradigm shift Summary

CORP IR / May 28, 201939

Increasing Data Generation
Estimated data generation by year in Zettabytes

 Connecting people  connecting devices (IoT):
by 2025 the average person will interact withconnected devices once every 18 seconds,
Metcalfe’s law

180
160

Scale

Multiple

giga

109

tera

1012

peta

1015

exa

1018

zetta

1021

yotta

1024

Data (Zettabytes)

140
120
100
80
60
40

163ZB in 2025

 Increase in criticality of data: “edge” & “cloud”

 Real-time data available instantly anywhere it isneeded (medical, etc.) where latency is an issue
 Cognitive systems (AI, ML/DL, language
processing) becomes available at the “edge”

20
0
2010

Drivers:

 Virtual, Augmented, Mixed Reality (VR/AR/MR)
2015

2020

2025

Year
Source: StorageNewsletter.com white paper (2017)

 Information & data security
 Autonomous driving, blockchain, etc…

Edge and cloud contribute to the growth of data generation through network
CORP IR / May 28, 201940

An Example of Data Creation, Storage, Analysis That Leads toMore Data
Data
creation
sensorDatacreation

Cloud
data
creation

Local
data
storage

Clouddata
analysisDataanalysisDatastorageLocal
data
analysis

Cloud
data
storageData
uploadA variety of algorithms analyze the created data to create even more data
CORP IR / May 28, 201941

Artificial/Augmented Intelligence
AI device related development isaccelerating (in particular algorithms
and applications)$15.8BCAGR 67%

$1.2B
CY'17

Hardware development active but
takes longer time

CY'18

CY'19

CY'20

CY'21

CY'22

AI devices expected to grow at an annualized rate of almost 70%
CORP IR / May 28, 201942

The Future of Computing

Mukesh V. Khare, Ph.D.
Vice President
IBM Research“AI will transform the world in dramatic ways in the coming
years. We are creating a global hub of AI hardware researchwith an ecosystem to innovate, incubate, and lead in thedevelopment of disruptive technologies.”

Era of AI hardware
CORP IR / May 28, 201943

Cognitive Era Roadmap
 Evolution
 From Narrow AI (single task and domain, already done), to Broad AI (multi-task and multidomain, now), to General AI (cross domain multi-tasking, ~2050)

 Power requirements
 Narrow AI tasks such as image net training takes hundreds of kW-hours
 This may be ok for cloud use, but difficult for edge use
 For a more flexible edge use, power requirement has to come down by 1000 x

 Proposed solutions
 Re-optimize the device architecture for neuromorphic computation
 Develop not only digital computational elements but also non-volatile analog computational
elements for lower power usage

CORP IR / May 28, 201944

Outline Introduction: Medium to long term outlook
 Process technology challenges for major device types
Scaling:
Lithography and 3D device structures
Process complexity: State-of-the arts semiconductor device fabrication flows
AI:
Introduction to the paradigm shift Summary

CORP IR / May 28, 201945

Summary Electronics industry will continue to grow
 Driver is the synergy between the ever increasing data and theconnected devices
 Major devices have been evolving over the many decades thanks to thenumerous innovations

 Molecular level process control is only possible with leading-edge tools
 AI semiconductor which is a new category of device will prompt further
growth of the industry

CORP IR / May 28, 201946

Evolution of Computational Power Per Fixed Cost

Moore’s Law (5th Generation)
Semiconductor density has been
doubling roughly every 18 months.
Becoming more powerful, efficientand affordable.

Tokyo Electron will continue to provide leading-edge technology solutions
CORP IR / May 28, 201947

Technology Enabling Life

Safer mobility
Precision medicine
Ubiquitous education

Technology which contributes to the society
CORP IR / May 28, 201948

SPE Business Market Outlook
May 28, 2019
Yoshinobu Mitano
SVP & General Manager, SPE Business Division

CORP IR / May 28, 201949

Business Environment and Outlook for TEL’s SAM in the SPE
Business
TEL’s SAM* in the semiconductor
manufacturing equipment market($B)
30* TEL forecasts. SAM: Served available market

