TOKYO ELECTRONSUSTAINABILITYREPORT 2022

Plum blossom (Taiwan)
The cover photo shows flowers of the countries and regions in which we do business

PR60-321

About Tokyo Electron

Sustainability Management

Product Competitiveness

Customer Responsiveness

Higher Productivity

Management Foundation

TEL FOR GOOD

1

Data

Editorial Policy

The sustainability report aims to communicate to all stakeholders the responsibilities and roles that Tokyo Electron has in society and the various activities it implements toward value creation. The report describes global initiatives aimed atdeveloping and resolving issues for the industry and society by clarifying priority themes, short- and medium-term goals, and SDGs initiatives in the four material issues of Product Competitiveness, Customer Responsiveness, Higher Productivity
and Management Foundation that supports these areas. Data sets are included at the end of the report, with an accompanying third-party assurance report attached for those items that are considered to be of particularly high importance.
We remain committed to understanding all of our stakeholders' demands and disclosing information timely and transparently. For more detailed information, please consult our official website.

Website

Scope

Published Date

This report and related data cover the Tokyo Electron Group(27 consolidated companies, including the Group companies).

July 2022 (Next report: July 2023)* Some data is for the entire Group in Japan.

Period Covered

Scope of Disclosure

Fiscal year 2022 (April 1, 2021 to March 31, 2022),
some content also covers fiscal year 2023

Details on the"Sustainability Initiatives
in the Value Chain"included in the
Integrated Report arepresented in this report.

Integrated
ReportSustainability
ReportContact
Update Rate

WebsiteAkasaka Biz Tower, 3-1 Akasaka 5-chome, Minato-ku, Tokyo 107-6325, JapanTokyo Electron Limited

Sustainability Report

Information Volume

Reference Guidelines
Global Reporting Initiative (GRI): GRI Standards
Environmental Reporting Guideline 2018, Ministry of theEnvironment, Government of Japan
Recommendations of the Task Force on Climate-related Financial
Disclosures

Contact to Tokyo Electron Limited

Tokyo Electron’s Logo
Tokyo Electron’s logo was created as a symbol for our next stage of growth, based on our Corporate
Philosophy and vision in 2015. This simple design represents our reliability and the engaging presence webring to a competitive industry. The green square at the center of the logo signifies the core of innovation supporting development in the industry; the translucent blue expresses our leading-edge advanced
technology.
We strive to contribute to the development of a dream-inspiring society through our leading-edge
technologies and reliable service and support.

TOKYO ELECTRON SUSTAINABILITY REPORT 2022

About Tokyo Electron

Sustainability Management

Product Competitiveness

Customer Responsiveness

Higher Productivity

Management Foundation

TEL FOR GOOD

Data

2

Contents
Editorial Policy		

1Contents		

2

About Tokyo Electron
Company Overview

3

CEO’s Message		

6

Customer ResponsivenessManagement Foundation

TEL FOR GOOD

About Customer Responsiveness

20

About Management Foundation

Solutions that Create Value for Customers

21

Corporate Governance

31

Initiatives for Field Solutions

21

Risk Management

36

Ensuring Safety for Customers

23

Compliance		

39

Improvement of Customer Satisfaction

24

Respect for Human Rights

40

Environment

58

Human Resources

42

Social60

Diversity and Inclusion

42

TEL Values		

43

Employee Growth

43

Independent Practitioner's Assurance

63

Corporate Profile

64

Higher Productivity
Sustainability Management

30

About Higher Productivity

25

Work-life Balance

44

7

Promotion of Improved Productivity

26

Health and Safety

45

Identifying Material Issues

9

Productivity Improvement in the Value Chain 27

Environment		46

Annual Sustainability Goals and Results

11

Supply Chain Management

55

169 Targets of the SDGs

13

Value Creation Model

14

Tokyo Electron's Sustainability

56

Data
Performance Summary

Product Competitiveness
About Product Competitiveness15

Research and Development

16

Tackling Technological Innovation

18

TOKYO ELECTRON SUSTAINABILITY REPORT 2022

About Tokyo Electron

Sustainability Management

Product Competitiveness

Customer Responsiveness

Higher Productivity

Management Foundation

TEL FOR GOOD

Data

3

Company Overview
Tokyo Electron operates worldwide as a leading company in semiconductor production equipment Industry. By providing the Best Products and Best Technical Service, we are aiming for medium- to long-term profit expansion andcontinuous corporate value enhancement. We are also the practicing our Corporate Philosophy by contributing to the development of a sustainable society through our business.

Number of Sites (As of April 1, 2022)
Head Office
Branch, Office (including Field Service), Sales Office

Tokyo Electron Korea
TEL Magnetic Solutions
Tokyo Electron Europe
TEL Solar Services

TEL Manufacturing and Engineering of America

Tokyo Electron (Shanghai)Tokyo Electron (Shanghai) Logistic CenterTokyo Electron (Kunshan)

TEL Technology Center, America
TEL Venture CapitalTokyo Electron Israel
Tokyo Electron India

Tokyo Electron U.S. Holdings
Tokyo Electron America

Tokyo Electron Taiwan
Tokyo Electron (Malaysia)
Tokyo Electron Singapore

Tokyo Electron
Technology Solutions

Tokyo Electron Miyagi

Tokyo Electron (World Headquarters)

Tokyo Electron Kyushu

Japan:
Overseas:
Worldwide total:

7
20
27

companies atcompanies at

25
52
77

companies* at

Tokyo Electron FE
Tokyo Electron BP
Tokyo Electron Agency

sites
sites insites in17
18

countries and regions
countries and regions (consolidated)* Group companies in the process of being wound up are not shown on the map.

