Integrated Report 2023
(January 1, 2022 to December 31, 2022)

01

I-PEX Inc. Integrated Report 2023

Overview

Value Creation

Segment Overview

Sustainability

Management Foundation

Financial Information

Corporate Overview/
Stock Information

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 to create abrighter 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”
Our reason for existing

Open up a new field that
constantly generates
excitement for the world“How”“What”

Our capabilities and values

Our approach to business expansion

Open and enlarge the
sharpest tip byconnecting people,
wisdom, and technology

Surpassing expectations
through inspired
manufacturing andcreativity

Contents
01 Overview
01
03
05
07
09

Corporate Identity
Growth History
I-PEX Products Contributing to the Digital Society
The I-PEX Group Network Connecting the World
Challenge & Innovation
09 “Sharpest Tip” Technologies for the Digital Society
11 Building a Foundation for Creating Innovation

13 Value Creation
13 Message from the President
17 Value Creation Process
19 Materiality
21	I-PEX Vision 2030 Medium- to Long-Term Management

Strategy
Priority Measure 1:	Growth by Mixing Core Businesses
and Priority Businesses
Priority Measure 2: Evolution of Business Models
Capital Policy:
Capital Efficiency and Optimization

25 Segment Overview
26 Connectors
27 Sensors / Machinery & Equipment
28 Molded & Assembled Parts

29 Sustainability
29	Message from the Sustainability Officers
31	Environment
33	Society

36 Management Foundation
36 Corporate Governance41	Directors, Audit & Supervisory Committee Members,
43
45

and Executive Officers
Compliance and Risk Management
Message from an Outside Director

46 Financial Information
46
48

Financial Information
Performance Highlights

50 Corporate Overview/Stock Information
Scope
PeriodI-PEX Inc. and 22 companies in the I-PEX Group (21 of which are consolidated subsidiaries)
Fiscal year 2022 (January 1, 2022 to December 31, 2022)
This report also contains information from other periods in order to provide the latest
information and make comparisons with past fiscal years.
Publication Date August 2023
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 theirrightsholders, who have authorized their use by I-PEX.

02

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I-PEX Inc. Integrated Report 2023

Overview

Value Creation

Segment Overview

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

Sustainability

Management Foundation

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.

2017.07
Daiichi Seiko (M)Sdn. Bhd.

Financial Information

2006.11
Listed on the
JASDAQ Securities
Exchange.

2007.05
Matsue Dai-ichi
Seiko Co., Ltd.

2020.01
Okinawa Plant

2021.12
Tech Forest

Corporate Overview/
Stock Information

04

2004–
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

1976-1987

Established as a High
Precision Mold Manufacturer

Business Expansion andBreakthrough in Commissioned
Production

1963

1964

1968

1971

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.

1976

1979
1980

1972

Opened Tokyo Office in Shinagawa,Tokyo, Japan

1973

Received orders for mass production ofmolded connectors, and started commissioned production of precision plastic
components.

1973
Precision plastic components on which mass
production commenced

1988

Started commissioned production of
automobile components.
Established Philippine, D-I Inc. in thePhilippines.

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

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

1986

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

1997

2000

Started the world’s first mass productionof Ramps, an important component usedin hard disk drives (HDDs).
Established Thai Dai-ichi Seiko Co., Ltd.
(now I-PEX (Thailand) Co., Ltd.) in Chonburi,
Thailand.
Established Touchstone Precision, Inc.
(now I-PEX USA Manufacturing Inc.) in
Auburn, Alabama, U.S.A.
Established PT. Pertama Precision Bintan(now PT IPEX Indonesia Inc) in Bintan,
Indonesia.

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

2005

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

A company withtechnical capabilities
to implement digitalmanufacturing(now I-PEX Viet Nam Co., Ltd.) in Ho Chi
Minh, Vietnam.
Listed on the JASDAQ Securities
Exchange.

2000.12
PT. Pertama Precision Bintan

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

2004

2006 Established Vietnam Dai-ichi Seiko Co., Ltd.

HDD Ramp

1993

Business Field Expansion andBecoming a Listed Company

2000.12
Touchstone Precision, Inc.

Building Systems for Production
in Optimal Global Locations

1994

Sealing resin molds forsemiconductors
1963
Molds at the time of thecompany’s founding

1988–2003

Established Singapore Dai-ichi Pte. Ltd. (nowI-PEX Singapore Pte. Ltd.) in Singapore.

Started to export molds for precision
plastics to U.S.A., Canada, Mexico, andSingapore.
Opened a representative
office in Singapore

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

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

Released GP-SYSTEM: MARK-I, the world’s
first fully automatic semiconductor
molding equipment.

1993.10Singapore
Dai-ichi Pte. Ltd.

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.

2019

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

2020

Established Okinawa Plant in Uruma,
Okinawa, Japan.
Opened I-PEX Campus in Ogori, Fukuoka,
Japan.
Changed the company name to I-PEX Inc.

Wheel Speed Sensor

Angle Sensor

2021

Opened new Tech Forest building on I-PEX
Campus.

2022

Stock listing transferred to the Tokyo Stock
Exchange’s Prime Market.
Made subsidiaries of KRYSTAL, Inc. and its
affiliates.
Opened the Okinawa Innovation Center in
Uruma, Okinawa, Japan.

ESTORQ® Electrostatic
Capacitance Torque Sensor

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

Micro-Coaxial Connectors
CABLINE® Series
Board-to-Board Connectors
NOVASTACK® Series

2023 Merged KRYSTAL Inc. and its affiliates andWater Meterchanged the company name to I-PEX
Piezo Solutions Inc.

Micro RF Coaxial
Connectors
MHF® Series
FPC/FFC Connectors
MINIFLEX® Series

Smart Entry KeyPower Connectors
ISH® Series

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I-PEX Inc. Integrated Report 2023

Overview

Value Creation

Segment Overview

Sustainability

Management Foundation

Financial Information

Corporate Overview/
Stock 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.
Based on the manufacturing DNA we have cultivated, we will support changing lifestyles in thedigital society by serving as an “Innovative Product development & Engineering solutions eXpert”
that creates new value one step ahead of the needs of the times.

Life

07 Power Connectors

08 Angle Sensor

Resistant to high heat and vibration; utilized in automobile headlights, etc.

Detect the rotation angle andspeed of engine cranks and cams.

02
10

03
01

01 Micro-Coaxial Connectors

09 Smart Entry Key

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

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

08
02 Micro RF Coaxial Connectors

We supply aircraft engine components using metal processing
technology.

07

04

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

10 Turbine shrouds

Industry
09
12

03 Board-to-Board (FPC)

11 Semiconductor molding

13

Connectors
Support high-speed communication and high-frequency standards
with unique noise control
technology.

11

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

05
04 Forensic-related parts

Microfluidic analysis chips used in
DNA analyzers.

06

Digital Infrastructure

12 Electrostatic Capacitance

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

14

05 Ramps for hard disk drives

06 Ultra-Small Active Optical Module

14 Smell Sensor

13 Piezoelectric MEMS foundry

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

Optical connectors modules fornext-generation optical interconnection.

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

Provide superior single-crystal
piezoelectric deposition and
MEMS processing technologies

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I-PEX Inc. Integrated Report 2023

Overview

Value Creation

Segment Overview

Sustainability

Management Foundation

Financial Information

Corporate Overview/
Stock 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 forcustomers. 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

956
9EuropeApprox.

employees

1employeesJapan

500 companies

100 companies

2,225
18

Southeast Asia

Approx.

2,010
8

employees

Number ofcustomers
Approx.

employees

Other regions

250 companies
Number ofcustomers

sites

Number ofcustomers
Approx.

Southeast Asia Production Bases• France• Singapore (2)• Malaysia• Indonesia• Philippines• Thailand• Vietnam

Over• Singapore

20 companies

150 companies

China/East Asia Production Bases

Sales Offices• Shanghai (3)• Guang Dong

Japan Production and R&D Bases• Shanghai• Guang Dong
• Hong Kong
• Taiwan• Korea
Sales Offices

Sales Office

200 companies

sites

Number of­employees and sites

Europe 
Sales Officesites

Number ofcustomers

Number of­employees and sites

site

Number ofcustomers
Approx.

95
3

sites

Number ofcustomers

Number of­employees and sites

7

Number of­employees and sites

employees

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

North America Production Base
Sales Offices• Alabama• 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

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I-PEX Inc. Integrated Report 2023

Overview

Value Creation

Segment Overview

Sustainability

Management Foundation

Financial Information

Corporate Overview/
Stock Information

Challenge & Innovation

Challenge“Sharpest Tip” Technologies for the Digital Society

Single-Crystal Films a Key to Higher-Speed Communications

New Challenge of Piezoelectric MEMS Business

MEMS*1 is a key technology supporting next-generation manufacturing. It is widely used forsensors and actuators and its market continues to grow each year. As a part of its efforts toresearch and develop “sharpest tip” technologies, the I-PEX Group is focused on the potential of MEMS and has launched a new company, I-PEX Piezo Solutions Inc., which has expertise in piezoelectric MEMS processing and single-crystal deposition technologies forpiezoelectric thin films.
Interview

Common Poly-Crystal

Single-Crystal*2 A device used in the transceiver circuits of communication terminals; characterized by accepting only signals in the specified frequency band

For details on KRYSTAL® Wafer, refer to the following:https://www.i-pex.com/ips/info/articles/single-crystal-technology

Innovative Product development & Engineering solutions eXperts
Continuing to Take on Challenges

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

About MEMS, a Next-Generation Key Technology
speakers. Characteristics such as device size, precisionand power consumption vary greatly depending on thelead zirconate titanate (PZT), a type of piezoelectricmaterial, that is used. Therefore, both film depositionand processing technologies are important.
Expansion of MEMS Market(According to I-PEX research)(1M USD)

10,0002.4 times

Other MEMS

MEMS is an important fundamental technology of the
I-PEX Group, and we can handle every process
involved in its manufacture, from design to depositionand processing.
Many applications exist in the world, but there is alimited number of companies that possess the fundamental technologies on which they are founded. When
products can be commercialized using these fundamental technologies, value is provided to society in amanner that maximizes the potential of the materials.
In this respect, we have a competitive advantage thatcannot be matched by other companies.
In particular, the smell sensor, our first proprietarybrand and a product we are looking to develop for theB2C market, is our product that is closest to consumers.
By sustainably fulfilling needs and working to strengthen
partnerships via communication through our products,

we hope to accelerate the shift from so-called “product-­out” manufacturing to innovation for value-adding, which
is more service oriented.
We previously developed technologies primarily forpassive parts. However, with digitalization rapidly progressing and lifestyles changing, MEMS will be a growtharea going forward, which is why we decided to enter themarket in 2015. We see MEMS as a potential test case for
expanding our business from manufacturing to value-­adding in all the business areas in which we are involved,
from connectors, sensors, molds and assembly parts tomachinery and equipment. Going forward, we will continue to take on challenges in the spirit of a startup
company and push forward as a united I-PEX Group to be
the “Innovative Product development & Engineeringsolutions eXpert” that solves problems for customers
pioneering the next generation.

Piezoelectric MEMS
0

2020

2026 Forecast

Strength in Single-Crystal Deposition for Lead-Free Materials
We established I-PEX Piezo Solutions Inc. in January 2023
after acquiring KRYSTAL, Inc. and its affiliates as subsidiaries in June 2022. This new company will combine thepiezoelectric MEMS design, deposition and device processing technologies cultivated by I-PEX with the single-­
crystal piezoelectric technology (KRYSTAL® Wafer) as wellas lead-free deposition research and development of
KRYSTAL. In doing so, we aim to acquire personnel with ahigh level of technical expertise and specialized knowledge, and to expand our business as a piezoelectric
MEMS foundry capable of a broad range of solutions.
Single-crystal deposition for lead-free piezoelectricmaterials is a “sharpest tip” technology in which wehave overwhelming strength. PZT are used in a variety
of applications thanks to their superior characteristics.
However, they contain trace amounts of lead, so theirVS*1 Abbreviation of Micro Electro Mechanical System.

Kenji Ogata

MEMS refers to devices with a three-dimensional structure that consolidate micro-processing technologies
such as electronic circuits, sensors and actuators on asingle semiconductor substrate. These devices are usedin many digital products around the world, including
smartphones and consoles, and their potential is being
closely watched in various fields.
MEMS can be roughly divided into electrostatic andpiezoelectric types. We are focused on developing technologies specifically for piezoelectric MEMS. A key
feature of such devices is their piezoelectric element,
which converts mechanical changes, such as a change
in vibration or pressure into electrical changes, or, conversely, electrical changes into mechanical changes.
The former is found in microphones and the latter in

When light is shone on a common poly-crystal film from one direction, the light isdispersed at the seams between the crystals. However, single-crystals are uniform insize and form a line, thus light is delivered perfectly straight. This optical transmittance is a key to increasing the speed of communication devices and RF filters*2.

impact on the environment is a concern. This is why thedevelopment of lead-free piezoelectric materials was
an issue.
We have already succeeded in single-­crystal deposition for lead-free piezoelectric materials such as aluminum nitride (ALN), which is expected to be utilized in
next-generation 5G high band applications. Moreover,from the end of fiscal year 2022 to January 2023, we
became the first in the world (according to our research)
to succeed in single-crystal deposition of lithium niobate(LN) on a silicon wafer. Single-crystal films are characterized by high optical transmittance compared to common
poly-crystal films. If such films can be commercialized,
they can be expected to contribute significantly tofurther accelerating communication speeds in the 5.5G
and 6G eras.

Utilization of “Sharpest Tip” Technologies
Wine Quality Evaluations Using Smell Sensors
We are working with customers to help them use
our smell sensors more effectively in their chosen
applications, supporting the demonstration of thistechnology in the field.
Specifically, working with professors of the
Research Faculty of Agriculture at Hokkaido University, we developed a real-time remote monitoring
system with smell sensors for the wine fermentation
process and aroma constituents. The system was
exhibited at Agribusiness ­Creation Fair 2022 held in
October last year. Visually rendering the aroma simplifies the highly involved measurements that normally require a keen sense of smell and expert
technique. This includes measuring for the ripenessof the grapes and the level of alcohol fermentationand evaluating quality before and after shipping. The
system is expected to help alleviate farming labor

shortages and facilitate technology transfer related
to the fermentation process.