5.8

4.5

10

0

5.2

5.0

20

10.8

6.1

15.5

15.8

2.1

2.4

2.5

3.6

3.8

4.0

CY'20

CY'21

CY'22

10.1
2.2

3.4

2.0
2.9

CY'17

CY'18

CY'19

Coater/Developer

Cleaning

Etch

Deposition

CORP IR / May 28, 2019

– Copper material adopted to lower resistance ofinterconnect– Capacitor formation is the key to continuing scaling– Multi-layering has reached over 90 layers

13.3

1.8
3.0

 DRAM

 NAND

3.9
12.1

Business environment– Higher aspect ratio etch, high-productivity sacrificial
film removal and atomic level control in film formationin 3D structures are crucial for continued increase indensity Logic/Foundry– Increasing complexity of patterning requires cooptimization between unit processes– Adoption of EUV lithography for mass production
50

DRAM Process Challenges at a Glance Scaling increasingly difficult due to capacitor pitch
limitation– Multi-patterning at Capacitor, WL, BL, STI levels
Interconnects  To scale capacitor EOT, high-k (ZrO /Al O/ZrO )222

dielectrics have been introduced with metal (MIM)

Capacitor
Contact

Buried gate
BitlineSTI

Conventional 6F2cell structure* HKMG: High-k metal gate

 CMOS (periphery) portion moving to HKMG* &FinFETs to reduce area Capacitors will change from cylinders (dielectricon outside and in center) to pillars (dielectric on
outside only) with thinner high-k for space saving– Aspect ratio increases to >50:1 @D16 nodeand continues to ~80:1
 All aspects of high aspect ratio structure difficult tofabricate (etch, film deposition, cleaning, …)

DRAM faces scaling, materials and integration challenges
CORP IR / May 28, 2019

51

NAND Process Challenges at a Glance
Word line isolation (Slit)

Contact
Staircase

Gate

Channel Scaling is no longer limited by lithography. Rather, it islimited by the number of ONON or OPOP device
layers one can stack for higher capacity

 The high aspect ratio of the device structure is proving
to be more challenging for every new generation
 CMOS (periphery) portion moving under memory to
reduce area creates a difficult thermal budget problem
2020 2021

2022 –
2023

12X

25X

51X

65 - 100

65 - 100

65 - 100

65 - 100

4

4-8

8

8

8

50 - 70

40 - 60

40 - 60

40 - 50

40 - 50

40 - 50

20

20

20 - 40

~40

~40

~40

2016 - 20172018 - 2019

# of 3D tiers

4X

6X

9X

Hole CD (nm)65 - 100

65 - 100

Holes between slits

4

Vertical pitch (nm)Bitline CD (nm)Photo image: TECHINSIGHTSCORP IR / May 28, 2019

Etch and deposition of the multi-layering
progressively difficult as AR increases

TEL forecasts

52

Logic: Overcoming Technological Hurdles (Placement Errors)with EUV Step 1: Line/SpaceLine

Each exposure processcreates placement errors

Conventional
exposure

Too close2

1
Too farSpace

1
Self-aligned multiple patterning (SAMP)- high etch and dep usage

Step 2: Cut
Cut

Closer3

3 masks
Three exposures: (Litho + Etch) x 3

EUV
introduction

Lower yield

Exposure using
EUV

Placement errors reduced

1

Cross section ofa logic structure

1
LELELE = (Litho-Etch)3- limited etch and dep usage1

1
1 maskOne exposure: (Litho + Etch) x 1
CORP IR / May 28, 2019

Increased yield53

Effects of EUV Lithography Adoption
 EUV adoption will solve the technological hurdles our customers face (i.e.
placement errors), bringing about positive effects for the semiconductor and
SPE industries– Advancement of scaling– Acceleration of customers’ investment in next generation technologies through yieldenhancement

 The advancement of scaling driven by EUV will further differentiate our
products and create business opportunities– Greater market share for coater/developer– Increase demand for etch, deposition and cleaning equipment– Product differentiation driven by evolution of self-aligned patterning technology– Business expansion through process integration that leverages our robust product line-up
CORP IR / May 28, 2019

