Tokyo Electron Medium-term Management Plan
June 8, 2022

CORP IR / June 8, 2022

1

Forward Looking Statements
 Disclaimer regarding forward-looking statements
Forward-looking statements with respect to TEL’s business plan, prospects and other such information are based on
information available at the time of publication. Actual performance and results may differ significantly from thebusiness plan described here due to changes in various external and internal factors, including the economic
situation, semiconductor/FPD market conditions, intensification of sales competition, safety and product quality
management, intellectual property-related risks, and impacts from COVID-19.
 Processing of numbers
For the amount listed, because fractions are rounded down, there may be the cases where the total for certain
account titles does not correspond to the sum of the respective figures for account titles. Percentages are calculatedusing full amounts, before rounding.
 Exchange risk
In principle, export sales of Tokyo Electron’s mainstay semiconductor and FPD production equipment are
denominated in yen. Although some sales and expenses are denominated in foreign currencies, the impact of
exchange rate fluctuations on profits is negligible.

FPD: Flat panel display
CORP IR / June 8, 20222

Medium-term Management Plan Briefing 2022 Program and Participants Presentation

4:00pm ~ 6:10pm– The New Medium-term Management Plan

Participants

As of June 8, 2022

As of July 1, 2022

Corporate Director, Chairman of the Board

RetiredRepresentative Director, President & CEO

Representative Director, President & CEO, Corporate
Officer

Tetsuo Tsuneishi– Review of the Previous Medium-termManagement Plan and Financial Strategy for
the New Medium-term Management Plan

Toshiki Kawai– Procurement and Manufacturing Strategy

Sadao Sasaki

Representative Director, EVP & GM
GM of Development & Production Division,
GM of Corporate Production Division

Representative Director, SEVP & GM, Corporate Officer
GM of Development & Production Division, GM of
Corporate Production DivisionCorporate Director, EVP & GM
GM of Global Business Platform Division,
Finance

Corporate Director, Chairman of the Board of Directors

Yoshikazu Nunokawa
Seisu Ikeda

Corporate Director, SVP & GM
GM of Account Sales DivisionCorporate Officer, EVP & GM
GM of Account Sales Division

Yoshinobu Mitano

Corporate Director, SVP & GM
GM of SPE Business DivisionCorporate Officer, EVP & GM
GM of SPE Business Division

Takeshi Okubo

SVP & GM
GM of Global Sales DivisionCorporate Officer, EVP & GM
GM of Global Sales Division, GM of Field Solutions
Business Division

VP & GM, Tokyo Electron Miyagi

VP & GM
Deputy GM of Global Business Platform Division,
Finance

ATSBU GMATSBU GM

Deputy GM of Corporate Innovation
Division, DX

Deputy GM of Corporate Innovation Division, DX– SPE Business Strategy– Backend Business Strategy：
Activities for the Development of Wafer
Bonding Process– Account Sales Strategy
Break (5 min)– Field Solutions Business Strategy– Introducing TEL™’s DX Activities and Our
Ideal State

Hiroshi Kawamoto– New Board of Directors Structure and the
Corporate Officer System

Yohei Sato

 Q&A Session
CORP IR / June 8, 2022

6:10pm ~ 6:45pm

Noritaka Yokomori

3

The New Medium-term Management Plan
June 8, 2022
Toshiki Kawai
Representative Director, President & CEO

Agenda Business Highlights– Progress on the Medium-term Management Plan
– Main Achievements New Medium-term Management Plan
– Business Environment– Overview of the New Medium-term Management Plan

CORP IR / June 8, 2022

5

FY’22 Financial Highlights
Net Sales andGross Profit Margin
Net sales
Sales (\B)
(¥B)
2,000

Gross profit margin

41.2%

2,003.8(\B)
Operating income (¥B)

50.0%

600

500
40.0%

24.3%

1,399.1

21.0%

1,278.2

40.0%

30.1%

22.9%

30.0%

26.5%
248.2

320.6

310.5

30.0%

437.0

37.2%

400

1,127.2

1,200

Net親会社株主に帰属する
income attributable to系列1ownersof parent
(¥B)
当期純利益
(億円)
ROE

29.9%

40.4%

1,600

599.2

Operating margin

45.5%
40.1%

Net Income Attributable to
Owners of Parent and ROE

Operating Income andOperating Margin

21.8%

242.9
20.0%

300

185.2

237.2

800
200
20.0%

10.0%

400
100

0

10.0%

FY'19

FY'20

FY'21

FY'22

0

0.0%

FY'19

FY'20

FY'21

FY'22

FY'19

FY'20

FY'21

FY'22

Net sales, gross profit margin, operating margin and ROE reached record high
CORP IR / June 8, 2022

6

Progress on the Medium-term Management Plan
Announced on May 2019

Financial Model (by FY'24)

FY’22 Actual

Net sales

¥1.5T

¥1.7T

¥2T

¥2T 3.8B

OP margin

26.5%

28%

>30%

29.9%

ROE

>30%

37.2%

Reached our financial model 2 years ahead of schedule
CORP IR / June 8, 2022

7

Major Achievements and Initiatives on the Medium-termManagement Plan
• Outperformed the market. Increased WFE* market share• Significant progress was made in acquiring PORs and introducing new products
and functions through high value-added products that only we can make【Our latest main products】
Deposition

Coater/developer

Etch

Cleaning

Wafer
proberWafer
bonderFPD Etch

NT333™

LITHIUS Pro™ Z

Episode™ ULCELLESTA™ Pro

Prexa™

Synapse™ Si

PICP™ Pro

• As planned, invested over 400 billion yen on R&D expenses over the past three
years. Continue investing for future growth* WFE：WFE (Wafer fab equipment): Wafer fab equipment refers to the production equipment used in front-end production and in wafer-level packaging production.

CORP IR / June 8, 2022

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Agenda Business Highlights– Progress on the Medium-term Management Plan
– Main Achievements New Medium-term Management Plan
– Business Environment– Overview of the New Medium-term Management Plan

CORP IR / June 8, 2022

9

Spread of IoT・AI・5G and Accelerating the Digital ShiftIoT AI 5G/6G Cloud Metaverse
Smart healthcare
Smart mobility

Smart devices

Smart cities
Smart fabs

AR/VR/MR

The world is currently pushing firmly ahead with implementing ICT and DX as well as taking
action to realize a carbon-free society in order to build a strong and resilient society in which
economic activities do not stop under any circumstances
CORP IR / June 8, 202210

World Data Traffic

CAGR

Zetta byte*

Datacentric

35

30

26%
(2020-2030)

25
20

Computercentric

15

Mobilecentric

Bits

10

Qubits

Neurons

5
0

1990

2000

2010

2020

2030

2040

Source: Omdia*Zettabyte: 1 Zettabyte = 1021byte, 1 Zettabyte is said to be "the number of sand grains on sandy beaches around the world"

Explosive increase in data traffic
CORP IR / June 8, 202211

Outlook for the Semiconductor Market
US$ trillion>$1.35 trillion

1.2
1.0

Products × Value

Products(electronic devices)

0.8(services)

0.6$555.9 billion

Data centers

0.4(2021)

Smartphones

PC

0.2

Services for industry
Source:1990-2021 (WSTS)
2022-2030 (IBS, May 2022)

Services for consumers

0.0
1990

2000

2010

2020

2030

Growing to more than double by 2030
CORP IR / June 8, 2022

12

WFE Market

ICT・DX・decarbonization,
electric vehicles, autonomous
driving, post-5G

Data center$50~65B

Mobile$30~40B

PC
$20B
$~10B
1985

1990

1995

2000

2005

2010

2015

2020

2025

2030

Source：TechInsights Manufacturing Analysis Inc. (VLSI) (1985-2021)

WFE Market will grow further with progress ofdigitalization and evolution of semiconductors
CORP IR / June 8, 2022

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The New Medium-term Management Plan : Financial Targets

Financial Targets (by FY’27)

CORP IR / June 8, 2022

Net sales≥ 3 trillion yen

OP margin

≥ 35%

ROE

≥ 30%

14

Material Issues

Continuously create high value-added
Product
next-generation products
Competitiveness

Customer
Strong relationship based on trust
Responsiveness
Sole strategic partner