Exhibiting at Agribusiness
Creation Fair

Using a wireless device toconfirm wine fermentation
progress and aroma constituents
via smell sensors

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I-PEX Inc. Integrated Report 2023

Overview

Value Creation

Segment Overview

Sustainability

Management Foundation

Financial Information

Corporate Overview/
Stock Information

Challenge & Innovation

Innovation

Building a Foundation for Creating Innovation
Changing Behavior and Reforming Organizational Culture

Aware that a foundation that supports innovation is essential to realizing the Group’s I-PEX Vision
2030, we are working hard to build such a foundation. This involves changing the conservativemindset and way of acting of the past as well as adopting a mindset of not fearing failure andthe spirit to take on challenges without giving up, fostering a renewed corporate culture toproactively support this behavior.

A Foundation for Creating Innovation
To more fully embody our corporate identity (CI) andcontribute to a comfortable and secure digital society,
we are working to create an environment in which
diverse personnel can demonstrate and enhance theirtalents and generate better ideas. I-PEX Campus, anoffice complex using a college campus we renovatedunder the “KNOT” concept, serves both as a venue fostering more active communication both inside andoutside the company and as the I-PEX Group‘s core basebringing together the technical and corporate divisions
as a place for creating innovation where ideas and inspiration are born. As the main site for human resource
development, the campus is also helping us enhance
our corporate value through stronger branding, by

hosting factory tours where we showcase our products
and the history of the company.

I-PEX Campus received an award in the Best Renovation category at the
31st BELCA Awards, February 2022

Accelerating New Business Development and Open Innovation*
Pursuing a growth strategy through a combination of coreand priority businesses, we are focusing on new businessdevelopment supported by our core technologies.
The Okinawa Innovation Center is pursuing development related to hydrogen and renewable energy inpartnership with universities and other corporations
within the prefecture, with support from the Cabinet
Office and the prefectural government. This development will lead to the creation of environmental businesses that fulfill our commitment to the points ofmateriality of helping to tackle climate change andcontribute to a recycling-based society needed for thecontribution to a comfortable and safe digital society
supported by innovation. We are working to help bringabout a carbon-free society by providing solutions thatcombine a series of mechanisms for generating

electricity with renewable energy and creating, storing,transporting, and using hydrogen without wasting
surplus electricity.

Okinawa Innovation Center that will serve as a co-working factory

A Co-Working Factory for People Inside and Outside the Company to Come Together for Co-Creation
co-working factory, the Center will continue to partner
In recent years, co-working spaces and offices havewith universities, research institutes, and companies
been coming into use for stimulating business co-­inside and outside the prefecture to create a manufaccreation (= generating new ideas). The Okinawa Innoturing infrastructure that gives shape to ideas. By purvation Center will serve as a co-working factory, wheresuing the practical application and joint developmentideas take shape for the purpose of the co-creation ofof the technology, expertise, and ideas held by univermanufacturing.
sities, research institutes, and co-creation partner comAlong with the use of hydrogen and renewablepanies, we will rapidly expand into as-yet-­unexplored
energy, the Center is also currently working on thebusiness areas.
application of the smell sensor in the awamori (anOkinawan distilled spirit) industry. Going forward, as a
* Creating new ideas with an outside partner

A Place for Technology Transfer
The Engineering Academy is a place for young employees to learn the basics of being an “Innovative Productdevelopment & Engineering solutions eXpert.” It hosts six
courses: resin molding die design, press die design, automated assembly machine, electrical design, die manufacturing, and automated assembly machine manufacturing.
The courses are taught by highly experienced company
instructors, and the intensive curriculum is designed to
impart knowledge and skills in a short period of timethrough classroom lectures with custom teachingmaterials and hands-on training based on actual job
requirements. The academy speeds up the skill acquisition process of participants through a systematic courseof study and the attentive support of the instructors. This,
along with the practical training provided, serves todevelop personnel who are ready to start making a contribution immediately. Going forward, we will begin
accepting participants from overseas sites and take steps
to expand the curriculum to include technologies not
limited to proprietary Group technologies.

Courses in progress.
(From the left: die design, automated assembly machine design, electrical design, die manufacturing, automatic assembly machine manufacturing)

Creating a New Foundation
Development of High-Frequency, High-Speed Transmission Routes Supporting the Digital Society
Communication services that are indispensable to everyday life
are spreading throughout the world. With the rapid increase indata volume, data transmission is getting faster and electricity
consumption is also increasing substantially.
Through the development of optical electronic technologies
in addition to conventional high-frequency and high-speed electrical transmission technologies, we will work to meet demand
for the large-capacity, high-speed communication of various
electronic devices and for a lower environmental impact.
At the new Tokyo R&D Center, under construction, we aim tocontribute to a comfortable and safe digital society supported byinnovation by expanding resources for the design, measurement,
and analysis of high-­
frequency, high-speed transmission andoptical and wireless transmission, centering on a 3m anechoic
chamber. We will continue to take on the challenge of developing
optical, electrical, and wireless transmission technologies that caterto demand for high-speed, large-capacity communication and low
power consumption.

A computer rendering of the new Tokyo R&D Centerscheduled to open in 2025 in Machida, Tokyo.

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I-PEX Inc. Integrated Report 2023

Overview

Value Creation

Segment Overview

Sustainability

Management Foundation

Financial Information

Corporate Overview/
Stock Information

Message from the President
01 Overview and Progress since Becoming President

Moving from awareness-raising to actions and results

In addition to building a robust
business structure, we aim tobecome an “Innovative Productdevelopment & Engineeringsolutions eXpert,” that provides
inspiration and surprise as values
by translating awareness-raising
into actions and results.
Takaharu Tsuchiyama
President, CEO

The I-PEX Group has been carrying out reforms aimed at raising medium- to long-term corporate value. These
reforms began in 2019 when we formulated a new corporate identity (CI) and have included changing thecompany’s name, identifying points of materiality, and establishing a medium- to long-term management
strategy, I-PEX Vision 2030.
To steadily execute these reforms, I have worked over the past three years to raise awareness of our CI,
which is the starting point of our business activities, as well as to clarify the reason for the Group’s existence
and our future vision. As a result, I think we have made progress in widening the purview of discussions, which
tended to focus on near-term measures, to include medium- and long-term perspectives.
However, the issue is that the CI has yet to fully translate into actions and results. It is no easy task for individual employees to take the initiative in changing the corporate culture of an organization they have long
been a part of—the process needs to move forward from the top down.
This specifically means clearly presenting a roadmap and goals, what needs to be done and by when. To thisend, the actions that each workplace should and should not do need to be narrowed down. Over these past few
years, because of the COVID-19 pandemic, the communication with workplaces needed to make these decisions
was not sufficient. The next phase of the process going forward will involve new initiatives to translate CI
awareness into actions and results. I also plan to actively visit each site and increase opportunities for face-toface communication.

02 FY2022 Results and Issues Going Forward

The challenge of changing the business structure
Results for fiscal year 2022 reversed course from the record-high profit registered in fiscal year 2021 as bothrevenue and profit declined. In the first quarter, operating income exceeded our forecast thanks to solid performance in connectors and other electronic parts, which have a high profit margin, and also because of exchange
rates. However, from the second quarter on, orders stagnated due to the lockdown in Shanghai and othersupply chain disruptions, slowing demand for products like personal computers, production cuts by automakers, and production adjustments due to shortages of materials. Factory utilization rates were also sluggish. We
expected that the situation would subsequently recover, but against a backdrop of rising recessionary concerns,
demand decelerated further and we did not achieve our forecasts.
I fully realize that a major factor in this year’s results is our field of business, which does not adequately
disperse risk.
We have experienced many ups and downs over the past 20 years, but downswings in one business havealways been offset by performance in others. In fiscal year 2022, however, the markets for all of our major
segments stagnated, causing a drop in earnings. Given this situation, achieving stable earnings requires us tohave an earnings structure that does not depend on specific markets, and so it is essential that we create a new
business. For this reason, we are currently preparing to make the MEMS business, which holds major demandpotential in diverse markets, a new business pillar.
Along with creating this major new business, we will work to expand the market domain of our mainstay
connector business. The personal computer market, which accounts for a majority of our connector sales, tends
to ramp up at a rapid pace, and it is very difficult to anticipate exactly when that will be. To address this issue,
we are diversifying markets by enabling any given connector to be used in other applications as well, such as
in-vehicle applications. In addition, to further evolve our existing connectors, we will focus on developing newtechnologies to make inroads into the enterprise market, including for data centers and communication basestations, and expand sales.
By taking these steps we are aiming to build a robust business structure.

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I-PEX Inc. Integrated Report 2023

Overview

Value Creation

Segment Overview

Sustainability

Management Foundation

Financial Information

Corporate Overview/
Stock Information

Message from the President
03 Creation of New Businesses

05 Capital Policy

Creating new value from research and development

Working to reduce assets, shifting toefficiency-focused operations

The Group has currently set a medium-term goal of pursuing initiatives designed to tie awareness to actions
and results pivoting on the CI and under the slogan “Challenge & Innovation.” To this end, we are taking on“new business challenges that showcase the inspiration and surprise of innovation” and working to “transformthe consciousness, behavior, organizational climate, and organizational culture to support innovation.”
In terms of the first initiative, that of taking on “new business challenges that showcase the inspiration andsurprise of innovation,” both research and development will be key.
For some time now, one focus of our research aiming to strengthen and expand fundamental technologies
has been MEMS. For example, we established I-PEX Piezo Solutions Inc. in January 2023 as a piezoelectric
MEMS foundry specializing in single-crystal technologies for piezoelectric films. This was the latest stage in our
research into piezoelectric technologies that began around eight years ago. We have now finally gotten one
application up and running, and the MEMS business is moving into a stage from which we can expect it to bea third business pillar for the Group.
In addition, in the area of storage batteries, we are developing technology that can increase a battery’s
capacity or extend its life by changing the surface structure of the current collector within the battery. The
Group has patents related to battery materials, which we are using to create evaluation samples that can beused in various fields while focusing on specialty applications for industrial drones and other areas where
growth can be expected.
Furthermore, to address our point of materiality of tackling climate change and contributing to a recycling-oriented society, we have developed a solution that combines a battery management system and usedautomotive lithium-ion batteries, and are also moving ahead with research into businesses that utilize thewater, oxygen, and heat given off in hydrogen production.
In December 2022, we established the Okinawa Innovation Center and are currently developing productprototypes that use hydrogen energy in cooperation with universities, research institutes, and companies insideand outside of Okinawa Prefecture.
Regarding the second key point, development, in our case this means development related to applications—what will be used to make what kind of product. Within a basic technological fabric, we will develop needed
applications in line with the changing times. In particular, we are accelerating the development of high-­
frequency, high-speed transmission technology that will be essential in the migration from 5G to 6G.
By combining these two key points, research and development, we will work to achieve sustainable growth
to reach its management targets.
At the same time, to maintain financial soundness, we will decide on investment allocations to research anddevelopment while being constantly aware of the return on investment. Specifically, we will focus on development that promises high profitability for the near term and on research as a medium- to long-term initiative.

04 A Culture of Taking on Challenges to Create Innovation

Framework for smooth communication andspeedy decision-making
The second initiative is to “transform the consciousness, behavior, organizational climate, and organizational
culture to support innovation.”
The world is changing at an unprecedented pace and customer needs are changing rapidly as well. Even if a
new idea for manufacturing or technology arises in the workplace, it takes too much time to implement it within
an appropriate timeframe under the old top-down organizational framework. To speed up decision-making andboost efficiency, we are changing to an organizational framework under which necessary authority is delegated.
I and other members of management will be visiting workplaces and increasing opportunities for close
communication, which is also very important. Through conversations with employees, I have come to realizethat our Group has extremely high potential for innovation. It is important to offer encouragement by being
positive about taking on challenges and to connect ideas to action.
This holds true not only in Japan but at overseas Group companies as well. Until recently, our basic awareness and perspective was “from Japan to overseas,” but this caused the issue of development overseas not
making much progress. We have therefore assembled a glocalization team, and are putting a framework inplace for making quick decisions locally at overseas sites and transitioning to an organization that can generate
a series of innovations around the world.

With regard to our capital policy, we will reduce assets and work to optimize our operating systems.
One strength of the Group thus far has been a supply system made possible by integrated production withadvanced technical capabilities, and we have generally prepared and operated plants and production facilities
on our own. In recent years, we have worked to bolster our production framework and plants, which has
resulted in fixed assets taking up a relatively high proportion of total assets compared to other companies inthe same industry, which I feel is an issue.
More recently, customer needs are increasingly diversifying and lifecycles are also getting shorter. To
accommodate these changes in a timely and flexible manner, we have to change to a structure that is lighterin terms of fixed assets by more skillfully making use of outside partnerships instead of focusing mainly on
integrated, in-house production as we have done. Specifically, our plan is to make fixed assets 50% or less of
total assets.
Going forward, while striking a balance between profitability, shareholder returns, and financial soundness,
we will consolidate and adjust assets, reduce idle capital, establish ROE as a key financial indicator, and work toconvert to a lean corporate structure that generates a high level of cash with an appropriate amount of capital.
With regard to ROIC as well, we will set targets for each business division and monitor progress to work forfurther improvement.
With respect to capital costs, utilizing liabilities up to an equity ratio of around 50%, we will minimize costs
while striking a balance with capital.

06 To Our Stakeholders

Becoming an “Innovative Product development &Engineering solutions eXpert”
I want us to be a group of specialists that not only manufacture products but also add value by proposing services and ideas to address the concerns of client companies and in turn help address major social issues.
With digitalization accelerating and society changing at a rapid pace, simply repeating the same approachto manufacturing day after day will not lead to sustainable growth. With the conviction that we, too, have tochange, our CI makes clear the reason for the Group’s existence and our vision for its future. If we share thisawareness, it will translate into action. This is the significance of the CI awareness-raising activities we haveconducted since I became president, and we intend to continue these activities to steadfastly translate thisawareness into actions and results.
In addition, we regard dialogue with shareholders, investors, and other stakeholders as an important opportunity for us as we work to raise corporate value. In this year’s Integrated Report, which we are publishing for thesecond year, we have clearly laid out thestrengths of the Group’s businesses and a sustainable business model within the value-­creation process. We have also shown the
progress we have made toward establishing
our CI, in terms of building a new frameworkand carrying out initiatives, putting in place thesustainable business model, addressing the six
points of materiality we have identified as key
issues for creating medium- to long-term value,and steadily implementing the I-PEX Vision
2030, the medium- to long-term strategy
derived from the points of materiality. Our
hope through this report is to continue toengage in constructive dialogue and co-create
value with all of our stakeholders. We appreciate your ongoing support.
Takaharu Tsuchiyama
President, CEO

16

17

I-PEX Inc. Integrated Report 2023

Value Creation

Overview

Segment Overview

Value Creation Process
Outsideenvironment

OUTPUTOUTCOME

Financial capital

Innovative Product development &Engineering solutions eXpert

Solving issues faced byinnovative customers

Solving social issues

Connectors¥92,237 million

Optical conversion modules,
Power connectors, etc.

eed transmission and
h-sp
high
Hig
s MEMS designschine
a n d f re q u
a
d
l
m
ma
e
mo atic
nu ncyi s e u to m
fa c
a
c
e
tu na
a
rin l
pr of
e
g
ur

Extr
em
el
ign
an y smdm aa n ll a
uf nd
ac
t

Employees in Japanand overseas

on

ci

so

s to

lut

me

ion

rn

s

Ma

g

eed

s f rom
P re c i s i o n m¥

100billionpectations
er ex

tom

HDD components,
forensic-related parts, etc.

