Tokyo Electron

Annual Report 2012Page9ContentsHighlights

Top Message

Segment Information

Featuren Feature 1

Corporate GovernanceCorporate Citizenship

R&D/Intellectual Property

Financial Section

Corporate Datan Feature 2Feature 1

Management Talks About Manufacturing,Core SPE and New Growth Drivers

Manufacturing as a Platform for
Maximizing Customer Value
Hirofumi Kitayama
Representative Director,
Executive V.P. and General Manager,
Manufacturing Division (Quality)

We have set ourselves the challenge to “become the world’s top

expectations. The new plants in Miyagi and China put this con-semiconductor production equipment manufacturer.” As part ofcept of value into practice.

our plan to achieve that goal, we began operations at the Tokyo

Other issues which we must always keep in mind are the provi-

Electron Miyagi new plant in Japan in October 2011. This newsion of fast, high-quality services delivered close to the customer,

plant unifies all the processes behind etch systems, from develop-exchange rate fluctuations, BCP, and the national policies of thement to product manufacturing. The plant’s mission is to use thiscountries in which we operate. To deal with these issues, we areunified structure to deliver products with even higher value topromoting localization and global procurement initiatives aimed

customers on a timely basis. We will shorten the product develop-at ensuring our costs are in line with market expectations.

ment time, enhance product quality from the development stage,Through our sourcing in Taiwan, Korea, and China, we haveand improve productivity by completely eliminating wasted time,

gradually grasped the characteristics of the cost and quality ofcommunication, and costs. What we challenge with flow-line

goods in each region. Important things are, we have to fully

manufacturing introduced at this new plant is “production innova-

leverage these characteristics, and at the same time we havetion” through visualization.

to value the good faith and trusting relationships with newIn March 2012, Tokyo Electron (Kunshan) Limited began oper-Hirofumi Kitayama

Hikaru Ito

Kenji Washino

Representative Director

Corporate Director

Corporate Director

When pursuing costs, weIn fiscal 2012, the SPE division

We are challenging ourselves

should not overly focus on

was able to gain a foothold toto create new growth drivers

direct costs and neglect to see

further raise our position inwhich draw on our SPE

the mechanism of production

coming years in our focus areas.

strengths and lead to theand quality.

local partner companies as well as established partner compa-

ating its plant in Kunshan, China. Initially, the plant is engaged innies. When pursuing costs, we should not overly focus on

the repair of parts used in FPD plasma etch systems. It successfully

direct costs and neglect to see the mechanism of production

shipped its first products to customers at the end of April.

and quality. Paradoxically, by utilizing global sourcing, the Jap-Through the challenge to manufacture FPD etch systems at a costanese art of manufacturing can continue to find value throughthat meets market expectations, we seek to build a manufactur-

thoroughly examining indirect costs for all processes and slim-

ing base in the area where demand for digital consumer electron-

ming them down.

ics is expected to grow significantly.

With our 50th anniversary approaching, we will spare no effort

From the customers’ perspective, our value lies in products
backed by unsurpassed technology and product manufacturing

to advance product manufacturing based on our enduring desire
to maximize customer value.

supported by a cost structure consistent with market
Operations Start at New Production Base for Etch Systems

Operations Start at New Kunshan Plant in China

The new Miyagi Plant integrates
development and manufacturing aswell as using a new production
system, thereby improving quality andincreasing productivity.

establishment of differentiated technologies.
Tokyo Electron Miyagi Limited

We have built a manufacturing basefor FPD production equipment inChina which is expected to become acenter for flat panel display manufacturing, aiming to reduce costs andquickly respond to customers
Tokyo Electron (Kunshan) LimitedZoomZoom

Tokyo Electron

Annual Report 2012Page10ContentsHighlights

Top Message

Segment InformationFeaturen Feature 1

Corporate GovernanceCorporate Citizenship

R&D/Intellectual Property

Financial Section

Corporate Datan Feature 2

Feature 1

Seizing Opportunities toAchieve Our Growth Strategy

Actively Introducing
New Products to Achieve Growth
That Outpaces Market Expansion

Kenji Washino

Hikaru Ito

Corporate Director,
Executive V.P. and General Manager,
Corporate Business Strategy/Organic EL/FPD/PVE