54

SPE Business Strategy
DeviceModuleCapacitor formation

High aspect ratio dielectric etch / Tactras™ Vigus™
Collapse-reducing single wafer cleaning / CELLESTA™-i
High-k dielectric & electrode deposition / TELINDY™, NT333™, Trias™

Channel formation

High aspect ratio oxide & nitride film stack etch / Tactras™ Vigus™
High mobility channel film deposition / TELINDY™
High-k dielectric & charge trap deposition / TELINDY™, NT333™

SAQP

High temp tolerant SoC coating / LITHIUS Pro™ Z
Ultrathin film high selectivity etch / Tactras™ Vigus™
Atomic layer deposition (ALD) / TELINDY™

Patterning using EUV

EUV resist coating & development / LITHIUS Pro™ Z
Resist hardening + etch / Tactras™ Vigus™

DRAM

NAND

DRAM
Logic

Critical process / Relevant systems

Expand business by differentiating TEL’s technology in unit processes
and proposing solutions that incorporate integration
CORP IR / May 28, 201955

Coater/Developer, Cleaning System Business Strategy
May 28, 2019
Keiichi Akiyama
VP & General Manager, CTSPS BU

CORP IR / May 28, 201956

Business Environment and Outlook for TEL’s SAM in the
Coater/Developer and Cleaning System Businesses($B)

Single wafer cleaning system
CELLESTA™-i

TEL’s SAM in the coater/developerand cleaning systems markets** TEL forecasts

30

Coater/Developer
CLEAN TRACK™
LITHIUS Pro™ Z

Batch cleaning system
EXPEDIUS™-i

Business environment

20

 Coater/Developer– Adoption of EUV lithography for mass productionis accelerating

10

0

1.8
3.0

2.2
3.4

2.0
2.9

CY'17

CY'18

CY'19

2.1

2.4

2.5

Coater/Developer

3.6

3.8

4.0

Cleaning

CY'20

CY'21

CY'22

 Cleaning system– Increased demand for bevel cleaning– Further demand for drying technology thatprevents pattern collapse accompanying scaling

Growth in coater/developer and cleaning systems SAM on demand for
CORP IR / May 28, 2019
increasing density of semiconductor devices

57

FY2019 Progress Coater/Developer– Grew market share to 88% amid increased ratio of investment in leading-edge processes– Maintained 100% share in in-line coater/developer for EUV
CELLESTA™ Pro SPM Features

 Cleaning system

 High productivity and availability– Maintained market share of 25%,
a five-point increased in CY’17

 High uniformity
 Controlled selectivity for metal– Enhanced product line-up• Launched CELLESTA™ Pro SPM– Expanded bevel wet etch applications• Expanded its use in wiring materials (metal)

Bevel wet etch
Metal

Wafer

Dielectric
film
CORP IR / May 28, 2019

Metal removal withhigh-selectivity
Wafer

58

Coater/Developer SAM Outlook
Coater/Developer SAM
by light source* * TEL forecasts

3.0

($B)

2.4

2.2
2.0

2.5

 EUV
– Growth in line with progress made on
scaling

2.1

2.0

 ArF Immersion

1.8– Although SAM ratio will gradually fall due tointroduction of EUV, market is the largest
1.0

 ArF, KrF, i-Line, Others– SAM ratios will continue to be high due toexpansion of 3D NAND, IoT devices, etc.
0.0
CY'17
EUV

CY'18

CY'19

ArF Immersion

CORP IR / May 28, 2019

CY'20
ArF

KrF

CY'21

CY'22

i-LineOthers59

Coater/Developer Strategy
 Promote unification of system platforms– Improve value for customers and unify developmentwith latest LITHIUS Pro™ Z series

CLEAN TRACK™
LITHIUS Pro™ Z

CLEAN TRACK™
LITHIUS Pro™ AP

 Develop value-added products for scaling
and 3D structures– Address 3D NAND wafer warpage