Operating income¥

10billion

f
nu

rin
actu
anuf

a

gs

ur

s
pa

Tackle climate change
and contribute to a­recycling-based society

Machinery andequipment
Semiconductor molding
equipment, etc.

8% or higher

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

Optimal manufacturing­systems to meet quality
requirements

ROE

si n

The power tosolve problems

Medium- to long-term value creation

Create innovation throughnew technology development

Manufactured
capitalcus

urMolding andassembly parts

Stable shareholder returns

Intellectual capital

ct

d in

Automotive sensors, torquesensors, etc.

The Strengths of I-PEX Group

49,061 t-CO2

Contribute to a comfortable
and safe digital society
supported by innovation

Net sales
Sensorsing

Co-­creation

5,293

Natural capital
CO2 emissionsalcuDigitalFinancial capital

g

d

so

Human capitalade-Capitalexpenditure¥5,509 millionseba t of
nt
in
me po
g
lop
e ve t a r t i nsthe

22 sites

Business
model

Addressing“Sharpest Tip”
Issues

lu
Va

ct d

Global manufacturing
network

BusinessdomainManagement
goals

oldingP ro d u

Manufactured
capitalesi te m45

Number of countries

chnologi

posCustomers
Over 1,200 companies

18

Achieve sustainable growthm
Co

Businessrelationship capitalDes¥2,547 million

re te
o
C

Social valueis

R&D expenses

1,171

Economic valueysIntellectual property
rights owned

Materiality

Corporate Overview/
Stock Information

Business ModelIntellectual capital

Establishment ofa recycling-­
based society

Financial Information

INPUT

Total assets

Response to
climate changeManagement Foundation

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 alsoenable us to put digital manufacturing into practice.

Shareholders’ equity ratio 63.1%

Digitalization ofsociety

Sustainability

Strengthen corporate
governance

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

Natural capital%

Reducing the environmental
impact of business activities

19

I-PEX Inc. Integrated Report 2023

Overview

Value Creation

Segment Overview

Sustainability

Management Foundation

Financial Information

Corporate Overview/
Stock Information

Materiality
In formulating the I-PEX Vision 2030, our medium- to long-term management strategy, we considered what would be important to achieve our vision while accommodating changes in society
and we defined and systematized points of materiality on that basis. By implementing businessinitiatives derived from this, we will work to raise sustainable corporate value and help solve
social issues.

Materiality and direction of initiatives

Contribute to a comfortable and safe
digital society supported by innovation∙ Contribute to the “Super Smart Society (Society 5.0)” through “sharpest tip” technologies

Six Points of Materiality for Sustainable Value Creation
The I-PEX Group has designated “Contribution 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-oriented society.” To promote
this effort, we will take a three-pronged approach, thatof “transforming the business structure and expanding
our field of business,” “strengthening human resource

Activity results and future goals

management,” and “building optimal manufacturingsystems and promoting capital cost and cash flow management,” while “strengthening corporate governance”
will serve as the foundation of our management. This
will be our framework for building a sustainable business model. Through efforts to solve these issues, wewill contribute to building a comfortable and secure
digital society, and, by securing a medium- to long-termcompetitive advantage, we will seek to create new value.

∙ Corporate acquisitions to expand the
MEMS business
P.09∙ Product development for the enterprisemarket∙ Opened Okinawa Innovation Center
P.12

FY2023 goals

FY2030 goals∙ Establish working group for newvalue creation (company-wide)∙ Commercialize new
businesses that contribute to the digital society∙ Create innovation plan utilizing
proprietary technologies bycontinuing to engage in open
innovation, etc.

∙ Develop new technologies and applications through partnerships*1
and “market-in”*2 approach∙ Utilize proprietary technologies at advanced levels through businesssynergies∙ Raise awareness of innovation and change mindsets

Environment (E)Tackle climate change and contribute toa recycling-based society∙ Raise energy efficiency in production and expand use of renewableenergy∙ Contribute to an energy-saving society through “sharpest tip”
technologies∙ Set target for CO2 emissions reduction
P.31∙ Established solar power facilities at
Malaysia and Singapore plants
P.32∙ Reduce electricity consumption∙ Install solar facilities at thePhilippines Plant (scheduled forthe end of 2023)∙ Switch to green energy*5∙ Developed recyclable materials
through collaboration with a materials
company
P.32∙ Complete development ofrecyclable materials and evaluate them for inclusion in I-PEX
products∙ Strategic focus on key existing products∙ Move forward on changes tobusiness portfolio∙ Reduce CO2 emissions
by 40% (2021 as baseline year)∙ Continuing initiatives
aimed at carbon neutrality*6 by 2050

∙ Build new business models via circular economy*3 and upcycling*4

Materiality System Diagram

Main SDGs we willcontribute to“Contribution to a comfortable and safe
digital society supported by innovation”
Tackle climate change and contributeto a recycling-based society

Transform the business structure andexpand our field of businessMedium- tolong-termvaluecreationTransform the businessstructure and expand
our field of business∙ Strengthen profitability of coreand priority businesses∙ Achieve mixed growthstrategy and businessmodel evolution as
stated in I-PEX Vision
2030∙ Shift from manufacturing to value-addingSociety (S)∙ Promote diversity, equity and inclusion*8∙ Enhance employee engagement and motivation

Build a­sustainablebusinessmodel∙ Net sales of ¥100.0
billion or more andoperating income of¥10.0 billion or more

∙ Allocate management resources to new and growth businesses froma company-wide perspective∙ Secure and develop personnel with high specialization and thepotential to create future businesses∙ Started succession plan training anddetailed career course plan
P.33

∙ Prepare for the introduction of
the career course system andcompensation system (expected
to be implemented in 2025)∙ Female manager ratio(Japan) of 10%∙ Increased training time per domestic
employee twofold (compared to FY2021) ∙ Initiate second step of HR
development system, prepare toand implemented basic technicalextend education system
education (molding technologies andglobally
image processing/AI)
P.34∙ Provide ongoing career support∙ Female employment ratio of 22.0%
in order to gradually increase
the female manager ratio(Japan)Female manager ratio of 2.6% (Japan)∙ Increases points for the general
Reformed post-retirement
indicators “job satisfaction” andre-employment system“motivation”
P.35∙ Increased points assigned to “jobsatisfaction,” a general indicator used
for Japanese employees
P.35

Build an optimal manufacturing systemand promote capital cost and cash flow
management∙ Shifting from single-site to multi-site
production and from in-house to contract
manufacturing (two companies)
P.24∙ ROE of 8%∙ Expand shift from single-site tomulti-site production and opti∙ Payout ratio of 30%
mize procurement and transport∙ Include ROIC figures by businessdivision in period-start targets∙ Build a speedy, flexible production system, consolidate production
sites, and promote allocation (transfer)∙ Introduced, developed and provided
training on ROIC for each division
P.23∙ Promote an outsourcing policy based on profitability and added-value standards∙ Perspective of raising capital efficiency
was added to management accounting∙ Set targets and manage target/
results comparisons based on
the characteristics of eachbusiness division∙ Awareness-raising activities conducted
on corporate philosophy
P.40∙ Create a system to embody the
Corporate Identity (CI) in business operations∙ Evaluated the effectiveness of theBoard of Directors and addressed issues
P.38∙ Appropriately assess Board of
Director effectiveness evaluations and make improvements∙ Launched group governance task force
P.40∙ Establish governance system at
the Group level∙ Promote capital cost management by introducing ROIC*9 and cash
flow management by improving the CCC*10

Strengthen corporate governance
P.20*1 Co-creation and collaboration with other companies and groups*2 Listening to the feedback of customers and identifying their requests andconcerns in order to launch new products that address them
*3 Economic activities that generate added value while reducing resource
inputs and consumption to utilize resources effectively*4 Utilizing waste to generate new value∙ Created a glocalization*7 system∙ Convert to an earnings structure resistant to cyclical fluctuations
and create new business pillars∙ Strengthen HR management from a company-wide perspective,
perform global personnel evaluations and build career advancement
programs

Build an optimal­manufacturing systemand promote capital
cost and cash flow
management∙ Followed up on priority businesses∙ Consolidate and specialize in connection with existing products andnarrow focus for new areas of development

Strengthen human resource
management

Strengthen
human resource
management

Results of main activities
in FY2022

Governance (G)*5 Energy created from renewable energy sources such as solar, wind power,hydropower, geothermal and biomass*6 Balancing greenhouse gas emissions and absorption amounts*7 Think global, act local*8 Working in an environment where diverse human resources are given fair
opportunities and diversity is accepted*9 Return on Invested Capital   *10 Cash Conversion Cycle

Strengthen corporate governance∙ Further raise awareness of the corporate philosophy∙ Strengthen supervision of important matters related to management∙ Strengthen global group governance∙ Build corporate governance system with both
rapid, decisive decision-­making and supervision
over management andexecution

20

21

I-PEX Inc. Integrated Report 2023

Overview

Value Creation

Segment Overview

Sustainability

Management Foundation

Corporate Overview/
Stock Information

Financial Information

I-PEX Vision 2030 Medium- to Long-Term
Management Strategy
Medium- to Long-Term Management Goals

Figure 1

Through growth by mixing core businesses and priority
businesses, expansion of our field of business, and evolution of business models, we will improve businessprofitability and capital efficiency and work to achieve,
as our medium- to long-term goals, net sales of ¥100
billion, an operating income percentage of 10% and ROE
of 8%.

Business direction in each sector

Automotive

ConsumerIndustrial

Life Science

Priority businesses

MEMS (various sensors and foundries)• High-speed communication and high-frequency(connectors and composite
devices)• Hybrid/electric vehicles• Digital infrastructure• Wearables and analyzers(battery solutions, connectors, smart devices)(photoelectric conversion
devices, connectors, large-­
capacity HDDs)(composite equipment anddevices)• Power devices(power semiconductor
equipment)• Industrial fields• Mobile devices and digital consumer electronics• Internal combustion,
hybrid/electric vehicles• HDD(connectors)(passive sensors andconnectors)• Healthcare(torque sensors, robots, newequipment)(nursing care and rehabilitation devices)

Growth scenario

Core businesses

2021

2022

2024

2027

2030

Core businesses

Priority businesses• Semiconductors andpassive parts(general-purpose semiconductor equipment)

I-PEX coretechnology

Priority
Measure1(various HDD components)

Extremely small andprecise molds

High-speedtransmission andhigh-frequency analysis

Compositemolding

Figure 2

Expansion of field of businesslong-term priority businesses and work for their creationand development. In particular, our acquisition of a com­pany with single-crystal piezoelectric thin film (PZT film)
technology in fiscal year 2022 put in place the framework
for a piezoelectric MEMS foundry that can consistently
handle everything from piezoelectric MEMS design
support and single-crystal deposition to MEMS processing.
We have thus made great strides toward achieving our
medium- to long-term goals for the MEMS business.
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.

Innovative Product development & Engineering solutions eXpert business sector

DigitalAggregation
MEMS

Value-adding
Software andhardwareHybrid/electricvehiclesDigitalinfrastructure

Hardware designPowerdevicesP.22 Figure 1

Wearables/
analyzers

Production

2

MEMS design andmanufacturing

Growth by Mixing Core Businesses and Priority Businesses

Since our founding in 1963 as a producer of high-­precisionmolds, we have expanded our field of business to become
a commissioned component manufacturer and solutions
provider, accumulating the core technologies that underpin I-PEX today, namely, automatic machine design andmanufacturing, composite molding, high-speed transmission and high-frequency analysis. Based on these varied
technologies, we will pursue the further evolution ofcore businesses that currently produce revenue in the
consumer, automotive, and industrial segments, and, moreover, we will position businesses with potential for development in these segments, businesses in the life science
segment—a new area of challenge for us—and businesses
like MEMS that cut across segments as medium- toPriority
MeasureDesign andmanufacture of­automatic machines

Evolution of Business Models

Healthcare

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 evolution ofbusiness models from self-reliance to collaboration, we
will pursue models that further raise corporate value.

Specifically, the matrix is made up of business fields
we plan to augment in stages—production, hardware, andaggregation—and business models we will expand inphases—internal resources, the company brand, external
resources, and ecosystems. In areas where these two axes
cross, 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. P.22 Figure 2

Manufacturing

PhysicalInternal resources

Self-reliance

Company brand

External resources

Ecosystem

Collaboration
Evolution of business models

22

23

I-PEX Inc. Integrated Report 2023

Capital Policy

Value Creation

Overview

Capital Efficiency and
Optimization

By integrating the concept of ROIC, we will manage the business with greater awareness of capital efficiency andstrive to achieve ROE of over 8% for the medium term. Taking into account past performance, we will set targets andmanage outcomes to take advantage of the characteristics of each business.
Correlation Chart of Key Indicators
Material cost ratio

Operating income
percentage

Labor cost ratio

Gross profit margin

Manufacturing cost ratio
Advertising cost ratio

SG&A expense ratio

ROE= Net income ÷ shareholders’ equity

ROIC= Operating income ÷ invested capital= Operating income percentage x invested
capital turnover

When business operations are lean and not wasteful, ROE correlates with ROIC. We therefore plan tocreate a management system in the future thatenables ROIC to be analyzed and managed for eachbusiness and investment.