TOKYO ELECTRON SUSTAINABILITY REPORT 2022

About Tokyo Electron

Sustainability Management

Product Competitiveness

Customer Responsiveness

Higher Productivity

Management Foundation

TEL FOR GOOD

4

Data

History

1960s–1970s

1980s–1990s
Single Chip
Microprocessor

Mainframe
ComputerTransition of Typical Applicationsof Semiconductors

Founded as a technical specialized
trading company

2000s–2010s
Personal
Computer

Shifting to a full-scale
manufacturer

2020s–

DigitalConsumerElectronics

Mobile Phone

Accelerating
globalization

Big Data

Aspiration toward innovationand new growth

1963

1978

1980

1990s

2006

2021

Tokyo Electron Laboratories, Inc. isestablished with capital from Tokyo
Broadcasting System, Inc.

Tokyo Electron Laboratories, Inc.
renamed Tokyo Electron Ltd.

Listed on the Second Section of theTokyo Stock Exchange

Enhanced the Group structure in Japanby, for example, establishing service andmanufacturing companies, and set up
overseas subsidiaries throughout theworld to globalize operations“TEL Values” formulated as code of conduct

Began publishingintegrated reports

1990
Tokyo Electron (TEL) marks a major
move into development and marketingof FPD production equipment

1984

1964

Listed on the First Section of theTokyo Stock ExchangeTokyo Electron Laboratories
acquires importing and selling rights
for diffusion furnace manufactured
by Thermco Products Corp. (U.S.)
and begins sales

1994
1999

TEL-Thermco Engineering Co., Ltd.
began domestic production ofdiffusion furnaces

Category of industry on the Tokyo
Stock Exchange First Sectionchanged from “Wholesale Trade” to“Electric Appliances”

1986
Export of semiconductor production
equipment begins

Sales by Region (Consolidated)(Unit: Billions(Unit:
of yen)Billions of yen)

China

Southeast
Southeast
Asia, andAsia,
Othersand Others(4.4%) (4.4%)
88.488.4

Europe Europe

566.2
566.2

606 606

North America
North America(13.4%) (13.4%)
268.0268.0

PR59-229

2022
Listed on the Prime Market of theTokyo Stock Exchange

Establishment of Tokyo Electron
Corporate Governance Guidelines

Formulated the new
Vision andMedium-termManagement Plan
“Technology Enabling Life”
formulated as corporate
message2019
Formulation of the Medium-termManagement Plan to further
enhance corporate value(Unit: People)(Unit: People)

Japan

Japan

8,6618,661(55.4%) (55.4%)(3.9%)

2,002
2,002

Japan

(11.5%) (11.5%)
230.3230.3

TELは、東京エレクトロン株式会社の日本およびその他の国における登録商標または商標です。

North America
North America(5.4%) (5.4%)
107.9107.9

Japan(3.9%)

東京エレクトロン
統合報告書 2021

〒107-6325
東京都港区赤坂5-3-1 赤坂 Bizタワー
Tel.03-5561-7000
www.tel.co.jp

2015

Number of Employees by Region (Consolidated)

China(28.3%) (28.3%)

Europe Europe

Established “TELUNIVERSITY” to strengthen
human resource
development

Re-emergence as the New TEL(Vision, Medium-termManagement Plan formulated
and new Corporate Logo created)

Started direct sales and support
systems overseas

1968

2007

TOKYO ELECTRONINTEGRATEDREPORT 2021

表紙のイメージ“デジタル×グリーン”(12.8%) (12.8%)

billion yen
billion yen
2,003.8
2,003.8

peoplepeople
15,634
15,634(FY2022)(FY2022)(FY2022)(FY2022)
Korea Korea

Taiwan Taiwan(18.0%) (18.0%)
361.5361.5

381.1381.1(19.0%) (19.0%)

Asia

Asia

4,3654,365(27.9%) (27.9%)

Fractions smaller
Fractions
thansmaller
100 million
than 100
yenmillion
are truncated.
yen are truncated.

TOKYO ELECTRON SUSTAINABILITY REPORT 2022

About Tokyo Electron

Sustainability Management

Product Competitiveness

Customer Responsiveness

Higher Productivity

Management Foundation

TEL FOR GOOD

5

Data

Semiconductor Manufacturing Process and Our Main Products
Wafer Process (Front-end)
Assembly and Test Process (Back-end)

Lithography(Photoresist coating, Development)

Deposition

Thermal Processing
SystemTELINDY PLUS TM

Single Wafer
Deposition System
Trias + TM

Silicon dioxide film

Atomic Layer Deposition
System
NT333 TM

Silicon nitride film

Cleaning

Etching

Coater/Developer
CLEAN TRACKTM LITHIUS ProTM Z

Plasma Etch
SystemTactras TM

Single Wafer Cleaning System
CELLESTATM -Plasma Etch
SystemEpisode TM UL

Completed Transistor
before Wiring

Photoresist

Wafer
Repetition

Oxide/Nitride film deposition

Photoresist coating

Exposure

Development

Ashing/Cleaning

Etching

Isolation Formation/Gate Formation

Interconnect formation

Single Wafer
Deposition System
Trias TM

Gate Electrode

Inspection

Plasma Etch System
Tactras TM/Episode TM UL

Packaging/Inspection

Wafer Prober
PrecioTM XL

Wafer Bonder/Debonder
SynapseTM V/
Synapse TM Z Plus

Wafer/Dicing Frame Prober
WDF TM 12 DP +Completed
Semiconductor
Packaging

Wafer Bonding/Debonding

Inspection

Packaging/Assembly

Metal film
Metal film

Intermetal dielectric film

Contact Formation

Interconnect Formation

Wafer Probe Testing

Completed Integrated Circuit

Flat Panel Display (FPD) Production Equipment

FPD Coater/Developer
ExcelinerTM

FPD Plasma Etch/Ash System
Impressio TM

FPD Plasma Etch/Ash System
BetelexTM

Inkjet Printing System
for manufacturing OLED display
EliusTMTOKYO ELECTRON SUSTAINABILITY REPORT 2022

