Integrated Report 2024
January 1, 2023 to December 31, 2023

01

I-PEX Inc. Integrated Report 2024

Overview

Innovative Productdevelopment & Engineeringsolutions eXpert
This is what we aim for.
With our keen sensitivity, it is the sharpest tip that opens the way to the next generation in order tocreate a brighter future.
We bring surprise, joy and excitement to the world by creating new values that reflect society,reflect tomorrow, and stay one step ahead of the needs of the times.

Corporate Identity (CI)

“Why”

“How”

“What”

Our capabilities
and values

Our approach tobusiness expansion

Open and enlarge the
sharpest tip by connecting
people, wisdom, andtechnology

Surpassing
expectations throughinspired manufacturing
and creativity

Reinforcing the Management
Foundation via Materiality

Financial & Corporate
Information

Net sales¥

Ordinary income

59,014 million¥

Overseas sales ratio–555 million

66.4%

Number of countries
and regions

Number of sites

Number of employees

12

39

5,007

Total assets

Net assets

Shareholders’ equity ratio¥

91,603 million¥

58,387 million 63.6%

Net Sales by Segment

Connectors

Net sales ¥32,555 million

Sensors23.2%

Micro-coaxial connectors, ultra-small active
optical modules, etc.

55.2%

Net sales
composition

Molded & Assembled Parts

Automotive sensors, torque sensors, etc.

Net sales ¥13,704 million

7.8%

13.8%
Machinery & Equipment

HDD-related parts, forensic-related­components, etc.

Net sales ¥Semiconductor molding equipment, etc.

8,166 million

Net sales ¥4,587 million

Contents
01 Overview

13 Materiality-Driven Value Creation

01 Corporate Identity

13 Value Creation Process

02 At a Glance
03 Growth History

15 Overview and Progress of the Medium- to Long-Term
Management Strategy: I-PEX Vision 2030

05 I-PEX Products Contributing to the Digital Society

17 Building Stronger Capitals

07 The I-PEX Group Network Connecting the World

19 Build an Optimal Manufacturing System and Promote
Capital Cost and Cash Flow Management

09 Message from the President

21 Contribute to a Comfortable and Safe Digital Society
Supported by Innovation

32 Reinforcing the Management Foundation via
Materiality

Scope:I-PEX Inc. and 21 companies in the I-PEX Group (20 ofwhich are consolidated subsidiaries)

Period:Fiscal year 2023 (January 1, 2023 to December 31, 2023)
This report also contains information from other periods inorder to provide the latest information and make comparisons with past fiscal years.

32 Strengthen Corporate Governance
37 Directors, Audit & Supervisory Committee Members, andExecutive Officers
39 Compliance and Risk Management
41 Message from an Outside Director

42 Financial & Corporate Information

23 Transform the Business Structure and Expand Our Fieldof Business

42 Financial Information

26 Tackle Climate Change and Contribute to a
Recycling-Based Society

45 Seven-Year Financial Summary

29 Strengthen Human Resource Management

02

At a Glance *As of December 2023

Our reason for existing

Open up a new fieldthat constantly
generates excitement
for the world

Materiality-Driven
Value Creation

Message from the President

43 Performance Highlights
46 Corporate Overview/Stock Information

Publication: June 2024
Disclaimer: This report contains forward-looking statements such as
the plans and strategies of I-PEX Inc. and its consolidated
subsidiaries. Such statements are based on judgments
derived from information available at the time, and actual
results may differ significantly for a variety of reasons.
* All trademarks (products, services, and logos) in this report belong to I-PEX or
their rightsholders, who have authorized their use by I-PEX.

03

I-PEX Inc. Integrated Report 2024

Overview

Message from the President

Materiality-Driven
Value Creation

Reinforcing the Management
Foundation via Materiality

Financial & Corporate
Information

04

Growth History
The I-PEX Group, with roots in precision molding technology, has been at the “sharpest tip” of manufacturing throughout its history. Today, our mainstay business is connectors; we also develop products

2005.03
Dong Guan Dai-ichi
Seiko Mold &Plastics Co., Ltd.

2006.06
Vietnam Dai-ichi
Seiko Co., Ltd.

2011.03
Listed on the 1st
Section of the Tokyo
Stock Exchange.

2017.08
Daiichi Seiko (M)Sdn. Bhd.

2006.11
Listed on the
JASDAQ Securities
Exchange.

2007.05
Matsue Dai-ichi
Seiko Co., Ltd.

2020.01
Okinawa Plant

2021.12
Tech Forest

such as sensors with a view to IoT and a society in which people and robots collaborate.
Going forward, we will continue to take on the challenge of new business fields and actively pursue
further growth.

1988.11
Philippine, D-I Inc.
1976.10
Eikosha Co., Ltd., our firstcompany for mass production

1979.01
Singapore Dai-ichi Pte. Ltd.
1963.07
Dai-ichi Seiko Co., Ltd.
1982.01
Ogori Plant

1963–1975

Established as a High
Precision Mold Manufacturer
1963

1964

Dai-ichi Seiko Co., Ltd. was establishedin Kyoto to exclusively produce high-­
precision molds by using module
systems for manufacturing molds (fullsplit structures/complete heat treatment
hardening/shift to complete precision
machining after full quenching), whichwere developed in 1960.
Made extensions to the plant andestablished the Jig Dept., which takes
advantage of precision processing
technology cultivated through moldmanufacturing.

1968

Started to export molds for precision
plastics to U.S.A., Canada, Mexico, andSingapore.

1971

Opened a representative officein Singapore.

1972
1973

Opened Tokyo Office in Shinagawa,Tokyo, Japan.
Received orders for mass production ofmolded connectors, and started commissioned
production of precision plastic components.

1963
Molds at the time of thecompany’s founding
1973
Precision plastic components
on which mass productioncommenced

1991.04
Shanghai Dai-ichi Mould& Plastics Co., Ltd.

1988–2003

Building Systems for Production
in Optimal Global Locations
1988

1976–1987

Business Expansion andBreakthrough in Commissioned
Production
1976

1993.10Singapore
Dai-ichi Pte. Ltd.

1980

1989

Established MDI Sdn. Bhd. in Johor Bahru,
Malaysia.

1991

Established Shanghai Dai-ichi Mould &Plastics Co., Ltd. (now I-PEX Precision
Mold & Plastics (Shanghai) Co., Ltd.) in
Shanghai, China.

1982
1986

Established Yamanashi Plant inYamanashi, Japan.
1980
Automatic semiconductor molding
equipment
GP-SYSTEM MARK-I

1993

Completed the construction of andstarted operations at the new plant ofSingapore Dai-ichi Pte. Ltd. in Yishun,
Singapore.
Established Dai-ichi Seiko America, Inc.
(now I-PEX USA Components Inc.) in San
Jose, California, U.S.A.

2005

Established Dong Guan Dai-ichi Seiko Mold &Plastics Co., Ltd. (now I-PEX Precision Mold &Plastics (Dongguan) Co., Ltd.) in Dongguan, China.

2006

Established Vietnam Dai-ichi Seiko Co. Ltd. (nowI-PEX Viet Nam Co., Ltd.) in Ho Chi Minh, Vietnam.

2007

Established Matsue Dai-ichi Seiko Co., Ltd.
(now I-PEX Shimane Inc.) in Matsue, Japan.

2011

Listed on the 1st Section of the Tokyo Stock
Exchange.

2015

Opened Detroit Office of Dai-ichi Seiko
America, Inc. (now I-PEX USA ComponentsInc.) in Detroit, Michigan, U.S.A.

2017

Established Daiichi Seiko (M) Sdn. Bhd.
(now IPEX Global Manufacturing (M) Sdn.
Bhd.) in Johor Bahru, Malaysia.

1997

2000

Started the world’s first mass productionof Ramps, an important component usedin hard disk drives (HDDs).

2019

Established I-PEX Global Operations, Inc. in
Tomigusuku, Okinawa, Japan.

2020

Established Okinawa Plant in Uruma,
Okinawa, Japan.

Electric hand
ES-Hand®
Smell Sensor
noseStick®
Smell Sensor
nose@MEMS®

Changed the company name to I-PEX Inc.

2021

Opened new Tech Forest building on
I-PEX Campus.

2022

Stock listing transferred to the Tokyo Stock
Exchange’s Prime Market.

Angle Sensor

Micro-Coaxial Connectors
CABLINE® Series

Made subsidiaries of KRYSTAL, Inc. and its
affiliates.

Established Thai Dai-ichi Seiko Co., Ltd.
(now I-PEX (Thailand) Co., Ltd.) in­Chonburi, Thailand.

Established PT. Pertama Precision Bintan(now PT IPEX Indonesia Inc) in Bintan,
Indonesia.

ESTORQ® Electrostatic
Capacitance Torque Sensor

Opened I-PEX Campus in Ogori, Fukuoka,
Japan.

Wheel Speed Sensor

Established Laguna Dai-ichi, Inc.
(now I-PEX Philippines Inc.) in Laguna, thePhilippines.

Established Touchstone Precision, Inc.
(now I-PEX USA Manufacturing Inc.) in
Auburn, Alabama, U.S.A.
Sealing resin molds forsemiconductors

Acquired I-PEX Co., Ltd., an innovator of highspeed, wide-area transmission connectors, as a
subsidiary.

HDD Ramp

1994
Started operations at Ogori Plant in
Ogori, Fukuoka, Japan.

2004

A company withtechnical capabilities
to implement digitalmanufacturing

2000.12
PT. Pertama­Precision Bintan

Established Singapore Dai-ichi Pte. Ltd.
(now I-PEX Singapore Pte. Ltd.) in Singapore.
Released GP-SYSTEM: MARK-I, the world’s
first fully automatic semiconductor
molding equipment.

Becoming a Listed Company

Listed on the JASDAQ
Securities Exchange.

Established our first company for mass
production in Fuchu, Tokyo, Japan.

1979

Business Field Expansion andStarted commissioned production of
automobile components.
Established Philippine, D-I Inc. in thePhilippines.

Established our first subsidiary in Chikushino,
Fukuoka, Japan.

2000.12
Touchstone­Precision, Inc.

2004–

Board-to-Board Connectors
NOVASTACK® Series

Opened the Okinawa Innovation Center in
Uruma, Okinawa, Japan.

2023
Water Meter

Merged KRYSTAL, Inc. and its affiliates andchanged the company name to I-PEX Piezo
Solutions Inc.

Micro RF Coaxial Connectors
MHF® Series

60th Founding Anniversary
FPC/FFC Connectors
MINIFLEX® Series

Smart Entry KeyPower Connectors
ISH® Series

05

I-PEX Inc. Integrated Report 2024

Overview

Materiality-Driven
Value Creation

Message from the President

Reinforcing the Management
Foundation via Materiality

Financial & Corporate
Information

06

I-PEX Products Contributing to the Digital Society
Mobility

The I-PEX Group’s products help bring convenience and comfort to many facets of everyday life. Basedon the manufacturing DNA we have cultivated, we will support changing lifestyles in the digital society
by serving as an “Innovative Product development & Engineering solutions eXpert” that creates newvalue one step ahead of the needs of the times.

Life

07 Power Connectors

08 Angle Sensors

Resistant to high heat and­ ibration; utilized in automobilev
headlights, etc.

Detect the rotation angle andspeed of engine cranks and cams.

02
10

03
01

01 Micro-Coaxial Connectors

Used to connect panels in notebook
computers; I-PEX has the world’s
top share.

08
02 Micro RF Coaxial Connectors

Smart keys for automobiles featuring high flex resistance and water
resistance.

10 Turbine Shrouds

We supply aircraft engine components using metal processing
technology.

07

04

Support various communication­standards; used to connect
antennas, etc. in diverse electronic
devices.

09 Smart Entry Keys

Industry
09
12

03 Board-to-Board (FPC) Connectors

13

Support high-speed communicationand high-frequency standards withunique noise control technology.

04 Forensic-related Components

Microfluid analysis chips used in
DNA analyzers.

11 Semiconductor Molding

11

Equipment
Resin cover for semiconductor
integrated circuits; we were firstin the world to fully automate
these devices.

05
06

12 Electrostatic Capacitance

Torque Sensors

Digital Infrastructure

Detect, control torque generated
by the rotation of robots andother equipment.

14

05 Ramps for Hard Disk Drives

06 Ultra-Small Active Optical Module

Supply of various hard disk drive
components, including Ramps,
which I-PEX was the first in theworld to mass produce.

Active optical modules for next-­
generation optical interconnection.

14 Smell Sensors

13 Piezoelectric MEMS Foundry

Utilize MEMS technology; various
potential applications, including quality
assurance for agricultural crops.

Provides superior single-crystal
piezoelectric deposition and
MEMS processing technologies.

07

I-PEX Inc. Integrated Report 2024

Overview

Message from the President

Materiality-Driven
Value Creation

Reinforcing the Management
Foundation via Materiality

Financial & Corporate
Information

The I-PEX Group Network Connecting the World
With manufacturing plants, sales offices and R&D centers in 12 countries and regions worldwide, the
I-PEX Group possesses a robust network to accurately address needs across the globe.
By creating original value that surpasses their imagination, we aim to be the first choice for customers.
This passion, alive in each of us as we work around the world, is the philosophy helping us to open up
the next generation.

China/East Asia
United States

Number of­employees and sites

917
9EuropeApprox.
employees

1employeesJapan

500 companies

100 companies

2,197
18

Southeast Asia
Number of­employees and sites

1,799
8

Approx.

Sales Office

Number ofcustomers
Approx.

Sales Office

China/East Asia Japan FranceProduction Bases

Shanghai (3)GuangdongSingapore (2)Malaysia
Indonesia
Philippines
Thailand
VietnamSales Offices

Shanghai
GuangdongHong Kong
Taiwan
Korea

Singapore

20 companies

150 companies

Production and R&D BasesSoutheast Asia Production Bases

Other regions

250 companies

Number ofcustomers

Europe 

200 companies

sites

sites

Approx.

Approx.

employees

Number ofcustomers

employees

sites

Number ofcustomers

Number of­employees and sites

site

Number ofcustomers
Approx.

86
3

sites

Number ofcustomers

Number of
employees and sites

8

Number of­employees and sites

employees

Sales Offices

North America 
Kyoto [Headquarters]Tokyo
Yamanashi
Shizuoka (2)Shimane
Yamaguchi
Fukuoka (5)Okinawa (2)Kanagawa
Aichi
Osaka
Okinawa

Production Base

AlabamaSales Offices

Texas
California* Number of sites within the same regions are written in brackets.

Please refer to this link for details about
our network.
https://corp.i-pex.com/en/company/business_jp

08

09

I-PEX Inc. Integrated Report 2024

Overview

Message from the President

Materiality-Driven
Value Creation

Reinforcing the Management
Foundation via Materiality

Financial & Corporate
Information

Message from the President
FY2023 Results and Issues Going Forward

Urgent need to return to a growth trajectory

We will establish a business foundation toensure robust capital efficiency andprofitability while pursuing change andgrowth to become a forward-thinking
organization, seeking to achieve themedium- to long-term management
strategy, I-PEX Vision 2030
Takaharu
Tsuchiyama
President,
Representative Director

Overview and Progress since Becoming President

Fostering a forward-thinking corporate culture by raising awareness of
our Corporate Identity (CI)
When I envision the future of the I-PEX Group, my desire is for all our employees to continue moving
forward with a shared outlook, grounded in the company motto that expresses our founding spirit. To thisend, since becoming president, I have sought to share a new philosophy and code of conduct across theGroup to lead us into the next stage of growth, focusing on actions to raise awareness of our CI to foster asense of unity. I have created opportunities to speak directly with employees from the various businessdivisions, working to share our CI and convey a determination both to change and grow and to take initiative as individuals to tackle issues.
Underlying these actions to raise CI awareness is my desire for I-PEX to change and grow into a
company that actively proposes ideas while leveraging our corporate culture of responding diligently tocustomer demands. This desire is incorporated into our medium- to long-term management strategy, I-PEX
Vision 2030. For example, one of our priority measures, the evolution of business models, entails expanding our field of business—rather than focusing solely on manufacturing, we are seeking to branch out into
services that add value.
I have a strong sense that these efforts have borne fruit in terms of more forward-thinking words andactions, not least in meetings and conversations with employees. When analyzing the results of employee
surveys, however, I feel we still need to spend more time on raising employee engagement.
Also, through dialogue with overseas sites, while we are naturally working to raise CI awareness globally, we are also working to set up management frameworks and put mechanisms firmly in place for
information sharing and collaboration to support further growth as a global company.