 Improve quality of service through use of data
and automation

3D NAND– Promote high-quality support not reliant on technicalskill of personnel

CORP IR / May 28, 201960

Cleaning System SAM Outlook
Cleaning system SAM
by system type*

5.0

No significant changes to SAM ratios forcleaning systems* TEL forecasts

4.0
（$B）

4.0
3.8

3.4
3.0

3.0

3.6

 Single wafer cleaning– Will continue to be the largest market– Technological innovation aimed at reducing
defects and improving etch/drying performance
will continue

2.9

2.0

 Batch cleaning– Demand will continue in the market for wet etchfor 3D NAND critical processes

1.0 Scrubber cleaning
0.0

CY'17

CY'18

Single wafer cleaning

CORP IR / May 28, 2019

CY'19

CY'20

Batch cleaning

CY'21

CY'22

Scrubber cleaning– The importance of physical back/bevel cleaning
is increasing in pre-lithography process andother areas
61

Single Wafer Cleaning Strategy
 Single wafer cleaning

Without bevel wet etch

With bevel wet etch

– Bevel wet etch
• Expect annual market growth rate of around 10%• Contribute to improving customers’ yields.
Maintain a high market share by differentiating
through performance in precisely removing film fromthe outer part of the wafer

Conventional drying
technology

New drying
technology

Pattern collapses occur

No collapse– Prevent pattern collapse
Expand market share by TEL original technology to
reduce collapse of high aspect ratio pattern– Metal etch
Launched new dedicated SPM chambers for controlling
selectivity for metal in order to solve reduced yieldissues caused by dry etch damage and residue
CORP IR / May 28, 2019

Metal etch process

TiN

W

W

TiN W

W

62

Batch and Scrubber Cleaning Strategy
SiN etch process
Selectivity to SiO2

 Batch cleaning

Uniformity

Wet
etch

– SiN etch and W etch processes for 3D NAND
Focus on processes that require long durations
and advanced process technology. Differentiate byrealizing high uniformity, high selectivity and highproductivity in wet etch

Wafer back and defocus diagram Scrubber cleaning

Small particles– Pre-lithography process
Provide high-value solutions such as reducing
particles brought in by wafers, contributing to theimprovement of exposure tool availability whichhave grown increasingly important due to theintroduction of EUV

Embedded particles

Surface particles
Total focus spot count (>50nm)

1,000

Before
After
539

787

500

1

1

NitrideOxide

0

CORP IR / May 28, 201963

Cleaning System Growth Scenario
5.0

Sales targets by system type within
TEL’s SAM for cleaning systems** TEL forecasts. SAM shown on a dollar basis and sales on a yen basis

4.0

SAM share
25%

150%

 Single wafer cleaning
130%

110%

90%

3.0

70%

2.0

50%

30%

1.0
10%

0.0

-10%

CY'17

CY'18

CY'19

CY'20

CY'21

CY'22

SAM (in dollars)

Single wafer cleaning

Batch cleaning

Scrubber– Grow sales with pattern collapse reduction
technology and by improving productivity– Maintain a high market share for bevel wet etchand expand applications through removal of newmaterials

 Batch cleaning– Expand POR in 3D NAND critical processes

 Scrubber cleaning– SAM will grow as importance of back/bevel
processing increases due to introduction of EUV

Aim for 30% SAM share within 5 years
CORP IR / May 28, 201964

Summary Coater/Developer
Continue to develop technology that differentiates TEL in leading-edge
technology areas and maintain high value and market share Cleaning system
Continue to differentiate via technological development, focusing on processes
where customers need a high level of technological support, such as improving
yield Synergies
Raise efficiency of development and production by sharing BKM* andpromoting unification of development, production and management ofcoater/developer and cleaning systems* BKM: Best known method
CORP IR / May 28, 201965

Etch System Business Strategy
May 28, 2019
Isamu Wakui
VP & General Manager, ES BU

CORP IR / May 28, 201966

Business Environment and Outlook for TEL’s SAM in the Etch System
Business
TEL’s SAM in the etch systems market*($B)
30* TEL forecasts

Tactras™ Vigus™

Business environment

20

15.5
10

Certas LEAGA™

10.8

15.8

13.3

12.1
10.1

Etch

 Investment in HARC process growing due toincreases in number of 3D NAND layers andproduction capacity
 Increase in patterning process accompanying
logic scaling