About Tokyo Electron

Sustainability Management

Product Competitiveness

Customer Responsiveness

Higher Productivity

Management Foundation

TEL FOR GOOD

Data

6

Products and Best Technical Service, and will strive to achieve short-, medium- and long-term profit expansion andcontinuous corporate value enhancement.

CEO’s
Message

I would like to express my sincere gratitude to all stakeholders for your continued support and patronage.
Society has faced a series of increasingly serious challenges in recent years, including the prolonged spread of COVID-19,
abnormal weather and natural disasters due to climate change, human rights issues and conflicts between nations as wellas supply chain disruptions and cyber-attacks. These challenges affect industry, society and the lives of people.

Our pursuit of sustainability is the realization of this Vision and the practice of our Corporate Philosophy of "We
strive to contribute to the development of a dream-inspiring society through our leading-edge technologies andreliable service and support." We undertake a diverse range of company-wide measures through our business. As
the importance of semiconductors increases in society, we strive to strengthen our material issues, which are“Product Competitiveness” by continuously creating next-generation products with overwhelming added value,”Customer Responsiveness” to be the sole strategic partner using solid relationships of trust with customers,“Higher Productivity” to continually improve operational efficiency, in addition to “Management Foundation”
which supports our business activities at the foundational level.
With regard to the environment, we launched the E-COMPASS (Environmental Co-Creation by Material, Process
and Subcomponent Solutions) environment-focused initiative in June 2021. We will work together with ourcustomers and partner companies to promote technological innovation and reduce the environmental impact ofsemiconductors throughout the entire supply chain from the following three main perspectives.
■

Meanwhile, the transition to a data-driven society is progressing at an unprecedented speed, including the spread of
IoT, AI and 5G, smarter industries, evolution of autonomous driving and use of metaverse that has been gathering
attention. For semiconductors, which are supporting the core of this shift, expectations for technological innovations
such as larger capacity, higher speed, higher reliability and lower power consumption are limitless. The semiconductor
market exceeded US$500 billion for the first time in 2021 and is expected to exceed US$1 trillion by 2030, more thandouble the current market. Along with this, the semiconductor production equipment market in which we operate isalso expected to expand even further.
Under such circumstances, we will apply our expertise as an equipment manufacturer developed through being an
industry leader and pursue technological innovation in semiconductors to contribute to the development of a
dream-inspiring society.
Tokyo Electron established a new Vision in June 2022 and formulated its new Medium-term Management Plan that
includes new financial targets as it strives for further growth. Under this plan, we will continue striving for the BestNew Vision“A company filled with dreams and vitality that contributes to technological 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 to continuously create high value-added leading-edge equipment andtechnical 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.

■■

Pursuing higher performance and lower consumption in semiconductors
Achieving both the process performance and environmental performance of equipment
Reducing CO2 emissions in all business activities

In June 2022, in addition to our medium-term environmental goals for 2030, we have established the long-term
environmental goal of reducing greenhouse gas emissions to net zero by 2050 toward the realization of net zero.
As a leading company in environmental management, we will contribute to the preservation of the global
environment by actively promoting the reduction of the environmental impact of our products, plants and offices.
We also value the concept of human rights based on a strong sense of integrity. We are working to identify andcorrect human rights risks through the implementation of human rights due diligence within our Group as well as
suppliers. We will incorporate the concept of respect for human rights into every aspect of our business activities,
and strive to nurture a dynamic corporate culture where each person can realize their full potential.
To promote sustainability management in line with international frameworks, we signed the United Nations Global
Compact and are taking on the SDGs. We also joined the Responsible Business Alliance (RBA) and strive to comply
with its code of conduct in our supply chain.
We will continue to promote sustainability-focused management
and contribute to addressing issues of industry and society as wellas their development to fulfill our mission and responsibilities,
aiming to remain a company that is loved and trusted by all
stakeholders.

Toshiki KawaiYour continued support and patronage are verymuch appreciated by all of us at Tokyo Electron.

Representative Director, President & CEOTokyo Electron Limited
TOKYO ELECTRON SUSTAINABILITY REPORT 2022

About Tokyo Electron

Sustainability Management

Product Competitiveness

Customer ResponsivenessTokyo Electron’s Sustainability

Higher Productivity

Management Foundation

TEL FOR GOOD

7

Data

Initiatives for the Sustainable Development Goals (SDGs)

Sustainability and Framework of Corporate Principles
Tokyo Electron’s sustainability initiatives are the practice of its Corporate Philosophy through achieving its
Vision. We make clear the material issues in our growth and promote these initiatives. Together with thebuilding of a resilient management foundation, by providing high-value-added products and services, we
contribute to the resolution of issues and development of industry and society as well as the achievement of
the SDGs.
To be a company that is highly trusted and loved by society, we work on medium- to long-term profit
expansion and continuous corporate value enhancement.
Framework of Corporate Principles