Corporate Director,
Executive V.P. and General Manager,
SPE

After the global financial crisis of 2008, two major changes intrends have been occurring in the semiconductor production
equipment (SPE) market. One is an increase in the ratio of investment for logic devices. The other is a decrease in the number ofsemiconductor manufacturers who are able to make large capital
investments: in other words, advancement of so-called “oligopolization.” In response to these changes, the SPE Division has
upgraded and expanded the line of products for logic devices andstrengthened the sales organization.
In fiscal 2012, in particular, we gained a foothold for further
increasing our position in the coming years in the fields of etchand clean, our focus areas. These two products achieved market
share gains, and in addition, succeeded in getting approvals
from major customers as their next-generation volume production equipment.
At the same time, the year brought considerable accomplishments in product development. A notable example is Atomic
Layer Deposition (ALD), a new deposition process that isexpected to be an essential technology for the manufacturing of
next-generation devices. Tokyo Electron succeeded in developing
and commercializing a semi-batch ALD system for this process. Inaddition, in coaters/developers, an area in which Tokyo Electron
has dominant market share, the Company began full-scale
market introduction of a new model for 20nm node following
favorable evaluations from customers.
Looking ahead, Tokyo Electron will aim for further expansion of
the SPE business by boosting competitiveness in etch systems,
cleaning systems, and the field solutions business while solidifying
its position for products with high market share through activeintroduction of new products.
To that end, we will continue to develop products and technologies unavailable from competitors, as exemplified by new
plasma technology that uses a radial line slot antenna, and tonurture and develop human resources all around the world who
can provide the best solutions by matching such technologies tocustomer needs.

Expand Sales with Differentiated New Products

In recent years, the amount of IP traffic being sent over the Internet has exploded, as GPS, sensor data and other types of data arebeing transmitted to servers, in addition to computer data. By
2015, the amount of data transmitted is forecasted to be morethan double compared to today. We are also seeing smartphones,
tablets, and other mobile products drive the growth in the electronics industry, as consumers demand products that are faster,
more energy efficient, and thinner.
To meet the era’s needs, we are expanding our products for
wafer-level packaging (WLP) which promises strong future growth,
as well as strengthening our existing products for front-end wafer
processing. Ranging from our Etch system and CVD system to therecent additions of wafer bonder/debonder, our product lineup forthrough-silicon via (TSV) processes is winning high appreciationfrom our customers. In May 2012, we bolstered our presence in
the WLP market with the acquisition of NEXX Systems, a U.S. company with an established reputation for electrochemical deposition
and PVD technology. We will maximize synergies between ourexisting product lines to aggressively expand this business.
In the display fields, organic light-emitting diode (OLED) displays
continue to draw attention for their high resolution and energy efficiency. We are collaborating with Seiko Epson Corporation on thedevelopment of a coating system using an inkjet method, while developing an evaporation system using our own proprietary technology.

This two-pronged approach will enable us to take advantage of theopportunities offered by the revolutionary shift in our markets, andalso meet customer needs with the optimal approach.
In the belief that one of our missions is to address environmental issues through our technology, we are enhancing the photovoltaic cell (PV) production equipment business. We areaccelerating the development of the equipment for thin-film
silicon technology as we expect it to be the most suitable forlarge-scale power generation and to have high growth potentialfrom the medium to long term perspective.
Amid a market where the pace of innovation is accelerating andsophisticated solutions are demanded, there are three priorities for
product development: planning capabilities to accurately grasp
customer needs; capabilities to move quickly by taking ideas from
R&D to commercialization in a short time period; and producttechnology and service capabilities. To hone these three capabilities, we need to consider collaborations and tie-ups with companies outside our industry to respond flexibly and proactively tomarket needs without overly relying on our own technology.
In FY2012, Tokyo Electron invested the highest R&D expenses
to date of ¥81.5 billion. We will continue to invest in new areas,
as well as in our existing core SPE fields, and challenge ourselvesto create new businesses which draw on our strengths and leadto the establishment of differentiated technologies.

TEL Products for Advanced Packaging Technology
Expanding our product lineup for advanced packaging technology by purchasing the U.S. company NEXX Systems.
Cleaning
Deep Si etcher

Plasma Etch System
Tactras™ RLSA™ Etch

Single Wafer Cleaning System
CELLESTATM -i

ALD SiO2 System
NT333TM

High-density low-damage silicon etcher. Its
strength lies in critical processes such astransistor formation.

This system boasts max. 1,000 wafers/hour,
the highest in the industry. It responds tovarious cleaning requirements accompanying
miniaturization.

A semi-batch ALD system that uses a different concept from conventional ones. It
simultaneously realizes high quality and highproductivity.

Dielectric liner deposition

Patterning

Electrochemical deposition

Wafer bonderZoom

Physical vapor deposition

Wafer debonder

Logic+Memory TSVMulti Chip TSV

Zoom