0
CY'17

CY'18

CY'19

CY'20

CY'21

CY'22

 SAM in CY’22 forecast to be 50% greater thanin CY’19

SAM in the etch business to continue growing due to increase in
HARC and patterning processes
CORP IR / May 28, 2019

67

FY2019 Progress Achieved medium-term market share target of 30% in CY’18 by focusing on
HARC process, patterning process and interconnect process, all of whichleverage TEL’s strengths
 Expanded market share in 3D NAND 6X/9X generations by differentiating
through process performance and productivity
 Increased sales in DRAM copper interconnect process, where we captured
market share by leveraging knowledge of logic

CORP IR / May 28, 2019

68

FY2019 Progress
Video

CORP IR / May 28, 201969

Etch System SAM Outlook
 HARC process
20.0
19.0
18.0
17.0
16.0
15.0
14.0
13.0
12.0
11.0
10.0
9.0
8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0

Etch system SAM by process type**TEL forecasts
($B)

15.5

15.8

 Patterning process– Multi-patterning will continue to be used, even after the
adoption of EUV for mass production, and SAM willremain at high levels

13.3
12.1
10.8

– SAM will increase due to advancement of 3D NAND
and DRAM scaling

10.1

 Interconnect/contact process– SAM will grow due to adoption of copper dual
damascene interconnects for DRAM and increasing
number of logic interconnects layers

 Critical conductor process
CY'17

CY'18

CY'19

CY'20

CY'21

CY'22

HARC

Patterning

Interconnect/contact

Critical conductor

Gas chemical etch

OthersCORP IR / May 28, 2019

– Stable investment will continue despite low SAM ratio

 Gas chemical etch process– Growth trend for SAM due to introduction of 3D
structures in devices
70Etch System Strategy
 HARC process– 3D NAND (multi-level contact, word line isolation), DRAM (capacitor):
Continue to differentiate through process performance and productivity– 3D NAND (channel): Launch new systems that candifferentiate by providing both precise process controllability
and even higher productivity

Multi-levelcontact

 Patterning process– DRAM: Reduce customer production costs by combining
etch steps– Logic: Differentiate through integration of etch and deposition
technologies

 Interconnect/contact process

Word line
isolation (slit)

ChannelIsotropic etch
Interconnects– Apply knowledge cultivated in logic to DRAM
 Gas chemical etch process– Create a new market through plasma assist technology

CORP IR / May 28, 2019

Capacitor

Source: N. Loubet, et al., Stacked Nanosheet Gate-All-Around Transistor to Enable Scaling Beyond FinFET

Nanosheet image:Courtesy of IBM
71

Etch System Growth Scenario
20.0
19.0
18.0
17.0
16.0
15.0
14.0
13.0
12.0
11.0
10.0
9.0
8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0

Sales targets by process type within
TEL’s SAM for etch systems** TEL forecasts. SAM shown on a dollar basis and sales on a yen basis

3500

Focus on processes with growing SAM and aim tocapture a high SAM share3000

 HARC process

2500

2000

1500

1000

500

0
CY'17
CY'18
SAM (in dollars)

CY'19
HARC

CY'20

Interconnect/contact

Gas chemical etch

CY'21
CY'22
Patterning– Increase sales by growing 3D NAND and DRAM SAM
and capturing new PORs

 Patterning process– Expand SAM share by offering production cost
reductions

 Interconnect/contact process– Maintain high market share with growing SAM and bydifferentiating technology

 Gas chemical etch process– Increase sales by creating new markets

Aim for 30-35% SAM share within 5 years
CORP IR / May 28, 201972

Summary SAM in the etch business to continue growing due to increase in HARC andpatterning processes Achieved medium-term market share target of 30% in CY’18 by focusing on
HARC process, patterning process and interconnect process, all of whichleverage TEL’s strengths
 Focus on processes with growing SAM and aim to capture a high SAM share

CORP IR / May 28, 201973

Deposition System Business Strategy
May 28, 2019
Hiroshi Ishida
VP & GM, TFF BU

CORP IR / May 28, 201974

Business Environment and Outlook for TEL’s SAM in the Deposition
System Business
TEL’s SAM in the deposition
systems market*($B)
30