The SDGs are a universal set of goals to achieve by 2030, which wereunanimously adopted by the United Nations Sustainable Development
Summit in 2015. For each priority theme of our material issues, we clarified
the SDGs it is working toward through business and conduct activities for theentire Group.
Tokyo Electron Supports the SDGs.
Additionally, we regularly hold SDGs workshops where employees working
in a variety of fields come together autonomously to share activities throughbusiness and discuss issues such as future prospects toward the achievementof the SDGs.
In fiscal year 2022, we reaffirmed the 17 goals and 169 targets* being undertaken by the priority themes ofour material issues.
* 169 targets reaffirmed: Our initiatives toward the 17 goals and 169 targets that make up the SDGs

MissionCorporate Philosophy: Purpose of Tokyo Electron’s existence and its mission in society

VisionVision: Top priorities to be addressed to realize the Corporate Philosophy

Value

TEL Values: Attitudes, codes of conduct, and values to be observed by each employee

Refer to 169 Targets of the SDGs on p. 13

We strive to contribute to the development of a dream-inspiring society through our leading-edge technologies andreliable service and support.

New Medium-term Management Plan

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

Pride/Challenge/Ownership/Teamwork/AwarenessSustainability Promotion Framework

In addition to pursuing sustainable operations in line with our approach to sustainability, we also strive to generate
medium- to long-term profit expansion and continuous corporate value enhancement by creating new value
through our business and contributing to the resolution of industrial and social issues and to the development ofindustry and society. In June 2022, we revised our Vision and set new financial targets in the new Medium-termManagement Plan and also announced our main initiatives for the future to achieve the new Medium-termManagement Plan as well as our capital policy, shareholder return policy and other measures.

We promote sustainability activities throughout the entire Group through the following committees.
Financial Model Targets in the New Medium-term Management Plan
Conference Name
Sustainability
Committee

Participants■■■

Sustainability Global
Committee

Sustainability
Monthly Meeting
1
2

■
■

■

Corporate officers and General Managers
Presidents of the Group companies in Japanand overseas companies
The executive officer in charge of thesustainability promotion
Heads of related departments
Sustainability managers of the Group
companies in Japan and overseas companies2
Person in charge of sustainability at related
divisions■■■

Function

Meeting
Frequency

Set and manage progress of sustainability goals(short-, medium- and long-term)
Promote company-wide projects1

Twiceannually

Promote activities for achieving annual
sustainability goals (short- and medium-term)■

Implement global projects■

Share information on sustainability activities■

Discuss cross-division sustainability initiatives

Financial Model (Through FY2024)

FY2022 Results

Financial Targets (by FY2027)

Net Sales¥1.5 trillion¥1.7 trillion¥2 trillion¥2.0038 trillion≥¥3 trillion

OperatingMargin

26.5%

28%

>30%

29.9%

≥35%

37.2%

≥30%

ROE*

>30%

Twice
annuallyMonthly

Report and discuss important issues at the Corporate Officers Meeting, the highest decision-making body on the executive side
Corporate Officers' Meeting: Refer to the Corporate Governance System on p. 31
Sustainability manager: Person responsible for coordinating all aspects of sustainability at the Group companies in Japan and overseas companies

In addition to these committees, we invite all employees to submit examples of sustainability in the workplace,
toward issue resolution and advancement of industry and society, and practice of our Corporate Philosophy.
Outstanding initiatives are awarded the TEL Sustainability Award by the CEO and shared throughout the entire
Group as best practices.

We formulated the Medium-term Management Plan in May of 2019 and have been engaged in efforts toachieve a financial model, as the Plan’s core target, with net sales of 2 trillion yen, an operating margin of 30%
or more, and ROE of 30% or more by fiscal year 2024. As the semiconductor production equipment market has
expanded significantly, our business developments in our focal fields have been progressing smoothly, andperformance has outperformed the growth of the market. As a result, we have nearly reached our targets two
years ahead of schedule.
We seek to achieve world-class operating margins and ROE and have set new financial targets under the new
Medium-term Management Plan of net sales of at least 3 trillion yen, an operating margin of at least 35%, andROE of at least 30% by fiscal year 2027.
* ROE: Return On Equity

TOKYO ELECTRON SUSTAINABILITY REPORT 2022

About Tokyo Electron

Sustainability Management

Product Competitiveness

Customer ResponsivenessParticipation in Global Initiatives
We participate in a variety of global initiatives and promote sustainability in our business activities.

United Nations Global Compact

Higher Productivity

Responsible Business Alliance

Task Force on Climate-related Financial
Disclosures

In 2020, we expressed our approval of the recommendations offeredby the Task Force on Climate-related Financial Disclosures (TCFD*).
We are conducting ongoing disclosures and discussions based on theframework of governance, strategy, risk management, metrics andtargets relating to the risks and opportunities that climate changepresents to our overall business.

DJSI Asia PacificEuronext Vigeo World 120 Index

CDP*

TCFD: Refer to p. 48

1
2

8

Data

FTSE4Good Index

STOXX Global ESG Leaders indices

Corporation Governance of
The Year®

MSCI World ESG Leaders Indexes

Sustainalytics’ ESG Risk Ratings

Institutional Investor

DJSI: Dow Jones Sustainability Indices. An ESG (environmental, social and governance) investment index of S&P Dow Jones Indices LLC. The DJSI Asia
Pacific covers companies in that region.
FTSE4Good Index: An index related to environmental performance and corporate social responsibility developed by FTSE Russell.

3

MSCI World ESG Leaders Indexes: Companies that have high ESG performance are selected from the MSCI Global Sustainability Index, an ESG
investment index developed by Morgan Stanley Capital International (MSCI).
Please refer to the link for the logo’s disclaimer.