Management Foundation

Corporate Overview/
Stock Information

Financial Information

P.20

Raising the Profit Margin, Pursuing ROIC Management

ROIC

Sustainability

Corresponding
Materiality

The I-PEX Group uses return on invested capital (ROIC) as a key performance indicator for financial matters. The goal is to achieve growth strategies by investing in management resources thatcreate added value while freeing up more management resources. In addition, we organize
elements of the ROIC concept into a tree structure that extends all the way down to the manufacturing floor. Everyone, from executive management to frontline employees, will work together
to generate ideas for the “ideal manufacturing system” based on profit improvement activities
and then take action based on these ideas.

ROE

Segment Overview

Inventory turnover
Accounts receivable
turnoverWorking capitalturnoverInvested capitalturnover

Accounts payable turnover
Tangible fixed asset
turnoverFixed asset turnoverIntangible fixed asset
turnoverPromoting DX to Increase Business Efficiency

MES
Factories
worldwide

We are moving forward with digital transformation (DX)by working to digitize business processes.
In the production and equipment departments , as afirst step, we are working to increase business efficiency
by introducing digital tools. This currently involves
deploying IoT systems to production equipment andmanufacturing lines to increase work efficiency as wellas implementing and further developing a manufacturing execution system (MES) as a tool for analyzing daily
production to make improvements. For our second step,
we will move forward with introducing robotics and AI tofurther raise productivity.
In the procurement division, we upgraded our electronic ordering system (EDI) and initiated connections
with suppliers in Japan. As a first step, we established ties
with around 100 companies and are currently setting up
operations for electronic ordering. Going forward, oursecond step will be to initiate connections with suppliersof overseas sites and further expand the EDI system.

DX Promotion Project Example

Optimization of Production Allocation

EDI System

In addition to building a stable global supply framework, we are optimizing production allocation taking
into account profitability and risk control measures.
Specifically, we have shifted from in-house to contract
production by partnering with strategic suppliers andutilizing global sites to diversify the production of key
items. Going forward, we will expand the list of items
produced in this way and work to maintain supply lines
and strengthen competitiveness as we respond to anincreased level of uncertainty.

Enhancing manufacturing site capabilities
and generating profit

Total processoptimization
Improving profitability

Gateway
Cultivating manufac­
turing technologies

MES
Manufacturingexecution system

Wireless
devices

Increasing efficiency
via system utilization

Coordinating withpartners

Streamlining production burden
by reducing man-hours∙ Promoting IoT operations
monitoring system∙ Utilizing IT in equipment
department∙ Use of MES∙ Promoting improvement
activities∙ Digitizing maintenance records∙ Visualizing plant management
indicators∙ Automated inspection

Group applications

Receivingorders digitally

Sending orders
digitally

EDI
Integrated, digitizedmanagement oftransaction information
between companies

Suppliers

Overall Process Optimization

BOM System Advantages

To increase investment efficiency and boost profitability, we are updating the rules
used for processes from order reception to equipment manufacturing and mass production. For mass-produced items, we will promote automatic ordering via a parts
management system (BOM* system). By standardizing order items and automating theordering process, we will work to raise order accuracy and reduce man-hours required
to process orders.

∙ Increases efficiency ofparts management∙ Reduces human error∙ Standardizes order items* Abbreviation of bill of materials.

Manufacturing flow
Product design

Create prototype

Development
department

Production
equipment
department

Project start

Determine specifications with the customer and createengineering drawing

Releasedrawing

Create mass-­production
equipment
Production equipment
department

Create andsubmit sample
for evaluation
based on thedrawing

Mass production

Equipment
Relocation

Production
department

Ship/
deliver

Customer

Create mass-­production
equipment based on
finalized form (productdrawing)

Optimization of Invested Capital/­
Improving the Cash Conversion Cycle*
We will achieve our growth strategy by emphasizing
ROIC as a management indicator and investing in management resources that generate added value. Seeking
to become an asset-light organization, while putting acheck on premature capital investment in new businesses, we are drawing on wisdom and ideas from bothwithin and outside the Group as well as capitalizing on
unused and external resources.
In addition, we will free up management resourcesand expedite the capital recovery cycle by reviewing
existing contracts and production efficiency to bolster
the cash conversion cycle.
*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 foraccounts receivable generated by subsequent sales.
Cash conversion cycle = Inventory turnover period + Accounts receivable
recovery period - Accounts payable turnover period

Capital Recovery Cycle
Inventory
turnover period

Accounts receivable
recovery period

Inventory,transport

Accounts
receivable

Reducing inventory
and lead times

Expediting collection of
accounts receivable

Accounts payable
turnover period
Accounts
payableExtending paymentof accounts payablefor purchases

CCC

Period from cash-out to cash-in

24

25

I-PEX Inc. Integrated Report 2023

Overview

Value Creation

Segment Overview

Sustainability

Management Foundation

Financial Information

Corporate Overview/
Stock Information

26

Segment Overview
Segment Sales (by Product)
Amid the lingering impact of COVID-19, the global economy
in the fiscal year under review was marked by sharp
increases in the costs of resources and energy stemmingfrom the prolonged crisis in Ukraine, shortages of components and raw materials caused by supply chain disruptions, and ongoing inflation. Uncertainties in the economic
outlook thus increased and instability continued.
In this economic context, we faced a very challenging
year, after having posted record-high profit the previous

Hiromichi
Nakagawa
Executive Officer
Operation Director,
Mobility Components
Division

fiscal year. Net sales were down due to a variety offactors, including supply chain disruptions from the lockdown in Shanghai and other developments, a slowdown
in demand for computers and other products, and production cutbacks by automakers facing semiconductor
shortages. Net income dropped by a significant margin,
reflecting lower capacity utilization at our plants amid
the drop in sales as well as higher depreciation andlabor costs.

Akihiko Hara
AtsushiYasuoka
Board Member,
Executive Officer
Sales Director

Kenji Ogata
Board Member, Managing
Executive Officer
Chief Technology Officer
R&D Div. Director

Board Member, M­ anaging
Executive Officer
Chief Operating Officer
Operation Director of
Electronic Components &Devices Div.

Yasumitsu
KikuchiTomohiro
Nishiyama

Executive Officer
Operation Director,
Equipment Division

Executive Officer
Operation Director,
MFG Solution Division

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

Connectors
2022 Business Environment and Results

Segment Revision
The I-PEX Group has worked to build business value inthree segments: Consumer, Automotive, and Industrial
Machinery & Other. However, to achieve the I-PEX Vision
2030 we formulated last year—aiming to be a company
with technical capabilities to implement digital manufacturing—and to more clearly convey our progress andpresent our business activities in a more understandableway, we reorganized our businesses into four product-­
based segments: Connectors, Sensors, Molded & Assembled Parts, and Machinery & Equipment. We will visuallycommunicate our growth strategy by presenting our
product-based segments by markets.

Revised Segments
Machinery &Equipment
Molded &Assembled Parts

Industrial
Machinery &Other

Sensors

Automotive

Connectors

Consumer

Old Segments

New Segments

Old segments replaced by new segments
By Market
By Product

Connectors

Life

Mobility(Consumer) PCs(Consumer) Smartphones(Consumer)
Car electronics(Automotive) Connectors

Sensors
Molded &Assembled Parts
Machinery &Equipment

Digital infrastructure(Consumer) Networks(Consumer)
Server/Base stations(Industrial Machinery &Other) Forensic-relatedparts(Automotive)
Modules & other(Industrial Machinery &Other) HDDs

Net Sales ShareNet Sales(Million Yen)

40,734

34,771

58.3%
2021

2022

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 toincrease every year, we will focus in particular on thefurther development of LIGHTPASS® Series products andother electrical and optical solutions, targeting the data

centers and communication base stations that undergird
data transmission. With respect to automotive connectors,
in line with 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.

LIGHTPASS® Series Development Roadmap

Details on AP-10 (16 amp high-power supply terminal forboard-to-board connection)

IndustryMulti
Terabit
Module(Consumer) Other(Industrial Machinery &Other) Torque sensors(Automotive) Sensors

Demand for digital products was down amid mounting
concerns over recession. Sales flagged as a result, particularly sales of connectors for notebook computers. Automotive connectors saw growth in power terminals used inelectric vehicles, but ongoing sluggishness in automobile
production led to a decline in connectors for LED headlights and other applications.

(Industrial Machinery &Other) Other(Industrial Machinery &Other) semiconductor
molding equipment* The old segments are written in brackets

100 Gbps

100 Gbps

LIGHTPASS®-EOM
100G

LIGHTPASS®-EOB
100G

2021

2022

①

②

28
27.8
27.6
27.4
27.2
27
26.8
26.6
26.4
26.2
26

400 Gbps
ModuleMisalignment amount① X-axis: 0.55mm② Y-axis: 0.70mm

Heat Resistance up to 105°C

2023

For details on the LIGHTPASS® series:
https://www.i-pex.com/library/video/lightpass°C

For details on the AP-10 high power terminal
Connector:
https://www.i-pex.com/product/ap-10

27

I-PEX Inc. Integrated Report 2023

Overview

Segment Overview

Value Creation

Sustainability

Management Foundation

Financial Information

Corporate Overview/
Stock Information

Segment Overview

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

Sensors2022 Business Environment and Results
Demand for automotive sensors was down as semiconductor shortages and supply chain disruptions impeded
production at automakers. There were signs of a moderate
recovery in the automobile market in the second half ofthe year, but there was no major improvement in supply-side constraints on automotive components, preventing a full-fledged turnaround in performance. We areworking to boost production efficiency to stabilize therevenue structure.

2022 Business Environment and Results
Net Sales ShareNet Sales

Sales of HDD-related parts were sluggish overall. Althoughsales of parts for large-capacity HDDs for data centerswere solid, investment in data centers saw a temporary
contraction in the fourth quarter due to concerns about
recession. Performance of forensic parts was sluggish due
to delays in procurement of components and materials
caused by supply chain disruptions. We are shifting production of molded and assembled parts to optimal sites
and making adjustments to unprofitable businesses tostabilize the revenue structure.

(Million Yen)

14,915
11,517

19.3%
2021

2022

Outlook
We see supply-side constraints on automakers caused bysemiconductor shortages and supply chain disruptions
subsiding gradually, making way for a turnaround indemand for automotive sensors. Going forward, we expect
growth in sensors for air bags in particular, buoyed by
mounting demand related to safe driving. For torque

Net Sales ShareNet Sales(Million Yen)

8,125

7,345

13.6%
2021

2022

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.

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 with these larger
capacities, we will lay the groundwork for the mass production of related parts that involve a high level of difficulty. In
forensic-related parts, we expect demand to increase formolded parts that use I-PEX’s thermosetting technology inconjunction with the mounting complexity of DNA analysis
systems. With respect to automotive parts, we expect
growth in module components for regenerative braking as
automobile production recovers.

HDD-related parts

Type of storage

ESTORQ® Development Strategy
Collaborative robots

New applications

Embedded applications

Enhanceperformance

Research market
demandCoupling

Acquire newcustomers

Propose new
applications

Machinery & Equipment

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

Molded & Assembled Parts

Propose embedding intorque actuators, etc.

Contribute to
new market
creation throughapplication
proposals
ES-Gripper®

Ramp

Low

Fast
OnlineSSD

ES-Hand®

Transferspeed

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

TAPE

Slow

Large-capacity
storage(economic benefit)

Nearline
HDD
OfflineHigh2022 Business Environment and Results
Semiconductor molding equipment performed briskly
throughout the year. The semiconductor market saw a
slowdown from the middle of the year, primarily among
general-­purpose semiconductors. However, demand for
manufacturing equipment for automotive semiconductors
and power semiconductors—particular areas of strength
for the I-PEX Group—remained robust, with sales growth
outstripping initial projections.

OutlookIn the area of semiconductor manufacturing equipment, we
expect ongoing brisk demand for sealing devices for power
and automotive semiconductors, fueled by the push forcarbon neutrality and the electrification and computerization of automobiles. Here, to capture more orders, we willdraft 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 otherthan semiconductors, such as electronic components.

Net Sales Share

Outlook for MEMS Business

Net Sales(Million Yen)

Launch of I-PEX Piezo Solutions Inc.

5,229

8.8%

3,877

2021

2022

Manufacturing Equipment for Power Semiconductors
Power semiconductors• Power convertors• Rectifiers (AC/DC)

Industrial
machineryHomeappliances
Automotive

Batteries

Inverters

MotorsThe I-PEX Group made KRYSTAL, Inc. (now I-PEX Piezo
Solutions Inc.) a subsidiary in June 2022. This is theworld’s first company to succeed in creating a single-­
crystal version of lead zirconate titanate, or PZT,
which is a material used in MEMS. The addition of thiscompany gives us a framework for carrying out allprocesses of the MEMS business in-house, from materials development to mass production. Going forward,
we will channel our efforts into the further growth of
the MEMS business as a piezoelectric MEMS foundrythat can consistently handle everything from piezoelectric MEMS design support and single crystal
deposition to MEMS processing.

Examples of MEMS Devices

Mirrors

Speakers

RF filters

Ultrasonicsensors

Ink-jet printerheads

Smell sensors

For details on I-PEX Piezo Solutions Inc., refer to the following:https://www.i-pex.com/ips/about-us/company

28

29

I-PEX Inc. Integrated Report 2023

Overview

Value Creation

Segment Overview

Sustainability

Management Foundation

Financial Information

Corporate Overview/
Stock Information

Message from the Sustainability Officers
I-PEX Group Sustainability Policy

Changing the Mindset of the I-PEX

The I-PEX Group believes that contributing to a comfortable and safe digital society supported by innovation, basedon our corporate philosophy, will lead to the sustainable enhancement of corporate value and development towards
a better society. Based on this philosophy, we have established a long-term vision and, as a member of society, will
engage in points of materiality identified from the perspective of management challenges and importance to help
resolve issues that occur in society and the natural environment. In this way, we will contribute to social development by building a sustainable business model and creating value over the longer term.