HigherProductivity

Pursuit of operational
efficiency

Management Foundation

Toward short- , medium- and long-term profit andcontinuous corporate value enhancement
CORP IR / June 8, 2022

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Continue to Invest Aggressively on R&D

More than 1 trillion
yen planned for
5 years from FY’23

About 600 billion yen

FY’ 18

19

20

21

22

23

24

25

26

27

Continue active investment in growth tocreate high value-added next-generation products
CORP IR / June 8, 202216

Further Increasing Corporate Value＆

Offence

DefenseOffenceAiming for world-classoperating margin andROE ≥ 30%

Safety Quality
 Compliance Engagement
 Risk management& Security

Product
Competitiveness

Customer
HigherResponsiveness Productivity

CORP IR / June 8, 2022

Management Foundation

17

Won the Grand Prize Company in the Corporate Governance ofSponsored by the Japan Association of Corporate Directors / Released on Jan. 12, 2022
the Year® 2021

Feedback (Evaluation points for TEL) Approach to increase earning power and aggressive style topursue profits
 Aggressive ESG (efforts to enhance corporate value throughboth Offence and ESG)
 Actions to increase employee engagement
 System to evaluate representative directors
 Operating rhythm to make governance more solid Communication with outside directors throughthe Board of Directors and offsite meetings

CORP IR / June 8, 2022

Corporate Governance of the Year® is a registered trademark of the Japan Association of Corporate Directors.

18

TEL's Corporate Principles
Corporate
Philosophy

MissionVisionThe purpose of TEL’s existence and its
mission in society

We strive to contribute to the development of a dream-inspiring society throughour leading-edge technologies and reliable service and support

VisionTop priorities to be addressed to realize the
Corporate Philosophy

A company filled with dreams and vitality that contributes to technologicalinnovation in semiconductors

ValuesTEL Values

Attitudes, codes of conduct, and values tobe observed by each employee

Pride/Challenge/Ownership/Teamwork/Awareness

CORP IR / June 8, 2022

19

New Vision
A company filled with dreams and vitality that contributes totechnological innovation in semiconductors
Tokyo Electron pursues technological innovation in semiconductors that supports the sustainable development of the world.
We aim for medium- to long-term profit expansion and continuous corporate value enhancement by utilizing our expertise tocontinuously create high value-added leading-edge equipment and technical services.
Our corporate growth is enabled by people, and our employees both create and fulfill company values. We work to realize
this vision through engagement with our stakeholders.

Corporate Message

CORP IR / June 8, 2022

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TSV : TEL’s Shared Value (TEL’s CSV)CSV (Creating Shared Value)
The concept is to create social and economic value by leveraging corporate expertise to solve social issues,
thereby enhancing corporate value and achieving sustainable growth.

New Vision : A company filled with dreams and vitality that contributes totechnological innovation in semiconductors

TSV
TEL’s Shared Value• Pursue technological innovation in semiconductors that supports
the sustainable development of the world• Continuously create high value-added leading-edge equipment andtechnical services• Medium- to long-term profit expansion and continuous corporate
value enhancement• Engagement with our stakeholders

Realization of Vision＝Creating Shared Value in TELCORP IR / June 8, 2022

21

Our Approaches to Social Issues
Sustainable development of the world / Diversification of values and happiness
Online/Metaverse

AI diagnosis/Prevention/Robots

Smartification

EV/Autonomous driving/MaaS

SolutionsTechnologies
Semiconductors

Higher speed
communication(5G/6G)

Logic

Cloud/Edge
ComputingMemory

AI
Power

IoT
AnalogSensors

Pursue technological innovation in semiconductors：
Larger capacity/Higher speed/Higher reliability/Lower power consumption

CORP IR / June 8, 2022

AR/VR/MR
Displays
Higher definition/Flexible/Lower power consumption

22

Vision & New Medium-term Management Plan
FY’23

FY’27

FY’31 (CY’30)

 Goals for 2030
• Supporting sustainable development in the world①Driving the semiconductor market through technological innovation②Contributing to a sustainable global environment• Medium- to long-term profit expansion and continuous corporate valueenhancement• Engaging with our stakeholders

 New Medium-term Management Plan (FY’23-27)

Realization of Vision
A company filled with dreams and vitalitythat contributes to technologicalinnovation in semiconductors•Achievement of Financial Model(Five-year goal toward 2030)

Aiming to achieve the Medium-term Management Plan
by FY'27 with a view to realizing Vision in 2030
CORP IR / June 8, 2022

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Approaches to Sustainability

Environmental Co-Creation by Material, Process and Subcomponent Solutions

Semiconductors

Products

Business activities

Contribute to technological innovation forhigher performance and lower power
consumption of semiconductors

Offer the Best Products andBest Technical Services

Improve green performance• Leading-edge technology contributes to alower power consumption society• Accelerating environmental technology
innovation• Improve environmental performance ofsemiconductor production equipment(Productivity per unit area and hour,
equipment utilization, quality, material
consumption, recycling, etc.)• Environmentally Hazardous SubstanceFree• Reduction of CO2 emissions at plants andoffices• Reduce and recycle packaging materials• Reduce environmental impact during
procurement and logistics

Promoting technological innovation of semiconductors and reducing environmental impactof semiconductor manufacturing throughout the supply chain as an industry leader
CORP IR / June 8, 2022

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Laser Edge Trimming: Ulucus™ L (Released on June 8)
Achieve high precision, high quality
cutting and high productivity
by laser control processing

Edge trimming equipment for
semiconductor’s 3D Packaging*ウェーハ外周の切断

Reduces the amount of DIW*
consumption by 70% or morecompared to conventional method**

Ulucus™ L

The equipment platform is basedon LITHIUS Pro™ Z, which is highly
reliable and productive.

* DIW: Deionized water, ** TEL estimates

Released a new model equipment with environmental and process performance that
only TEL can manufacture for the backend process where further technological evolution andmarket expansion are expected
CORP IR / June 8, 2022

25

26

Medium-term Environmental Targets for 2030
CO2 Emission Reduction Goal
Plants and Offices

Products

30%

Reduction

Per wafer (compared to 2018)70%

Reductionof total emissions (compared to 2018)
Reduce energy consumption by 1% YoY at each plant andoffice (per-unit basis)

Ratio of renewable energy 100%
Long-term Goal
(2050)

CORP IR / June 8, 2022

As a leading corporation in environmental management, Tokyo Electron works actively toconserve the global environment. We
Wewillstriverealizeto contributenet zerotoby
theproactively
development
promotingof a dream-inspiring
the reductionsocietyofenvironmental
by proactively
burdenpromotingof both our
the facilities
reductionandof environmental
products. We strive
burdento ofcontributeboth our tofacilities
theandproducts, andofatathe
development
dream-inspiring
same time, providing
society by
evolutionary
providing evolutionary
manufacturing
manufacturing
technologiestechnologies
that effectively
reducethateffectively
the power
reduceconsumption
the powerofconsumption
electronic products.
of electronic products.
26

Net Zero
CORP IR / June 8, 2022

Scope 1 & 2

To be achieved by 2040

Scope 3To be achieved by 2050

27

Safety First

Safety Goals (by FY’27)

TCIR ≤ 0.1
TCIR: Total Case Incident Rate.
The number of workplace incidents per 200,000 working hours

CORP IR / June 8, 2022

28

TEL Values ascodes of conduct

Engagement

CareerCorporate growth is enabled by, and

our employees both create and fulfill company values
Retention

Work-life balance

Diversity andInclusion
3G
Global・Generation・Gender

CORP IR / June 8, 2022

29

Key Indicators for Continuous Corporate Value Enhancement• Net sales/Operating margin/ROE
Product
Competitiveness

Customer
HigherResponsiveness Productivity
Management Foundation

CORP IR / June 8, 2022

• Initiatives for Net Zero
 Products/Plants and offices/
Reduction of CO2 emissions from logistics, etc.