TELINDY PLUS™

* TEL forecasts. TEL’s SAM: Diffusion furnaces, semi-batch
ALD system, metal CVD system

5.8

4.5

3.9

Triase+™

 Increasingly scaled and complex device structures are
increasing the number of deposition processes. In
particular, demand for ALD, which has excellent
performance, is growing

0
CY'18

NT333™

Business environment

10

CY'17

Deposition

5.2

5.0

20

6.1

CY'19

CY'20

CY'21

CY'22

 Customers are choosing the most appropriatetechnology for each process among batch, semi-batchand single wafer to balance performance and cost

The number of deposition processes is increasing as device structures become
increasingly scaled and complex. Demand for ALD in particular is growing
CORP IR / May 28, 201975

FY2019 Progress Streamlined production, meeting strong demand for systems
 Successfully captured business in the memory market, which experienced particularly highdemand, thereby growing market share Secured business in multiple new functional film processes of major customers

 Started construction of new production buildings at the Yamanashi (Fujii) and Tohoku plants
in response to growing market for deposition systems
New building at the
Yamanashi (Fujii) plant

CORP IR / May 28, 2019

New building at
the Tohoku plant76

Deposition System SAM Outlook
Deposition system SAM by application*
7.0
($B)

* TEL forecasts

6.0

5.8

5.0

6.1

5.2

5.0

4.5
3.9

4.0

 NAND– Investment for 3D NAND scaling will continue.
Particularly, demand for high quality dielectric film,
mainly with ALD, is increasing for high aspect ratio
step DRAM– Scaling will continue. Investment is expected in new
structures and materials to improve capacitor
performance

3.0

2.0

 Logic/Foundry

1.0

0.0
CY'17

CY'18
NAND

CORP IR / May 28, 2019

CY'19
DRAM

CY'20

CY'21
Logic/Foundry

CY'22– SAM ratio will decrease, but stable investment
expected. Continued demand for technologicalinnovation to suppress resistance increase in thinwire
77

Deposition Business Strategy
DRAM

3D NAND

•
•
•

•
•
•
•
•

Lower temperatures
High-k dielectric film
Capacitor electrode

Channel silicon film
Charge trap film
Block high-k dielectric film
Buried oxide film
Buried silicon film

Single-wafer System

Vertical Furnace

Semi-batch System

Triase+™ EX-II ProTM TiN

TELINDY PLUSTM Super Large Batch

NT333TM
Gap-fill SiO2 Dep

AR ≃ 16:1

Improved Continuous
thin film/
productivity/ film
quality
coverage improvement

BottomTop

Dia: 20nm, AR = 50:1

S/C >95%
Higher Equipment
tempera- stability
ture

N2

Si precursor

100/125

150/175

Provide high value-added technology by leveraging ouradvantage of having batch, semi-batch and single wafer
CORP IR / May 28, 2019
technologies

N2

Modification

Oxidation

78

Deposition System Growth Scenario
 Expand business by choosing the mostappropriate method among batch, semi-batch
140000* TEL forecasts. SAM shown on a dollar basis and sales on a yen basis
and single wafer, and providing high value4.0
120000added technologies
5.0

Sales targets by application within
TEL’s SAM for deposition systems*

160000100000

3.0

80000

2.0

60000

40000

1.0
20000

0.0

0

CY'17
CY'18
CY'19
CY'20
CY'21
CY'22
SAM (in dollars)
DRAM
NAND
Logic/Foundry
Others In deposition technologies, which are becoming
increasingly advanced, accelerate developmentof new materials and new deposition method byleveraging our strengths. Aim for further growth– Deposition of new metal material to achieve lower
resistance– New deposition methods to promote scaling, suchas anisotropic deposition and selective deposition– Pre-treatment technology to realize better electriccharacteristics

Focus on high value-added deposition processes,
aim for 40%+ SAM share within 5 years
CORP IR / May 28, 201979