We saw ongoing declines in demand for our mainstay products in fiscal year 2023, including connectors,
automotive components, and HDD-related parts. Although there were signs of a turnaround in the second
half, the year overall was challenging.
I believe a major contributing factor lies in a business structure in which risks are not adequately
diversified. Our pressing issue is to realign the business structure into a more robust form that does notdepend on specific markets as we steadily boost earnings, in addition to moving forward with the launchof businesses that offer new sources of earnings.
To this end, our aim in fiscal year 2024 is to build a business foundation with robust capital efficiency
and profitability, through the following three initiatives. This will allow us to achieve the targets set forthin I-PEX Vision 2030 of net sales of ¥100 billion and ROE of 8% or higher.
1. Raising awareness of ROICFirst, to ensure rigorous balance sheet management centered on the return on invested capital (ROIC), we
will set clear performance indicators. The corporate division will take the lead in setting targets based on
the mission of each business, including company-wide ROIC and business-specific ROIC targets, as well as
drivers of improvement such as fixed asset turnover. Since characteristics vary from business to business,each business division will set its own performance indicators, such as personnel expense ratios or utilization rates. The corporate division and various business divisions will work closely together to instill greaterawareness of ROIC across the Group.
In addition to further expanding sales, we will explore ways of tightening our strategic focus, including
by reviewing and consolidating production sites. Our goal is to reduce fixed assets to less than half of total
assets and achieve a fixed asset turnover of 2.0 or more. We will further ensure progress through regular
evaluations that will be monitored in our Management Meeting.
2. Rebuilding an optimal manufacturing framework
Our second initiative is to update our medium- to long-term management strategy, I-PEX Vision 2030. In
formulating the vision in 2021, we back casted from the world we foresaw in 2030, setting out certain
business themes as priority businesses, such as digital infrastructure (photoelectric conversion) and hybrid/electric vehicles, and focusing on the potential for development of these core technologies.
About three years have passed since we formulated the strategy. As the next phase of our efforts to get
the MEMS business up and running as a new pillar of earnings, we are working to establish a stable supply
framework, including financing measures.
Taking a fresh look at developments in the business environment, including in terms of technologies,
products, and markets, we will update our priority business themes and reconfigure the business portfoliowith a view toward 2030, the final year of I-PEX Vision 2030. This will guide our efforts to rebuild an
optimal manufacturing framework.
3. Creation of new businesses
Our third initiative is the creation of new businesses. As a new candidate to follow the MEMS business, weare focusing on the environmental and energy solutions business, reflecting our positioning of tacklingclimate change and contributing to a recycling-based society as a point of materiality.
We are paying particular attention to the potential of reusing lithium-ion batteries used in electric vehicles
as a way of reducing environmental impact, and are researching battery management systems suitable forreusable lithium-ion batteries. As a first step in this direction, we formed a capital alliance in January 2024with L-B. Engineering Japan to collaborate on the development of a storage battery system equipped withreusable batteries. We expect this solution to be useful in ensuring power supply during disasters and tocontribute to a circular economy.

10

11

I-PEX Inc. Integrated Report 2024

Overview

Message from the President

Materiality-Driven
Value Creation

Reinforcing the Management
Foundation via Materiality

Financial & Corporate
Information

Message from the President

Creation of New Value

Research and development with an awareness of return on investment
The I-PEX Group pursues research and development in two
directions: research that aims to strengthen and expand ourfundamental technologies from a longer-term perspective,and development that draws on the foundation of our coretechnologies to explore new applications. We undertook 15
R&D projects in fiscal year 2023, of which 14 carried over into
Battery management system suitable for reusable
fiscal year 2024.
batteries, developed by I-PEX
In terms of research, for example, we are researching thereuse and recycling of vehicle batteries. Specifically, we aremaking headway with the development of a control systemfor entire storage batteries, including a battery management
system and IoT technology, suitable for reusable lithium-ion
batteries. We will contribute to a circular economy by providing solutions that utilize reused lithium-­ion batteries.
Another focus is research into products that use hydrogen
Okinawa Innovation Center
energy. Primarily through our Okinawa Innovation Center, weare currently developing product prototypes in cooperation
with universities, research institutes, and companies inside and outside Okinawa Prefecture. We are also
exploring the development of solutions that combine the research into battery management systems andhydrogen energy.
On the development front, we are making headway with several high-frequency, high-speed transmission technologies, including LIGHTPASS® Series active optical modules for photoelectric conversion,compact high-speed transmission connectors for the enterprise market, and the AP Series of board-toboard power terminals that are a core component in electric vehicles.
We are also working to reduce the power consumption of semiconductor molding equipment. We selected
and tested equipment in fiscal year 2023 and plan to start in on full-scale verification in fiscal year 2024.
In terms of growth investments, we are laying the groundwork for a new R&D center in Machida, Tokyo,
due to open in 2025. Featuring a 3m anechoic chamber, the center will offer more comprehensive
resources for the design, measurement, and analysis of high-frequency, high-speed transmission andoptical and wireless transmission. Going forward, we will continue to aim for sustainable business growth
and achieve our management goals while determining the best allocation of research and development
outlays, with an eye toward return on investment.

A Culture of Taking on Challenges to Create Innovation

The growth of people and the organization is the driving force behindenhanced corporate value
I consider human capital to be one of our most critical assets for realizing the Group CI and our vision.
Our aim is for the growth of each employee to become a driving force that leads to the sustainableenhancement of corporate value. We will build a grand design for human resource management thatallows personnel with diverse values, skills, and experience to flourish.
We have set forth several themes in particular, including strengthening human resource managementfrom a company-wide perspective; performing global personnel evaluations and building career advancement programs; securing and developing personnel with high specialization and the potential to create

future businesses; promoting diversity, equity, and inclusion; and enhancing employee engagement andmotivation. We plan to develop human resources strategies based on these themes by comparing andorganizing key elements of human resources management, such as recruitment, placement, evaluation
and working conditions, training, and engagement.
Going forward as well, by securing diverse human resources and encouraging the growth of employees who are eager to continue to embrace challenges, we will generate innovation and expand ourfield of business.
In addition to human resources, the strength of our global organization will be indispensable to future
growth. The I-PEX Group currently has sites in 12 countries and regions worldwide and employs roughly
5,000 people. Around 60% of our employees are located in countries other than Japan, and mid-careerhires, with their wide range of experience, play an active role in Japan and overseas. We are currently
working to formulate key regulations, reform boards of directors, and realign organizations to put a governance framework in place for our overseas affiliates.
We are also revisiting our performance management and monitoring mechanisms to ensure transparency. We are pursuing a number of measures in particular, including restructuring the management
frameworks of local affiliates and finding better approaches to finances and income and capital management, establishing performance management and evaluation systems, revamping the nomination andcompensation approaches of the management teams of local affiliates, and taking steps to prevent fraud.
These efforts will give our overseas affiliates a stronger framework from which to make swift decisions
and expand our businesses in various countries and regions.

Message to Our Stakeholders

Pursuing corporate transformation seeking to achieve the medium- tolong-term management strategy, I-PEX Vision 2030
2023 marked the 60th year since the founding of the I-PEX Group. We are proud of the major strengthof our Group—precision and perfection in manufacturing excellence—which has enabled us to growthe business to date.
To achieve the medium- to long-term management strategy, I-PEX Vision 2030, will require capitalizingon the strengths in manufacturing we have cultivated over the years to address social needs and lay thegroundwork for growth. This entails becoming an “Innovative Product development & Engineering solutions eXpert” that can propose services and ideas to address the concerns of client companies and in turnhelp address major social issues.
In fiscal year 2024, we will continue taking action to raise CI awareness and foster a forward-thinking
corporate culture. At the same time, we will seek to further enhance corporate value and help addresssocial issues through initiatives informed by our points of materiality, including strengthening the
profitability of core businesses; rebuilding an optimal manufacturing framework; cultivating the MEMS
business and creating other new markets; promoting management with an awareness of capital costs;
and strengthening governance.
We regard dialogue with shareholders, investors, and other stakeholders as an important opportunity
for the Group as we aim for sustainable increases in corporate value. Through this Integrated Report, we
will continue to engage in constructive dialogue and co-create value with shareholders, investors, and arange of other stakeholders. We appreciate your ongoing support.

Takaharu Tsuchiyama
President, Representative Director

12

13

I-PEX Inc. Integrated Report 2024

Overview

Value Creation Process

Outsideenvironment

Message from the President

Business Model

OUTPUTOUTCOME

Financial capital

Innovative Product development &Engineering solutions eXpert

Solving issues faced byinnovative customers

Solving social issues

I-PEX Vision 2030
strategies and growth
drivers for value creation¥91,603 million

Intellectual capital

1,084

re m
Ext

Human capital
Employees in Japanand overseas

in

g

en

po

¥

100

ons

Molded & Assembled
Parts
Evolution ofBusiness Modelsi
P re c i s

on m

an

c
u fa

HDD-related Parts, Forensic-related
Components, etc.

¥

10Intellectual capitalbillionbillionMachinery & Equipment

8% or higher

The Strengths of I-PEX GroupThe power tosolve problems

Medium- to long-term value creation
Tackle climate change
and contribute to a­recycling-based society

Dividend
payout ratio

30

Build a sustainable     business modelTransform the businessstructure and expand ourfield of business

Strengthen humanresource management

Build an optimal­manufacturing system andpromote capital cost andcash flow management

Corporate    Identity (CI)

Create innovation throughnew technology development

Businessrelationship capital
Trusting relationships withcustomers and the supply
chain for open innovation

Optimal manufacturing­systems to meet quality
requirements

ROE
Semiconductor Manufacturing
Equipment, etc.

48,674 t-CO2

Stable shareholder returns

Manufactured
capitaltu

5,007

Contribute to a comfortable
and safe digital society
supported by innovation

Automotive Sensors, TorqueSensors, etc.

Operating income

xpectati

er e

om

ing

ust

gc

tur

nu g s
a
M rin

ing

Sensors
Growth by Mixing
Core Businesses andPriority Businesses

sin

dd

tb
as
int ed oncofs o c u s to m er needs
ial
solu
tions

Natural capital
CO2 emissions14

Achieve sustainable growth

rp

m

fa
c
u

Capitalexpenditure¥4,971 millione

22 sitesplo tve s t a r
dect theduP r o f ro m

Global manufacturing
network

Addressing“Sharpest Tip”
Issues-alu
Va

Manufactured
capitalBusiness
model

Digital Co-creation

46

Financial capitaling

Response to
Number of countries
climate change

mold

BusinessdomainCustomers
Over 1,200 companies

Management
goals

as

Businessrelationship capitaliesSocial value

Net sales

te
osi
mp
Co ng
i
s is c t u r
ly
a
uf
an

r
Co

Economic value

I-PEX Vision 2030m

¥3,033 million

e te c h n o l o gConnectors
Micro-Coaxial Connectors, UltraSmall Active Optical Modules, etc.

na

R&D expenses

-speed transmission an
High
d
s
d
o m a t i c m a c h i n e s M highol
f aut
m
E
o
M S f re q
u re
ise
u
de
ec ufacts i g enc
r
p
y
n
n
a
d
a
an
an d mdanelys
D e masig llnIntellectual property
rights owned

Materiality

Financial & Corporate
Information

INPUT

Total assets

Establishmentof a recycling-­
based society

Reinforcing the Management
Foundation via Materiality

With strengths in core technologies, manufacturing, and value-adding, the I-PEX Group is working to solve problems
in various fields, focusing particularly on digital arenas. Going forward, we will strive to create new value as an­“Innovative Product development & Engineering solutions eXpert” with the technological abilities that will also enable
us to put digital manufacturing into practice.

Shareholders’ equity ratio 63.6%

Digitalizationof society

Materiality-Driven
Value Creation

Strengthen corporate
governance

Human capital
Challenging & innovative organization and workforce playing
an active role
Raising employee engagement

Natural capital%

Reducing the environmental
impact of business activities

15

I-PEX Inc. Integrated Report 2024

Overview

Message from the President

Materiality-Driven
Value Creation

Reinforcing the Management
Foundation via Materiality

Financial & Corporate
Information

Overview and Progress of the Medium- to Long-Term
Management Strategy: I-PEX Vision 2030
We are currently implementing I-PEX Vision 2030, the Group’s medium- to long-term management strategy.
Through growth by mixing core businesses and priority businesses, expansion of our field of business, andevolution of business models, we will improve business profitability and capital efficiency and work toachieve, as our medium- to long-term goals, net sales of ¥100 billion, an operating income percentage of 10%
and ROE of 8% or higher.

Vision Overview
In addition, in order to press ahead with the transformation of our corporate structure, we have embarked
on the challenge of evolving our business model andachieving mixed growth of both core and priority businesses, ably supported by the corporate division.
The Group will work together as one to comprehensively advance these initiatives. This is what the I-PEX
Vision 2030 is all about.
Our vision 

Six points of materiality
Corporate
Identity (CI)

Building a sustainablebusiness modelMedium- to long-termvalue creation

Innovative Productdevelopment & Engineeringsolutions eXpert
A company with technicalcapabilities to implement“digital manufacturing”

Evolution ofbusiness models

Management goals¥100billionOperatingincome¥10billion

ROE

8% or

Dividend
payout ratio

30%

higherThe I-PEX Group has designated “contribute to a comfortable and safe digital society supported by innovation” as
its most important issue from a CSR perspective.
To help bring about a comfortable and secure digitalsociety, it is essential that we “tackle climate change andcontribute to a recycling-based society.” To promote thiseffort, we will take a three-pronged approach: to “transform the business structure and expand our field of
business,” “strengthen human resource management,”
and “build an optimal manufacturing system andpromote capital cost and cash flow management.” We
will also work to “strengthen corporate governance” toserve as the foundation of our management. This will be
our framework for building a sustainable business model.
Through efforts to solve these issues, we will contributeto building a comfortable and safe digital society, and,by securing a medium- to long-term competitive
advantage, we will seek to create new value.

Contribute to a comfortable and safe
digital society supported by innovation
Tackle climate change and contributeto a recycling-based society

Medium- tolong-termvaluecreationTransform thebusiness structureand expand our fieldof business
Build an optimal
manufacturing
Strengthen
human resource system and promotemanagement capital cost and cash
flow management

Strengthen corporate governanceIndustrial

Life Science

MEMS (various sensors and foundries)• High-speed communication andhigh-frequency(connectors and composite
devices)• Hybrid/electric vehicles(battery solutions, connectors,
smart devices)• Power devices(power semiconductor
equipment)• Digital infrastructure(photoelectric conversion
devices, connectors, large-­
capacity HDDs)• Industrial fields(torque sensors, robots, newequipment)• Mobile devices and digital consumer electronics(connectors)• Semiconductors and passive parts(general-purpose semiconductor
equipment)• Internal combustion, hybrid/electric vehicles(passive sensors and connectors)• HDD(various HDD components)

Extremely small andprecise molds

High-speed transmission
and high-frequency
analysis

Evolution of Business Models
As indicated in the section on materiality, it is necessary
for us to create economic value while simultaneously
addressing the digitized society, tackling climate change,and helping to build a recycling-based society. By
expanding our business into the digital sector (from manufacturing to value-adding) and facilitating the evolutionof business models from self-reliance to collaboration,
we will pursue models that further raise corporate value.
At the intersection of the business fields we plan toaugment in stages and the business models we will
expand in phases, we will pursue the evolution of new
product creation and existing products to add comprehensive capabilities that will enable us to respond flexibly in any business environment.