•
•
•
•

Stakeholder Engagement
SafetyRisk Management
Governance30

CORP IR / June 8, 2022

31

Review of the Previous Medium-term Management Plan and
Financial Strategy for the New Medium-term Management Plan
June 8, 2022
Hiroshi Kawamoto
VP & GM, BS DivisionTokyo Electron Miyagi Limited

CORP IR / June 8, 2022

32

Overview
 Review of the previous Medium-term Management Plan and results– Execution of growth investments made over the past five years– Trends in net sales and operating income– Trends in TEL's market capitalization and total net assets (start of 2010 onward) Financial strategy to achieve the new Medium-term Management Plan Shareholder return policy

CORP IR / June 8, 2022

33

Review of the Previous Medium-term Management Plan
(Billion yen)
FY2022(Actual)By FY2024(Plan)Net sales

2,003.8

1,500.0

1,700.0

2,000.0

Gross profit

911.8

650.0

740.0

890.0

Gross profit margin

45.5%

43.3%

43.5%

44.5%

SG&A expenses

312.5

252.0

264.0

290.0

SG&A expenses to sales ratio

15.6%

16.8%

15.5%

14.5%

Operating income

599.2

398.0

476.0

>600.0Operating margin

29.9%

26.5%

28.0%

>30.0%

ROE

37.2%

>30%

Achieved the financial model of 2 trillion yen in net sales two years ahead of schedule Factors behind achieving the model two years ahead of schedule– Dynamically executed business strategy to address changing circumstances– Continued growth investments even during periods where the market is undergoing adjustment– Close communications and collaborations with partner companies
CORP IR / June 8, 2022

34

Performance of Growth Investments Made Over the Past Five Years
Miyagi logistics building(Began operation in Feb. 2018)

Iwate production building Yamanashi production building(Began operation in Jul. 2020)(Began operation in Aug. 2020)(Billion Yen)

200

100

0

R&D expenses
97.1

FY'18

113.9

120.2

FY'19

FY'20

136.6

FY'21

158.2

FY'22

50

0

54.6

49.7
20.6

FY'18

(Began operation in Nov. 2018)

Depreciation

Capex
45.6

*Began operation of the automatedwarehouse in Jun. 2018

Miyagi No.2 development bldg. TEL Digital Design Square(Billion Yen)

100

Production capacity doubled Production capacity doubled Production capacity 1.5 times

24.3

FY'19

FY'20

(Began operation in Oct. 2021)

57.2

53.8
29.1

(Began operation in Nov. 2020)

Miyagi Technology
Innovation Center

33.8

FY'21

36.7

FY'22

Invested on increases in production capacity, enhancement of development
capabilities, advancement of DX, and partnerships with suppliers
CORP IR / June 8, 2022

35

Trends in Net Sales and Operating Income(Billion Yen)
2,500

2,350.0 60%

TEL Net sales
2,250
2,000

Operating margin

1,750• Effects of European debt crisis,
slowdown in emerging markets• Weak demand for PC, mobile

50%

2,003.8

Adjustment• Financial crisis in Asia
• 64M DRAM oversupply

1,500
1,250

• IT bubble crash• Excessive logic foundry investment

Operating income40%• World financial crisis• Memory oversupply

30.5%
30%

4M DRAM oversupply

29.9%

1,000

20%

750
10%

500
250

0%
0
-250

-10%
91

92

93

94

95

96

97

98

99

00

01

02

03

04

05

06

07

08

09

10

11

12

13

14

15

16

17

18

19

20

21

22

23
(E)

(FY)

As cycles have reduced, aggressively continue growth investmentseven during periods of adjustment
CORP IR / June 8, 2022

36

Trends in TEL's Market Capitalization and Total Net Assets(Starting from 2010)（¥B）
12,000Start of 2010 through end of 2021
 Market capitalization x9.6
 Net assets x2.4

8,000

6,000

4,000

Non-financial capital

10,000

Tuesday, January 4, 2022

Record high market capitalization¥10,756.3B

Market value added¥9,426.3B
June 3, 2022
Closing price basis(PBR x7.0)

Intellectual capital
Manufacturing capital
Human capitalMarketcapitalization

Social capital
Natural capital

2,000

Net assets¥1,347.0B

0

Net assets

CORP IR / June 8, 2022

Market capitalization

37

Financial Strategy to Achieve the New Medium-term Management Plan
 Increase investment into production capacity
in anticipation of market growth
Sales（￥B）
3,200

OPM

≥
3,000

 Allocate more than 1 trillion yen in R&D expenses overthe next five years (development portfolio management)

2,800

2,350.0

2,400≥ 35.0%35.0%

2,003.8
2,000
1,600

29.9%

30.5%

 Consider DX advancement investment ratios in light of
economic effects

1,200

800
400
0

– Development of new products in the leading-edge generation– Integration that enhances added value of products– Component research, expansion of fundamental
technologies, and exploration of new areas

25.0%

FY'22 FY'23 FY'24 FY'25 FY'26 FY'27（Estimate）（New plan）– Increases to added value of equipment and profitability ofadvanced field solutions– Optimization of R&D activities– Optimization of sales activities and admin work

 Optimize fixed costs based on scope of business andbusiness activities
CORP IR / June 8, 2022

38

Shareholder Return Policy（Yen）

Dividend per share

2,000

1,678 yen
TEL shareholder return policy

1,403 yen

1,500

Year-end
927 yenDividend payout ratio:

50%

Annual DPS of not less than 150 yen

1,000

781 yen758 yen

624 yen

We will review our dividend policy if the company does not generate
net income for two consecutive fiscal years

588 yenInterim
751 yen500

We will flexibly consider share buybacks

0

FY'18

FY'19

FY'20

FY'21

FY'22

FY'23(E)No change to shareholder return policy
CORP IR / June 8, 2022

39

Total Returns with Respect to FCF(Billion yen)
300

300%

240%

200

200%

153%
123%
100

49%

73%

101%

87%

100%

0

0%

FY'16

FY'17

FY'18

FY'19

FY'20

FY'21

FY'22

Income (expenditure) from issuance or sale of shares (acquisition of treasury stock)

Paid dividends
Rate of return to shareholders with respect to FCF (record date basis)
CORP IR / June 8, 2022

40

Summary Achieved financial model from the previous Medium-term Plan (scenario of 2 trillion yen in
net sales) two years ahead of schedule– Dynamically executed business strategy to address changing circumstances– Continued growth investments even during periods where the market was undergoing adjustment– Had close communications and collaborations with partner companies– As cycles have reduced, aggressive growth investments even during periods of adjustment were
well-received by the stock market, resulting in significant growth to market capitalization compared to
net assets

 Key financial strategies to achieve the new Medium-term Management Plan
– Increase investment into production capacity in anticipation of market growth– Allocate more than 1 trillion yen in R&D expenses over the next five years properly (development
portfolio management)– Consider DX advancement investment ratios in light of economic effects– Optimize fixed costs based on scope of business and business activities No change to shareholder return policy, return profits to shareholders through growth
CORP IR / June 8, 2022

41

Procurement and Manufacturing Strategy
June 8, 2022
Sadao Sasaki
Representative Director, EVP & GM,
Development & Production, Corporate Production Division

CORP IR / June 8, 202242

We would like to sincerely thank all of our stakeholders fortheir kind support
 Need for Production Innovation(Procurement/Manufacturing)– Build production operation with high productivity– Build a sustainable supply chain Efforts toward reducing environmental
impacts– Activities toward Scopes 1, 2 and 3– Activities toward total net zero CO2 emissions

CORP IR / June 8, 2022

43

Major Domestic Production Sites (As of April 1, 2022)
Iwate: Full-utilization(increasing production）

Yamanashi: Near full-utilization

Production sites:
Introduction of renewableenergy 100% complete

Kumamoto: Full-utilization(increasing production）

Miyagi: Full-utilization(increasing production）

Sales/Field Service
R&D/Production/Engineering

Continue to provide high-quality semiconductor production equipment tosemiconductor manufacturers all over the world according to required deadlines
CORP IR / June 8, 2022

44

Need for Production Innovation (Procurement/Manufacturing)- Build production operation with high productivity- Build a sustainable supply chain
1.
2.
3.