Group by Pursuing Sustainability*

Sustainability Promotion Organization
Board of Directors
ReportMaiko Hamano

Reiji Konishi

General Manager in
Charge of Sustainability
Corporate Planning Division

Chair of Sustainability Committee
Board Member,Managing Executive Officer

Supervise

Sustainability Committee
Sustainability Office
Materiality Working Groups

Sustainably Enhancing the I-PEX Group’s Corporate Valueand Helping Bring about a Better Society
Amid growing awareness of corporate responsibilities toward
climate change and human rights issues in recent years, we
believe social and environmental sustainability is indispensable to realizing our corporate philosophy. We have identified
six points of materiality to achieve sustainable growth for ourGroup, and are constantly working to address them. We formulated a new Sustainability Policy for the Group in August lastyear. At the same time, to execute and drive the policy forward
in practical terms, we established a Sustainability Committee
made up of executive officers from each business, which will
help us pursue management that is attentive to the environment (E), society (S), and governance (G).
With regard to the environment, we have begun activities
aimed at achieving carbon neutrality by 2050. We will also work
to develop products that can address environmental issues andto integrate them into a new business portfolio. In addition, we
will identify risks and opportunities for the Group with respect

Initiatives for the realization of thesix points of materiality
We have established Working Groups linked to our six points ofmateriality to help guide our operations for the sustainablegrowth of the Group. Last year, the Working Groups examined
the overall direction of our activities, along with specific initiatives and targets, and submitted proposals to the Sustainability
Committee. In particular, for the points of materiality, “Tackle
climate change and contribute to a recycling-based society” and“Strengthen human resource management,” we set numericaltargets and commenced concrete activities.
From a global perspective, our overseas sites have a highproportion of female managers and have achieved greater
diversity, including in terms of nationality. In Japan, however,actions in recent years to promote women to executive positions

Reiji Konishi
Chair of Sustainability Committee

to climate change and work to disclose information in line with
the TCFD recommendations.
With regard to society, since we have long been active inoverseas businesses, this is an area in which we are constantly
engaged. Our focus is on human capital, an area of growing
importance in Japan, and on carrying out business restructuring
to further enhance corporate value.
With regard to governance, the Board of Directors consists ofInternal and Outside Directors with the skills necessary for theGroup to execute its management strategy. However, going
forward, we will promote the appointment of female directors tomake the board more diverse.
We will make ongoing improvements to our ESG initiatives inlight of social demands, seeking to enhance corporate value andhelp bring about a better society so that we can continue togrow sustainably beyond our 60th anniversary.

Maiko Hamano
General Manager in Charge of Sustainability
notwithstanding, the proportion is still relatively low. To address
this, we will pursue activities aimed at achieving a 10% ratio of
female managers in Japan by 2030, focusing on fostering a challenge-taking, innovative organization globally, where not only
women but also a wide array of personnel can play an activerole. Other Working Groups are also involved in various concrete
initiatives. Hydrogen, a next-generation energy, is being developed in particular as a new environmental business aimed ataddressing social problems and is expected to contribute tovarious solutions, from manufacturing to value-adding. As wemove steadily forward with initiatives related to the six points ofmateriality, we will work to change mindsets within the company
and raise I-PEX’s corporate value.

* A general approach and corporate activities aimed at achieving medium- to long-term growth by addressing the company’s points of materiality relating to the environment (E), society (S), and corporate governance (G), as well as actions to fulfill corporate responsibilities and work to address social issues through the business.

Contribute to acomfortable andsafe digital society
supported byinnovation

Tackle climatechange andcontribute to a
recycling-basedsocietyTransform thebusiness structureand expand ourfield of business

Strengthen humanresource
management

For Greater Understanding of Sustainability
SDGs Card Game for New Employee Training
To help employees understand more about sustainability, we
held an SDGs card game as part of the training curriculum for
new graduates in fiscal year 2022. Through this interactive,
hands-on training, participants not only acquired informationand knowledge but also engaged in dialogue and exploration
during the games, and learned about how companies and individuals are connected and co-exist in society as well as ideals
related to this. The training helped participants gain an essential understanding of sustainability, including the SDGs, better
preparing them to put it into practice.

Online Briefing for Integrated Report
In line with the publication of our first integrated report, we
held a briefing for managers and supervisors to deepen theirunderstanding of the purpose of issuing the report, theimportance of ESG, and key issues and initiatives for theGroup’s sustainable growth. We will continue to conduct
briefings and educational programs and work to raise awareness among employees as we move forward with our sustainability activities.

Build an optimal
manufacturingsystem andpromote capital
cost and cash flow
management

Strengthen
corporate
governance

30

31

I-PEX Inc. Integrated Report 2023

Overview

Value Creation

Environment

Sustainability

Segment Overview

Financial Information

Corporate Overview/
Stock Information

Corresponding
Materiality
P.20

As environmental issues such as climate change grow increasingly severe, we strive to live up to
our corporate identity (CI), our ideal as a company, and contribute to a comfortable and safe digitalsociety supported by innovation while growing in a sustainable manner. To do that, we must address
climate change through our own environmental initiatives and business activities so that we canpromote a mutually reinforcing cycle between social value and economic value. The I-PEX Grouphas made “Tackle climate change and contribute to a recycling-based society” one of its points ofmateriality and has set a new medium- to long-term goal of carbon neutrality by 2050. We arefocused on initiatives to meet this goal. Along with continuing the earth-friendly business activities
we have carried out to date, we will also further strengthen and promote green manufacturing.

Deploying Solar Power Equipment

Tackling Climate Change
We are working to reduce CO2 emissions through initiatives such as promoting energy savings and increasing the useof renewable energy. Last year we set a medium- to long-term goal of reducing Scope 1 and Scope 2* CO2 emissions
by 40% by 2030 (compared to fiscal year 2021 levels), and, by extension of this goal, we will continue to reduce
emissions to achieve carbon neutrality by 2050.

With respect to in-house power generation, we already had
solar power equipment in China since 2021 (at the ­Shanghai
Plant), but in 2022 we installed solar power equipment at­ ingapore Plant and comour Malaysia Plant and at our S
menced in-house generation of r­ enewable energy.

We are also planning to install solar power equipment at our plant in the Philippines. In-house generationof renewable energy is scheduled to commence whenconstruction is completed toward the end of 2023.

Plant

Installation
date

Panel area

Installation
location

Electricity
generated(daily)Percentage ofelectricity
consumed

Malaysia
Plant

March 2022

6,865m2

Rooftop5,400kWhApprox. 20%

Singapore
Plant

August 2022

880m2

Rooftop

600kWhApprox. 4%
Solar power equipment at the Malaysia Plant

Contributing to Energy Savings in Society with “Sharpest Tip” Technologies
We are promoting environmental improvements in production processes and the development of new technologies
and products that contribute to an energy efficient, recycling-based society.

* Scope 1: GHG emissions directly released from the company
Scope 2: Indirect GHG emissions released from the energy purchased by the company.

Energy-Saving Initiatives in Production

Initiatives for Power Semiconductors

Our electricity consumption is the source of CO2 emissions with the largest impact on climate change, which
is being caused by global warming.
In order to ensure all members of the company are
involved in reducing electricity consumption, we newly
included “reduce electricity use” in the energy-saving
activities conducted as a part of ISO 14001 certification
activities for 2023 and thereby established it as a shared,
company-wide initiative. Based on this, in fiscal year
2023, we intend to gather data, assess the current status,
consider reduction methods, and then tie these findings
to future reduction activities.

CO2 Emissions(t-CO2)80,00061,516

57,11057,557

66,19049,06140,000

0

2018

2019

2020

2021

2022

* The data covers production and equivalent business sites. Fiscal year
2022 is the total of Scope 1 (735 tons-CO2) and Scope 2 (48,326 tons-CO2).

To reduce CO2 in the supply chain and accommodate
adjustments to the labor environment in the transportindustry, we are reorganizing logistics networks for
greater efficiency and stability by consolidating andeliminating distribution routes.

As the shift to decarbonization progresses in industries
around the world, power semiconductors have gained
prominence as key components for enhancing theenergy efficiency of power conversion and motor drives.
Through the development, manufacture and sale ofsemiconductor molding equipment, which is used to
produce power semiconductors, we are contributing to
the increased use of electronic devices that consumeless electricity.

By collaborating with logistics providers and suppliers
to streamline transport processes, consolidate distribution
centers and increase loading efficiency, we will work toincrease energy efficiency upstream and downstream.

Consolidate
and eliminate
distribution routes

Battery

Inverter

Motor

Example: Electro-mobility with in-vehicle semiconductors

Reorganize into efficient andstable logistics network

We have worked to reduce the environmental impact by reducing waste by increasing production efficiency andutilizing recycled materials, reusing water from plating processes, and promoting the recycling of waste materials
given off by business activities. We are currently conducting joint development with a mold material manufacturer toestablish a sustainable lifecycle for mold materials, and going forward, we will actively promote activities to further
contribute to a recycling-based society.

Promoting the Circular Economy
We are currently working with a material manufacturer
to develop molding materials with a sustainable lifecycle.
Through these activities, we are helping to reduce waste.
Main Initiatives∙ Procurement and research for utilization of recycled materials in
production processes∙ Establishment of mechanisms for recycling primary materials∙ Materials with high recycling ratios (materials with additional UL
certifications)∙ Reductions to packaging and transport materials by changing
specifications of cushioned packing materials, returnable boxes,and packaging materials

Increasing Use of Renewable Energy in Production
In order to carry out energy-saving activities related to
production while at the same time contributing to further
reductions in CO2 emissions, in fiscal year 2023 we areplanning to begin converting to green energy, anotherPower semiconductors

Contributing to a Recycling-Based Society

Reducing CO2 by Streamlining Logistics

Previous

Management Foundation

name for renewable energy.
Specifically, at the Ogori Plant, Tachiarai Plant andShimane Plant, which are our production sites, we plan toswitch to green energy for some of our electricity use.

∙ Other circular uses through recycling

Use of new mold material
as a primary material forconnectors on the first
production run only

ProduceUse ofReturn used­recycled mold
mold materials
material as
to the materials
a primarymanufacturer
The
Circularmaterial forconnectors
EconomyWe Envision

RecycleRecycle usedmold materials into
mold materials suitablefor production

Recover32

33

I-PEX Inc. Integrated Report 2023

Overview

Society

Value Creation

Sustainability

Segment Overview

Management Foundation

Corresponding
Materiality
P.20

For the past 60 years, the I-PEX Group has continued to grow while expanding its businessdomains. We now have sites in 12 countries and regions worldwide and employ over 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 also
welcomed new colleagues last year through acquisitions.
To create economic and social value and grow sustainably, it is crucial that we continually
generate innovation and expand our field of business. A diverse mix of individuals drive these
efforts. We believe it is essential to draw actively on a broad range of knowledge, experience, andvalues, and will focus on maintaining an environment where diverse personnel can fulfil theirpotential, as well as on strengthening our HR management to foster growth.

Human Resource Development

Human Resource Management

HR Development System

Start of Step 2 of HR Development System

Basic Skills

Executives

3. Energize the organization to
boost its ability to generateinnovation

Junior

Career Course

Level

Directors

7

Division A

Division B

Executive
Officer

GeneralManager

Corporate
Function Div.
(shared core technologies, planning, andadministration)

Training

HR Pool A
Next-Generation Executives= Successor candidates

MBA Essentials
CourseHR Pool B
Next-Generation Senior Managers= Successor candidates

Leadership
Program6

Advanced,
Technical
Specialty
CourseGeneralArea
CourseGeneralCourse

5

Level

4
3

Level

2

Level

e-Learning

Management
Course

Level

Level

Manager
HR Pool C
Next-Next Generation Senior Managers= Future candidates (medium/long term)

Level

1

Level

Operator/
AssistantCourseOperations

Specialization

Training for general managers anddeputy general managers
Training for managers and deputy managers
Selective
training

Training for
manager candidates
Training for staff leaders,
supervisors, mid-level employees
and junior employees

Communication

Manufacturing
divisiontraining

New employee training

Further Expansion of Educational Opportunities
Career Courses (plan)

Succession Plan

Solutions

We respect the values and career aspirations of each
employee and offer educational opportunities todevelop the skills needed for both employees and thecompany to grow. We revise the curriculum each year,
and in fiscal year 2023 we plan to add an applied course
for digital HR development training and a new marketing training program that covers both required knowledge and practical applications.
In addition, the Engineering Academy that opened in
2022 P.11 currently provides an accelerated development
curriculum, primarily to young employees in Japan. Goingforward, we plan to extend the scope of this program toparticipants globally, so that a broad array of personnel cantake advantage of this educational opportunity.

Basics of
Toyotaproduction
systemManagement

Solutions

PDCA +
S cycleLogicalthinking

Engineering Academy

Mid-Level

Management

Divisional specialty training

occupy key positions for the next and following generations. We have defined requirements for each key position, and by conducting necessary training and job
rotations in a systematic manner, we are aiming tocreate a leadership pipeline for stable job succession.
Measures for the next fiscal year include clarifying
career paths to enable diverse personnel to perform
and advance in the respective business fields in linewith their aptitudes and reinforcing multi-track careercourses based on roles, work styles, and other factors.

We have reinforced our human resource management
system in Japan, working to visualize data on humancapital, such as educational background, career history,
and certifications, to help us in strategically assigningpersonnel and fostering the growth of each employee.
By 2030, we aim to achieve a global HR management
system that includes overseas operations.
In terms of career advancement programs, we initiated a succession plan in fiscal year 2022 to systematically educate and train managerial employees who will

Leadership

Job training & OJT

Succession Plan and Career Advancement Programs

Communication

Executive training(operation directors, directors)

CI awareness-raising

Managers

Cross-industry, cross-cultural exchanges

2. Raise the human capital valueof each employee and link
this to business expansion
and growth

Language training, recent trends, culture and etiquette

Employees and Companies Continuing to Grow as Global One I-PEX

CISpecialized Skills

Public certifications

Cultural Skills

Shared Skills

Internal certifications

Our policy on human resource management is to secure diverse personnel and support the growth of individuals
striving to continue to take on challenges.

1. Create systems that enable
diverse personnel to play anactive role in various businessfields based on their aptitudes

take part in educational programs. To ensure thisawareness translates into action, the next step in fiscal
year 2023 will be to define the training required foreach level and measure the effectiveness of training invarious ways. Going forward, we will extend the HR
development system to global sites and continue torefine training programs so that educational activities
bear fruit in corporate performance.