4
5

Euronext Vigeo World 120 Index: An index selected by NYSE Euronext and Vigeo Eiris composed of 120 companies that excel from an ESG perspective.
STOXX Global ESG Leaders indices: STOXX, a subsidiary of Deutsche Börse, selects companies that meet its evaluation standards based on the resultsof research from the ESG research company Sustainalytics.

6

Sustainalytics’ ESG Risk Ratings: An ESG risk measured for institutional investors by Sustainalytics in the Netherlands. The rating is based on acompany’s exposure to industry-specific material ESG risks and how well a company is managing those risks. Copyright ©2022 Sustainalytics. All rights
reserved. This article contains information developed by Sustainalytics (www.sustainalytics.com). Such information and data are proprietary of

Evaluation from Third-party Institutions
Our sustainability initiatives have allowed us to continue to be selected as a constituent stock underleading global ESG investment indices, including the DJSI1 Asia Pacific Index, FTSE4Good Index2, MSCI World
ESG Leaders Indexes3, Euronext Vigeo World 120 Index4 and STOXX Global ESG Leaders indices5. At thesame time, we were evaluated as a low-risk company in Sustainalytics’ ESG Risk Ratings6.
In 2021, we were selected as a prestigious A List company in the water security category of a survey
conducted by the CDP7, and won recognition as the “Grand Prize Company,” an award given to the mostoutstanding company, in the Corporate Governance of the Year®8 2021 program sponsored by the Japan
Association of Corporate Directors.

TEL FOR GOOD

Additionally, the entire Group in Japan received recognition as top 500 companies under the 2022
Certified Health & Productivity Management Outstanding Organizations Recognition Program9.
Regarding our IR10 activities, we were selected as the “Most Honored Company” by U.S. magazine
Institutional Investor, and received the Best IR Award from the Japan Investor Relations Association.

The United Nations Global Compact (UNGC) is a global initiative that
promotes sustainability, proposed by ex-UN Secretary-General Kofi
Annan at the 1999 World Economic Forum. We signed onto the
UNGC in 2013 and are working to contribute to the realization ofsound globalization and a sustainable society in accordance with its
Ten Principles in the areas of Human Rights, Labor, Environment andAnti-Corruption.

The Responsible Business Alliance (RBA) is a global initiative promoting
supply chain sustainability focused on the electronics industry. We joined
the RBA in 2015, and as a member company, we work together with
suppliers to ensure compliance with the RBA Code of Conduct comprised offive sections: Labor, Environment, Health and Safety, Ethics andManagement Systems.

Management Foundation

Sustainalytics and/or its third party suppliers (Third Party Data) and are provided for informational purposes only. They do not constitute an

7endorsement of any product or project, nor an investment advice and are not warranted to be complete, timely, accurate or suitable for a particularpurpose. Their use is subject to conditions available at https://www.sustainalytics.com/legal-disclaimers.
CDP: An international environmental non-profit organization (NPO) established in the U.K. that conducts surveys on climate change and water security

8

measures taken by private corporations and local governments, and the results are made public.
Corporate Governance of The Year®: Carried out by the Japan Association of Corporate Directors since 2015 with the endorsement of the Ministry of

910

Economy, Trade and Industry and other organizations to encourage companies that practice sound corporate governance to attain medium- to longterm growth.
Certified Health & Productivity Management Outstanding Organizations Recognition Program: The program publicly recognizes particularly
outstanding organizations that are practicing health-oriented business management, based on initiatives attuned to local health-related challenges
and toward health promotion initiatives led by the Nippon Kenko Kaigi.
IR: Investor Relations

TOKYO ELECTRON SUSTAINABILITY REPORT 2022

About Tokyo Electron

Sustainability Management

Product Competitiveness

Customer Responsiveness

Identifying Material Issues
Tokyo Electron identifies important and priority material issues to be addressed for medium- to long-term profit
expansion and continuous corporate value enhancement by examining both social and business environments,
evaluating risks and opportunities and through active engagement and such with stakeholders.

Higher Productivity

Management Foundation

We examined the risks and opportunities closely related to sustainable business development in considerationof the SDGs and other initiatives, social issues and social/business environments.
Social Trends

Environment

Issues AwarenessSocial Issues■

Human rights■

Supply chain
management■■

GovernanceCompliance■Business Environment
The spread of IoT, AI and 5G, smarter industries, autonomous driving, use of the highly anticipated metaverse, and othertechnologies, are moving us toward a data-driven society at an unprecedented speed. Semiconductors are a core partof this shift, and their market size is expected to more than double in the next ten years with technological innovations
in larger capacity, higher speed, higher reliability, lower power consumption, etc. Alongside this, the semiconductor
production equipment market in which we operate is expected to expand even further.
New evolutions are also required in Flat Panel Display, which act as the interface between people and ICT, and further
technical innovations are occurring. In the future, as organic EL displays become widespread, panel size increases, anddesign improvements that take advantage of enhanced characteristics such as high-definition, lower power
consumption, thinner profile and flexibility, are expected to further expand the application fields.
Taking actions to preserve the global environment has become an urgent issue, and under international frameworks
such as SDGs and the Paris Agreement in which initiatives toward decarbonization are essential, the role which
technological innovations in semiconductors and displays will play in society will be more prominent in the future.
At the same time, in step with the increasing importance of corporate governance, which fundamentally supports
the medium- to long-term growth of corporations, further strengthening of measures is essential to ensure safety andquality, as well as compliance and risk management.