CORP IR / June 8, 2022

Production capacity increases
Insufficient start-up personnel
Parts shortages

45

Continuous Production Innovation in Pursuit of Safety, High Quality
and High Reliability
 Build a production system able to quickly respond to market changes
 Shorten time from new product development to mass production
 Shorten production lead times: Achieve 100% module shipment
 Utilize DX and automation in manufacturing, and expand automated warehouse Significantly reduce equipment start-up time (One-touch start-up)– Reduce start-up time up to 75％ (primary target), One-touch (final target)

One-Touch

Shorten start-up time-50%
3,000hExpected outcome from shorten start-up time Enhance productivity and start-up quality
 Reduce accident risks
 Optimize resources and the work-life balance

1,500hConventional  after production innovation
CORP IR / June 8, 2022

46

Efforts to Utilize TEL PLM-DX and Improve Productivity and Efficiency
PLM

ERP

DesignDigitalization

Procurement Planning
Digitalization

BOM
BOP

TEL PLM-DX

 Improve core system– Production leveling < 12 months– MRP processing capability for
procurement increased 10-fold Introduce PLM-DX and BOM concept

Information
sharing– Enhance production capability
up to 2 times within 3 years

Closed-Loop
Management– Minimize manufacturing lead time
– 3-fold increase in design efficiency

MES
Manufacturing
Digitalization

PLM: Product Lifecycle Management
ERP: Enterprise Resource Planning
MES: Manufacturing Execution System
BOM: Bill of Material
BOP: Bill of Process– Reduce new product development
period by half

“Shift Left” production plan toward the business scale of 1 trillion-yen procurement
CORP IR / June 8, 2022

47

Build a Sustainable Supply Chain
 Fair and transparent relationships and reliable trust relationships
with our business partners

Tokyo Electron supports
SDGs– Implement CSR/BCP assessments based on industry codes of conduct– Share knowledge in such areas as safety, quality, the environment and compliance

Production trend briefings
twice a year
(procurement amount ratio: 90%)

Partners Day
once a year
(procurement amount ratio: 65%)

CORP IR / June 8, 2022

Applaud environmental impact reduction activities,
adding environmentally related items
to assessment studies✔ Reduce CO2 emissions and the amountof energy usage✔ Introduce renewable energy✔ Promote resource conservation✔ Promote waste reduction and recycling✔ Promote activities for reducing theenvironmental impact of logistics

Business
Partners
48

Procurement BCP and Proactive Procurement Activities
Measures for procurement BCP
Early procurement of parts
Mid- and long-term forecast
Promote “Shift Left” procurement strategy
Build BCP system resilient toprocurement difficulty

Safety stock
Inventory liquidity

 Early procurement for long term Ensure inventory exchange flexibility among

factories
 Inventory reductions in total

Secure semiconductor devices
Oversee whole supply chain fromupstream to downstream
Visualize and grasp risks

Supply chain responsive
to any kind of risks(Raw materials, parts,
processing and assembly)
Strong and reliable supply chain

CORP IR / June 8, 2022

 Secure semiconductor devices for our

Visualize
supply chain

equipment Visualize and streamline distribution channel
 Collaborate with semiconductor makers= TEL can be a customer of our customers

Parts and Suppliers
Risk management on
business partners
Strengthen partnership Identify and analyze risk parts
 Multi sourcing of producing countries Standardization, centralization anddecentralization of parts
 Measures to secure capacity for us

49

Efforts toward Reducing Environmental Impacts

CORP IR / June 8, 2022

50

Responsibilities as an Industry-Leading Company
Digital (ICT/DX)× Green (Decarbonization)

ICT: Information and Communication Technology
DX: Digital Transformation of societies and business models, etc.

Environmental Co-Creation by Material, Process and Subcomponent Solutions

TEL will forcefully lead the entire industry toward the realization ofa decarbonized society
CORP IR / June 8, 2022

51

52

Milestones for CO2 Emission Reductions toward Net Zero Emissions
Our sites

70%

Scopes 1 & 2
TEL emissions

reduction
100%
Renewable
Energy• Energy
conservation/creation• Recycling• Alternative energy• RE adoption• Emissions trading

Net
Zero

*Total Emissions(compared to 2018)
Reduce energy usage (per-unit basis) at all sites by 1% overprevious year

Develop environmentally friendly
equipment, also for legacy fabs

Scope 3Emissions ofcompanies
other than TEL

Products

Products

30%

50%

reduction

reduction

GHG
reductions

20%

2018
CORP IR / June 8, 2022

2020

Modal shift
Joint delivery
ratio

More efficient useof environmentallyfriendly packaging

10%

50%

2030

RE* Semiconductor
Factories

Cooperation with semiconductor
manufacturers

Net
Zero

- Energy efficiency-enhancement- Move to energy-conserving facility equipment- GHG reductions (process development)

2040*RE: Renewable energy

2050
52

Activities Toward Scopes 1, 2 and 3
Strengthen partnerships: Pursue industry-wide sustainability
the environmental impact of
1 Reduceprocurement
logistics

harmful substances
Abolish TEL-designated prohibited
substances before they begin to be
regulated

Disseminate information on
hazardous substanceregulations to all partners

Current

Regulations
Start

Time
Line

2050

Common Goals

 Promote modal shift Reduce the environmental
impact of packaging materials
 Adoption of electric/H2 trucks(requested)

3

Proactive develop of environmental
technologies for equipment
Use environmental technologies toaccelerate manufacturing technology
innovation

Industry Green
Performance

CO2 Emissions
During Distribution

What We Aim For

Realize logistics with minimized
environmental impacts

2 Equipment free of environmentally

Current Abolish prohibited substances
before they begin to be regulated Create a system for sharing
information on part that containprohibited substances (as defined inparts specifications) Reduce the number of sheet metal
product and cable assembly productstudies by half

2050

 Efforts with joint development partners
 Share 10-year environmental technology
roadmap Set environmental performancestandards for reducing environmental
impacts in product specifications
 Degree of achievement with respect to,or number of product types achieving,environmental specifications on a
product-by-product basis

Prepare system (awards, etc.) for publishing business partner achievements after this fiscal year’s TEL Partners Day
Accelerate technological innovation to create new, more-competitive equipment environmental technology
CORP IR / June 8, 2022

53

Activities Toward Scope 3
We are targeting "net zero" to reduce environmental impact, and aim to solve environmental
technology issues through industry-wide collaboration and to contribute to society as a memberof among environmentally advanced companies

Products and Technology

10 technical sector themes and 7 environmentally
important sectors
Together with all of You
Heaters

Power
Supplies

Pumps

Manufacturing
Technologies

CO2
emission

Footprint

Chemicals

Chillers

Substances of Utilization ofhigh concern waste energy

 Share environmental information
about products Share goals for enhancing
environmental performance Share 10-year roadmap forenvironmental technology

Environmental
SectorSupport from TEL

EnergyWater

CORP IR / June 8, 2022

Warming
substances

Chemicalexhaustible Substances ofresource environmental
concern

Plastics

 Accelerate joint development withsupporting companies
 Joint development investments insupporting companies**We will invest when we deem it necessary54Summary Pursuit of production innovation (Procurement/Manufacturing)– Reduce burden on site by One-touch equipment start-up– Utilize TEL PLM-DX to double production capabilities– Achieve production leveling and stabilization through proactive procurement

 Efforts toward reducing environmental impacts– Scope 1/2: Utilize renewable energy across the board– Total net zero CO2 emissions: Through the collaboration with semiconductor manufacturers
and supply chain, we will realize RE semiconductor factories, environmentally friendly
equipment and GHG reductions

CORP IR / June 8, 2022

55

SPE Business Strategy
June 8, 2022
Yoshinobu Mitano
Corporate Director, Senior Vice President and General Manager
SPE Business Division

CORP IR / June 8, 2022

56

Overview
 WFE Market and Technological Requirements by Application
 Technology Roadmap
 SPE Segment Sales Target and Business Opportunities
 Development Efforts– Strengthen R&D Capabilities– Increase in New Product Sales Composition Ratio– Increase Environmental Performance– Increase Efficiency of Equipment Start-up

 Summary

CORP IR / June 8, 2022

57

WFE Market and Technological Requirements by Application
Technological Requirements
WFE Market Growth (USB$) Logic/foundry：– Scaling along with structural changes
 Reduction in manufacturing cost per transistor
 Lowering power consumption
 Higher performance

92.3

 NAND– Increasing the layer counts
 Reduction in manufacturing cost per bit

 DRAM– Scaling to realize

CY2021DRAM

NVM

CORP IR / June 8, 2022

CY2026
Logic/foundry Reduction in manufacturing cost per bit Lowering power consumption
 Higher performance

WLP/FA
58

Logic Technology Roadmap

Assume new knob will be created in each node
* DTCO: Design technology co-optimization** Single Diffusion Break, *** Self Align Gate Contact

Year of HVM(20k/month)

2018

2020

2022

2024

2026

2028

2030

Node

N7

N5

N3

N2

N1.4

N1

N0.7

3~2 Fin

2 Fin

2~1 Fin

GAA NS

Forksheet

CFET

2nd Gen. CFET

Poly pitch (PP)

56

48

45

42

39

36

33

Min. MP [nm]

40

28

22

20

18

16

12

Cell height (CH)240 (2Fin)

210 (2Fin)

176 (2Fin)

120 (NS)

90 (NS)

64 (CFET)

48 (CFET)

Density (a.u.)
PP x CH x DTCO*

1

1.73(vs. N7)

1.53(vs. N5)

1.81(vs. N3)

1.65(vs. N2)

1.75(vs. N1.4)

1.67(vs. N1.0)

Heterogeneous
channel2D material

DeviceScaling booster

EUV
SDB**
High m channel

SAGC***
Dipole eWF

Backside PDN

Source: iedm 2020[1], IRDS2020 with TEL’s update[1] imec, S. B. Samavedam et al.