In Japan, the HR development system is divided into
basic, shared, and specialized skills, and put into practice through various training programs, including training for the development of necessary and effective job
skills and various types of specialized training.
In fiscal year 2022, educational outlays amounted to¥37 million and time spent on education per employee
in Japan was 18.1 hours, double last year’s figure, helping
to further raise employee awareness of the need to

Basic Policy on Human Resource Management

Operation
Director
Director

Corporate Overview/
Stock Information

Financial Information

34

35

I-PEX Inc. Integrated Report 2023

Overview

Value Creation

Sustainability

Segment Overview

Management Foundation

Corporate Overview/
Stock Information

Financial Information

Corporate GovernanceSociety

Corresponding
Materiality
P.20

Promoting Diversity, Equity, and Inclusion

Basic Approach

Promoting Women’s Participation and Advancement

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

We believe that fostering an organization in which personnel with a range of perspectives and different experiences can respect one another and exchange opinions isessential to generating innovation. This is what drives
our efforts to manage diversity. In Japan, with the aim ofactively promoting women’s empowerment, we aresystematically hiring and training female employees. We
set a target of raising the ratio of female managers to
10% by 2030. Along with reinforcing hiring practices for
women, we will foster a work environment and provide
career development support to allow female employees
to continue their careers across various life events.

Corporate Governance System

Mid-Career Hiring
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 overhalf of all employees hired on average over the past five
years, and accounted for the same percentage of managers as well. These employees play an active role in theorganization by drawing on their previous careers andexperience. Moving forward, we plan to continue mid-­career hiring efforts.

200

70.7
101

100

0

46.9
2018

New graduate hires

84
46.4

38.6
2019

2020

Mid-career hires

100

65.1
109

58

2021

2022

10

Nomination andCompensation Committee

0Mid-career hire percentage

Five Directors(Chaired by independent
Outside Director)

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

Board of Directors

16

Area

2021

2022

3.23

3.30

Overseas

4.05

4.01

Japan

3.24

3.27

Overseas

4.02

3.97

Japan

3.78

3.82

Overseas

4.16

4.11

Audit & Supervisory
Committee

ReportConsult

Audit
Eight Directors
Three Directors(including three Outside Directors)(including three Outside Directors)

Coordinate

Management
supervision

Audit
Instruct

President, CEO

ReportMain Governance Bodies

employees to choose from diverse working options tocreate more comfortable work environments. In fiscal year
2023, we will strive to enhance employee engagement by
exploring and implementing mechanisms that are particularly correlated with job fulfillment, to increase engagement
and better motivate employees to achieve their goals.

Japan

Internal Committees

Executive Committee

12

Executive Board

12

Management Meeting

12

Administrative Meeting

11

Report5

Sustainability Committee
Internal Control andCompliance Committee

Independent
Coordinate
auditorInternal
Auditing

Financialauditing

8Internal
auditing

Other specialized committees

Governance oversight

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

YoY

Corporate Governance Highlights
Independence

Expertise
Outside Directors(Audit & Supervisory
Committee Members):

3

Governance: 3

Attendance
Corporate and business
management:

7

Manufacturing
and development:

3

Promoting Work-Style Reforms
We are enhancing the HR system to maintain workplace environments in which diverse personnel canconsistently perform with confidence, regardless of thediversity of their work styles or changing life stages.
Specific measures in Japan include a remote work
program, a system for choosing work schedules, a system
for taking paid leave by the hour, establishment of contracted daycare centers, a system for shortened working

Appoint

15

Advise(Business Execution)

roles aligning individual aspirations with organizational
needs. These reforms have enabled us to more effectively utilize employees reemployed post-retirement
while boosting their motivation, thus fostering an environment where they can continue to work with positiveenergy and a sense of job fulfillment.

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

Number of meetings in FY2022

Appoint

ReportIncreasing 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 and use it to identify priority
issues to be addressed. Having implemented work-stylereforms in Japan, we introduced a system that allows

XX

50

Reforming the Post-Retirement Reemployment System
Positioning employees reemployed post-retirement as acorporate strength and seeking to actively draw on theexperience, knowledge, techniques, skills, and personalconnections they have cultivated over the years, weestablished a new system in fiscal year 2022. The systemdefines new compensation standards as well as clarifies

Appoint(%)

179

OutsideGeneral Meeting of Shareholders

New Graduates and Mid-Career Hires(People)Insidehours for childcare beyond statutory requirements, and asystem for shorter working hours to fulfill nursing care
responsibilities. We also encourage male employees totake childcare leave—here, the leave-taking rate is 23.8%
in Japan, higher than the national average. In addition to
improving these programs, we have formed a work-stylereform team to carry out actions to encourage the morewidespread use of our various in-house programs.

Ratio of Outside
Directors

Board of Directors
Average
Attendance Rate

Expertise/
Experience Expected*

38%

Globalexperience:
InsideDirectors:

5

Sales andmarketing:

5

100%

3

Finance, accounting
and law: 3* Each officer has multiple areas of expertise and experience.

36

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I-PEX Inc. Integrated Report 2023

Overview

Value Creation

Segment Overview

Sustainability

Management Foundation

Financial Information

Corporate Overview/
Stock Information

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.
Three 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 ourcurrent system of corporate governance.

Questionnaires (self-evaluation, etc.) 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 havebeen identified. In this way, we are working to strengthen the functions of the Board of Directors.
Overview
Survey method

Questionnaire given to all officers who participate in board meetings, including Audit & Supervisory
Committee Members

Surveyed 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 eight Directors (three of whom are Audit & Supervisory Committee Members)
and three are appointed from outside the company (all three of whom are Audit & Supervisory Committee Members).
The board, which meets once a month in principle, oversees business execution by the Representative Director andother Directors and makes decisions on important matters.

Analysis/evaluation

Audit & Supervisory Committee
The Audit & Supervisory Committee is made up of threemembers, all of whom are independent Outside Directors. Audit & Supervisory Committee Members attend
meetings of the Board of Directors and other important
committees, and they supervise and audit overallmanagement as needed. 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 and Article 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 theBoard of Directors, in order to further strengthen corporate governance by raising the objectivity and transparency of evaluation and decision-making processes
related to officer nomination and compensation. The
committee is consulted on the election, dismissal 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 chaired by
Outside Director Junichi Hashiguchi.

The Board of Directors’ administrative office analyzes the results and identifies issues; the Board of
Directors discusses the issues and considers the evaluation in greater depth
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 FY2022
An evaluation was made of the effectiveness of theBoard of Directors in fiscal year 2022. It covered all seven
Directors, including Audit & Supervisory Committee
Members, and also the seven executive officers who
participate in board meetings as observers. Scores
improved on matters related to allowing time for discussion and deepening discussions, areas that were specifically addressed as a result of the evaluation. Other

Issuesidentified

Operation of the Board of Directors
The Board of Directors, which is chaired by the Representative Director and made up of eight Directors (threeof whom are Outside Directors who are Audit & Supervisory Committee Members), met 16 times in fiscal year
2022. 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.

FY2021
evaluation

Results ofinitiatives(FY2022)

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∙ Matters related to investment∙ Matters related to M&A∙ Matters related to equity investment∙ Matters related to materiality∙ Matters related to capital policy∙ Annual business and financial plans

Policies and progress of I-PEX Vision 2030
∙ Sustainability policies and systems∙ Fiscal year 2023 budgets∙ Capital policy
Policy and progress of six points ofmateriality∙ Response to Governance Code (­Diversityof core human resources)∙ Strengthening of HR management∙ Group governance∙ Response to climate change and contribution to a recycling-based society
Policies and progress related to shareholder engagement∙ Briefings on financial performance

concrete achievements related to the effectiveness of
the Board of Directors were formulating a medium- tolong-term growth strategy, holding adequate discussions
on M&A projects, formulating policies and establishing acommittee related to sustainability management, which
includes women’s active participation and measures toaddress climate change, and also discussions and further
initiatives to strengthen capital policy and governance.

∙ Adequate discussion on important company matters∙ Discussions from diverse viewpoints and with a medium- to long-term time horizon∙ Provision of information on I-PEX policies, direction and growth strategies∙ Allow time for discussion of important agenda items by increasing administrative efficiency
and closely examining the agenda:
Time for discussion was created by streamlining board administration and holding meetings in
two sessions. In the second session, board members continued discussion of important mattersrelated to management.
∙ Deepen discussions by including a medium- to long-term time horizon and the perspectivesof stakeholders
I-PEX Vision 2030, the six points of materiality and shareholder engagement were establishedas agenda items related to important management matters, an agenda schedule was created
for the year, and its execution was supervised and discussed.

Issuesidentified∙ 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

Initiatives
planned(FY2023)∙ Increase administrative efficiency, select important agenda items, make an agenda schedule forthe year, and continue discussions on agenda items that contribute to raising corporate value
over the medium to long term
∙ Actively disclose information to shareholders and work for mutual understanding∙ Strengthen risk management by establishing a Group governance system

FY2022
evaluation

38

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I-PEX Inc. Integrated Report 2023

Overview

Value Creation

Segment Overview

Sustainability

Management Foundation

Financial Information

Corporate Overview/
Stock Information

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 Division. When it isnecessary for personnel to assist the three Audit & Supervisory Committee Members (all of whom are Outside
Directors) with their duties, staff are assigned to the committee. Employees who are asked to assist Audit & Supervisory Committee Members with their duties are required
to put the highest priority on the requests and instructionsof the committee, and their assignment to the position

requires the committee’s consent. These measures aretaken to ensure their independence.
Activities in fiscal year 2022 included establishing
opportunities for Outside Directors to visit a business sitein Japan and two sites overseas in order to increase theirunderstanding of I-PEX. In addition, beginning in fiscal
year 2023, we have been working to eliminate the information gap between Inside Directors and Outside Directors
by sharing more information with Outside Directors
through full-fledged briefings on important agenda items
and other matters held in advance of board meetings.

Executive Compensation
Compensation for executive Directors consists of fixedmonthly compensation, performance bonuses*1, which
are linked 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 theGroup’s sustained growth, raise corporate value overthe medium to long term, and share further value withshareholders. 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 thatform the basis of business management activities. With
this amount as the upper limit, points are calculated foreach eligible Director based on both quantitative

performance indicators 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 thenumber of I-PEX common shares to be granted and themonetary amount needed for tax payments based on
the degree of achievement 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 andcompensation for Directors who are Audit & Supervisory
Committee Members is no more than ¥45 million.

*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,and Number of Eligible Officers*3

Officer Category

Fixedcompensation

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

132

137

Performancebonuses

Performancelinked stockcompensation*4

Retirement
benefits

Non-monetarycompensation(included in theamounts at left)

7

–35

23

—

this, in fiscal year 2023 we have created a new Group
Governance Task Force and have begun initiatives with afocus on strengthening Group governance. We are now
actively visiting even overseas subsidiaries that we could
not travel to previously because of the pandemic.
Through these activities, we will move discussions
forward on the functions of local affiliates and the statusof their boards from the standpoint of Group governanceand further strengthen systems for the Group overall.

Disclosure
We promote constructive dialogue with shareholders
and investors to sustain growth and raise corporate
value over the medium to long term. The Representative
Director is the chief IR officer and the officer in charge of
disclosure (general manager of the Corporate Planning
Division), who is appointed by the Representative­Director, and supervises dialogue with shareholders andinvestors. Through this framework, we work to maintain
constructive dialogue.
Along with the Corporate Planning Division, the division in charge of IR, the company has also assigned the
Financial Division, and under the direction of the officer
in charge of disclosure, they coordinate to promotesmooth and rational dialogue and work to ensure that
disclosure is appropriate and timely. In addition, earnings briefings, company presentations, facility tours andother events are held to provide further opportunities
for dialogue with shareholders and investors. The officer
in charge of disclosure reports important feedback andrequests that emerge from dialogue back to the Boardof Directors or the management team in a timely
manner and shares information with them.
In conducting dialogue, insider information is appropriately managed in accordance with laws, regulations
and rules related to insider trading.

Sample Initiatives
Initiatives for enhancing the General Meeting of Shareholders
and facilitating the voting rights exercise process∙ Shareholder meeting notice sent at an early date
∙ Voting rights can be exercised via electronic means∙ Participation in electronic voting platform
Other initiatives for facilitating the voting rights exercise
process for institutional investors∙ Provision of shareholder meeting notice in English(a summary)

Total amount of compensation by type (Million Yen)

Total amount ofcompensation(Million Yen)

We are currently strengthening corporate governance, apoint of materiality that needs to be resolved for us togrow in a sustainable manner. One specific initiative tothis end is reinforcing global Group governance. We
manage Group companies based on the Group Company
Management Rules, but as a result of the evaluation of
the effectiveness of the Board of Directors conducted infiscal year 2022, it was commonly agreed that we needed
to strengthen governance of Group companies. Based on

Number of
eligible
officers*5

Activities related to IR∙ Creation of disclosure policy(https://corp.i-pex.com/en/ir/policy)∙ Regular briefings for analysts and institutional investors∙ IR materials available on the company’s website(https://corp.i-pex.com/en)∙ Department (personnel) in charge of IR

Corporate Philosophy Awareness-Raising
5

To Further Raise Awareness of Our Corporate Identity (CI)

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

—

—

—

—

—

—

—

Outside Directors

21

21

—

—

—

—

3

*3 Includes one Director who resigned as of the end of the 59th Annual General Meeting of Shareholders on March 29, 2022.
*4 Performance-linked stock compensation includes an allowance for the estimated payment amount.
*5 The number of eligible officers includes officers who receive performance-linked stock compensation.

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.

We created a new corporate identity (CI) in January 2019 for a newstage of growth and changed our company name in August 2020.
Internally, an interdepartmental project team was launched tocarry out awareness-raising activities for our CI. Overseas, awareness is being raised in line with local circumstances at each site,
and we are moving forward with a sense of unity.
Specifically, we administer an annual employee questionnaire,
hold study sessions on our philosophy in each business division,
conduct workshops to promote communication within the organization, and host direct talks between employees and the president using “Tsuchiyama-san’s CI Café,” a column published on ourinternal website. Through these and other measures, we are
increasing understanding of our CI and sympathy for it.

40

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I-PEX Inc. Integrated Report 2023

Overview

Value Creation

Segment Overview

Directors, Audit & Supervisory Committee Members,
and Executive Officers (as of March 29, 2023)

5

Board Member, Executive Officer
Sales Director

AtsushiYasuoka

Management Foundation

Sustainability

Number of theCompany’s shares owned:

3,200∙ Date of birth: November 27, 1965

Junichi
Hashiguchi

Outside Director (Audit &Supervisory Committee Member)
Independent Director

Shuji
NiwanoApr. 2013 Sales Div. Director of I-PEX Unit
Jan. 2015 Appointed Executive Officer
Jan. 2019 Sales Div. Director of Sales Div.
Jan. 2021 Executive Officer and Sales Div.
Director (to present)
Mar. 2023 Appointed Board Member(to present)

Apr. 1970 Joined Nissan Motor Co., Ltd.
July 1996 General Manager of Purchasing
Department 1 of Nissan MotorCo., Ltd.
June 2000 Executive Officer, General
Manager of Purchasing Divisionof Unisia Jecs Corporation(currently Hitachi Astemo, Ltd.)May 2004 Vice President, General Manager
of Sales Department of KIRIUCORPORATION
June 2006 Senior Vice President, General
Manager of Sales Department
and Purchase Department of
KIRIU CORPORATION

Number of theCompany’s shares owned:

8

2,200

1

President, CEO

Takaharu
Tsuchiyama

4
Number of theCompany’s shares owned:

45,500∙ Date of birth: April 29, 1959
∙ Significant concurrent positions outside
the Company
Chairman of I-PEX Precision Mold &Plastics (Shanghai) Co., Ltd.