Composite molding• Wearables and analyzers(composite equipment anddevices)• Healthcare(nursing care and rehabilitation
devices)

Design and manufactureof automatic machines

MEMS design andmanufacturing

Innovative Product development & Engineering solutions
eXpert Business Sector
Expansion of field of business

Six Points of Materiality for Sustainable Value Creation

Automotive

Consumer

I-PEX core technology

Net
sales

industrial segments, and, moreover, we will position businesses with potential for development in these segments,
businesses in the life science segment—a new area ofchallenge for us—and businesses like MEMS that cut
across segments as medium- to long-term priority businesses and work for their creation and development.
Through a growth strategy based on a mix of core andpriority businesses that will each create innovative new
products and technologies, we will continue to seek toachieve our management goals as quickly as possible.

Business Direction in Each SectorCorebusinesses(Key issues)

Growth by mixing
core businesses andpriority businesses

Since our founding in 1963 as a producer of high-­
precision molds, we have expanded our field of businessto become a commissioned component manufacturer
and solutions provider, accumulating the core technologies that underpin I-PEX today, namely, automatic
machine design and manufacturing, composite molding,high-speed transmission and high-frequency analysis.
Based on these varied technologies, we will pursue thefurther evolution of core businesses that currently
produce revenue in the consumer, automotive, andPrioritybusinesses

Our vision for 2030 is to be an Innovative Productdevelopment & Engineering solutions eXpert—acompany with the technical capabilities to implement“digital manufacturing.” As we work towards achieving
this corporate vision, we have identified six points ofmateriality as the key issues integral to the realizationof a sustainable business model and medium- to longterm value creation.

Growth by Mixing Core Businesses and Priority Businesses

DigitalAggregation

Value-­
addingMEMS
Software andhardwareHybrid/electricvehiclesDigitalinfrastructure

Hardware designPowerdevices
Wearables/
analyzers

Production
Manufacturing

Physical

Healthcare
Internal resources

Company
brand

External
resources

Self-reliance

Ecosystem

Collaboration
Evolution of business models

Roadmap to Achieving the Vision
Build asustainablebusinessmodel

As a milestone on the way to achieving I-PEX Vision
2030, we have adopted the slogan of “Challenge & Innovation” for our medium-term goals. We will lookto prioritize highly profitable “development”
Priority businesses
and advance our “research” activities overCore businesses
the longer term in an effort to build a robust
business structure. With these measures, we
2021
2022
will most certainly achieve our vision.

Gr
2024

sc
ow t h

2027

ena

rio

2030

16

17

I-PEX Inc. Integrated Report 2024

Overview

Building Stronger Capitals

Materiality

Capital to bestrengthened

Importance ofcapitals

Enhancing
capitalthrough thepoints ofmateriality

Direction of
initiatives

Results ofmain
activities in
FY2023

FY2024
goals

FY2030goals

Contribute to a comfortable andsafe digital society supported by
P.21
innovation

Materiality-Driven
Value Creation

Reinforcing the Management
Foundation via Materiality

Financial & Corporate
Information

While addressing changes in the external environment, we will work to create longer-term value and build a sustainable business model. We will further hone our ability to solve problems, our strength as an “Innovative Productdevelopment & Engineering solutions eXpert,” thereby generating economic and social value and strengthening
our six capitals.

Transform the business structureand expand our field of business
P.23


Build an optimal manufacturingsystem and promote capital costand cash flow management
P.19


Tackle climate change and contributeto a recycling-based society
P.26
Strengthen human resource
management


P.29

Strengthen corporate governance
P.32


Financial capitalIntellectual capitalBusinessrelationship capital

Message from the President

Manufactured capital

Natural capitalBusinesses face a growing responsibility toaddress climate change. To do our part as acorporate citizen in helping to bring about asustainable society, it is critical that wefurther strengthen and promote green manufacturing. Since plastic is one of the mainmaterials used in the Group’s business activities, we see the effective use of resources asa key task alongside curbing CO2 emissions.

Human capital

All capitals

To maintain a competitive advantage
and achieve sustainable growth amid
rapid advances in digitalization andchanges in consumer lifestyles, wemust further develop and refine thediverse technological capabilities wehave accumulated over the years. We
will make inroads into new businessareas by pursuing joint developmentthat brings together the technology,
expertise, and ideas held by partnercompanies with the technology of theGroup.

Since the markets for our major segments are heavily swayed by the shortterm performance of customers, wemust draw on our core technologies tobuild a stable earnings structure that
does not depend on specific markets
and create new businesses. We aim to
expand our business into digital arenas
and facilitate the evolution of ourbusiness model from self-reliance tocollaboration, yielding a businessmodel that can raise corporate value.

In creating value, it is vital to ensurethat we can generate cash flow andstrengthen our financial capital while
optimizing our allocations to growthinvestments. A key challenge in thearea of manufactured capital will be topare down assets such as factories andproduction facilities to boost capitalefficiency.

R&D expenses ¥3,033 million
Customers over 1,200 companies
Sales coverage 46 countries

Intellectual property rights
owned 1,084
Capital expenditure ¥4,971 million

Shareholders’ equity ratio 63.6%
Total assets ¥91,063 million
Global manufacturing network
22 sites

CO2 emissions 48,674 t-CO2

Employees in Japan and overseas 5,007

All items listed on the left lead toenhanced capital

Contribute to the “Super Smart
Society (Society 5.0)” through“sharpest tip” technologies
Develop new technologies andapplications through partnerships*1
and “market-in”*2 approach
Utilize proprietary technologies atadvanced levels through businesssynergies
Raise awareness of innovation andchange mindsets

Consolidate and specialize in connection with existing products andnarrow focus for new areas ofdevelopment
Convert to an earnings structure
resistant to cyclical fluctuations andcreate new business pillars
Allocate management resources to
new and growth businesses from acompany-wide perspective
Shift from manufacturing tovalue-adding

Build a speedy, flexible production
system, consolidate production sites,and promote allocation (transfer)
Promote an outsourcing policy
based on profitability and added-­value standards
Promote capital cost management
by introducing ROIC*4 and cash flow
management by improving the
CCC*5

Raise energy efficiency in production andexpand use of renewable energy
Contribute to an energy-saving society
through “sharpest tip” technologies
Build new business models via circular
economy*6 and upcycling*7

Strengthen HR management from acompany-wide perspective, perform
global personnel evaluations and build
career advancement programs
Secure and develop personnel with highspecialization and the potential to create
future businesses
Promote diversity, equity and inclusion*9
Enhance employee engagement andmotivation

Further raise awareness of the corporate
philosophy
Strengthen supervision of importantmatters related to management
Strengthen global group governanceHeld R&D meetings (12 times)
Held MEMS working group (twice)
Developed products for enterprisemarket and electrification applications

Strengthened profitability of corebusinesses
Followed up on priority businesses
Continued glocalization*3 activities

Adopted top-down business planningapproach starting from company-­
wide ROIC targets
Developed method for setting business missions
Developed method for setting ROIC
targets for each business division

Reduced electricity consumption
Prepared to change carton size forin-house logistics
Started purchases of renewable energy
Installed solar power generation at Philippines plant
Evaluated implementation of recycledmaterials in I-PEX products

Designed system for introduction ofcareer courses
Implemented fundamental technology
education
Female employment ratio of 19.5% in Japan
Implemented career support training
Encouraged male employees to takechildcare leave

Discussed code of conduct based on CI
Changed, implemented method forassessing effectiveness of Board of
Directors
Continued Group Governance Task Force
activities
Revised subsidiary management
regulations

Establish working group for newvalue creation (company-wide)
Create innovation plan utilizing
proprietary technologies by continuing to engage in open innovation, etc.

Set up business strategy meeting topursue growth, profitability, andefficiency for each business
Update I-PEX Vision 2030 based on
discussions on portfolio transformation

Implement ROIC, set targets andmanage outcomes for each businessdivision
Refine investment criteria

Continue activities to reduce electricity
consumption and extend to other areas
Install solar power generation facilities at
Shanghai Plant 2 in China
Reduce packaging and cushioning material waste in in-house logistics
Complete development of recycled materials and use in I-PEX products

Prepare for introduction of career course
system and compensation system
Develop unified company-wide education
curriculum
Provide ongoing career support for
women
Explore introduction of second career
systemReview engagement metrics

Release code of conduct based on CI andcommunicate internally
Make improvements in key issues basedon evaluation of effectiveness of Board of
Directors
Strengthen Group risk management
framework and review decision-making
authority

Commercialize new businesses that
contribute to the digital society

Net sales of ¥100 billion or more
and operating income of ¥10 billion
or moreAchieve mixed growth strategy andbusiness model evolution as statedin I-PEX Vision 2030

ROE of 8%
Payout ratio of 30%

Reduce CO2 emissions by 40% (2021 asbaseline year)
Continuing initiatives aimed at carbon
neutrality*8 by 2050

Female manager ratio (Japan) of 10%

Build corporate governance system withboth rapid, decisive decision-making andsupervision over management andexecution*1 Co-creation and collaboration with other companies and groups*2 Listening to the feedback of customers and identifying their requests and concerns in order to launch new products that address them
*3 Think global, act local *4 Return on invested capital*5 Cash conversion cycle

Continuously driving innovation and expanding our business domains requires diverseand specialized human capital. Our challenge is to attract and cultivate outstanding
talent, and create working environments inwhich every employee can demonstrate
their full potential. We must put in place aframework that encourages employees togrow and to exercise their abilities, thereby
strengthening our human resource management to ensure the sustainable growth of
the business.

To enhance corporate value and build arobust organization, it is vital for thecompany and our employees to have ashared philosophy and a common vision. We
also aim to create a robust organization fromwhich we can generate greater profitability,
expand markets, and acquire new customers.
We will do this by enhancing our oversightfunctions for key management-related
matters and by strengthening our framework both to enable appropriate businessexecution throughout the Group and toenhance corporate value.

*6 Economic activities that generate added value while reducing resource inputs and consumption to utilize resources effectively*7 Utilizing waste to generate new value*8 Balancing greenhouse gas emissions and absorption amounts*9 Working in an environment where diverse human resources are given fair opportunities and diversity is accepted

18

19

I-PEX Inc. Integrated Report 2024

Overview

Materiality-Driven
Value Creation

Message from the President

Reinforcing the Management
Foundation via Materiality

Financial & Corporate
Information

Build an Optimal Manufacturing System andPromote Capital Cost and Cash Flow Management
The I-PEX Group’s policy in targeting sustainable growth is to pursue management practices that emphasize
the cost of capital and capital efficiency as well as sales and profit. In line with this policy, we have set ROIC
targets for each business and reflected the elements of ROIC into a tree that extends all the way down toperformance indicators for the manufacturing front line. Employees ranging from top management to frontline staff will take action to boost profits, working to build an optimal manufacturing system, generate cash
flow, and streamline cash allocation.

Improving Cash Returns and Allocating Cash
We are aiming to maximize cash returns by investing inmanagement resources that can generate added value
while maintaining an optimal capital structure and appropriate levels of leveraging, thereby achieving our growthstrategy. When allocating cash, we will strike a balance
between growth investments and shareholder returns.
In terms of growth investments, our primary focus
will be on the businesses and R&D that can generate
greater value in line with the strategy outlined in I-PEX
Vision 2030.
For example, in the connector business, we will
harness the Group’s core technologies in high-frequency
and high-speed transmissions to expand sales to theenterprise market, while also making investments todrive stronger sales of connectors to tap into demandarising from the ongoing electrification of vehicles.

Investments in the MEMS business will focus on solutions that capitalize on the Group’s strengths in single-­
crystal piezoelectric technology—the size of thismarket continues to grow year after year as a key
technology underpinning the next generation in the
manufacturing sector.
In terms of shareholder returns, we will maintainstable dividends as well as target a payout ratio of 30%
over the medium term, while balancing the capital generated from improved profitability with growth investment opportunities, as mentioned above. While stressing
the continuity and stability of dividends, we will consider
the possibility of additional measures to offer shareholder returns, taking into account the internal reserves
needed for growth investments, the Company’s financial
situation, and an optimal capital structure.

Optimization of Invested Capital, Improving the Cash Conversion Cycle*1
The I-PEX Group strives for ongoing improvement in the
cash conversion cycle with the objective of efficiently
investing capital and boosting profitability.
The finance and procurement divisions have spearheaded efforts since 2021 to improve the cash conversion
cycle, starting with the key initiative of extending theturnover period for accounts payable. In particular, we
negotiated and arranged new payment terms with our
suppliers, proposing new settlement methods to replace
the existing ones. This enabled us to extend the turnover
period for accounts payable.
Another approach involved implementing vendor-­managed inventory*2 to curb our excess inventory. Also,
by using a bulk invoicing service, we have made effective improvements in cash flow by, for example, extending the payment terms for communications expenses.
We will continue to negotiate payment terms withvendors in Japan and make use of vendor-managed

inventory. At the same time, we will take steps to consolidate procurement functions at trading companies andrevise payment terms at our overseas sites.

Capital Recovery Cycle
Inventory turnover period
Inventory,transport

Reducing inventory andlead times

Accounts receivable
recovery period

Meanwhile, because the inventory turnover period
and the accounts receivable turnover period—both elements of the cash conversion cycle—are closely related
to ROIC, as with the aforementioned accounts payable
turnover period, we are paring down inventory andshortening lead times in our manufacturing divisions
and setting targets and implementing specific measures*1 Cash conversion cycle (CCC): An indicator that shows the number of days from payment of accounts payable incurred when a company purchases products or
raw materials, etc. to the time when it receives payment for accounts receivable generated by subsequent sales.
Cash conversion cycle = Inventory turnover period + Accounts receivable recovery period – Accounts payable turnover period*2 Vendor-managed inventory describes an arrangement in which the supplier and customer agree in advance on inventory levels and an inventory management
policy. The supplier flexibly and appropriately replenishes and manages inventory according to this arrangement.

Reducing Capital Costs
To sustainably enhance corporate value, we will seek to improve ROE by strengthening our earnings capabilities andcontinuing to deliver returns to shareholders. In this way, we look to boost growth expectations and streamline capitalcosts by engaging in further dialogue with the market.
Cost of liabilities
Cost of equity

WACC
Weighted average
cost of capital

ROIC
Return on invested capital

Cost of equity

ROE

Shareholders’ expected return

Return on equity

Reduction in capital costs

Improving ROIC

For the purpose of entrenching ROIC management practices in each business division which will feed into theparing down of unprofitable assets, we have established
key performance indicators and measures that reflect
the characteristics of each business, with a particularfocus on working capital, fixed assets, and businessassets. The performance indicators and progress of eachbusiness are monitored and discussed at the monthly
Management Meeting, and measures for improvement
are deliberated on.

Accounts
receivable
Improvement in operating
income margin

Improvement inbusiness profit margin

ROIC improvement
Improvement in working
capital turnover

Period from cash-out to cash-in

Enhancement ofcorporate value
Improvement
in ROICWe will look to further refine the rules on investment
decision-making for fixed assets not included in working
capital. We will also execute an asset-light strategy,
mainly by streamlining production equipment for
low-margin products based on our standing policy oftightening our strategic focus, shifting from in-houseproduction to outsourcing and otherwise optimizing
production sites, and selling off underutilized assets.