Aiming for 1.6-1.8x increase in logic density along with pitch scaling, DTC and scaling booster
CORP IR / June 8, 2022

59

NAND Technology Roadmap
Source: TEL estimatesYear of HVM(20k/month)

2020

Stack

128L

16x~19xL(176)

22x~25xL(240)

28x~32xL(304)

35x~4xxL(368)

41x~45xL
(440)

5xxL
(512)

1 or 222

2

2 or 33

3 or 4

Vertical pitch 50~55nm

45~55nm40~50nm35~45nm35~45nm35~45nm35~40nm

7~8mm

8.5~10.5mm

10~12.5mm

11~14mm

13.5~17mm

16~20.5mm

18.5~21mm(~1.6x/3years)
Tier

Memoryheight

2021

2022

2023

Poly Si grain CIP

Channel

2024

2025

2026

2027

2028

2029

incl. MILC Si*

WL metal

W

W

W

Mo

Mo

Mo

Mo

#of memory
holes b/w slits

9

9

9~24

14~24

19 or 24

19 or 24

19 or 24

Peri. CMOS

Under arrayor Next array

Under array

Under arrayor Bonding

Under arrayor Bonding

Under arrayor Bonding

Under arrayor Bonding

Under arrayor Bonding(In general)

2030

VerticalPitch#of memory holes b/w slits
CORP IR / June 8, 2022

Tier

Vertical pitch* MILC Si: Metal-induced lateral crystallization silicon

60

DRAM Technology Roadmap
Source: TEL estimatesYear of HVM(20k/month)2020

F* [nm]

16

2021

2022
15~14

2023
13~12

2024

2025
12~11

2026

2027~28≦10<102029~30

6F2
Cap

3D

Cell / Peri.
layoutBL*Feature size: STI hp along WL = STI hp / COS(21o)Patterning

193i SAQP, DP (+ EUV)

Pillar cap. A.R.

>40

Capacitor

ZAZ CIP>45

M. Popovici (imec) et al. IEDM 2018
Schematic by TEL

>50

>55

>60

Alternative: STO etc.

TiN
Ru
STO
Ru
TiN

Capacitor stack

Poly SiON
Peri. CMOS

High-k Metal Gate
FinFET

CORP IR / June 8, 2022

61

SPE Segment Sales Target and Business Opportunities
SPE New Equipment Sales Target ($B)

Business Opportunities
 Logic/foundry

Coarter/developer
Etch
Deposition≥ 2,300.0

Cleaning– Increase patterning complexity requires cooptimization between unit processes

Wafer prober– Adoption of High-NA EUV lithography

Others– Adoption of GAA and backside PDN
1,499.0

 NAND– 3D NAND layer counts reach more than 300 layers– High aspect ratio etch, high productivity sacrificial film
removal and atomic-level deposition on 3D structure DRAM– Technology to suppress RC delay in wiring
FY2022CORP IR / June 8, 2022

FY2027– Capacitor formation technology for further scaling62

Development Efforts
Simultaneous 4-Generation Developments

 Align long-term technology roadmap with customers
 Simultaneously develop and evaluate technologies
up to 4 generations ahead

Demo evaluation (TEL)POR
N+1 Development
Evaluation system

Demo Evaluation(Customer
Environment)

introduction
Mass Production POR

HVM

 Demonstrate process performance on customer
structured wafers at customer’s environments atearly stage Create high value-added products and acquire
PORs

Demo evaluation (TEL)

N+2Development POR
Evaluation system
introduction

Demo Evaluation(Customer Environment)

HVM

Mass Production POR

Demo evaluation (TEL)

N+3Development POR
Evaluation system
introduction

Demo Evaluation(Customer Environment)

HVM

Mass Production POR

Demo evaluation (TEL)

N+4Development POR
Evaluation system
introduction

Demo Evaluation(Customer Environment)

HVM

Mass Production POR

CORP IR / June 8, 2022

63

Strengthen R&D Capabilities
Yamanashi R&D building
Deposition system, gas chemical etch system,
corporate R&D

Kumamoto R&D building
Coater/Developers, surface preparation system

Etch system(Completion scheduled for fall 2024)(Completion scheduled for spring 2025)(Completion scheduled for spring 2023)

Miyagi Technology Innovation Center

CORP IR / June 8, 2022

Miyagi R&D building

TEL Digital Design Square

Etch system

DX, Software(Began operation in Oct. 2021)(Began operation in Nov. 2020)64

Increase in New Product Sales Composition Ratio
Deposition system sales
for advanced logic/foundry customers

New Products
Existing Products*New products: Products newly
adopted from N+1 generation

FY2023

FY2024FY2025

FY2026FY2027

The proportion of high value-added products will increase.
Contribute to enhancing sales, profits and market share
CORP IR / June 8, 2022

65

Increase Environmental Performance
Cleaning system
Productivity

Tool footprint

DIW Consumption(WPH/system)(m2)(K ton)DIW supply & waste
Management Cost
(¥M)

×2.7

Exisiting
Product-52%

New
Product

Exisiting
Products

New
Products-30%

Exisiting
Products

New
Products

Power
Consumption perwafer (kWh/wafer)-30%

Exisiting
Products

New
Products-46%

Exisiting
Products

New
Products

Environmental performance = equipment performance
Further enhance environmental performance
CORP IR / June 8, 2022

66

Increase Efficiency of Equipment Start-up
Equipment start-up time（hour）-50%
Conventional

 Measures：- Optimize inspection items and automate
inspection- Expand online support- DX network tool
- Automatic tool
DX network tool

Automatic tool

After increasing
effciency
EV

Conventional

After increasing effciency

Further enhance customer satisfaction and productivity
CORP IR / June 8, 2022

67

Summary Business opportunities are expanding along with the technological innovationin both logic and memory

 Provide added value through co-optimization of our wide range of products
 Create high value-added equipment and acquire PORs through 4-generation
simultaneous developments and evaluations with our customers

 Enhance and strengthen development capabilities
 Enhance customer satisfaction and productivity by shortening equipment
start-up times using DX and AI

CORP IR / June 8, 2022

68

Backend Business Strategy：
Activities for the Development of Wafer Bonding Process
June 8, 2022
Yohei Sato
BUGM
ATS BUCORP IR / June 8, 2022

69

Semiconductor Technology Node and Bump Pitch
1.0E+03

CSP

W.B.

X FCBGA

Pitch■● Solder Bump

1.0E+02TSV
1.0E+01

X Cu Pillar Bump

1.0E+00

1.0E-01●TSV Micro Bump

1.0E-02

1.0E-03
1970
[um]

1980

Technology Node
FBGA

1990

2000

Wire Bonding Memroy
Flip Chip SoC Organic

2010

2020

2030

CSP
micro Bump TSVIntroduction of wafer bonding technology accelerates further reduction of pitch
CORP IR / June 8, 2022

70

Semiconductor Technology Node and Bump Pitch
1.0E+03

CSP

W.B.