Career summary Mar. 1982 Joined the Company
Mar. 1997 Operating Director of Tool &Equipment Dept.
June 2000 Appointed Director
Mar. 2002 Operating Director of Tool &Equipment Dept. and General
Manager of R&D Dept. Division 1
July 2003 Operating Director of Electrical
Components Division andGeneral Manager of R&D Dept.
Division 1
Mar. 2005 Operating Director of Electrical
Components Division

3

Board Member, Managing
Executive Officer, Chief
Operating Officer Operation
Director of Electronic
Components & Devices Div.

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

1

Number of theCompany’s shares owned:

3

5∙ Date of birth: March 24, 1955

YoichiWakasugi

Nov. 1983 Joined the Company
Mar. 1998 Operating Director of Production
Technology Division
June 2001 Appointed Director
Mar. 2002 Operating Director of
Semiconductor Equipment
Division and General Manager of
R&D Dept. Division 3
Mar. 2005 Operating Director of
Semiconductor Equipment
Division
Apr. 2007 Chief Equipment Unit Officer

Number of theCompany’s shares owned:

4

9,200

∙ Date of birth: August 22, 1963

Board Member, Managing
Executive Officer,
Chief Strategy Officer Corporate
Planning Div. Director

Reiji
Konishi

Career summary 

Sept. 2010 Deputy Supervisor on Business,
and Chief R&D Div. Officer
Mar. 2013 Appointed Senior Vice President
Apr. 2013 Chief R&D Div. Officer, and in
charge of Precision Components
Dept. and Equipment Dept.
Jan. 2015 Chief R&D Div. Officer
Jan. 2021 Chief Technology Officer(to present)
Jan. 2022 Appointed Board Member,Managing Executive Officer(to present)

Number of theCompany’s shares owned:

101,900∙ Date of birth: September 1, 1971

July 1996 Joined the Company
Dec. 2003 Seconded to I-PEX Co., Ltd.
Jan. 2014 General Manager of Marketing
Dept. of Sales Div. of I-PEX Unit
Jan. 2017 Marketing Div. Director
Jan. 2018 Appointed Executive Officer
Jan. 2021 Corporate Planning Director

Number of theCompany’s shares owned:

—∙ Date of birth: August 2, 1966
∙ Significant concurrent positions outside
the Company
Attorney (Partner of Oh-Ebashi LPC &Partners)

Apr. 2012 Director, Managing Executive
Officer of NEC Mobiling, Ltd.
Feb. 2014 Director, Managing Executive
Officer and General Manager ofFinance, Accounting and IT
Division of MX Mobiling Co., Ltd.
Mar. 2016 Full-time Auditor of theCompany
Mar. 2017 Outside Director (Audit &Supervisory Committee Member)(to present)

Apr. 1994 Registered as an attorney, joined
Oh-Ebashi Law Offices
Apr. 2001 Partner of Oh-Ebashi Law Offices
Aug. 2002 Partner of Oh-Ebashi LPC &Partners (to present)
May 2008 Outside Auditor of PAL Co., Ltd.
(currently PAL GROUP Holdings
CO., LTD.)May 2020 Resigned as Outside Auditor of
PAL GROUP Holdings CO., LTD.
Mar. 2021 Appointed Outside Director(Audit & Supervisory Committee
Member) (to present)

Executive Officer
Operation Director,
Equipment Division

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

As of April 1, 2023
Mar. 2021 Appointed Director
Jan. 2022 Appointed Board Member,
Executive Officer
Chief Strategy Officer (to present)
Apr. 2023 Managing Executive Officer(to present)

Executive Officer
Operation Director, MFG Solution Division

Executive Officer
Finance Director

Tomohiro
Nishiyama

TakeshiShimazaki

Composition and Skills Matrix of the Board of Directors
Name

Position and responsibility in the Company

Audit & Supervisory
Committee meetings
Attendance rate

Management ofcorporate
operations

Takaharu
President, CEO
Tsuchiyama
Board Member, Managing Executive Officer,
Kenji
Chief Technology Officer R&D Div. Director
Ogata
AkihikoHara
Reiji
Konishi

Career summary 
Apr. 2020 Appointed Senior Vice President
Jan. 2021 Chief Operating Officer ofElectronic Components &Devices Div. (to present)
Jan. 2022 Appointed Board Member,Managing Executive Officer(to present)

June 2009 President and Representative
Director of KIRIU CORPORATION
June 2014 Chairman and Representative
Director of KIRIU CORPORATION
Mar. 2016 Director of the Company
Mar. 2017 Outside Director (Audit &Supervisory Committee Member)of the Company (to present)
Mar. 2019 Outside Director of TSUBAKI
NAKASHIMA CO., LTD. (to present)
Mar. 2022 Company Auditor of MarkLinesCo., Ltd. (to present)

42,800∙ Date of birth: April 2, 1958

Kenji
Ogata

Apr. 2007 Chief Components Unit Officer
Apr. 2009 Chief Automobile Components
Unit Officer
Mar. 2013 Appointed Senior Vice President
Jan. 2017 Group Manager of Components
Business Group, and Chief
Automobile Components Unit
OfficerJan. 2019 Chief Sales Div. Officer
June 2019 Appointed President
Jan. 2022 Appointed President, CEO(to present)

13,200∙ Date of birth: September 9, 1947
∙ Significant concurrent positions outside
the Company
Outside Director of TSUBAKI NAKASHIMA
CO., LTD. Auditor of MarkLines Co., Ltd.

Executive Officers (excluding those concurrently serving as Board Members)

8

Career summary AkihikoHara
Aug. 1985 Joined the Company
Mar. 2007 Operating Director of Electronic
Components & Devices Div. ofConnector Unit
Jan. 2012 Operating Director of Electronic
Components & Devices Div. of
I-PEX Unit
Mar. 2012 Appointed Director
Jan. 2017 Deputy Chief I-PEX Unit Officer
Jan. 2019 Chief Connector Unit Officer22

Number of theCompany’s shares owned:

42

Career summary 

Apr. 1977 Joined NEC Corporation
June 2003 General Manager of IR Office,Finance Division of NEC
Corporation
May 2007 General Manager of Accounting
Division of NEC Mobiling, Ltd.
(currently MX Mobiling Co., Ltd.)
June 2009 Director, Executive Officer andGeneral Manager of Accounting
Division of NEC Mobiling, Ltd.

Directors

Outside Director (Audit &Supervisory Committee Member)
Independent Director

Career summary 

6Corporate Overview/
Stock Information

Career summary 

May 2005 Joined I-PEX Co., Ltd. (currently
the Company)
May 2007 General Manager ofInternational Business of Dept. ofSales Div. of I-PEX Co., Ltd.
Jan. 2012 Joined the Company
General Manager ofInternational Business Dept. ofSales Div. of I-PEX Unit

7

Outside Director (Audit &Supervisory Committee Member)
Independent Director

Career summary 

7

6

Financial Information

AtsushiYasuoka
Junichi
Hashiguchi
Shuji
NiwanoYoichiWakasugi

Board Member, Managing Executive Officer,
Chief Operating Officer Operation Director of
Electronic Components & Devices Div.
Board Member, Managing Executive Officer,
Chief Strategy Officer Corporate Planning
Div. Director
Board Member, Executive Officer
Sales Director
Outside Director (Audit & Supervisory
Independent Director
Committee Member)

100%

Outside Director (Audit & Supervisory
Independent Director
Committee Member)

100%

Outside Director (Audit & Supervisory
Independent Director
Committee Member)

100%

Note: The list above is not intended to show all expertise and experience of the Directors.

Expertise and experience particularly expected
Finance,
Manufacturing
Globalaccounting,Sales andand
Governanceexperienceand legal
marketingdevelopment
affairs

43

I-PEX Inc. Integrated Report 2023

Overview

Value Creation

Segment Overview

Sustainability

Management Foundation

Financial Information

Corporate Overview/
Stock 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 and made up
of Directors and other necessary personnel, and an
administrative office for it directly under the chairperson.
In addition, compliance managers are assigned to eachCommittee has 13
division. Including Directors, the ­members (ten men and three women), and there is aframework in place by which members and the administrative office discuss issues from multiple perspectives
and carry out related activities. The Committee met eighttimes in fiscal year 2022 to discuss the progress of internal control activities.
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 in-house
website and communicated to directors and employees.
CSR study sessions are also held as appropriate as a part

Business Risksof continuing efforts to raise compliance awareness. In
fiscal year 2022, we held study sessions on internal
control twice for managers and higher-ranked personnel, and in this fiscal year we will continue activities tofacilitate greater understanding of the importance oflegal 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.

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 to further
enhance audits.

onsite audits, and designs and implements the Group’s
auditing system. In addition, the Audit & Supervisory
Committee, Internal Auditing, and independent auditors
coordinate with each other, reporting and exchanging
information on audit schedules, auditing progress, thestatus of internal controls, and other matters. They also
work to qualitatively improve the internal control division
through audits of it and strengthen the Group’s overall
control and supervisory functions.

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.

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

Main risks anticipatedMain measures taken to address risks

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 toreduce quality non-conformance and strengthen quality governance

Risks 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 establishinginternal 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 totechnologies possessed

Competitiveness diminished by greater-than-­ Awareness-raising and the cultivation of a corporate culture to
anticipated technology innovations
minimize risk, carrying out ongoing market environment surveys,
and focused investment of management resources in priority R&D
areas and themes

Risks regarding quality

Risks related tointellectual property
rightsCompetition risks

Risks associated withlarge capital investment

Risks related to inventory

Regulatory risks

Foreign exchange risks

Risks of dependence on
specific buyers

Credit risks

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
in connection with business execution by the Group.
If a major accident, disaster, scandal or other such

Item

Risks of price fluctuationsof raw materials andpurchased components

Role of Internal Auditing
We have established Internal Auditing that is independent of divisions involved in business execution. The
office audits the business processes of the divisions andworks to discover and prevent non-compliance and to
improve processes. Our administrative division (internal
control division) guides and checks the overall Grouprelated to business functions on a daily basis, and Internal
Auditing (eight members: four permanent members andfour with other concurrent duties), which is directly
under the president, conducts internal audits, including

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

Risks related to demand
trends for I-PEX products

Risks related to goodwill
and other intangible fixed
assetsTechnology 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 toreduce intellectual property infringement by I-PEX

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
lead times, etc.

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

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 purchasingrare metals in fixed quantities, and multiple sourcing for purchased
components, etc.

Valuation or disposal loss on surplus or stagnant
inventory

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

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 andbuilding process flows related to contracts, and monitoring IP
infringement by other companies and taking appropriate measures

Sharp fluctuations in exchange rates

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

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

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

Uncollectible debt due to rapid deterioration incustomer business performance

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

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
and parts procurement trends among customers

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

Impairment loss due to declining profitability as aresult of business not progressing according to plan

Regularly verifying business profitability and risk and revising plans
as necessary

44

45

I-PEX Inc. Integrated Report 2023

Overview

Value Creation

Message from an Outside Director

Outside Director(Audit & Supervisory
Committee Member)— First, what is I-PEX doing to deal with changes in the global
industrial structure brought about by COVID-19?
— Second, what is the current status of the company’s businessrestructuring and portfolio optimization and what issues does
it face?
— Finally, how is I-PEX evolving its corporate governance?

In the current context, clearly the urgent management issues
facing the Group are to quickly get back on a growth track andto strengthen the earnings base by improving ROE. The market
is carefully watching the management goals set forth in I-PEX
Vision 2030 and the path to achieving them.
The Group must move ahead at an even faster pace toenhance corporate value and achieve its management goals.
It must also work to sustainably enhance corporate value andaddress social issues by steadfastly engaging in the six points ofmateriality it has identified. My role as a member of the Audit &Supervisory Committee is to support this.

Improvement activities aiming to become an“Innovative Product development & Engineeringsolutions eXpert”
In the fall of 2022, the Audit & Supervisory Committee conducted an on-site audit of affiliates in Singapore and Malaysia,
which are the main production facilities for the consumer andautomotive components businesses. Audit activities had to be
curtailed during the pandemic, but with the situation beginning
to return to normal and as travel restrictions were relaxed, we
visited the sites after confirming that everything was set locally.
Partly because they coincided with the downswing in market
conditions, the audits offered us an opportunity to find out
about the inventive measures the plants were pursuing in theiroperations during a period of low capacity utilization, as well as
the issues they face. First, on the production floor, we saw for
ourselves the low utilization rates, the build-up of inventory,
and idle floors. In interviews, the affiliates’ managing directors
briefed us on a range of management issues, including productivity improvements achieved through collaboration with business divisions at the parent company, the monitoring of KPIs
and management of a PDCA cycle related to plant operations,Management Foundation

Financial Information

Corporate Overview/
Stock Information

Operating Results

Overseas affiliates initiate improvement activities
aiming to become an “Innovative Productdevelopment & Engineering solutions eXpert”
Group governance vision to enhance corporate
value going forward
Shuji Niwano

The Group performance for fiscal year 2022 represented a turnaround from record-high profit in fiscal year 2021, with earnings
declining 10% and net income attributable to owners of parent
decreasing 97%.
Investors and other stakeholders are likely to be asking
several questions.

Sustainability

Financial Information

Report on Audits of Southeast Asian Affiliates

Urgent management issues are quickly returning
to a growth track and strengthening the earnings
base by improving ROE

Segment Overview

and the implementation of training plans for technicians. We
confirmed that the sites are steadily moving forward with the
improvement activities they initiated. The directors also
explained that a market downturn can be an opportunity toaccelerate steps to raise the level of management, and thatthey are pursuing improvements in preparation for an upturn.
These include rebuilding the supply chain in Southeast Asia inclose coordination with the business divisions, paring down
inventory, cutting distribution costs, and strengthening facilities
maintenance capabilities.
The visits gave me a keen sense of the way in which activities aiming to become an “Innovative Product development &Engineering solutions eXpert” give rise to the inventiveness ofdiverse personnel on the production frontlines and generatesynergies that support the growth of the Group.