9

Data

Social Themes of Risks and Opportunities■

With the state of society being affected by things such as the spread of COVID-19, the invasion of the conflict in
Ukraine and also due to climate change causing abnormal climate conditions and natural disasters, along withhuman rights issues, conflicts between nations, supply chains disruptions, cyberattacks and so forth, we are
currently facing many issues. Mitigating climate change and eliminating inequality in human rights in particular
are pressing issues for the global community, and there are strong calls for further action, not just byinternational organizations and national governments, but also by the private sector.
While participating in global initiatives such as the United Nations Global Compact and RBA and keeping aneye on societal trends, and considering recommendations from third party organizations, we also examinesocial issues that may impact our business activities.

TEL FOR GOOD

Evolution oftechnology■■

Information security■

Main Potential Risks

Opportunities

If we fail to comply with laws and regulations, industry
codes of conduct, in-house policies and so forth,product competitiveness and social credibility will
decline, and the cost of correcting the problem will
increase business costs.

Create business opportunities by providing technologies,
products and services that contribute to the reduction ofenvironmental impact

If we fail to comply with laws and regulations, industry
codes of conduct and so forth, social credibility andemployee engagement will decline.

Create a workplace environment that respects employee
diversity and enables all employees to demonstrate theirfull capabilities, improve employee turnover rate andpromote health management

If a natural disaster occurs, or it becomes impossible tocontinue business transactions with suppliers, events
such as delivery delays and contractual nonperformance will harm business continuity.
If sustainability-related issues such as the environmentand human rights become more serious, operations will
stagnate.

Establish a sustainable production system, further
increase business operations efficiency, improve business
continuity through enhanced business continuity plans(BCPs), strengthen competitiveness in the supply chain
and build trusted relationships with customers andsuppliers

If management’s monitoring or supervising function
declines, management risk will increase, and businessactivities will stagnate.

Enhance corporate value on a medium- to long-termbasis, gain stakeholders’ trust and increase social
credibility

If an ethical or compliance violation occurs, we will losesocial credibility and suffer economic loss.

Operate healthy corporate activities by complying withlaws and regulations, industry codes of conduct,
corporate ethics and other rules

If the development of leading-edge technologies isdelayed, we will lose business opportunities.

Create ground-breaking innovations, strengthen
competitive superiority and contribute to industry andsocial issue resolution and growth

If confidential information is leaked, social credibility
will decline, and compensation for damages will be
required.
If a cyberattack or natural disaster occurs, our businesswill stagnate.

Build a rock-solid information infrastructure bystrengthening information security, and improveinformation literacy

TOKYO ELECTRON SUSTAINABILITY REPORT 2022

About Tokyo Electron

Sustainability Management

Product Competitiveness

Customer ResponsivenessStakeholder Engagement

Higher Productivity

Management Foundation

TEL FOR GOOD

10

Data

Identified Material Issues

We examined the opinions and requests obtained through engagement opportunities with stakeholders.
Main Engagement Opportunities■

Shareholders/investors■■■

Customers■■

Earnings release conference, Medium-termManagement Plan briefing, IR Day
IR conference, IR road show1, individual IR interview
Shareholders’ MeetingTechnology conference
Joint development
Customer satisfaction survey

Key Opinions and Requests
■

■
■

■
■

■

■
■

Suppliers■■■

Production update briefing
TEL Partners Day
Sustainability assessment (including E-COMPASS)
STQA2 audit

■

■

■

■

Employees■■

Employee meeting
Global engagement survey
Individual workshops■■

Medium- to long-term enhancement of corporate value
and measures for such enhancement
Initiatives for highly effective governanceCapital policy, including shareholder return
Provision of innovative technologies for the future
Maximization of productivity using high-value-added
service
Proposal of comprehensive and optimal solutions
Sharing aspects such as market and technology trends
and information on production plans in a timely manner
Encouraging understanding regarding expected quality
standards, compliance with industry code of conduct, etc.
Further improving added value of products and service
through collaboration with us
Sharing of initiatives for corporate policy and Mediumterm Management Plan
Opportunities for career development and skill
improvement
Creation of work environments in which diverse humanresources can thrive

Material Issues

Importance to society

Stakeholders

Importance to business

Material Issues
Product
Competitiveness
Customer
Responsiveness■■Continuously create high value-added nextgeneration products
Strong relationship based on trust/Sole strategic
partnerPriority Themes
■

■
■

■
■
■

Local communities■■

TEL FOR GOOD (social contribution activities)
Tours of plants and offices
Environmental debriefing■■

Cooperation with companies regarding regional
revitalization and development
Promotion of environmental conservation
Human resource development and generation of
innovation

Higher Productivity■

Pursuit of operational efficiency

■
■

■
■
■

■

Governments/
associations■■

Cooperation with the government and administrative
agencies
Collaboration with global initiatives
Industry group activities■■■

Collaboration toward solving common issues
Create new value through innovation
Building of sustainable supply chains■

Management
Foundation■

Build a strong management foundation that
underpins our business activities

■
■
■

1
2

IR road show: IR activities presented directly to shareholders and investors
STQA: Supplier Total Quality Assessment■■■

Tackling technological innovation
Solutions that create value for customers
Improvement of customer satisfaction
Continuous of business operations
Quality management
Improvement of customer productivity/yield
Diversity and inclusion
Career development
Work-life balance
Health and safety
GovernanceRisk management
Compliance
Environmental contribution of products
Environmental management
Supply chain management

Identified Material Issues

Annual Sustainability Goals for Each Material Issues

We have come to understand social issues and business environments, considered risks and opportunities,
examined the opinions and requests of all stakeholders and identified our material issues. The CEO and thoserelated to sustainability, such as the corporate directors and the executive officers, approved “ProductCompetitiveness,” “Customer Responsiveness,” “Higher Productivity,” and “Management Foundation” as material
issues.
Based on a strong “Management Foundation” of safety, quality, compliance, governance, and risk managementthat underpin our business activities, we will be the first to grasp leading-edge technological trends and changing
needs, and continuously create next-generation products with overwhelming added value and performance toincrease “Product Competitiveness.” With our extensive track record in “Customer Responsiveness,” we will build
absolute trust with our customers and be the sole strategic partner. Furthermore, through “Higher Productivity,”
which arises from continually pursuing operational efficiency, we will work toward medium- to long-term profit
expansion and continuous corporate value enhancement.