X FCBGA

Pitch■● Solder Bump

1.0E+02
C2W Bonding
Core/SRAM
HBM

TSV

Active Interposer

1.0E+01

X Cu Pillar Bump

1.0E+00

W2W Bonding

1.0E-01●TSV Micro Bump

1.0E-02

Wafer Bonding●▲ Cu Hybrid Bonding
1.0E-03
1970
[um]

1980

Technology Node
FBGA

1990

2000

Wire Bonding Memroy
Flip Chip SoC Organic

2010

2020

CSP
micro Bump TSV

2030
Bonding surface
Dielectric layer

Introduction of wafer bonding technology accelerates further reduction of pitch
CORP IR / June 8, 2022

71

Application of Wafer Bonding
DeviceNAND

BSI

3D NAND++
Logic

MemoryHBM
DRAM

Sensor(DRAM…

Stacking
Device

CIS

Cell

)

+

DRAM

Peripheral

+
Logic

Logic

3D DRAM
(

)
Cell

(

)

Backside PDN Sequential CFET Disaggregation/ Chiplets
Logic

Logic

+

+

+

Peripheral

Bare Si

Logic

Bonding

W-W
Cu Hybrid

W-W
Cu Hybrid

D-W
Cu Hybrid

W-W
Cu Hybrid

W-W
Ox Fusion

W-W
Ox Fusion

D-W / D-D
Cu Hybrid

3D I/O Pitch

3 μm
1 μm

1 μm
0.5 μm

40 μm
25 μm1 μm
0.5 μm

Sub μm(nTSV)Sub μm(nTSV)

10 μm
1 μm

Chip stacking
w/ µBump

Structure
Chip stacking
w/ Cu Hybrid

Source: TEL

Source: TEL
3D DRAM structure

StatusHVM

R&D~HVM

R&D

R&D

R&D

R&D

R&D

Expanding adoption of wafer bonding technology for next-generation devices
CORP IR / June 8, 2022

72

Wafer Bonding Application for 3D NAND
Current structurePeripheral circuit performance deteriorates
due to exposure to high temperature during
memory cell manufacturing
Long interconnects wiring

New structure

Memory cell

Memory cell

Peripheral circuit

Peripheral circuitPeripheral circuit is manufactured on the separate wafer and bond tothe memory cell wafer•
higher peripheral circuit performance•
shorter TAT* process
Shorter interconnects wiring


CORP IR / June 8, 2022

* TAT: Turnaround time73

Wafer Bonding Application for Logic Backside PDN
Backside PDN：Power Delivery Network

Current
structure

Signal BEOL
(Front side)

Bulk Si Wafer
bonding

Backside thinning

ReversePower
Signal &PowerPower BEOL
（Backside）

SignalPursue further scaling without
the power wiring bottleneck
CORP IR / June 8, 2022

74

Our Proposal for Wafer Bonding Process
TEL Proposal for Wafer Bonding Process

Pre-Bond

SynapseTM Si
Coater

Depo

Etch

Post-Bond

UlucusTM L

Cleaning

Wafer Process

Coater

CMP

Bonding

Trimming

Grinding

Synapse™ Si
Plasmaactivation
Upper
Wafer

DI watertreatment

Cleaning

Ulucus™ L
Alignment andbonding

Thermalannealing

CMP

Depo

Etch

Cleaning

Wafer Process

Bonding Accuracy (Total Overlay)

Laser
Edge Trimming

Edge Trimming Quality
Before

After

Lower
Wafer

CORP IR / June 8, 2022

75

Wafer Bonding System
Synapse™ Si• Integrate high high-productivity platform cultivated in thefront-end process with plasma, cleaning and high-accuracy
bonding modules• high productivity (uptime ≧ 90%)
• alignment accuracy 3σ ≦ 50nm

High productivity and stable operation are realized at mass production fabs
Contribute to our customers to realize the future of "3D integration"
CORP IR / June 8, 202276

Laser Trimming System
Ulucus™ L (New release)• Edge trimming on bonded wafer• Latest platform utilizing super clean technology
from the front-end process, with the integration oflaser control technology

Laser technology realizes high accuracy and quality trimming processes, andenvironment-friendly capability through the reduction of DIW usage
CORP IR / June 8, 2022

77

Laser Trimming System
Revolutionize wafer bonding process with laser technology
Enhance yield and significantly reduce the use of DIW in the edge trimming process

Higher Accuracy

Smooth Sidewall

Higher Throughput

Save Water

Enabling narrower trimming width

Less damage, Better yield

High productivity, Reliability

Reducing DIW to 70% or more

CORP IR / June 8, 2022

78

Summary - For the Development of Wafer Bonding Process Introduction of wafer bonding technology
accelerates performance evolution at theleading-edge and system level Utilizing technology and experience gained in
front-end process, we launch Ulucus™ L for
wafer edge trimming, in addition to Synapse™
Si for wafer bonding By utilizing our comprehensive strengths, we
promote research and development for the
adoption of wafer bonding process for mass
production
CORP IR / June 8, 2022

TEL Technology Center, America

Tokyo Electron Kyusyu Limited
79

Account Strategy
June 8, 2022
Seisu Ikeda
Senior Vice President and General Manager
Account Sales Division

CORP IR / June 8, 2022

80

Agenda Technological exchanges and joint roadmap development with customers
 Demand forecast for the next 24+ months

 Regarding the Customer Satisfaction Survey (CS Survey)

CORP IR / June 8, 2022

81

Framework for co-creation of technology roadmap from N to N+4
CustomerTEL Technology trends ofsemiconductor devices, outlook
for device structure and design Proposal on new function and materials
through concept consideration andfeasibility study with customers

 Required performance for eachgeneration

 Equipment, process proposal, design andmanufacturing to achieve required
performance Sample wafers for high accuracy
evaluation

 Build evaluation environment

 Output to meet customers’ requirements

 Expected timeline

As the best partner for our customers,
continuously create high value-added next-generation products
CORP IR / June 8, 202282

Collaboration with Customers: Meet Tech Requirements for Several Generations
We are here

Nodes

Device2021

NTool selection

N+1

R&D

N+2

N+3

D
R
A
M

N
A
N
D

L
O
G
I
C

2022

2023

2024

Mass Production

Tool selection

R&D

R&D
equipment

Mass Production

Tool selection

R&D

Wafer
demo

2026

Mass Production

N+4
Concept
feasible study

2025

Process fix

Tool selection

Mass Production

R&D

Tool selection

HVM decision
(POR)

CIP
proposal

Simultaneous collaboration for the generations from N to N+4 with customers
Samsung/ July23, 2021
CORP IRAccount/ June 8,2022

83Demand Forecast for the Next 24+ Months
 Objectives: Proactive procurement strategies and smooth delivery to customers
 Expected outcomes:– By ensuring sufficient materials and realizing production leveling, meet customers’
required delivery time
– Enhance safety, quality and productivity by eliminating additional load on our production andstart-up engineers in case of delivery delays

 Difference from conventional approach【Conventional】 Compile multi-year investment roadmaps for major customers, and combinewith our macro-market analysis. We independently forecast medium-term WFE, which is thenreflected in the production plan at our plants【Current】 Since early 2021, in response to changes in the environment due to recent
component shortages, our customers agreed to provide their plans for equipment procures on amore frequent and regular basis. By combining our WFE market forecast with the customers’plans, we can provide our supply chain and suppliers with latest and accurate forecast
CORP IR / June 8, 2022

84

Demand Forecast for the Next 24+ Months – Operation Outline
Year 1
WFE update

Year 2
WFE update

WFE update① TEL’s forecast and
WFE outlook/////
Investment Map
update➁ Update cycle ofCustomers’ forecast

WFE update

Investment Map
updateInvestment Map
update/////Company A / update once a monthCompany B / update twice a monthCompany A
Company B

Customer
information③

BeforeUp to 9monthsNow

Up to 24months

BeforeUp to 9monthsNow

Up to 24months/////By forecasting demand for the next 24+ months,
we can secure sufficient components by planed procurement, and production leveling
CORP IR / June 8, 2022

85

Purpose, Positioning, and History of Customer Satisfaction Survey(CSSP: Customer Satisfaction Survey Program) Purpose: Observation of customer satisfaction– Conduct objective analyses to understand product and accountstrengths, weaknesses, problems and issues

Company-wide
improvement PDCA
Plan

 Position– Important reference for measuring direction of
improvement activities– The "C" part of the company-wide improvement PDCA