Improvement in sales
growth rate

Expediting collection of
accounts receivable

CCC

Desired level ofreturn on invested
capital set based on
medium- andlong-term
ROIC/ROE targets

Instilling ROIC Management and Paring Down Unprofitable Assets

Accounts payable
turnover period
Accounts
payableExtending payment ofaccounts payable forpurchasesin the sales division, such as the early collection ofreceivables.
By moving ahead with these initiatives, we aim toachieve improvements in both ROIC and the cash conversion cycle, efficiently generate cash, and realize a virtuous
cycle whereby we allocate the cash to investments inpriority businesses, to create even higher added value.

Improvement in efficiency ofbusiness assets
Improvement in fixed
asset turnover

Key measures for improving ROIC
Accelerated growth of new and priority businesses
Strengthening, stabilizing of existing and core businesses
Improvement in capacity utilization rate
(improvements in yield, automation, etc.)
Cost reductions(development, inputs, procurement costs, etc.)
Monthly budget management for
inventory assets and receivables
Stricter and more refined rules onmaking investment decisions
Promotion of outsourced production
Consolidation of sites and production equipment
Sale of underutilized assets

20

21

I-PEX Inc. Integrated Report 2024

Overview

Materiality-Driven
Value Creation

Message from the President

Reinforcing the Management
Foundation via Materiality

Financial & Corporate
Information

Contribute to a Comfortable and Safe Digital Society
Supported by Innovation
Intellectual Property Strategy
By capitalizing on its strengths in core technologies, manufacturing, and the proposal of value-adding services
and ideas, the I-PEX Group aims to be an “Innovative Product development & Engineering solutions eXpert”
capable of solving a range of issues for customers pioneering the next generation worldwide. Through partnerships and an approach driven by customer needs and concerns, we will look to spark innovation, hone thetechnical capabilities needed to implement digital manufacturing, achieve sustained growth, and contributeto a comfortable and safe digital society.

I-PEX Growth Investment Strategy for Accelerating Innovation
With the goal of addressing issues facing our customers
and society in general, we are expanding our businessfields from manufacturing to value-adding and investingheavily in ways to create and provide economic and social
value through our products and services. This will facilitate the evolution of our business model away fromself-reliance and towards co-creation and the use of
external resources.
We will harness the results thus generated by innovation and manufacturing as we pursue new avenues of
R&D, acquire intellectual property rights, and make capital
investments, continuing to hone our capacity for solving

issues—a key strength of an “Innovative Product development & Engineering solutions eXpert.”
Growth Investments
2022

2023

R&D expenses¥2,547
million¥3,033
millionCapital expenditure¥5,509million¥4,971
millionIntellectual property applications

74

51

Intellectual property rights owned

1,171

1,084

power semiconductors, and the other priority businesses
outlined in I-PEX Vision 2030, the Group’s medium- tolong-term management strategy.
As for our core businesses that are currently generating
earnings—including connectors, passive sensors, andgeneral-­purpose semiconductor equipment—we are outsourcing more production processes to expand margins
while keeping investments within the scope of depreciation.

Recognizing that capital investments are a key part of management decision-making, our policy when making investments is to comprehensively take into account market
trends and developments among our competitors as wellas our business strategy and the outlook for profitability.
In particular, at present we are investing aggressively inthe commercialization and monetization of the MEMS
business, photoelectric conversion devices, equipment forDevelopment of Connectors That Contribute to a
Comfortable and Safe Digital Society

Research and Development
Framework for R&D Meetings
PurposeSharing R&D topics between business divisions,creating opportunities to onboard ideas

Topicsdiscussed• Deliberation on the R&D projects various
business divisions want to pursue• Sharing of information and issues concerning
various R&D projects• Presentations from experts concerning beneficial technology, expertise, and ideas

Frequency

Every other month

Our high-speed transmission connectors for data centers
and AI servers are now even smaller and offer greater
density. For our LIGHTPASS® Series of photoelectric conversion modules, we announced new products that address
the needs of particular markets, including healthcare andindustrial machinery. To address mounting demand forelectric vehicles, we are pressing ahead with the development of products to expand our lineup of AP Series ofpower terminals.

Compact High-Speed Transmission
Connectors for the EnterpriseMarketActive optical modules forphotoelectric conversion
LIGHTPASS®-EOS 100G

Board-to-board power terminals
AP-TSS10 (left), AP-LT10 (right)

World-Class MEMS Foundry Boasting Piezoelectric Technology
We launched a piezoelectric MEMS foundry boasting high-performance single-crystal
piezoelectric deposition technology and piezoelectric MEMS processing technology.
Capable of handling the entire process from materials development to mass production,
we are working to bring mass production at the foundry at the earliest possible date.

KRYSTAL® Wafer

Environmental and Energy Solutions

Partnerships
In addition to our own in-house R&D, we partner with
universities, research institutes, and other companies in
the joint development of new products and applications.
By teaming up with partners that possess technology andexpertise the I-PEX Group does not have, we can achieveeven faster R&D results. For example, by collaboratingwith a leading company in the field of silicon photonics

Capital Expenditure Policy

Major Progress in FY2023

Framework for Creating Innovation
To share knowledge more widely within the Company,
I-PEX holds an R&D meeting every other month as aforum for exchanging the latest information about R&D
projects. Aside from in-house development activities,
topics discussed in the meetings range from current technological trends and market developments to futurechallenges for society. Reports on technology that could
be beneficial to the Group, information on new businesses, and marketing activities are also presented.
The President and representatives of management fromeach business division attend the meetings, ensuring thatnew ideas for manufacturing or technology are put inplace more quickly, facilitating faster, more efficientdecision-making.

products of other companies suspected of using our IP
without our permission. We thus seek to secure injunctions on the products of other companies and conclude
licensing agreements.
We also respect the IP rights of other companies. We
examine rights that may have affinity with the Group’sbusiness fields, comparing them against our own operations to avoid cases of unauthorized use.

In acquiring intellectual property (IP) rights, we narrow
our applications down to inventions we expect to finduse in Group products and services as well as those thatoffer the potential for licensing agreements with othercompanies. In this way, we avoid the time and expenseof filing applications for inventions with less potential,
achieving a high level of cost effectiveness.
We leverage our IP rights to protect Group products
and services, and actively enforce our rights against thefiber packaging, we are aiming to realize detachable
optical connectivity for silicon photonics for data centersand other high-speed datacom and telecom applications.
Going forward, we intend to expand swiftly into new,untapped business fields by moving ahead with joint
development efforts that capitalize on the technology,
expertise, and ideas of our partners.

We are currently developing a storage
battery system drawing on used lithium-­ion batteries from electric vehicles bycombining IoT technology with the Group’s
proprietary battery management system.
The system will serve as a business continuity measure during times of disaster, as
well as help bring about a carbon neutral
society by reducing waste.

Used as an electricvehicle battery

Portable
Stationary-type
storage battery storage battery

Solar street lamp

Medium power products

Small power product

Maximum
battery capacity

Maximum
battery capacity≦100%

Lithium-ion battery

Collection
and reuse≦70%

Maximum
battery capacity≦30%

Utilized as raw materials for new batteries

Visualization of circular economy for automotive lithium-ion batteries

Recycle batteries
Maximum
battery capacity

≒0%

22

23

I-PEX Inc. Integrated Report 2024

Overview

Message from the President

Materiality-Driven
Value Creation

Reinforcing the Management
Foundation via Materiality

Financial & Corporate
Information

24

Transform the Business Structure andExpand Our Field of BusinessConnectors

2023 Business Environment and Results
As the COVID-19 pandemic receded and automotive
semiconductor shortages eased, sales of sensors for
airbags, brakes, and other safety systems increased on
the back of recovery in production among automakers.
Demand for automotive components increased owing toa brisk automotive market, which pushed up plant operating rates. Profit levels were also boosted by the effectsof our ongoing measures to enhance profitability.

For more information on I-PEX’s connectors:
https://www.i-pex.com/

2023 Business Environment and Results
Heightened concerns of a recession in 2022 continued
into the first half of 2023, putting a damper on demandfor digital products and ultimately leading to lower sales.
Although sales of connectors for notebook computers
started to recover after bottoming out in the first quarter,
demand for parts used in large-capacity HDDs was sluggish amid constrained investments by IT companies indata centers. As for automotive connectors, sales ofconnectors for LED headlights were up on the back of abrisk automotive market, but sales of power terminals

used in EVs declined as a result of ongoing automakerproduction delays in the Chinese market.
Net Sales ShareNet Sales(Million Yen)

40,73455.2%
2021

34,771

32,555

2022

2023

(FY)

Outlook
To diversify the revenue structure, we will leverage ourmainstay high-frequency, high-speed transmission technologies to enter the enterprise market, with a focus on
expanding sales. As data transmission volumes continue
to increase every year, we will focus in particular on thefurther development of CABLINE®-CA IIP PLUS and LIGHTPASS® Series products and other electrical and opticalsolutions, targeting AI servers and other data center applications. With respect to automotive connectors, in linewith increasing popularity of electric vehicles (EVs) following tighter regulations in response to environmental considerations worldwide, we project rising demand forhigh-current, high-temperature compact connectors to
support the shift to EVs.
CABLINE®-CA IIP PLUS Connector Installed
for Use on an I-PEX Demo Board

For details on I-PEX’s sensors:
https://corp.i-pex.com/en/product/sensor

Sensors

Given that the markets of our mainstay segments are heavily swayed by the near-term earnings of customers,
it is imperative that we leverage our core technologies to create a stable earnings structure and new businesses that are not dependent on any specific market. To this end, in fiscal year 2023 we entered the environmental and energy solutions business and launched full-fledged operations at our piezoelectric MEMS foundry.
We will continue to extend our business reach into the digital domain and evolve our business model awayfrom self-sufficiency and towards co-creation, with the aim of further enhancing corporate value.

(Million Yen)

14,915https://www.i-pex.com/library/video/lightpass

For details on the CABLINE®-CA IIP PLUS Connector:
https://www.i-pex.com/library/article/
smartnic-dpu-cable-jumper-solution

13,704

11,51723.2%
2021

Anticipating further improvements in the automotive
market, we intend to focus on capturing greater orders forautomotive components. Going forward, we expect to see
further growth in sensors for airbags in particular, buoyedby mounting demand related to safe driving. To achieveeven greater profitability, we will tighten our focus on
strategic business areas as we move forward with steps to

2022

2023

(FY)

optimize production sites, while working to tap into new
business opportunities emerging in line with vehicle electrification and digitalization. For torque sensors used in
the joint shafts of robots designed to work side-by-side
with people, we will carry out activities aimed at acquiring
new customers and expanding applications, drawing on
our track record of sales to robot manufacturers in Japan.

ESTORQ® Development Strategy
Collaborative robots

New applications

Embedded applications

Enhanceperformance
Acquire newcustomers

Research market demand
Propose new applications

Coupling
Propose embedding intorque actuators, etc.

Machinery & Equipment

Contribute to
new market
creation throughapplication
proposals
ES-Gripper®

ES-Hand®

For details on I-PEX’s machinery and equipment:
https://corp.i-pex.com/en/product/semiconductor

2023 Business Environment and Results
Net Sales ShareIn the area of semiconductor manufacturing equipment,
we expect ongoing brisk demand for sealing devices for
power and automotive semiconductors, fueled by the pushfor carbon neutrality and the electrification of automobiles.
Here, to capture more orders, we will draft customized
proposals drawing on our distinctive technologies. Also,
harnessing the thermosetting sealing techniques we cultivated in our semiconductor manufacturing equipment, we
will work to strengthen the revenue base by expanding
into manufacturing equipment for products other thansemiconductors, such as electronic components.

Net Sales(Million Yen)

5,229

7.8%

3,877

2021

OutlookFor details on the LIGHTPASS® Series:

Net Sales

Outlook

Sales of semiconductor molding equipment were down
amid an ongoing downturn in the chip market in 2024
centering on general-purpose semiconductors, a market
that had been trending at record-high levels through thefirst half of 2022. This was despite still-strong demand formolding equipment for automotive and power semiconductors, a sector the I-PEX Group specializes in.

LIGHTPASS® Series Development Roadmap

Net Sales Share

2022

4,587

2023

(FY)

Manufacturing Equipment for Power Semiconductors
Industrial
machinery

Power semiconductors

Home
appliances
Automotive• Power convectors• Rectifiers (AC/DC)

Converter-­inverters
Batteries

Motors25

I-PEX Inc. Integrated Report 2024

Overview

For more information on I-PEX’s molded and assembled parts:
https://corp.i-pex.com/en/product/cm

Net Sales ShareNet Sales(Million Yen)

7,345

8,125

8,166

Financial & Corporate
Information

2022

2023

13.8%
2021

(FY)

Outlook
In HDD-related parts, we expect a turnaround in demand
for large-capacity HDDs for data centers (nearline
storage). To address technology trends associated withthese larger capacities, we will lay the groundwork forthe mass production of related parts that involve a highlevel of difficulty. In forensic-related components, we

expect demand to increase for molded parts that use
I-PEX’s thermosetting technology in conjunction with themounting complexity of DNA analysis systems. With
respect to automotive parts, we project growth in module
components for regenerative braking amid further recovery expected in automobile production.

HDD

DNA Analyzer

HDD-related parts (Ramp)

Reinforcing the Management
Foundation via Materiality

For the Group to grow sustainably as environmental issues such as climate change are intensifying, we recognize
the need to integrate our business activities with environmental initiatives, promoting a mutually reinforcing
cycle between social value and economic value.
The Group has set a long-term goal of achieving carbon neutrality by 2050. To reach this goal, we will further
strengthen and promote green manufacturing as well as product development that uses “sharpest tip” technologies to help address environmental issues.

2023 Business Environment and Results
In terms of HDD-related parts, sales of large-capacity
HDD parts were sluggish as IT companies scaled backtheir investments in data centers over concerns about an
economic recession. Sales of forensic-related components weakened in the first half, mainly reflecting supply
chain disruptions, but recovered in the second half. We
are shifting production of molded and assembled parts
to optimal sites and making adjustments to unprofitablebusinesses to stabilize the revenue structure.

Materiality-Driven
Value Creation

Tackle Climate Change and Contribute toa Recycling-Based Society

Transform the Business Structure and Expand Our Field of Business

Molded & Assembled Parts

Message from the President

Responding to the Recommendations of the Task Force on Climate-related
Financial Disclosure (TCFD)
We evaluate climate-related risks and opportunities in our business activities, working daily to tackle climate change—
one of our points of materiality. Recognizing that proper disclosure of our climate change initiatives is vital for sustainable growth, we disclose such initiatives in accordance with the recommendations of the TCFD.

Governance: Role of Board of Directors and Oversight Framework
We established a Sustainability Committee in August 2022
to serve as an organization for overseeing the execution ofbusiness related to sustainability. Reporting to the Boardof Directors, the committee is chaired by one of the company’s Managing Executive Officers and made up mainlyof Executive Officers from each business division. The
committee chooses themes based on their level of importance either in terms of our points of materiality, which arenecessary for enhancing corporate value (ROE, etc.), or ofother issues calling for discussion from a global perspective. As a rule, the committee meets once a month. Receiving regular reports on matters discussed and decided by
the Sustainability Committee, the Board of Directors
further reinforces our sustainability initiatives through its
own deliberations, decision-making, and oversight.