We are identifying the priority themes for each material issue, setting annual sustainability goals for each fiscal
year, and understanding and verifying the progress of results.
We have also clearly identified the persons responsible for each goal, and by conducting various activities toachieve said goals, we are in turn contributing to the SDGs and further enhancing our corporate value.

TOKYO ELECTRON SUSTAINABILITY REPORT 2022

About Tokyo Electron

Sustainability Management

Product Competitiveness

Customer Responsiveness

Higher Productivity

Management Foundation

TEL FOR GOOD

Data

11

Annual Sustainability Goals and Results
Fiscal Year 2022
Material Issues
Product
Competitiveness
Customer
ResponsivenessPriority Themes
Tackling technological innovation
Solutions that create value for customers
Improvement of customer satisfaction
Continuous improvement of business
operations

Annual Sustainability Goals

Results■

Ensure that 20% or more (three-year moving average) of all equipment models are new products for next-generation technologies

■

24.1%

■

Maintain the previous year’s global patent application rate1 (±10 percentage points)■

Maintained the previous year's rate (Achieved 74.3% in fiscal year 2021 and 74.6% in fiscal year 2022)■

Increase Tokyo Electron’s value to customers■

Both orders and sales increased significantly due to higher demand for semiconductors■

Increase sales-in-field solutions business by 5% or more from the fiscal year 2021 level■

Increased by 33% from previous fiscal year■

Achieve evaluations of “Very Satisfied” or “Satisfied” for 100% of customer satisfaction survey responses2■

100% (All 30 questions)Target a 10% improvement in operational efficiency as a medium- to long-term goal, achieve centralized data management throughadoption of a new enterprise resource planning (ERP) system, and build a business foundation where employees can focus even more on
higher value work (1) Adopt ERP at headquarters (2) Prepare to adopt ERP at manufacturing sites in Japan and overseas subsidiaries(1) Completed adoption of ERP at headquarters (2) Implemented preparations to adopt ERP at manufacturing sites in Japan andoverseas subsidiaries■■

HigherProductivity■

Check the impact of important common issues and thoroughly implement measures to prevent recurrence of similar faults■

Verify the effects of strengthening the quality information environment■

Quality management■■

Promote Shift Left5 (front-loading) activities for quality■

Reported at the Quality Council on measures6 and issues due to rework after defects occur
The Quality Domain Subcommittee has been working to improve the environment for strengthening analytical capabilities andpromoting the improvement of equipment and parts quality■

Identify risks and thoroughly implement countermeasures from the initial development stage (thorough prevention)■

Examine and define what the quality domain aims to be■

Diversity and inclusion■■

Career development
Work-life balanceContinued to regularly update and operate the Quality Dashboard4
Conducted surveys and set KPIs for effectiveness verification■■

Improvement of customer productivity/
yield

Continued and thoroughly operated QA-BOX3
Held regular monthly meetings to decide how to respond to issues posted on the QA-BOX and ensure that the entire Group is
involved■■■

Health and safety■

Conduct a diversity-conscious talent pipeline (plan for developing human resources for the succession planning) and achieve the goal ofincreasing the ratio of female in management positions■■

Identified the talent pipeline in each organization
Identified the gap between the medium-term target and the actual status of the ratio of female managers

Implement initiatives to make the ratio of female recruits equal to or greater than the general ratio of females7 in each region■

Increased ratio of female engineers hired in April 2022 to 12% from 6% in the previous year (Japan)

Create an organizational system where even those from outside of Japan can take on corporate roles through the use of technology andshared global human resources systems■

Implemented a reporting system mechanism that operates globally for some functions

Foster a culture of learning and development in the workplace through (1) Leader development programs (2) Provision of personalized
global learning opportunities (3) Support for career development throughout working life

(1) Conducted leader training (e.g., management skills training) Total: 425 participants (Japan) (2) Conducted external web-based
education Total: 988 participants (Japan) (3) Conducted generation-specific career training Total: 371 participants (Japan)
Number of Career Counseling Room users: 98 (Japan)

Reach at least 70% take-up rate of annual paid leave■

Increase the percentage of employees receiving specific health guidance to 60% (figures based on the results of medical checkups up to
the end of fiscal year 2024)
Reduce the number of workplace injuries per 200,000 work hours
Target: the total case incident rate (TCIR) is less than 0.50■■

64.6% (Japan)
Strengthened promotion of specific health guidance to eligible persons to improve the implementation rate by increasing
opportunities for interviews by enhancing online interviews
0.30

Reported to and discussed with the Board of Directors on the status of sustainability, human capital, intellectual property, andinternal audit
Conducted external evaluation to strengthen internal audit system■ Developed Shareholder Relations (SR) activities with institutional investors with an awareness of general shareholders' meeting
proposals and sustainability-related issues■ Increased off-site meetings from once to twice a year to discuss medium- to long-term strategies and the governance system.
■