Action

Daily
ActivitiesDo

TEL
CS Survey

Check

Note: CS surveys are also required under ISO regulations

 Activity history
2003

2008

2014

2016

CTBU
Korea subsidiary
CORP IR / June 8, 2022

All SPE

All SPE
+FPD

2017

2023

Survey coverage*>90%*Customers who conduct their own supplierassessments are not included in this survey

Plan to include
new products

86

CSSP (Customer Satisfaction Survey Program) Operation
 Target customers: 250 sites (number of locations/fabs as units) Questions/inquiries：– Sales: Ease of contact, how well sales comprehends requests and issues, and its ability to propose andexecute resolutions, etc.
– Equipment/plants: Equipment lead times, performance and functions; development and technicalcapabilities and speed, etc.
– Service: Awareness of safety regulations, compliance with safety procedures, on-site support
capabilities, etc
 Answer options: "Very satisfied: 4 points," "Satisfied: 3 points," "Dissatisfied: 2 points," and "Extremely
dissatisfied: 1”. Choose one out of the four Passing line: Achieve at least “Satisfied” as an average value for all items after calculating per-question
scores for all customers who answered the question
 Actions with respect to items that require improvement: Immediate follow-up with customers who provided“Extremely dissatisfied (Red Flag)” responses. Improvement, etc. of items falling below the passing line
described above
CORP IR / June 8, 2022

87

CS Survey KPI Results for All TEL Products (2021 vs 2022)
1. Customer response rate (Goal: At least 60%)
2021

2022

YoY

1,412 person(70.2%)

1,459 person(76.1%)+47 person(+5.9%)

2. Customer Satisfaction Survey results (Goal: Achieve at least 3 points out of 4 points)
2021

2022

YoY

96.7%
(29/30)

100%

+3.3%
(+1 questions)(30/30)3. Response rate to "Extremely dissatisfied (Red Flag)" (Goal: Resolve within a month)
Ratio of resolution within a month
Response ratio as of Feb. 22 (day 42)

2021

2022

YoY

93.4%
97.3%

94.8%
100%

+1.4%
+2.7%

Exceeded the passing average of 3 on all questions(for the first time since the start of this survey in 2014)
CORP IR / June 8, 2022
Response ratio to Red Flag has improved88

To further improve customer engagement
Intel
Outstanding Supplier Award

TSMC
Excellent Performance Award

Evaluation points
・Safety ・Affordability
・Quality ・Technology
・Capacity ・Sustainability

Customer A
Best in Value Award

Customer B
Best Partner Award

Evaluation points
Providing leading-edge technologicalsolutions across multiple processes byleveraging our strength in having an
extensive product lineup

Customer C
Best Partner Award

Other top prizes

Continue to enhance customer engagement and improve TEL's corporate value
CORP IR / June 8, 2022

89

Field Solutions Business Strategy
June 8, 2022
Takeshi Okubo
Senior Vice President and General Manager
Global Sales Division

CORP IR / June 8, 2022

90

Rapidly Growing Investment in Mature Generation
WFE investment～30%

Leading-edge

 Equipment– Reengineered equipment for 200mm wafer– New equipment for power devices

 Parts, repair and services

Mature– Parts replacement– Overhaul, cleaning, renewal

Mature generation
portion15%– Repair, maintenance, relocation

 Modification– Performance enhancement– Process change, productivity
enhancement

2015 2016 2017 2018 2019 2020 2021 2022

CORP IR / June 8, 2022

– Modifications to software, hardware

With the expansion of investment in mature generations,a wide range of business opportunities are growing

91

Equipment for Mature Generations
 Reengineered equipment for 200mm wafer– Thermal deposition systems, coater/developer, etch systems, etc.
– Sales expansions not only for replacement demand of existing customers,
but also for emerging customers

 Equipment for power devices– Equipment for SiC wafer, 300mm etch system– Respond to rapid growth in demand for power devices,such as for automotive
SiC epitaxial film deposition system

By integrating our technological assets with new technologies,
improve productivity and reduce impact on the environment
CORP IR / June 8, 2022

92

Field Solutions
 Parts and repair– Predictive maintenance for parts deterioration– Appropriate parts inventory management and prompt delivery

Number of installed base (Unit) Services

100,000 -– Providing “comprehensive contract type” services thatencompass everything from equipment delivery toafter-care maintenance

82,000– Proposing solutions that address customer demands
and maximizing equipment utilization rates

 Modification– Productivity improvement– Yield improvement

FY'20

FY'21

FY'22

FY'27ESAM* is expanding with 82,000 installed base currently and increasing by
approx. 4,000 to 6,000 units each year
CORP IR / June 8, 2022

*SAM: Served available market

93Advanced Field Solutions
Remote Support

TELeMetrics™

 Minimization of downtime
through predictive maintenanceof equipment
 Remote support that enables
prompt response even undertravel restrictions

Strengthen Global System
 Monitoring data on individual equipment
 Knowledge management and accumulation ofproblem case studies

 Provision of support that takes
advantage of time differences Parts management and delivery
through advanced logistics
 Engineer training program

Proposing solutions with high added value
centered around “TELeMetrics™” that utilize DX
CORP IR / June 8, 2022

94

Summary Expand sales for equipment for mature (legacy) nodes
 Deploying solution business based on
installed base
 Development and promotion of advanced
Field Solutions

Field Solutions sales (¥B)
650.0455.9– Providing leading-edge and sustainable support
that utilizes the latest technology, such as DX– Development of remote maintenance support
and training tools

 Enhancing the front-lines engineers and capabilities

equipment sales
for mature nodes– Continuous skill improvement for field engineers
FY'20 FY'21 FY'22

FY'27E

Support customers to maximize their business operations
through services with high added value
CORP IR / June 8, 2022

95

Introducing TEL’s DX Activities and Our Ideal State
June 8, 2022
Noritaka Yokomori
Deputy General Manager, DX
Corporate Innovation Division

CORP IR / June 8, 2022

96

TEL DX Vision The tide of DX ripples throughout the industrial world as a whole, and the semiconductor
industry is no exception. It is positioned as a part of the solution toward further demands fordie miniaturization and layering

AI Chip

Autonomous

Cloud Service

AR/VR

TEL DX Vision
A global company where all employees drive enterprise value creation sustainably through activities
such as value addition and efficiency improvements by leveraging digital technology

DX activities are ultimately a method and an opportunity to realize sustainable creation of corporate value.
We have defined the image we must achieve (our “To-Be Image”) in order to realize transformation.
CORP IR / June 8, 2022

97

TEL DX Grand Design
TEL Vision

A company filled with dreams and vitality that contributes totechnological innovation in semiconductors

TEL Medium-termManagement Plan

Achieving the Financial Model in TEL’s Medium-term Management Plan
Operating Margin ≥ 35%

Net Sales ≥ 3 trillion yen

Product CompetitivenessThe 4 Materialities

Customer Responsiveness

Higher Productivity
Management FoundationTEL DX Vision

A global company where all employees drive enterprise value creation sustainably through activities such as value
addition and efficiency improvements by leveraging digital technology
Innovative enhancement of materiality through DX activities that connect PLM steps

DX Application

Development
DX Business
PlatformDX
Infrastructure

CORP IR / June 8, 2022

Manufacturing

Field

Enhancing the Management Foundation through digitization and digital technology

Skill
Development

Consciousness
and Culture

Data Governanceand Platform98

Steps of DX Activities
DX in Contributing to Customers’ Value Creation

Product Innovation

R&D

3. Control

Ramp up

HVM

1. Consciousness
4. Learningand Evolution

Yield

C
B
A

2. Analysis

Time

Business Reforms

DX in Raising Capital Efficiency
Product Life Cycle

3. Implementation ofBusiness Reforms andDigital Tools

4. Learningand Evolution

1. A Rendering of
Our Current State

Planning

ProfitDesignProto-type

HVM

SupportModification

C Higherprofitability
ShorterA
time to market

D Extended
lifetime value
Data utilization

2. A Rendering of Our Ideal State

Time
Cost

B Lower production cost

Solving issues of a higher dimension through digital transformation
CORP IR / June 8, 2022

99

Relationships between Projects in DX-related Developments
Equipment Foundation
 Development ofequipment frames
 Development ofequipment foundation
technologies