Strategy

Outlook for MEMS Business
Targeting Earlier-Than-Planned Mass Production in 2024
The I-PEX Group made KRYSTAL, Inc. (now I-PEX Piezo­Solutions Inc.) a subsidiary in June 2022. This is the world’s
first company to succeed in creating a single-crystal versionof lead zirconate titanate, or PZT, which is a material used in
MEMS. The addition of this company gives us a framework
for carrying out all processes of the MEMS businessin-house, from materials development to mass production.
By leveraging this framework to shorten the lead time fromdevelopment to mass production, we are working to achieve
mass production in 2024, earlier than our initial target of2025. Our aim going forward is to develop this business tothe extent that it contributes to the longer-term growth of
the I-PEX Group as we focus on achieving the I-PEX Vision
2030 formulated in 2022.

Roadmap to
mass
production

Developmentof fundamental
technologies

Prototyping

Verification

Massproduction

Scenario

Examples of MEMS Devices

Gyro sensor

Speakers

RF filters

Reference data

Transition risks

1.5/2°C scenario

Sustainable Development Scenario (SDS)*1 Net Zero Emissions by 2050 Scenario (NZE)*1

Opportunities

4°C scenario

Stated Policies Scenario (STEPS)*1

Physical risks

1.5/2°C, 4°C scenario

Representative Concentration Pathways (RCPs)*2 Shared Socioeconomic Pathways (SSP1/5)*2*1 Source: IEA “World Energy Outlook (WEO) 2021”*2 Source: IPCC Sixth Assessment Report

Risks and Opportunities
Ultrasonic sensors

Ink-jet printer heads

Smell sensors

Growth Image for the Piezoelectric
MEMS Business

For more information on I-PEX Piezo
Solutions Inc.:https://www.i-pex.com/ips/about-us/
company

We conducted a qualitative analysis of climate change risks that could affect our business activities. Referring to scenarios
from the International Energy Agency (IEA) and the Intergovernmental Panel on Climate Change (IPCC), we examined the
1.5°C and 2°C scenario in terms of risks and opportunities in the transition toward carbon neutrality, and the 4°C scenario
in terms of physical risks and opportunities arising from the advance of climate change.

2023

2024

Joint development andprototyping

2025
Mass production(FY)

After categorizing the main climate change risks andopportunities affecting the Group’s business based on
external information, we analyzed and discussed risks andopportunities associated with the transition to a carbon
neutral society as well as physical risks arising from theadvance of climate change. We then identified the majorrisks and opportunities that could have an impact by 2050
on our business activities. We will continue to periodicallyanalyze and evaluate risks and opportunities based onchanges in external developments, calculating their financial impacts, developing specific response measures, andworking to actively disclose information on our initiatives.

26

27

I-PEX Inc. Integrated Report 2024

Overview

Message from the President

Materiality-Driven
Value Creation

Reinforcing the Management
Foundation via Materiality

Financial & Corporate
Information

Tackle Climate Change and Contribute to a Recycling-Based Society

Reducing CO2 by Streamlining Logistics

Major Risks and Opportunities

Risk, opportunity categories

Factors

ImpactStricter plastic regulations
Policies, regulations

Temperature rise

Stricter regulations on greenhouse gas emissions
Advances in environmental
technologies
Changes in evaluation criteria
of investors, customers
Increased air conditioning load

Rising sea levels

Coastal flooding

Transition
Risks

Technology
Markets, customers
Physical

Policies, regulations
Opportunities

Transition

Markets, customers,
technology
Markets, customers

Energy conservation, greater
production efficiency
Advances in environmental
technologies
Responding to investors, customer demands

Suspension of sales of existing plastic products due to non-compliance withregulations
Increased costs of materials, logistics, andelectricity due to introduction of carbon tax
Increased R&D costs of responding to environmental technologies

We are reducing environmental impact by shortening
transport distances for various products generated during
the production process. One example of this involved­products that were previously delivered to certain groupfactories in Japan where they underwent inspection and

Loss of investments, business opportunities

Increasing Use of Renewable Energy in Production

Increased energy costs
Suspension of operations due to flooding ofproduction, logistics sites
Lower electricity costs from energy-­saving
initiatives
Expanding business opportunities byaddressing environmental technology needs
Capturing investment, business
opportunities

Risk Management
Recognizing that addressing climate-related issues is a key
management issue not only in terms of mitigating risks but
also in terms of new earnings opportunities, we have set up
working groups tied to each of our points of materiality. Ledby the Sustainability Committee, these working groups areworking to put strategies in place to address each issue.

Each working group manages the progress of actions
aimed at resolving issues related to the points of materiality. After deliberation and approval by the Sustainability
Committee, their findings are regularly reported to theBoard of Directors. In this way, we are working to strengthen
our risk management and create business opportunities.

Metrics and Targets

CO2 Emissions Results and Targets (Scope 1+2)

We have set a medium- to long-term goal for the Group of
reducing Scope 1*1 and Scope 2*2 CO2 emissions (for production and equivalent business sites) by 40% by 2030 (compared to fiscal year 2021 levels), aiming to achieve carbon
neutrality by 2050.
*1 Scope 1: GHG emissions directly released from the company*2 Scope 2: Indirect GHG emissions released from the energy purchased by
the company(t-CO2)80,000Baseline year
66,19040,00048,674

26.5% reduction(compared to FY2021)

2030 target

40% reduction

39,714 (compared to FY2021)

0
2021

2023

2030

(FY)

* The data covers production and equivalent business sites.

To further reduce CO2 emissions, alongside efforts toconserve energy in production, in fiscal year 2023 wealso began to transition to renewable energy for electricity used at production sites in Japan. Specifically, we
purchased renewable energy for some of the electricity
Electricity
generated(daily)packaging on the premises before being shipped internationally. We changed the logistics route, carrying out thesesteps at a logistics facility near the airport instead, before
shipping internationally. The truck transport distance washalved as a result, reducing CO2 emissions.

used at the Ogori Plant, Tachiarai Plant, and Shimane
Plant. Also, in 2024, we will begin generating solar
power at our plant in the Philippines, and also plan toinstall solar power generation equipment at the China
Shanghai Plant 2.
Percentage
of electricity
consumed

Installation
date

Plant

Panel
area

Installation
locationJanuary 2022

China Shanghai

2,000 m2

Rooftop

650 kWh

250,000 kWh

2%March 2022

Malaysia

6,865 m2

Rooftop4,600 kWh

1,706,000 kWh

16%

August 2022

Singapore

880 m2

Rooftop

600 kWh

231,000 kWh

2%February 2024 Philippines

1,129 m2

Rooftop

1,130 kWh

—

—

2024

2023 results

China Shanghai Solar power generation facilities to be installed

Solar power equipment at the Philippines Plant

Contributing to an Energy-Saving Society through “Sharpest Tip” Technologies
The I-PEX Group develops new technologies and products that contribute to an energy efficient, recycling-­
based society, improves existing ­products, and pursues
energy saving in product manufacturing processes.
Specific initiatives include the development of semiconductor molding equipment that consumes lesspower compared to the high volume of electricity usedin typical equipment. We are also developing the­LIGHTPASS® Series of active optical module productsthat help reduce transmission loss and save energy,
also anticipating use based on the IOWN* concept, as
well as battery management systems suitable forreusing used lithium-ion batteries of electric vehicles
that will contribute to a recycling-based society.

*Innovative Optical and Wireless Network (IOWN) is a next-generation backbone network structure being promoted by the NTT Group that uses photoelectric
fusion and optical communication technologies. I-PEX Inc. is taking part in the IOWN Global Forum as a General Member.

Tackling Climate Change

Building New Business Models via Circular Economy and Upcycling

The factor in the I-PEX Group’s operations that has the greatest impact on climate change linked to global warming is
the CO2 associated with the purchased electricity the Group uses. We are therefore pursuing initiatives such as savingenergy in production and expanding our use of renewable energy.

We are working to reduce our environmental impact tohelp bring about a recycling-based society. This includes
reducing waste materials by boosting production efficiency, using recycled materials, recycling waste materials,
and reusing water from plating processes. In fiscal year
2023, we looked at how to reduce the size of cardboard
boxes used in our internal logistics and change the packaging specifications, laying the groundwork for implementation. Meanwhile, we are developing a solution thatcombines used automotive lithium-ion batteries with abattery management system. Furthermore, since plastic is
one of the core materials in the Group’s business activities,
we are working to realize a circular economy centeredaround molding materials. Specifically, we are jointly
developing recyclable materials with a molding material
manufacturer, aiming for molding materials that have a

Energy-Saving Initiatives in Production
In fiscal year 2023, we educated all of our employees on
the importance of saving energy. In our ISO 14001 certification activities, we promoted action to address energy
saving as a common issue for the Group by tasking eachsite with targets for reducing electricity usage and new
action items. We have positioned the Ogori Plant, a production site that brings together all of our business divisions, as a model plant to spearhead an initiative to review
the operation of production facilities and identify wastefulenergy use. We are implementing improvements andmeasures targeting a 10% year-on-year reduction in electricity consumption at our production sites. This initiative
ran until March
2024, and we are
now deploying theresults across all of
our sites as wework to further
reduce the energy
used in production. Kickoff of activities

sustainable lifecycle and targeting implementation in
fiscal year 2024.

Use of new molding material as a primary material
for connectors on the first
production run only

ProduceUse of recycled
Return usedmoldingmolding
material asmaterials toa primary
The Circular the materials
material for
manufacturer
Economyconnectors

We Envision
RecycleRecycle used molding
materials into molding
materials suitable for
production

Recover28

29

I-PEX Inc. Integrated Report 2024

Overview

Message from the President

Materiality-Driven
Value Creation

Financial & Corporate
Information

Reinforcing the Management
Foundation via Materiality

30

Strengthen Human Resource Management
Designing a Career Course Compensation System
To create economic and social value and grow sustainably, continually generating innovation and expanding
our field of business is crucial. Driving this are diverse personnel who can put into practice our corporate
identity (CI), the principles that shape us as a company. By securing talent with wide-ranging knowledge,
experience, and values, and building a framework that allows them to grow and thrive, we aim to continue
growing together with our employees.

Evaluation

Placement

Compensation

We are working to raise compensation levels to be competitive in the market. This entails revising the wage
curve to levels that are dynamically aligned with thecareer courses, targeting a market level that is benchmarked against our competitors as well as an appropriatebalance in the differences between job grades.

Hiring

We will also eliminate any elements of seniority-based
work conditions that may exist under our current system,transitioning the compensation structure to one that isbased on career course, responsibilities, roles, and work
styles, thereby increasing employee motivation.

Development

Strengthening HR Management, Performing Global Personnel Evaluations andBuilding Career Advancement Programs

Securing and Developing Personnel with High Specialization and the Potential toCreate Future Businesses

Human Resource Management

What We Expect of Our People

The I-PEX Group’s policy on human resource management is to secure diverse personnel and support thegrowth of individuals striving to continue to take onchallenges. This policy guides our efforts to build andoperate a grand design for human resource managementaligned to our CI, creating an organization in which
employees and the company grow together. To stay one

step ahead of the needs of the times and continue creating new value, we will implement a framework where
the growth of each employee feeds into the sustainablegrowth of the company. By designing systems to develop
human resources and reform the corporate culture, wewill cultivate an environment in which diverse personnel
can put their unique strengths to use.

Creating a Framework That Allows Employees and the Company to Continue Growing Together
1. Create systems that enable
diverse personnel to play anactive role in various businessfields based on their aptitudes

2. Raise the human capital value ofeach employee and link this tobusiness expansion and growth

3. Energize the organization to
boost its ability to generateinnovation

New Learning through Training in Fundamental Technologies
We educate employees in our fundamental technologies,
aiming to equip them with greater expertise with which
they can generate new ideas and realize further innovation. We carry out such education mainly through cooperation with universities and research institutes. Our
focus in fiscal year 2023 was on mass production technologies. We offered education about molding technology tobroaden employees’ knowledge of resin materials andhighlighted AI technologies that can find application inimage inspection.
Through such education, we aim to hone the skills
and abilities of employees. As employees make use of
the skills and knowledge they have learned, both theyand the company will continue to grow together.

Development

Categories to be
reinforced

Details

Organizational culture

We respect the rights and individuality of every employee, and are creating a safe and comfortable work environment
where employees can demonstrate their full potential.
We will realize an organization of people who think and learn together, engaging with one another and actively taking onchallenges that transcend organizational barriers.

Hiring

We hire people who share our corporate philosophy and can contribute to the growth of our businesses.

Placement

Our staffing aims to maximize employee growth and organizational performance.

Evaluation, working
conditions

We evaluate and treat employees in a way that is fair, transparent, and appropriate for individual circumstances so thatthey feel highly motivated in their work.
We provide employees with opportunities to hone their skills through learning and hands-on application, tapping into
their potential and desire to grow. In this way, we develop talent who can help carry out our management strategy.

Development

As an “Innovative Product development & Engineering solutions eXpert,” the I-PEX Group seeks to provide the global
market with the values of inspiration and surprise. To create such value, we look for people who share our five­values—“Challenge, Pursue, Connect, Advance, Pioneer”—and who can give shape to new concepts.

Offering Career Courses and Succession Plan Training
We are implementing an HR management system in Japan ranging from ageneral course to multi-track career courses. This framework will allow us to
tailor recruitment, placement, development, and working conditions basedon roles, level of contribution, work styles, and other factors. We are alsoestablishing new advanced and technical specialty courses aiming tosupport the active contributions of highly specialized personnel as well as
personnel in management positions. This will aid our efforts to secure,
deploy, and motivate a diverse workforce. Our succession plan offers aframework for systematically educating and training managerial employees
to lead our business in the next and following generations. By identifying
candidates and conducting necessary training and job rotations, we areaiming to ensure stable job succession.

Promoting Diversity, Equity and Inclusion
Diversity, Equity and Inclusion (DE&I) to Generate Innovation
The I-PEX Group has continued to grow while expanding
its business domains and now has sites in 12 countries
and regions worldwide. We promote diversity, equity andinclusion in the Group, believing that it is critical in termsof growing sustainably going forward to respect thediverse knowledge, experience, and values of our approximately 5,000 employees and to ensure an organization

where everyone can voice their opinions equally. We
carried out education on unconscious bias in fiscal year
2023 in Japan. We encouraged the creation of workplaceenvironments where diverse personnel can work comfortably and where all employees show acceptance andunderstanding to people in different contexts.

Promoting Women’s Participation and Advancement

Hiring of Women and Promotion of Women to Executive
Positions in Japan

Career Courses (plan)
Level

Career Course

7

Level

Management
Course

6

Level

5

Advanced,
Technical
Specialty
Course

Level

4

Level

3

Level

2

Level

1

Level

Operator,
AssistantCourseGeneralArea
CourseGeneralCourseOur overseas sites employ a high proportion of women in
managerial positions and encourage women’s participation. In Japan, however, although the percentage of womenin supervisor and managerial positions has increased, it
remains relatively low. To overcome this, we have set atarget of raising the percentage of women in managerial
positions to 10% in Japan by 2030 as we work to promotewomen’s participation.

(%)
25.0

12.5

0

22.0
15.5

15.5

4.3

4.4

1.7
2020

1.6
2021

5.3

(%)
10
19.5
6.2

2.6

3.2

2022

2023

Percentage of women hired
Percentage of women promoted to supervisor positions
Percentage of women promoted to managerial positions* In Japan

5

0
(FY)

31

I-PEX Inc. Integrated Report 2024

Overview

Reinforcing the Management
Foundation via Materiality

Financial & Corporate
Information

Strengthen Corporate Governance

Strengthen Human Resource Management

To achieve this goal, we are working to hire more
women and create workplaces where women can work
comfortably and continue to pursue a career. In fiscal
year 2023, we offered career design and leadershiptraining to help female supervisors develop theircareers. Training participants took classes with external
lecturers and did group work, giving them opportunities

to consider how they can play an active role in leadership and explore future career options. The program
also included dialogue between participants and supervisors. By offering the support these employees need tomake their career vision a reality, we are seeking to
make our workplace one where women can play anactive role.