Summary The number of deposition processes is increasing as device structures become
increasingly scaled and complex. Demand for ALD in particular is growing Expand business by leveraging our strength of being able to choose the mostappropriate method among batch, semi-batch and single wafer, and providing
high value-added technologies
 In deposition technologies, which are becoming increasingly advanced,
accelerate development of new materials and new deposition methods byleveraging our strengths
 Increase production capacity by building new production buildings at the
Yamanashi (Fujii) and Tohoku plants in response to growing deposition market,
aim for sales expansion
CORP IR / May 28, 2019

80

FPD Business Strategy
May 28, 2019
Tsuguhiko Matsuura
VP & GM, FPD Business Division

CORP IR / May 28, 201981

Display Trends
Increasing screen size

OLED
Color filter
Emissive
layer
TFT

LCD
TFT
Backlight

LCD

OLED

Design flexibility

Increasing resolution
TV

FHD
Mobile, VR

4K
300 ppi

8K
1,000 ppi

Flexible, free format

Technological change in displays increasing business opportunities
CORP IR / May 28, 201982

Display Evolution and Diversification of Process Technology
Newstructure/material

New display
methods

Enhance light extraction efficiency

Advancedpatterning
Nanoimprint<1.0μmμLED

Top emission/TFE
IGZO、LTPO

Mini LED

Top gate/BCE
Capacitance increase/
low leak current

Direct writing

Larger panel size

QLED
OLED

Flexible
Foldable

Edge bending

FPD
manufacturing technology

Diverse new technologies will enable display evolution
CORP IR / May 28, 201983

Business Environment and Outlook for TEL’s SAM in the FPD
business
TEL’s SAM in FPD manufacturing
equipment market（$B）

FPD plasma etch/ash system
Impressio™

6.6

5.6

5.1

5.0

4.7

4.5
FPD coater/developer
Exceliner™

Inkjet printing system for
manufacturing OLED panels
Elius™

Business environment

 Resolution in large displays increasing, OLED
market expanding
CY'17

CY'18

CY'19

Coater/Developer

CY'20
Dry etch

CY'21

CY'22

AMOLED Evolution of mobile displays

Data based on IHS Markit, Technology Group, Display Supply Demand Equipment Tracker Q4 2018.
Results are not an endorsement of Tokyo Electron Limited. Any reliance on these results is at the third party’s
own risk. Visit technology.ihs.com for more details.

Technological innovation continues mainly in large displays
and mobile displays
CORP IR / May 28, 201984

FY2019 Progress Achieved medium-term operating margin target of 20%
 Established a leading position in G10.5
 PICP™* etch system product development steady Launched Elius™ 1000 G4.5 inkjet printing system for manufacturing OLED
panels, which accommodates high resolution

FPD coater/developer
Exceliner™
CORP IR / May 28, 2019

FPD plasma etch/ash system
Impressio™

Inkjet printing system for
manufacturing OLED panels Elius™

* PICP: Plasma source for producing extremely uniform high-density plasma on substrate85

Business Opportunity: Increasing Resolution in Large Displays,
Growth of OLED TV Market
 OLED TV market will further grow. 8K TV market will launch Mark shift to OLED in high-end monitors, automotive displays and public displays(K units)

OLED TV (units)

8,000

Growth strategy
6,000 Deploy PICP™ plasma etch system in
G8.5/G10.5
 Launch inkjet printing system accommodatinghigh resolution (200 ppi and above)

4,000

2,000

0
CY'16 CY'17 CY'18 CY'19 CY'20 CY'21
Data based on IHS Markit, Technology Group, Display Long-Term Demand Forecast Tracker Q4 2018.
Results are not an endorsement of Tokyo Electron Limited. Any reliance on these results is at the third
party’s own risk. Visit technology.ihs.com for more details.