A vision of group governance for enhancing
corporate value
At the same time, taking the standpoint of the management of
the local affiliates, I could not say that discussions by their Boardsof Directors were necessarily adequate with respect to businessplanning, risk management, and other key management issues.
This is an issue that should be addressed from the standpoint of
the development and operation of an internal control framework
for the Group overall, led by the parent company headquarters
and put in place across the Group as a whole.
At present, around 70% of the Group’s sales are to overseas
customers. Since overseas affiliates will play a pivotal role in theGroup’s growth going forward, their Boards of Directors have to
go beyond simply making decisions and supervising production
as an overseas plant. They need to evolve into companies with
their own corporate identity, driving the execution of growthstrategies and taking responsibility for the decision-making andsupervisory functions needed for growth.
To this end, there needs to be more in-depth discussion of thefunctions of the local affiliates and the roles their Boards of
Directors play from a Group governance perspective. Once thisis redefined, the companies need to take the initiative in carrying out their own activities.
Raising effectiveness is not an issue only for the Board of Directors of the parent company—
it also pertains to the Boards of
Directors of the companies thatmake up the I-PEX Group. To
further enhance corporate value,
the Audit & Supervisory Committee will continue to pursue Group
governance that fully capitalizes Audit & Supervisory Committee
members with managing direcon the strengths of the frontlines.
tors of Singapore and Malaysia
affiliates

In the consolidated fiscal year under review, the global
economy, under the influence of COVID-19, remained
unpredictable because of these reasons as below:
Sharp price increases for resources and energy as aresult of the prolonged situation in Ukraine, a shortageof parts and raw materials owing to disruptions ofsupply chains, and rising concerns about inflation in the
U.S. and European economies.
The economy in Japan also showed signs of uncertainty, under the influence of COVID-19, because of highprices for raw materials, a shortage of semiconductors
and electrical parts, and price increases due to theongoing depreciation of the yen.
As a result, our consolidated net sales decreased
10.8% to ¥59,643 million, compared with the prior year,
operating income decreased 85.8% to ¥978 million,
ordinary income decreased 72.5% to ¥2,120 million, andnet income attributable to owners of parent decreased
97.2 % to ¥168 million.

Financial Position
Total assets at the end of the consolidated fiscal year
under review increased ¥546 million from the end of theprevious fiscal year to ¥92,237 million. The main increases
were goodwill of ¥2,038 million and machinery, equipment and vehicles of ¥1,803 million, and the maindecreases included work in process of ¥2,867 million.
Liabilities decreased ¥1,023 million to ¥33,891 million.
The main decreases were notes and accounts payable—
trade of ¥980 million and accounts payable—other of¥710 million, and the main increases included shortterm borrowings of ¥571 million.
Net assets increased ¥1,570 million to ¥58,346 million
as a result of a decrease in retained earnings of ¥921
million attributable to dividends from surplus and otheritems and an increase in foreign currency translation
adjustment of ¥2,897 million from the impact of foreignexchange rate fluctuations.

Cash Flows
Operating cash flow in the consolidated fiscal year
under review increased ¥9,669 million (¥12,809 million
increase the previous fiscal year). This was attributable
to an increase in inventories of ¥1,144 million, an
increase in accounts receivable—other of ¥1,220 million
and income taxes paid of ¥1,351 million being more thanoffset by income before income taxes of ¥1,133 million,
depreciation of ¥7,329 million, loss on sale of investment
securities of ¥469 million, a decrease in trade receivables of ¥2,359 million, an increase in accounts
payable—other of ¥432 million, and a consumption
taxes refund of ¥1,079 million.
Investing cash flow decreased ¥6,165 million (¥7,946
million decrease the previous fiscal year) from proceeds from sale of property, plant and equipment of¥738 million being more than offset by the purchase ofproperty, plant and equipment of ¥4,763 million, purchase of intangible assets of ¥504 million, and purchaseof shares of subsidiaries of ¥1,241 million resulting froma change in the scope of consolidation.
Financing cash flow decreased ¥3,690 million (¥3,236
million decrease the previous fiscal year) as a result of anet increase in short-term borrowings of ¥1,060 million
and proceeds from long-term borrowings of ¥4,800
million being more than offset by repayments of longterm borrowings of ¥6,510 million, repayments of leaseobligations of ¥528 million, repayments of long-term
accounts payable—other of ¥1,493 million, and dividends
paid of ¥1,019 million.
As a result, cash and cash equivalents at the end of
the period increased ¥471 million from the end of theprevious fiscal year to ¥14,269 million.

Capital Expenditure
Capital expenditure in the consolidated fiscal year
under review totaled ¥5,509 million and was primarily
for production facilities. In the electric/electronic components business, ¥3,092 million was invested inmachinery and equipment, including molds and automatic machines, to augment production capacity. In theautomotive components business, investments of ¥1,727

million were made in molds, automatic machines, andother machinery and equipment also for the purpose ofaugmenting production capacity. In the equipment business, investments of ¥25 million were made to maintainproduction capacity. Capital expenditures of ¥664
million were also made in administrative divisions.

46

47

I-PEX Inc. Integrated Report 2023

Overview

Value Creation

Segment Overview

Seven-Year Financial Summary

Net Sales

Consolidated fiscal year

54th

55th

56th

57th

58th

59th

60th

Fiscal year-end

12/2016

12/2017

12/2018

12/2019

12/2020

12/2021

12/2022

Operating Performance (Million Yen)
45,83451,92552,67454,01954,531

66,87159,643

Cost of sales

33,71736,34338,291

38,55037,58444,31541,548

12,116

15,582

14,383

15,468

16,94722,55518,095

11,715

12,97813,664

13,962

14,036

15,678

17,116

Operating income

401

2,604

719

1,505

2,911

6,877

978

Ordinary income

800

2,509

660

1,382

2,672

7,704

2,120

Net income (loss) attributable toowners of parent

157

1,667

–1,882

925

1,151

5,921

168

Capital expenditure

6,914

11,98010,535

12,765

9,631

10,697

5,509

Depreciation

5,477

5,730

5,726

5,578

6,429

6,898

7,329

R&D expenses

2,241

2,234

2,530

2,090

2,050

2,077

2,547

Operating Income(%)(Million Yen)(%)

80,000

80

8,000

18.0

60

6,000

40

4,000

20,000

20

2,000

0

0

0

6,877

66,87154,53154,01952,674

59,64340,000
28.6

27.3

33.7

31.1

13.5
10.3

30.3

Net Sales

2019

2020

2021

2022

2018

(%)

(Million Yen)

Current assets

31,09430,10629,34536,03035,925

41,13941,193

8,000

12.0

6,000

Total assets

59,17564,92966,82080,421

81,90891,69092,237

Current liabilities

9,112

11,144

13,905

16,46817,991

20,62919,673

6,283

7,767

12,983

17,58017,092

16,735

17,656

Net assets

44,681

46,877

43,84549,795*49,51556,77558,346

Operating cash flow

4,535

6,805

4,370

5,994

9,195

12,8099,669

Investing cash flow

–6,400–10,547–9,296–8,485–6,632–7,946–6,165

Financing cash flow

497

792

4,090

7,937

–2,558–3,236–3,69010,964

7,905

6,872

12,182

11,71913,797

14,269Per Share Data (Yen)
Net income (loss) attributable toowners of parent

11.5

6,000

99.73

–112.58

54.83

61.50

316.82

9.08

Net assets per share

2,666.11

2,799.15

2,617.79

2,656.10

2,641.63

3,060.94

3,139.58

Dividend per share

15.00

25.00

20.00

25.00

25.00

50.00

40.00

4,000

26.4

30.0

27.3

28.6

31.1

33.7

30.3

Operating income percentage (%)

0.9

5.0

1.4

2.8

5.3

10.3

1.6

Ordinary income percentage (%)

1.7

4.8

1.3

2.6

4.9

11.5

3.6

ROE (%)

0.3

3.6

–4.2

2.0

2.3

11.2

0.3

ROA (%)

0.3

2.7

–2.9

1.3

1.4

6.8

0.2

Shareholders’ equity ratio (%)

75.3

72.1

65.5

61.8

60.4

61.8

63.1

Dividend payout ratio (%)

159.4

25.1

—

49.5

40.7

15.8

440.5

* 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.

(FY)

(%)

12

5,921
11.2
6.8

6.0

4.9

1.3

3.6

2,672

2.6
660

0

Ordinary Income

3.0

0

2018

2019

2.0
–1,882

0

2,120

1,382
2020

2021

2022

2018

(%)

(Yen)

80

400

92,237

91,69050,00060.4

49,79543,84561.8
56,77563.1

00

Net assets

(FY)

2022

2021

Shareholders’ equity ratio

(%)

400

200

20

Total assets

–6
2021

440.5

200

40

49,5152020

2020

58,34625,000

2019

2019

0

60

20.0

0

2018

1,151

316.82

81,908
61.8

168
0.3
0.2

1.4

Net Income (loss) Per Share/Dividend Per Share/
Dividend Payout Ratio*

100,000
80,421

2.3

1.3
925

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

65.5

6

–2.9
–4.2

–3,000(FY)

Ordinary income percentage

66,820Gross profit margin (%)

0.0

2022

Operating income percentage

3,000

75,000Financial Indicators

2021

9.0

Total Assets/Net Assets/Shareholders’ Equity Ratio
9.41

2020

7,704

2,000

Cash Flows (Million Yen)

978
1.6

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

Interest-bearing debt

2019

Operating Income

Ordinary Income

4.5

1.4

(FY)

Gross profit margin

5.3

1,505
2.8

719
2018

9.0

2,911

Financial Position (Million Yen)

Cash and cash equivalents
at end of period

48(Million Yen)

60,000Net sales

SG&A expense

Corporate Overview/
Stock Information

Financial Information

Management Foundation

Performance Highlights

Financial Information

Gross profit

Sustainability

2022

(FY)

49.5

40.7

54.83 25.0 61.50 25.0
–200

50.0
15.8

40.0

–112.58
2018

0

9.08
–200

2019

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

2020

2021

2022

Dividend per share* The dividend payout ratio is not indicated for fiscal year 2018 because
there was a net loss.

(FY)

49

I-PEX Inc. Integrated Report 2023

Overview

Value Creation

Segment Overview

Sustainability

Management Foundation

Financial Information

Corporate Overview/
Stock Information

Corporate Overview/Stock Information

Performance Highlights(as of December 31, 2022)
R&D Expenses

Corporate Overview

Number of IP Applications/Number of IP Rights Held（名） (Number)(Million Yen)

3,000

(Number)

2,000

200
2,547

2,530
2,250

2,090

2,050

150

2,077

157 1,621

1,630
1,330

100

1,216

1,171
1,000

94

85

74

750

50

500

0

0

0

2018

2019

2020

2021

2022

2018

(FY)

R&D Expenses

2019

Number of IP applications

I-PEX Inc.

Head office12-4 Negoro, Momoyama-cho,
Fushimi-ku, Kyoto, JAPAN

Date of incorporation

July 10, 1963

Paid-in capital

10.968 billion yen

Head countNon-Consolidated: 2,000
Consolidated: 5,293

Main banks

MUFG Bank, The Bank of Kyoto,
Sumitomo Mitsui Banking Corporation,
Mizuho Bank

1,500

130

1,500

Trade name

2020

2021

2022

(FY)

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

Number of IP rights held

Stock Information
Hiring Rates for New Graduates and Mid-Career Personnel

Women in Managerial Positions/
Percentage of Women in Managerial Positions(%)(Number)

(%)

100

80

20

83.6

86.3

84.1

87.7

92.7

15.7

60

75

16.3
54

16.5

17.0

15.7
56

55

60

41

15

50

40

25

20

5

0

0

16.4

13.7

0
2018

2019

New graduate hiring rate

15.9

12.3

7.3
2020

2021

2022

Mid-career hiring rate

Employees/Average Years of Service

9.05
6,076

9.54
5,928

10.2
5,843

10.8
5,667

11.2

12

80,000960,00040,0002,000

320,0000

0

0

Employees

2020

Average years of service

2021

61,516

5,293
6

2019

2021

2022

2022

Scope 1+2

49,061
735

6640

Shareholder registryadministrator

Mitsubishi UFJ Trust and Banking Corporation

Total number of issuable
35,000,000
sharesTotal number ofissued shares

18,722,800

Number of shareholders

9,931

Major Shareholders (Top 10)
Shareholder name

Number ofshares held
6,821,400
1,300,800
644,400
570,580
300,000
276,100

Shareholding
ratio (%)
36.77
7.01
3.47
3.07
1.61
1.48

161,000

0.86

156,200
131,700
114,950

0.84
0.70
0.61

* The Company owns 172,166 shares of treasury stock, but these have been excluded from the above table. Treasury shares (172,166 shares) have been deductedfrom the shareholding ratio.

48,3262018(FY)

57,557

Stock code

DMC Co., Ltd.
The Master Trust Bank of Japan, Ltd. (Trust Account)
Custody Bank of Japan, Ltd. (Trust Account)
Employees’ Stockholding
Daiki Konishi
DFA INTL SMALL CAP VALUE PORTFOLIONORTHERN TRUST GLOBAL SERVICES SE, LUXEMBOURG RE CLIENTSNON-TREATY ACCOUNT
THE BANK OF NEW YORK MELLON 140040
STATE STREET BANK AND TRUST COMPANY 505103
JP MORGAN CHASE BANK 385781

66,19057,110Tokyo Stock Exchange, Prime Market(FY)

Scope 1/Scope 2 (tons-CO 2)*

4,000

2018

2020

CO2 Emissions(Years)

8,000

2019

Women in Managerial Positions
Percentage of Women in Managerial Positions(Number)

6,000

2018

(FY)

10

Stock exchange listing

Scope 1

2019

2020

2021

2022

(FY)

Scope 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 2018 to 2021 are the totals of Scope 1 and Scope 2.

Share Distribution by
Owner Category

Treasury shares

172

0.9%

Finance institutions

2,463

13.2%

(Unit: 1,000 Shares)

Individuals, etc.

6,555

35.0%

Foreign corporations, etc.

2,141

11.4%

Securities companies

387

2.1%

Other companies

7,001

37.4%

50

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