Mid-Career Hiring

New Graduates and Mid-Career Hires

The experience of mid-career hires is an importantelement in shaping organizational diversity. We aim togenerate innovation by bringing in diverse personnel tothe organization. Mid-career hires accounted for aroundhalf of all employees hired on average over the past
five years, and accounted for the same percentage ofmanagers as well. These employees play an active rolein the organization by drawing on their previous careersand experience. Moving forward, we plan to continue
mid-career hiring efforts.

Materiality-Driven
Value Creation

Message from the President

Basic Approach

Corporate Governance System(Persons)

(%)

120
70.7

84

60
38.6

46.4

65.1

58

2019
New graduate hires  

2020

2021

Mid-career hires  

2022

OutsideAppoint

87
50
23.9

0

Inside2023

Percentage of mid-career hires

Nomination andCompensation Committee

Five Directors(Chaired by independent
Outside Director)

13
AdviseReportConsult

Coordinate

Five Directors(all Outside Directors)

Audit

Ten Directors(including five Outside Directors)
Management
supervision(Business
Execution)

Appoint

15

Audit & Supervisory
Committee

Board of Directors

ReportEngagement

Number of meetings in FY2023

Appoint

80(FY)* In JapanXX

General Meeting of Shareholders

100

109

101

to sustainably increase corporate value through increasing the transparency of corporate management andmaintaining fairness and independence.

Our basic approach to the I-PEX Group’s corporate governance is to build relationships of mutual trust with all
stakeholders, including shareholders, customers,
employees, suppliers and local communities, by working

Audit
Instruct

President

ReportEnhancing Employee Engagement and Motivation
With the goal of maintaining comfortable, engaging
workplace environments for employees and increasing
job fulfillment, we conduct a survey to gauge employee
satisfaction and expectations. Our efforts to improve theworkplace have involved introducing a framework thatallows employees to choose from among various work
styles as well as projects for taking onboard employee

feedback. Still, work remains to be done to elicit the
motivation of all employees. Our engagement indicator
for fiscal year 2024 will focus on the degree to which
employees would recommend I-PEX to others. We will
work to enhance engagement by introducing a framework that enables employees to find fulfillment in theirwork and demonstrate their unique potential.

Main Governance Bodies

Items
Work here is fulfilling to me
I feel engaged in my work
I have a strong desire to achieve the targets I’ve been assigned

Area

2021

2022

2023

Japan

3.23

3.30

3.24

Overseas

4.05

4.01

3.98

Japan

3.24

3.27

3.24

Overseas

4.02

3.97

3.97

Japan

3.78

3.82

3.78

Overseas

4.16

4.11

4.09

Note: Weighted average scores of 5, 4, 3, 2, 1 on a 5-point scaleInternal Committees

Executive Committee

12

Executive Board

12

Management Meeting

12

Administrative Meeting7

Indicators for Raising Group Engagement Scores (items highly correlated with job fulfillment)

ReportSustainability Committee
Internal Control andCompliance Committee

ReportIndependent
auditor12
Financialauditing

8Internal
auditing

Governance oversightBusiness execution divisions(business divisions, R&D division, administrative divisions, affiliated companies in Japan and overseas)

Corporate Governance Highlights
Independence

Expertise
Outside Directors(Audit & Supervisory
Committee Members):

5hours to fulfill nursing care responsibilities, and theestablishment of contracted daycare centers. We also
encourage male employees to take childcare leave—
here, the leave-­taking rate is 37.5% in Japan, higher than
the national average. At our overseas sites, while there
are variations between regions, we have put systems inplace for working remotely and for choosing preferredworking hours.

Coordinate

Other specialized committees

Governance oversight

Promoting Work Style Reforms
We are enhancing the HR system to maintain workplaceenvironments in which diverse personnel can consistently perform with confidence, regardless of the diversity of their work styles or changing life stages. Specificmeasures in Japan include a remote work program, asystem for choosing work schedules, a system for taking
paid leave by the hour, a system for shortened working
hours for childcare, and a system for shorter working

Internal
Auditing

Attendance

HR development:

2

Management ofcorporate operations:

8

Governance:

5

Ratio of
Outside Directors

50%

Manufac­turing anddevelopment:

3
Inside Directors:

5

Board of Directors
Average
attendance rate

Expertise/
Experience Expected*

Sales and marketing:

6

Globalexperience:

100%

3

Finance, accounting
and law:

3* Each officer has multiple areas of expertise and experience.

32

33

I-PEX Inc. Integrated Report 2024

Overview

Message from the President

Materiality-Driven
Value Creation

Reinforcing the Management
Foundation via Materiality

Financial & Corporate
Information

Strengthen Corporate GovernanceCorporate Governance System

Evaluation of the Effectiveness of the Board of Directors

The I-PEX Group’s corporate governance system primarily consists of the Board of Directors, Audit & Supervisory Committee and independent auditors.
Five Outside Directors who are Audit & Supervisory
Committee Members attend meetings of the Board of
Directors, the highest decision-making body of management, to ensure the objectivity and neutrality ofmanagement oversight. In addition, the Audit & Supervisory Committee coordinates internally with the Internal
Auditing and externally with the independent auditors.
Audits related to compliance with various laws, regulations
and internal company rules are appropriately maintained,
which is the reason this has been adopted as our current
system of corporate governance.

Questionnaires (self-evaluations) are administered to all Directors once each year for the purpose of maintaining an
accurate understanding of the current state of the board and further raising its effectiveness. Based on the responses,
the effectiveness of the board is analyzed and evaluated, and improvements are made to issues that have been
identified. In this way, we are working to strengthen the functions of the Board of Directors.
Overview
Evaluation method

Questionnaire given to all Directors, including Audit & Supervisory Committee Members

Evaluation items

Board composition, administration, decision-making process, support system, level of involvement,
supervisory function, risk management system, shareholder engagement, committee administration,and other matters related to management

Board of Directors

The Board of Directors is comprised of ten Directors (five of whom are Audit & Supervisory Committee Members) andfive are appointed from outside the company (all five of whom are Audit & Supervisory Committee Members). The
board, which meets once a month in principle, oversees business execution by the Representative Director and other
Directors and makes decisions on important matters.

Analysis/evaluation

Audit & Supervisory Committee

The Audit & Supervisory Committee is made up of fivemembers, all of whom are Outside Directors. Audit &Supervisory Committee Members attend meetings ofthe Board of Directors and other important committees,
and they supervise and audit overall management asneeded. The independent auditor is Deloitte Touche
Tohmatsu LLC, which conducts audits based on Article
436.2.1 and Article 444.4 of the Companies Act andArticle 193-2.1 and Article 193.2 of the Financial Instruments and Exchange Act.

Nomination and Compensation Committee (discretionary body)

We have established the Nomination and Compensation Committee, a discretionary consultative body of
the Board of Directors, in order to further strengthen
corporate governance by raising the objectivity andtransparency of evaluation and decision-making processes related to officer nomination and compensation.
The committee is consulted on the election andcompensation of Directors and other officers, considers
these matters, and reports back to the Board of Directors. The committee has five members, two Directors
and three Outside Directors (including Audit & Supervisory Committee Members). The committee is chairedby Outside Director Junichi Hashiguchi.

The questionnaire is analyzed by the administrative office for the Board of Directors so that issues canbe identified. The chairpersons of the board and the Audit & Supervisory Committee are interviewed
before more in-depth discussions and evaluations are undertaken by the board.
Initiatives from the previous fiscal year are evaluated and improvement measures are considered for
issues identified in the current fiscal year’s evaluation

Results of Evaluation of Board of Directors in FY2023

In fiscal year 2023, all eight Directors, including Audit &Supervisory Committee Members, completed the questionnaire to evaluate the effectiveness of the Board of
Directors. The results of the evaluation showed
improvement in the score for allocating more discussion time in meetings, reflecting concrete measures we
implemented. The evaluation also confirmed that, as a
Issuesidentified

Operation of the Board of Directors
The Board of Directors, which is chaired by the Representative Director and made up of ten Directors (five ofwhom are Outside Directors who are Audit & Supervisory Committee Members), met 13 times in fiscal year
2023. The board makes decisions on important matterssuch as investments and the next fiscal year’s plan andreviews business execution by Directors and othermatters. The Management Meeting is convened apartfrom the Board of Directors, providing a venue for discussion and debate on various themes related to business administration.

FY2022
evaluation

Sample Agenda Items
Reporting

For Resolution

Important Matters for Deliberation• Matters related to investment• Matters related to equity investment• Reporting on IR activities and investor
opinions• Evaluation of the effectiveness of theBoard of Directors and reporting on it• Reporting on the activities of the Nomination and Compensation Committee• Reporting on the results of internal control
effectiveness evaluations• Reporting on audits of the Audit & Supervisory Committee• Matters related to management• Sustainability Committee reports• Matters related to non-financial information• Matters related to risks• Matters related to investment• Matters related to equity investment• Matters related to materiality• Matters related to capital policy• Annual business and financial plans• Matters related to the sale of assets• Matters related to reorganization

Policies and Progress of I-PEX Vision 2030• Medium- to long-term managementplan• Business portfolio• Progress of priority businesses
Policy and Progress of Six Points ofMateriality• Response to Governance Code• Strengthening of HR management• Group governance• ROIC target• TCFD-based disclosure
Policies and Progress Related to Shareholders’ Engagement• Dialogue with shareholders and investors

Results ofinitiatives(FY2023)

tangible result for the board’s effectiveness, there weremore active deliberations on qualitative analysis anddisclosure of climate change risks and opportunities inline with the TCFD’s recommendations and more robust
discussions and measures regarding capital policy andthe enhancement of corporate governance.

Allow for adequate discussion on important matters, hold discussions from diverse viewpoints
and with a medium- to long-term time horizon, and continue efforts to enhance shareholder
engagement, which were issues identified in fiscal year 2021
Strengthen the risk management system
Increase administrative efficiency, select important agenda items, make an agenda schedule forthe year, and discussions on agenda items that contribute to raising corporate value over the
medium- to long-term
For the purpose of separating oversight and execution, Executive Officers no longer attended
board meetings as observers. We strengthened the board’s oversight function by having the
Sustainability Committee in the second section of the Executive Board meeting report to theboard after discussing important topics that contribute to the longer-term enhancement of value.
To facilitate great discussion regarding important matters, we held preliminary briefings aheadof board meetings for the benefit of Outside Directors.
We also strengthened the PDCA cycle to improve the administration of the board by conducting
a review immediately after board meetings.
Actively disclose information to shareholders and work for mutual understanding
Communicated information about the company’s basic policy on sustainability and initiatives tostakeholders through dialogue and the integrated report
Strengthen risk management by establishing a group governance system
Created opportunities to periodically share information with overseas subsidiaries and reviewed
the makeup of the board

FY2023
evaluation

Issuesidentified

Hold discussions from diverse viewpoints and with a medium- to long-term time horizon,
strengthen the risk management system, and continue efforts to enhance shareholder­engagement—issues that were identified in fiscal year 2022

Initiatives
planned(FY2024)

Continue discussions that contribute to improvements in longer-term corporate value, selectpriority agenda items, and draft an annual schedule
Continue to build up the group governance framework and strengthen risk management
Continue to proactively disclose information to stakeholders and deepen mutual understanding

34

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I-PEX Inc. Integrated Report 2024

Overview

Message from the President

Materiality-Driven
Value Creation

Reinforcing the Management
Foundation via Materiality

Financial & Corporate
Information

Strengthen Corporate GovernanceSupport System for Outside Directors

Group Governance

While there is no dedicated organization that assists
Outside Directors with their duties, there is a system inplace in which all divisions provide assistance as needed,
starting with the Corporate Planning Department. The
administrative office sends the five Outside Directors (Audit& Supervisory Committee Members) the agenda items andmaterials to be submitted at upcoming board meetings tofurnish explanations of critical agenda items. Opinions andquestions received in response to these preliminary materials are reflected in the explanations given during board
meetings, in an effort to stimulate and deepen discussions

from multiple points of view. Even outside of board meetings, information about business strategies and othertopics is provided to Outside Directors. Specifically, thecompany’s Executive Officers regularly provide explanations about the business environment, growth strategies,
and the outlook. In addition, Outside Directors are provided
opportunities to visit company sites in Japan and overseas
so they can offer opinions about activities the company isundertaking with the aim of achieving the Group vision of
becoming an “Innovative Product development & Engineering solutions eXpert.”

Executive Compensation
Compensation for executive Directors consists of fixedmonthly compensation, performance bonuses*1, which arelinked to annual business performance, and a performance
share unit plan*2, which is a stock compensation plan linked
to medium-term performance. This compensation package
is designed to promote the Group’s sustainable growth,raise corporate value over the medium to long term, andshare further value with shareholders. The previous retirement benefits program for officers has been eliminated.
Regarding performance bonuses, the total amount offunds available for bonuses is determined based on consolidated sales and consolidated profit, indicators that form
the basis of business management activities. With thisamount as the upper limit, points are calculated for eacheligible Director based on both quantitative performanceindicators and qualitative evaluations. Next, the percentage of the total is calculated for each eligible Director’s
points, and the actual amount of bonuses paid to each is
calculated based on these percentages.
The performance share unit plan sets a numericaltarget in advance for company performance (consolidated)
during the period covered and calculates the number of
I-PEX common shares to be granted and the monetaryamount needed for tax payments based on the degree ofachievement of the numerical target after the period ends.
Regarding executive compensation, compensation for
Directors who are not Audit & Supervisory Committee
Members is no more than ¥350 million annually and compensation for Directors who are Audit & Supervisory
Committee Members is no more than ¥45 million.

Strengthening global group governance is one concretemeasure for reinforcing corporate governance, a pointof materiality which must be addressed to achieve sustainable growth. We established a new Group Governance
Task Force in fiscal year 2023 to focus on this measure.
Specific efforts include steps to manage companies in
the Group in accordance with the Group Company Management Rules. In light of the results of the evaluationof the effectiveness of the Board of Directors conductedin fiscal year 2022, we recognize that measures to reinforce group company governance functions are vital not
only in terms of creating a more efficient, more reliableorganization as a whole—they are also crucial for sustainable growth across the Group going forward. Measures include harnessing the collective strengths of theGroup and ensuring transparency by sharing information and collaborating with group companies, as well as
strengthening risk management and compliance frameworks. To this end, we have formed a dedicated unit to
lay the groundwork for these measures. Through these
activities, we will move discussions forward on the functions of local affiliates and the status of their boards
from the standpoint of group governance and further
strengthen systems for the Group overall.

Sustainability Governance
The I-PEX Group formulated a sustainability policy in2022 with a view to sustainably enhancing corporate
value and realizing a better world. We also establisheda Sustainability Committee to facilitate efforts by the
Board of Directors to proactively address sustainability
issues. The committee is made up mainly of Executive

Officers and chaired by one of the company’s Managing
Executive Officers. It meets, in principle, once a month
to discuss topics considered most germane with respect
to the points of materiality needed to enhance corporate value (ROE, etc.) and issues requiring discussion
from a global perspective.

Sustainability Promotion Organization
Board of Directors
Sustainability Committee
Chairman: Reiji Konishi(Board Member, Managing Executive Director)
Members: Executive Officers
Sustainability Office: Corporate Planning Department
Frequency of meetings: Once a month in principle*1 Compensation plan that is more clearly linked to performance for the fiscal year, making it a short-term incentive.
*2 Compensation plan that further enhances motivation to achieve medium-term performance targets and promotes the sharing of benefits and risks withshareholders.