Promote development activities that reflect technological
CORP IR / May 28, 2019
trends in large panels

86Business Opportunity: Evolution of Mobile Displays
High resolution, full-screen, OLED, embedded fingerprint sensors, lower power
consumption, foldable
Business strategy
 Increase number of masks and dry etch
processes
 Scaling and patterning precision improvement isrequired. Respond to LTPS and IGZO

 Improve performance of dry etch system andcoater/developer. Introduce SPE technologies

Opportunities for differentiation will expand as technological requirement
becomes more sophisticated87
CORP IR / May 28, 2019

FPD Manufacturing Equipment Growth Scenario
Sales and operating margin(Billion yen)
120

35%
30%

100
25%
80

20%
15%

60

10%
40

5%
0%

20
-5%
0

 Raise competitiveness of dry etchsystem and coater/developer Create inkjet market for large OLED
displays Launch new products that reflect
evolution of displays-10%
FY'15 FY'16 FY'17 FY'18 FY'19 FY'20 FY'21 FY'22 FY'23

Sales

Operating margin

Aim for 30% operating margin within 5 years
CORP IR / May 28, 201988

Summary
 Increase market share and profitability in growing market. Aim for 30%
operating margin
 Focus on areas in cutting-edge manufacturing processes where we canleverage our technological advantages– Raise competitiveness of dry etch system and coater/developer– Create inkjet market for large OLED displays– Launch new products that reflect evolution of displays

CORP IR / May 28, 201989

Field Solutions Business Strategy
May 28, 2019
Kiyoshi Sunohara
Corporate Director, SVP & General Manager, Field Solutions Business Division
Subleader, Business Innovation Project

CORP IR / May 28, 201990

Field Solutions (FS) Sales Results and Growth Strategy
Growth strategy key points

FS sales

380.0B yen
130.0
288.2
251.0
208.0
93.0

250.0
188.8

Parts and services

150.0
115.0
0

FY'17

FY'18

FY'19

FY'20

Target for
5 years hence

Grow SAM through increase ininstalled units(installed base of 69,000 units)Respond to new customer needs

Used equipment
and modification

99.4

101.0



•
•

200mm renewal equipment
Comprehensive contract services

 Enhance business efficiency bycooperating with Business Innovation
Project

Leverage our strengths as an equipment manufacturer
to increase earnings in both the used equipment/modificationand parts/services segments
CORP IR / May 28, 201991

Used Equipment/Modification Business
Automotive, smartphones, sensors, MEMS, communications markets growing 200mm renewal equipment– Diffusion furnaces, deposition system– Cleaning system– Etch system– Coater/Developer

Power device market*

($B)
60

* TEL forecasts

40

20

 Capture power device market– SiC etch

– SiC epitaxial deposition

CORP IR / May 28, 2019

0
CY'20

CY'21

CY'22

Power all

CY'23

CY'24

CY'25

Power MOS IGBT

CY'30
SiC

92

Parts/Services Business Model 1
Largest installed base in the industry
Expand SAM on increase ininstalled base

– Provide linked services from equipment delivery toafter-maintenance(Units)100,000
80,000– Provide high value-added services that meetcustomer needs by combining equipment diagnostic
functions using TELeMetrics™ and AI, with partsand repairs>69,000

60,00040,000– Ensure stable earnings by using multi-year contracts
to maintain/grow share>4,000/year
increase

20,000 Repair

0

FY'13

FY'16

FY'19

 Promote comprehensive contract services

FY'23– Grow share through repair/cleaning/refurbishingbusiness localization– Shorten lead-time and realize cost reductions

Enhance business efficiency: raise income through introduction ofsystems that boost business efficiency
CORP IR / May 28, 201993

Parts/Services Business Model 2
TELeMetrics™ service
Monitor operation status of customer equipment in real-time and provide high value-added services

Customer

TEL afterservice centers

Production/
development
facilities

Equipment data

 Change to results-based
compensation business– Assured uptime– Predictive maintenance(including AI functions)

TELeMetrics™

– Improved throughput
Customer
Equipment data

CORP IR / May 28, 2019

Customer
Equipment data

– Chamber-to-chamber matching– Fewer defects

94Summary Respond to expansion in SAM on increase in installed base
 Grow used equipment/modification business Promote comprehensive contract services
FS sales Enhance business efficiency

380.0B yen
130.0

288.2
251.0
208.0

99.4

101.0

93.0

Used equipment
and modification

250.0
188.8

Parts and services

150.0
115.0
0
FY'17

CORP IR / May 28, 2019

FY'18

FY'19

FY'20

Target for
5 years hence
95

CORP IR / May 28, 201996