DX Foundation
 Company-wide DX
training Data lake maintenance Maintenance ofenvironments for DX
development

Added Value
Application
 Development ofequipment AEPC Development of service
tools Development related tomeasuring instruments

Capital Efficiency/
Management Foundation
Application
 Development of apps forequipment Development of apps forthe field
 Development of apps for
GBP

QualityTime

Talents

Through a DX foundation and DX that improves capital efficiency,
we will improve the quality and speed of our work,and transition toward a use of time that creates even greater value
CORP IR / June 8, 2022

100

DX Engineer Training Plan

Data
Science

Data
Engineering

Business
Planning

All Employees

The ability to understand and utilize knowledge of
information science, such as cutting-edge
information processing, artificial intelligence andstatistics
The ability to realize a form of data science thatmeaningfully contributes to TEL's creation of
corporate value, and to practice and operate data
science in a manner that fits our purposes
The ability to organize issues and theirbackgrounds, derive solutions, and connect
them to our business

Utilizing data and digital technology in our day-to-day
business operations in order to optimize our business
operations and create added value

Engaging in planned training to foster personnel
who can capitalize data science in TEL’s business
CORP IR / June 8, 2022

101

Example Activity 1 – Increasing Productivity of Equipment:
Improving Utilization of Etch Equipment
Seasoning Step
Beforeimprovement

After
improvement
3. Control basedon analysis
4. Modellearning andevolution

2. Data
Analysis
CORP IR / June 8, 2022

1. Recognition
via sensors…

…

HVM Wafer…
 Reduced use ofdummy wafers…
 30% reduction intime spent on
seasoning…

…

Seasoning at the right time with endpoint detection*ISSM 2020, from “Seasoning Optimization by using Optical Emission Spectroscopy,” published by the Company

Feedback from the sensor provided an appropriate
understanding of chamber conditions and improved
utilization of equipment
102

Example Activity 2 – Increasing Operation Cost of Equipment:
Reducing Chemicals of Coater/Developer
Monitoring of chemical discharge statususing image processing technology

Film Thickness

Automatic film thickness adjustment function

Dispense
VolumeJudgement

X ml
PassedWafer image
by WIS

Y ml
PassedZ ml
FailedΑ ml
FailedBefore100

Chemical use quantities(relative comparison)

Monitoring of chemical coverage of interior of surfaces
using image processing technology

90

20% reduction

80
70
60
Conventional

CORP IR / June 8, 2022

After
Auto Adjustment

New

Contributed to customer operation costs
and the environment by using machine learning

103

Example Activity 3 – Increasing Productivity of R&D:
Process Informatics
Results with recipes
created by engineers

Results using machine learning

Pattern collapse/deformation

No damageExcellent coverage
Lack of coverage
3 weekevaluation

1 dayevaluation

Source: Tokyo Electron Technology Solutions Limited / Tokyo Electron Limited

Achieved good step coverage with no pattern deformationin the ALD process by machine learning
CORP IR / June 8, 2022

104

Example Activity 4 – Improving Overall Equipment EffectivenessNew
Knowledge
Accumulation

Knowledge
cycle

Customers’
Equipment

Time Taken to Resolve Problems(from incidence of problems to cause investigation)

AI

Accumulation of pastworldwide knowledge
and trouble cases in theknowledge management
systemKnowledge
management
systemConventional

Several days

Knowledge
utilization

Same day(improved OEE)

Addressing problems
based on knowledge

Utilized during
development of
FMEA as well

OEE: Overall Equipment Effectiveness
FMEA: Failure Mode and Effects Analysis

Using the Knowledge Management System to reduce the time taken
to resolve problems and improve equipment operation rates
CORP IR / June 8, 2022

105

Example Activity 5 – Increasing Productivity of Operations:
Optimizing Business Operations by Implementing Chat-bots in Back-Office Work

Responding
department

Legal Department, Finance Department, Personnel
Department, General Affairs Department
Employee
AAAAAAAAAAAAAAAAAAABBBBBBBBBBBBBCCCCCCCCCCCCCCCC
Asking a different
question Reduce the number of inquiries,
man-hours spent on inquiries
 Share know-how to resolve issueof tasks becoming too personalized,
train younger employees

Inquiring with theparty responsible• Make it possible to answer using choices or free input• If chat-bot cannot provide an automated answer, makeit possible to use the system to engage in inquiries• Realize a smarter system by analyzing user histories
and adding FAQs

 Make it possible to ask questions
any time without hesitation
 Clarify the departments responding
to inquiries
 Reduce variability in answers basedon the person in charge

Reduced the number of man-hours spent by employees answering questions
with introducing chat-bots in multiple departments
CORP IR / June 8, 2022

106

New Board of Directors Structure and the Corporate Officer System
June 8, 2022
Tetsuo Tsuneishi
Corporate Director, Chairman of the Board

CORP IR / June 8, 2022

107

Corporate Governance Framework (Audit & Supervisory Board System)
As of June 8, 2022
＜Framework (Excerpt)＞

Management & Supervision
Nomination
Committee

Compensation
Committee

ReportReportBoardof
Directors

Audit

Audit

Proposal & ReportSupervision/
Appointment or
Dismissal

Audit&
Supervisory
Board

Business execution
Corporate
SeniorStaff

CORP IR / June 8, 2022

Collaboration

Representative
Director,
President & CEO

Audit

108

Outside Directors as of June 8, 2022

Corporate Director(Outside Director)

Corporate Director(Outside Director)

Corporate Director(Outside Director)

Corporate Director(Outside Director)

Charles Ditmars Lake Ⅱ
Chairman and Representative Director,
Aflac Life Insurance Japan Ltd.
President, Aflac International
Incorporated

Michio Sasaki
Director and Vice President,
SHIFT Inc.

Makiko Eda
Chief Representative Officer,
World Economic ForumJapan

Sachiko Ichikawa
Partner, Tanabe & Partners
Statutory Auditor,
The Board Director Training
Institute of Japan

CORP IR / June 8, 2022

109

Corporate Governance Framework (Audit & Supervisory Board System)
As of June 8, 2022

The era of ultra VUCA

＜Framework (Excerpt)＞

Management & Supervision
Nomination
Committee

Compensation
Committee

Sharp growth of the semiconductor market

ReportReportBoardof
Directors

Audit

Need to improve the quality and speedof decision making in both
“Management & Supervision” and“Business execution”

Audit

Proposal & ReportSupervision/
Appointment or
Dismissal

Audit&
Supervisory
Board

Business execution
Corporate
SeniorStaff

CORP IR / June 8, 2022

Collaboration

Representative
Director, President
& CEO

Audit

110

Corporate Governance Framework (Audit & Supervisory Board System)
On and after June 21, 2022（TBD）

The era of ultra VUCA

＜Framework (Excerpt)＞

Management & Supervision
Nomination
Committee

Compensation
Committee

Sharp growth of the semiconductor market

ReportReportBoardof
Directors

Audit

Need to improve the quality and speedof decision making in both
“Management & Supervision” and“Business execution”

Audit

Proposal & ReportSupervision/
Appointment or
Dismissal

Audit&
Supervisory
Board

Business execution

Corporate Officers

Representative
Director, President
& CEO

Audit

Corporate Officers Meeting
CORP IR / June 8, 2022

111

Corporate Governance Framework (Audit & Supervisory Board System)
On and after June 21, 2022（TBD）

The era of ultra VUCA

＜Framework (Excerpt)＞

Management & Supervision
Nomination
Committee

Compensation
Committee

Sharp growth of the semiconductor market

ReportReportBoardof
Directors

Audit

Audit

Proposal & ReportSupervision/
Appointment or
Dismissal

Audit&
Supervisory
Board

Business execution

Corporate Officers

Strengthen and optimize 3 functions:1) In-depth discussion of mid- to long-term growth strategies2) Supervision of business execution3) Decision-making on business execution
Accelerate “proactive
management”

Representative
Director, President& CEO

Corporate Officers Meeting
CORP IR / June 8, 2022

Need to improve the quality and speedof decision making in both
“Management & Supervision” and“Business execution”

Audit

Growth of short-, mid-, and long-term profits
Increase corporate value continually
112

CORP IR / June 8, 2022

113