Total Amount of Compensation for Each Officer Category, Total Amount of Compensation by Type, andNumber of Eligible Officers*

Materiality Working Groups

Total amount of compensation by type (Million Yen)
Officer Category

Total amount ofcompensation(Million Yen)

Fixed
Performancecompensation
bonuses

Performancelinked stockcompensation

Retirement
benefits

Non-­monetarycompensation(included in theamounts at left)

Number of
eligible
officers

Directors (excluding Audit &Supervisory Committee Members)(excluding Outside Directors)

150

150

—

—

—

—

5

Directors (Audit & Supervisory
Committee Members)(excluding Outside Directors)

—

—

—

—

—

—

—

Outside Directors

21

21

—

—

—

—

3

* Does not include the two newly appointed Directors at the Annual General Meeting of Shareholders held on March 28, 2024

Succession Plan
Regarding the succession plan for the Representative
Director and other officers, the discretionary Nomination and Compensation Committee (discretionary body),
a consultative body to the Board of Directors, regularly
deliberates on the plan and reports to the Board of

Directors, which makes decisions on it. The Nomination
and Compensation Committee maintains independenceby having Outside Directors as the majority and a chairchosen from among them. It functions to provide advice
that is objective and effective.

Contribute to acomfortable andsafe digitalsociety supported byinnovation

Tackle climatechange andcontribute to a
recycling-basedsocietyTransform thebusiness structure and expand
our field of
businessStrengthen
human resource
management

Build an optimal
manufacturingsystem andpromote capital
cost and cash flow
management

Main Topics Discussed in the Sustainability Committee in Fiscal Year 2023
• Group governance• Dialogue with shareholders and investors• Medium-term management plan challenges and measures• Environmental initiatives• Strengthening of HR management• Business structure reforms• Progress of priority businesses• ROICStrengthen
corporate
governance

36

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I-PEX Inc. Integrated Report 2024

Overview

Reinforcing the Management
Foundation via Materiality

Materiality-Driven
Value Creation

Message from the President

Financial & Corporate
Information

Directors, Audit & Supervisory Committee Members,
and Executive Officers (as of March 28, 2024)
Directors

Executive Officers (excluding those concurrently serving as Board Members)

President, Representative Director

Takaharu
Tsuchiyama

Board Member, Managing Executive Officer,
Corporate Planning Department & Intellectual
Property and Legal Department

Reiji Konishi

Outside Director(Audit & Supervisory
Committee Member)

Board Member, Managing Executive Officer,
Chief Technology Officer
R&D Division Director

Board Member, Managing Executive Officer,
Electronics Components and Devices Division &Equipment Division

Kenji Ogata

Akihiko Hara

Junichi Hashiguchi

Outside Director(Audit & Supervisory
Committee Member)

Executive Officer
Operation Director,
Mobility Components Division

Executive Officer
Supply Chain Director

Executive Officer
General Affairs Director

Yasumitsu Kikuchi

Hiromichi Nakagawa

Tatsuya Konishi

Koji Saito

Executive Officer
Operation Director,
MFG Solution Division

Executive Officer
Finance Director

Executive Officer
Operation Director, Electronic
Components and Devices Division

Tomohiro Nishiyama

Takeshi Shimazaki

Gek Hong Tan

Composition and Skills Matrix of the Board of Directors

Board Member, Executive Officer
Sales Division

Position and responsibility in
the Company

Name

Atsushi Yasuoka

Independent
Director

Executive Officer
Operation Director,
Equipment Division

Independent
Director

Shuji Niwano

Outside Director(Audit & Supervisory
Committee Member)

Yoichi Wakasugi

Independent
Director

Takaharu Tsuchiyama President, Representative Director
Board Member, Managing Executive
Kenji Ogata
Officer, Chief Technology Officer R&D
Division Director
Board Member, Managing Executive
Akihiko Hara
Officer, Electronics Components andDevices Division & Equipment Division
Board Member, Managing Executive
Officer, Corporate Planning Department
Reiji Konishi& Intellectual Property and Legal
Department
Board Member, Executive Officer
Atsushi Yasuoka
Sales Division
Outside Director (Audit & Supervisory
Junichi Hashiguchi
Committee Member) Independent Director
Outside Director (Audit & Supervisory
Shuji Niwano
Committee Member) Independent Director
Outside Director (Audit & Supervisory
Yoichi Wakasugi
Committee Member) Independent Director
Outside Director (Audit & Supervisory
Emiko Suda
Committee Member) Independent Director
Outside Director (Audit & Supervisory
Eiko Shiraume
Committee Member) Independent Director

Audit &
Supervisory
Committee
meetings
attendance
rate

Expertise and experience particularly expectedManagementof corporate
operations

Globalexperience

Finance,accounting,and legal
affairs

Sales andmarketing

Manufac­turing andGovernancedevelopment

HRdevelopment

100%
100%
100%

Note: The list above is not intended to show all expertise and experience of the Directors.
Note: Because Emiko Suda and Eiko Shiraume were newly appointed as Directors at the March 28, 2024 Ordinary General Meeting of Shareholders, their attendance for the fiscal year under review is not given.

Definition of Skills
Skill

Outside Director(Audit & Supervisory
Committee Member)

Newly
appointed

Emiko Suda

Independent
Director

Outside Director(Audit & Supervisory
Committee Member)

Newly
appointed

Eiko Shiraume

Independent
Director

Definition

Management of corporate operations

Experience in contributing to key decision-making as a business executive

Global experience

Experience working overseas or knowledge of international business contexts

Finance, accounting, and legal affairs

Knowledge or experience of finance, accounting, or legal affairs in managing corporate operations

Sales and marketing

Experience in planning and executing sales and marketing strategies

Manufacturing and development

Knowledge or experience of manufacturing and R&D in the manufacturing sector

Governance

Knowledge or experience concerning risk management and corporate ethics

HR development

Knowledge or experience concerning the training and development of human resources

38

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I-PEX Inc. Integrated Report 2024

Overview

Message from the President

Materiality-Driven
Value Creation

Reinforcing the Management
Foundation via Materiality

Financial & Corporate
Information

Compliance and Risk Management
Strengthening Compliance System
We have established the Internal Control and Compliance Committee, which is chaired by a supervising
manager appointed by the Representative Director andmade up of the chairperson and other necessary personnel, and an administrative office for it directly
under the chairperson. In addition, compliance managers are assigned to each division. Including Directors,
the Committee has 13 members (ten men and three
women), and there is a framework in place by which
members and the administrative office discuss issues
from multiple perspectives and carry out related activities. The Committee met eight times in fiscal year 2023
to discuss the progress of internal control.
We have also established the Code of Behavior for
I-PEX Group Personnel, which is the foundation of ourcompliance system. A CSR handbook containing excerptsof the Code and of the Compliance Reporting Rules, andother related information is posted on an internal
website and communicated to Directors and employees.

Business Risks
CSR study sessions are also held as appropriate as a partof continuing efforts to raise compliance awareness. In
fiscal year 2023, we held a study session on internal
control for all the employees, and in this fiscal year we
will continue activities to facilitate greater understanding of the importance of legal compliance.
In addition, Internal Auditing conducts compliance
audits of the Group from an independent perspective
and reports on any compliance-related problems at theinternal audit reporting meeting. Moreover, as a part ofour efforts to reinforce internal controls, we establisheda help line for whistleblowers and put in place a framework for receiving information related to compliancefrom inside and outside the company. We defined theitems to be reported to the Board of Directors when
there are important findings related to compliance. To
protect whistleblowers, we stipulated in-company
bylaws that ensure employees providing information
will not be treated unfairly.

The following items describe potential risk factors for business expansion by our Group. We have included mattersthat we do not necessarily consider as risks for our business,but that we consider important for investment decisions
and for investors to understand our business activities, inorder to actively disclose information to investors.
Item

While we understand the possibility of these risks
occurring and try to avoid them while taking action in theevent of their occurrence, investors should deliberate overinvestment decisions concerning our shares by reading
this page along with the other sections of this report.

Main risks anticipatedMain measures taken to address risks

Risk regarding quality

Liability incurred or reputation damaged due to
product non-conformance, defect or recall

Building and continuing to improve quality systems matched to products and customer requirements and carrying out activities to reduce
quality non-conformance and strengthen quality governanceRisk of disasters or
accidents

Business activities being impeded by a major natural
disaster, an accident, or the spread of an infectious
disease, etc. at the location of a production plant fora specified productCreation of a business continuity plan (BCP), ensuring decentralized
inventory, establishment of a response headquarters for pandemics,
etc., and prevention of community transmission by establishing internal company rules

Country risks

Production activities impeded by the emergence ofcountry risk or spread of an infectious disease, etc. at
the location of an overseas plant

Creation of a BCP, regular exchange of information from multiple
perspectives, starting with information on international affairs within
the Group, and decentralization of production sites

Risks related to technologies possessed

Competitiveness diminished by greater-than anticipated technology innovations

Awareness-raising and the cultivation of a corporate culture to minimize risk, carrying out ongoing market environment surveys, andfocused investment of management resources in priority R&D areas
and themes

Risk related to intellectual
property rights

Technology infringement resulting from an intentionally unpatented technology being leaked

Management of company know-how on the intranet, employee education related to the handling of internal expertise, surveys to reduce
intellectual property infringement by I-PEX

Competition risks

Decline in the competitiveness of the Group’s products and drop of sales prices, etc. due to greater
competition

Continuing to provide high-value-added products through development that anticipates market needs and strengthening resiliency toprice declines by working constantly to reduce costs and shorten leadtimes, etc.

Risks associated with large
capital investment

Excess depreciation, disposal or impairment loss ofused equipment due to failure of product demand toincrease as anticipatedApproval screening at time of equipment roll-out, confirmation oftrends in long-term stagnant projects, impairment decisions based on
fixed standards and impairment accounting

Risks of price fluctuationsof raw materials andpurchased components

Purchase price increases for primary product materials or for mechanical or electrical components formachinery and equipment

Mitigating the risk of price increases by moving some material inventory off balance sheet, leveling purchase prices by purchasing rare
metals in fixed quantities, and multiple sourcing for purchased components, etc.

Risks related to inventory

Valuation or disposal loss on surplus or stagnant
inventory

Ongoing confirmation of trends in long-term stagnant inventory via aninternal committee, impairment decisions based on fixed standards
and impairment accounting

Regulatory risks

Changes in laws and regulations or the enactmentof new regulations that cannot be complied with

Establishing rules related to compliance and addressing changes inlegislation involving organizations specializing in legal risk and building process flows related to contracts, and monitoring IP infringementby other companies and taking appropriate measures

Foreign exchange risks

Sharp fluctuations in exchange rates

Forward exchange contracts to minimize risk, passing on increases toselling prices, etc.

Risks of dependence on
specific buyers

Reduction in parts supply due to changes in theconfiguration of parts handled by a specific supplieror changes in policies for transactions with a partnercompany

Multifaceted business development, diversifying earnings throughnew expansion into medium- to long-term priority businesses, andactivities to build stable business relationships with customers

Credit risks

Uncollectible debt due to rapid deterioration in customer business performance

Screening companies when entering into transactions and setting
transaction terms based on ongoing considerations related to credit
risk

Risks related to demand
trends for I-PEX products

Deterioration of the economic environment progresses, slowdown in launch timings of new-model
end-products or in the growth of end-products markets and resulting changes in purchase trends andparts procurement trends among customers

Diversifying risk through multifaceted business development, appropriate reallocation of production facilities, and reassignment of necessary personnel based on medium- to long-term demand forecasts

Risks related to goodwill
and other intangible fixed
assetsImpairment loss due to declining profitability as aresult of business not progressing according to plan

Regularly verifying business profitability and risk and revising plans asnecessary

Coordination between Audits, Accounting Audits and Internal Audits
Outside Directors who are Audit & Supervisory Committee Members attend meetings of the Board of Directors
and other bodies, receive briefings on the status ofbusiness execution, internal controls, and other matters,
and supervise management. In addition, comprising the
Audit & Supervisory Committee, they review internal
audits and audits by the committee based on audit

plans and the auditing system and methods of the independent auditors, and also receive reports on the audit
findings of the independent auditors and Internal Auditing. The independent auditors and Internal Auditing
also exchange information and opinions and work tofurther enhance audits.

Role of Internal Auditing
We have established Internal Auditing that is independentof divisions involved in business execution. The officeaudits the business processes of the divisions and works
to discover and prevent non-compliance and to improve
processes. Reporting directly to the Representative Director, the administrative division (internal control division)
serves as our Internal Auditing, consisting of six permanent members and three other employees with concurrent duties (four Japanese and five non-Japanese). With
the objective of undertaking audits from diverse perspectives, the team is a mix of professionals with management-­level experience with varying career backgrounds infinance, production management, sales, business planning, and other fields, as well as personnel possessing
specialist qualifications, including internal auditors certified by the Institute of Internal Auditors.
The internal control division conducts Group-widechecks concerning operational functions and provides
day-to-day guidance. It also undertakes on-site inspections

and other internal audits and is responsible for implementing and operating the Group’s audit system.
The results of audits are regularly reported to theRepresentative Director and are also directly reported to
the Audit & Supervisory Committee Members and relevant directors.
In addition, the Audit & Supervisory Committee, Internal Auditing, and independent auditors coordinate witheach other, reporting and exchanging information on
audit schedules, auditing progress, the status of internal
controls, and other matters. They also work to qualitatively improve the internal control division throughaudits of it and strengthen the Group’s overall control
and supervisory functions.
Also, in the fiscal year ended December 2023, eachdivision began conducting a self-assessment of the effectiveness of controls in the organization to identify any
issues. The control self-assessment, or CSA, is conductedusing a questionnaire format.

Risk Management System
We created the Internal Manual for Crisis Management,
the foundation of our risk management system, and areworking to fully integrate it into all divisions. Risk management overall is overseen by the General Affairs Division,
which monitors and addresses risks that it identifies inconnection with business execution by the Group.
If a major accident, disaster, scandal or other such

event occurs, we establish a crisis management headquarters that is led by the Representative Director andmade up of necessary personnel and takes measures in
response to the crisis. Also, if it becomes necessary toaddress new risks that arise, we promptly assign responsibility for them to a Director.

40

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I-PEX Inc. Integrated Report 2024

Overview

Message from an Outside Director

we will encourage organic collaboration
across the Group to help enhance
Yoichi Wakasugi
Outside Director(Audit & Supervisory
Committee Member)

Striving to make recommendations drawing on
corporate legal expertise and bringing a governance perspective to risk management
I have been involved in numerous corporate legal projects
over the years. Drawing on my accumulated experienceand knowledge, I strive to make recommendations that
can help the Group avoid legal risks and prevent disputes.
In terms of the company’s management, once I have correctly ascertained the facts underlying the assumptions
involved, I focus on gauging whether a conclusion being
reached is reasonable and whether it follows from proper
procedures. I also pay attention to whether the outcome isverified and put to use in subsequent management activities. In addition, in helping to oversee the Company’s
management, I refer to the opinions that the various other
Audit & Supervisory Committee Members offer based on
their own expertise and knowledge.
I think the I-PEX Group is an organization with an open
corporate culture that encourages people to speak theirminds. Regarding the operation of the Board of Directors,
agenda items and other matters are explained in advance,
the meetings proceed efficiently, and issues are subsequently confirmed. We also hold individual discussions with
Directors. In our deliberations, we incorporate feedback
from dialogue with shareholders as appropriate, exchanging constructive opinions on a range of issues, including theformulation of the medium- to long-term management
plan, the verification of its progress and response measures,and sustainability initiatives. I appreciate an environment inwhich our suggestions as Outside Directors are taken seriously and incorporated into discussions.
With the appointment of two new female Outside­Directors in fiscal year 2024, I believe that bringing a greater
diversity of opinions to bear on the Board of Directors willfurther enhance its effectiveness. By continuing to assess
the Company’s progress and discuss response measures, I
want to help enhance corporate value.
I also find that, in terms of risk management, including
the implementation of an internal control system, theMateriality-Driven
Value Creation

Reinforcing the Management
Foundation via Materiality

Financial & Corporate
Information

Financial Information

Through ongoing dialogue with overseas sites,

corporate value

Message from the President

Company has made a certain degree of progress. For
example, after listing up potential risks, the Company has
formulated and disseminated manuals and put a compliance consultation desk in place. We have also received
reports from Internal Auditing and held discussions withthe executive side. We will continue to take steps to reinforce risk management.

Sustainable growth depends on stronger global
group governance
Given that overseas sales account for around 70% of the
I-PEX Group’s business, to ensure sustainable growth going
forward, it will be critical to strengthen global group governance. With this in mind, the Company newly set up a Group
Governance Task Force in fiscal year 2023 and made otherefforts to strengthen group governance, including at overseas sites. We expect the effective implementation of governance at various group companies to further foster organic
collaboration across the Group. As Audit & Supervisory
Committee Members, we will continue to pursue dialogue
with overseas sites to help enhance corporate value.
2023 marked the 60th year since the founding of the
I-PEX Group. Carrying the business forward beyond thisimportant milestone will require the Group to achieve thesix points of materiality it has set out toward achieving thegoal of becoming an “Innovative Product development &Engineering solutions eXpert,” as it works to continuously
enhance corporate value and address social issues. We willcontinue to do all that we can to fulfill our duties as Audit &Supervisory Committee Members.

Audit & Supervisory
Committee meeting.
In fiscal year 2023,
the Committee held
discussions at 15
meetings.

Operating Results
In the consolidated fiscal year under review, the global
economy experienced a moderate slowdown in the midstof numerous challenges, including ongoing high costs of
raw materials and energy as a result of the prolonged
situation in Ukraine, climbing inflation rates mainly indeveloped economies in Europe and the U.S. and declining demand due to accompanying monetary tightening, aslowdown in the Chinese economy stemming in partfrom issues in the real estate market, and mounting tensions in the Middle East.
In Japan, although prices of raw materials continued

to rise and the yen continued to weaken, capital investment and personal consumption picked up and theeconomy showed signs of a gradual recovery.
In this context, consolidated net sales were down 1.1%
year on year to ¥59,014 million. Meanwhile, we recorded
an operating loss of ¥759 million compared with operating income of ¥978 million a year earlier, an ordinary
loss of ¥555 million compared with ordinary income of¥2,120 million a year earlier, and a net loss attributable toowners of parent of ¥1,269 million compared to net
income of ¥168 million a year earlier.

Financial Position
Total assets at the end of the consolidated fiscal year
under review decreased ¥634 million from the end of
the previous fiscal year to ¥91,603 million. The maindecreases included work in process of ¥979 million,
machinery, equipment and vehicles of ¥781 million andtools, furniture and fixtures of ¥592 million, and themain increases were notes and accounts receivable of¥1,655 million.
Liabilities decreased ¥675 million to ¥33,215 million.
The main decreases were long-term accrued expensesof ¥1,098 million and accounts payable – other of ¥420
million, and the main increases included long-termborrowings of ¥983 million.
Net assets increased ¥41 million to ¥58,387 million
as a result of a decrease in retained earnings of ¥2,011
million attributable to dividends from surplus and otheritems and increases in foreign currency translation
adjustment of ¥1,780 million from the impact of foreignexchange rate fluctuations and in accumulated adjustment for retirement benefits of ¥275 million.

Cash Flows
Operating cash flow in the consolidated fiscal year
under review increased ¥6,868 million year on year(¥9,669 million increase in the previous fiscal year). Thiswas chiefly attributable to a loss before income taxes of¥688 million, the recording of depreciation of ¥6,645
million, a decrease in inventories of ¥1,303 million, an
increase in trade payables of ¥458 million, and anincrease of ¥598 million in advances received, which
offset an increase of ¥1,804 million in trade receivables.
Investing cash flow decreased ¥2,781 million (¥6,165
million decrease the previous fiscal year) from proceeds from sale of property, plant and equipment of¥1,301 million being more than offset by the purchaseof property, plant and equipment of ¥3,998 million, andpurchase of intangible assets of ¥86 million.
Financing cash flow decreased ¥3,066 million(¥3,690 million decrease the previous fiscal year) as aresult of a net increase in proceeds from long-termborrowings of ¥5,200 million being more than offset by
the net decrease in short-term borrowings of ¥1,080
million, repayments of long-term borrowings of ¥4,509
million, repayments of lease obligations of ¥588 million,
repayments of long-term accounts payable – other of¥1,344 million, and dividends paid of ¥742 million.
As a result, cash and cash equivalents at the end of
the period increased ¥1,313 million from the end of theprevious fiscal year to ¥15,582 million.

Capital Expenditure
Capital expenditure in the consolidated fiscal year
under review totaled ¥4,971 million and was primarily
for production facilities. In the electric/electronic components business, ¥2,422 million was invested inmachinery and equipment, including molds and automatic machines, to augment production capacity. In theautomotive components business, investments of ¥2,355

million were made in molds, automatic machines, andother machinery and equipment also for the purpose ofaugmenting production capacity. In the equipment business, investments of ¥84 million were made to maintainproduction capacity. Capital expenditures of ¥109
million were also made in administrative divisions.

42

43

I-PEX Inc. Integrated Report 2024

Overview

Materiality-Driven
Value Creation

Message from the President

Reinforcing the Management
Foundation via Materiality

Financial & Corporate
Information

44

Performance Highlights
Net Sales

Operating Income

Number of IP Applications/Number of IP Rights Held

R&D Expenses(Million Yen)(%)

(Million Yen)(%)

(Million Yen)

(Number)

80,000

80.0

8,000

18.0

4,000

200

59,64354,53154,01959,014

60.0

6,000

13.5
10.3

4,000
40.0

40,000
33.7

31.1

28.6

29.1

0

20.0

0

Net sales  

2020

2021

2022

2023

978

2020

Operating income  (Million Yen)

11.5

(%)

(Million Yen)

12.0

6,000

6.0
4.9

2,000

3.6

2,672

2.6

0

3.0

2,120

1,382

–555
–0.9
2019

2020

Ordinary income  

2021

2022

2023

–3.0

2022

2023

–4.5

0

(%)

(Yen)

80.0

400

81,90861.8

60.4

49,79561.8
56,775

0.3

0.2

168

2020

2021

2022

63.1

63.6

58,34658,387

2023

0
2019
Total assets  

2020
Net assets  

2021

2022

2023

Shareholders’ equity ratio

(FY)

84.1

92.7

87.7

75.5

54

25
13.7

0

2019

(FY)

54.83 25.0 61.50 25.0

15.8

(%)

40.0

9.08

–200.02020

2021

Net income (loss) per share (EPS)  
Dividend payout ratio

2022

56

15.7
55

17.0

17.5

60

65

15.0

40

10.0

20

5.0

15.9

12.3

7.3
2020

2021

2022

0
2023

2023

Dividend per share

0
2019

(FY)

Mid-career hiring rate

(t-CO 2)12

80,000960,0004,000

640,0002,000

320,000

0

0

0

9.5
5,928

5,843

10.8

(FY)

2019
Employees  

2020

2022

2023

(FY)

Women in managerial positions
Percentage of women in managerial positions(Years)

10.2

2021

CO2 Emissions*1(Persons)

8,000

2020

11.2

11.3

66,190
5,667

5,293

57,11057,557

5,007

49,061

0

–58.5

–200
2019

16.5

24.5

Employees/Average Years of Service

200.0

40.0

Number of IP rights held

Women in Managerial Positions/
Percentage of Women in Managerial Positions

60

New graduate hiring rate  

200

50.0

(FY)

2022

0

–68.420

Number of IP applications  

2021

(%)

6,000

40.7

2020

20.0

400.0

49.5

2023

0
2019

(FY)

(Persons)

60.0

20.0

25,000

2023

80

–1.4
–2.2
–1,269

440.5

0

500

(%)

316.8240.0

49,51551

100

Net Income (Loss) Per Share/Dividend Per Share/
Dividend Payout Ratio(Million Yen)

80,421

2022

Hiring Rates for New Graduates and Mid-Career Personnel

Net income (loss) attributable to owners of parent
ROE  
ROA

91,603

2021

50
1.4

1,000

74

(%)

–6.0
2019

100,000

92,2372020

6.0–3,000Ordinary income percentage

91,690

2019

16.3

1,151

1,084

12.0

2.3

1.3
925

1,171

94

0

0

(FY)

86.3

6.8
2.0

1,216

50

1,000

R&D expenses

5,921
11.2

3,000

(FY)

Total Assets/Net Assets/Shareholders’ Equity Ratio

100

75

0

–2,00050,000

2021

9.0

4,000

2,077

85

Operating income percentage

7,704
6,000

2,050

1,500
1,330

–1.3

Net Income (Loss) Attributable to Owners of Parent/ROE/ROA

8,000

75,000

0
–759

2019

Gross profit margin

Ordinary Income

1.6–2,000

(FY)

130

4.5

5.3
2.8

0

2,090

1,630

150

2,547
2,000

1,505

3,033

3,000

9.0

2,911
2,000

30.3

20,000

2019

2,000

6,877

66,87160,000(Number)

2021

Average years of service

2022

2023

2019

(FY)
2

Scope 1+2*   

2020

2021

Scope 1  

Scope 2

48,674

48,326

48,385

735

289

2022

2023

(FY)

*1 The data covers production and equivalent business sites.
*2 Scope 1: GHG emissions directly released from the company
Scope 2: Indirect GHG emissions released from the energy purchased by
the company
Figures for fiscal years 2019 to 2021 are totals of Scope 1 and Scope 2.

45

I-PEX Inc. Integrated Report 2024

Overview

Seven-Year Financial Summary
Consolidated fiscal year
Fiscal year-end

Materiality-Driven
Value Creation

Message from the President

Financial & Corporate
Information

Corporate Overview/Stock Information (as of December 31, 2023)

55th

56th

57th

58th

59th

60th

61st

12/2017

12/2018

12/2019

12/2020

12/2021

12/2022

12/2023

Corporate Overview
Trade name

I-PEX Inc.

Head office12-4 Negoro, Momoyama-cho,
Fushimi-ku, Kyoto, JAPANOperating Performance (Million Yen)

Corporate Website
https://corp.i-pex.com

Net sales

51,92552,67454,01954,531

66,87159,64359,014

Cost of sales

36,34338,291

38,55037,58444,31541,54841,824

Date of incorporation

July 10, 1963

Gross profit

15,582

14,383

15,468

16,94722,55518,095

17,190Paid-in capital

10.968 billion yen

SG&A expense

12,97813,664

13,962

14,036

15,678

17,116

17,949Operating income

2,604

719

1,505

2,911

6,877

978

–759

Head countNon-Consolidated: 1,962
Consolidated: 5,007

Ordinary income

2,509

660

1,382

2,672

7,704

2,120

–555

Net income (loss) attributable toowners of parent

Main banks

1,667–1,882

925

1,151

5,921

168

–1,269MUFG Bank, The Bank of Kyoto,
Sumitomo Mitsui Banking Corporation,
Mizuho Bank

Capital expenditure

11,98010,535

12,765

9,631

10,697

5,509

4,971

Depreciation

5,730

5,726

5,578

6,429

6,898

7,329

6,645

R&D expenses

2,234

2,530

2,090

2,050

2,077

2,547

3,033

Financial Position (Million Yen)
Current assets

30,10629,34536,03035,925

41,13941,19343,281

Total assets

64,92966,82080,421

81,90891,69092,23791,603Current liabilities

11,144

13,905

16,46817,991

20,62919,673

18,881

Interest-bearing debt

7,767

12,983

17,58017,092

16,735

17,656

17,266

Net assets

46,877

43,84549,795*49,51556,77558,34658,387

Stock Information
Stock exchange listing

Tokyo Stock Exchange, Prime Market

Stock code

6640

Shareholder registryadministrator

Mitsubishi UFJ Trust and Banking Corporation

Total number ofissuable shares

35,000,000

Total number ofissued shares

18,722,800

Number of shareholders 7,193

Cash Flows (Million Yen)
Operating cash flow

6,805

4,370

5,994

9,195

12,809

9,669

6,868

Investing cash flow

–10,547–9,296–8,485–6,632–7,946–6,165–2,781

Financing cash flow

792

4,090

7,937

–2,558–3,236–3,690–3,066

7,905

6,872

12,182

11,71913,797

14,26915,582

Cash and cash equivalents
at end of period

Reinforcing the Management
Foundation via Materiality

Major Shareholders (Top 10)
Number ofshares held

Shareholding
ratio (%)

DMC Co., Ltd.

6,821,400

36.77

The Master Trust Bank of Japan, Ltd. (Trust Account)

2,185,100

11.77

Shareholder name

Per Share Data (Yen)

Custody Bank of Japan, Ltd. (Trust Account)

597,700

3.22

Net income (loss) attributable toowners of parent

INTERACTIVE BROKERS LLC

573,700

3.09

Employees’ Stockholding

553,980

2.98

Daiki Konishi

300,000

1.61

J.P.MORGAN SECURITIES PLC FOR AND ON BEHALF OF ITS CLIENTSJPMSP RE CLIENT ASSETS-SETT ACCT

224,366

1.20

Net assets per share
Dividend per share

99.73–112.58

54.83

61.50

316.82

9.08–68.42

2,799.15

2,617.79

2,656.10

2,641.63

3,060.94

3,139.58

3,141.98

25.00

20.00

25.00

25.00

50.00

40.00

40.00

JPMorgan Securities Japan Co., Ltd.

197,043

1.06

30.0

27.3

28.6

31.1

33.7

30.3

29.1

DFA INTL SMALL CAP VALUE PORTFOLIO

188,000

1.01

155,500

0.83

Financial Indicators
Gross profit margin (%)
Operating income percentage (%)

5.0

1.4

2.8

5.3

10.3

1.6

–1.3

THE BANK OF NEW YORK MELLON 140040

Ordinary income percentage (%)

4.8

1.3

2.6

4.9

11.5

3.6

–0.9

* The Company owns 172,194 shares of treasury stock, but these have been excluded from the above table.
Treasury shares (172,194 shares) have been deducted from the shareholding ratio.

ROE (%)

3.6

–4.2

2.0

2.3

11.2

0.3

–2.2

ROA (%)

2.7

–2.9

1.3

1.4

6.8

0.2

–1.4

Shareholders’ equity ratio (%)

72.1

65.5

61.8

60.4

61.8

63.1

63.6

Share Distribution by
Owner Category

Dividend payout ratio (%)

25.1

–

49.5

40.7

15.8

440.5

–58.5

(Unit: 1,000 Shares)* The major change in net assets in the 57th fiscal year is the result of a capital increase through a public offering conducted in December 2019.

Treasury shares

172

0.9%

Individuals, etc.

4,788

25.6%

Foreign corporations, etc.

3,004

16.0%

Financial institutions

3,261

17.4%

Securities companies

587

3.1%

Other companies

6,908

37.0%

46

I-PEX Inc.
12-4 Negoro, Momoyama-cho, Fushimi-ku, Kyoto, JAPAN
Tel: (81) 75-611-7155
https://corp.i-pex.com