GovernanceManagement
Foundation

Continue to improve on issues identified in evaluations of the effectiveness of the Board of Directors■

Promote an integrated risk management system throughout our Group (1) Ongoing rollout of Control Self-Assessment (CSA) (2) Unifiedclassification and response to risks to the entire Group (3) Launch of internal education program Roll out in Japan in fiscal year 2022 andoverseas in fiscal year 2023

(1) Continued operation of the PDCA cycle throughout the entire Group (quarterly monitoring of risk catalog, semi-annual meetingsof the Risk Management Committee (2) Conducted assessments by external organizations on the risk catalogs that centralize risks
for the entire group (3) Conducted workshops for management class and elementary web-based education for employees

Continuous cultivation of a compliance culture (1) Provide Code of Ethics training and achieve a pledge rate of 100% (2) Implement andimprove a compliance survey (3) Achieve 100% recognition of the internal hotline among employees(1) 91.6% (2) Reviewed the objectives and details of the survey based on the results of the third-party assessment to implement
the survey (3) 91.6%

Reduce per-wafer emissions of CO₂ by 30% (by fiscal year 2031, compared with fiscal year 2019)■

Reduced by 10.7% (compared with fiscal year 2019)

Reduce the amount of the use of wooden packaging materials by 50% (packaging for semiconductor production equipment, by fiscal
year 2024)■

Reduced by 8.6% (switchover percentage to reinforced cardboard)■

Reduce total CO2 emissions at plants and offices by 70% (by fiscal year 2031, compared with fiscal year 2019)■

Reduced by 48.5% (compared with fiscal year 2019)■

Rate of 100% renewable energy usage at plants and offices (by fiscal year 2031)■

60.3% adopted (electricity switchover percentage)■

Reduce energy consumption by 1% YoY at each plant and office (per-unit basis8)■

Achieved goal at 7 of 11 plants or offices

Maintain water consumption (per-unit basis9) at each plant and office at the fiscal year 2012 level in Japan and at individual base year
levels overseas■

Achieved 7 of 14 goals■■

Risk management
Compliance■■

Environmental contribution of products

Environmental management

■

■

■

Supply chain management■

Implement supply chain sustainability assessments for the following percentages of suppliers
Material suppliers: Covering at least 80% of our procurement spend
Logistics suppliers: 100% of customs-related operators
Staffing suppliers: 100% of employment agencies and contracting companies (internal contractors)
Implement supply chain BCP10 assessments for the following percentages of suppliers
Material suppliers: Covering at least 80% of our procurement spend

■
■
■

■

Material suppliers: Achieved 80% or more of our procurement spend
Logistics suppliers: Achieved 100% of customs-related operators
Staffing suppliers: Achieved 100% of employment agencies and contracting companies (internal contractors)
Material suppliers: Achieved 80% or more of our procurement spend

1 Global patent filing rate: Percentage of inventions filed as a patent application in multiple countries 2 For each question, average score is calculated for all customers who responded 3
QA-BOX: Refer to Measures to Prevent Quality Problems from Occurring and Recurring on p. 29
Shift Left: Refer to p. 16 and Ensuring Self-process Assurance Systems and Promoting Shift Left on p. 28
4 Collected, analyzed, processed and concisely summarized data and summarized in tables, graphs, etc. 5
Self-process Assurance: Refer to Ensuring Self-process Assurance Systems and Promoting Shift Left on p. 28 7 The ratio of females majoring in science or engineering in the case of engineers6
8 Per-unit basis: Calculated using complex weighting of the number of developed evaluation machines, units produced, floor area and labor-hours for each district 9 Per-unit basis: Calculated based on floor area and labor-hours, etc., for each district 10 BCP: Business Continuity PlanTOKYO ELECTRON SUSTAINABILITY REPORT 2022

About Tokyo Electron

Sustainability Management

Product Competitiveness

Customer Responsiveness

Higher Productivity

Management Foundation

TEL FOR GOOD

Data

12

Fiscal Year 2023
Material Issues

Priority Themes

Annual Sustainability Goals

Initiatives to the SDGs

Product CompetitivenessContinuously create highvalue-added next-generation
products
Customer Responsiveness
Strong relationship based ontrust/Sole strategic partner

Higher Productivity
Pursuit of operational
efficiency

Tackling technologicalinnovation

Solutions that create
value for customers
Improvement ofcustomer satisfaction
Continuous
improvement ofbusiness operations
Quality management
Improvement ofcustomerproductivity/yield

■
■

■
■

■

■

■
■

■
■

Increase research and development (R&D) investment to be 1 trillion yen or more over 5 years (fiscal year 2023 to 2027)
Maintain the previous year’s global patent application rate (±10 percentage points)

Increase Tokyo Electron’s value to customers
Increase sales-in-field solutions business by 5% or more from the fiscal year 2022 level
Achieve evaluations of “Very Satisfied” or “Satisfied” for 100% of customer satisfaction survey responses

Target a 10% improvement in operational efficiency as a medium- to long-term goal, achieve centralized data management through adoption of a new ERP system and build a business foundation where employees can focus evenmore on high-value work (1) Launch ERP introduction to overseas subsidiaries (2) Prepare for ERP introduction to domestic manufacturing sites
Check the impact of important common issues and thoroughly implement measures to prevent recurrence of similar faults
Strengthen the information environment for more accurate quality status and promote improvement activities
Identify root causes of market failures and promote and strengthen Shift Left (front-loading) initiatives by thoroughly implementing countermeasure activities
Identify risks and thoroughly implement countermeasures from the initial development stage (thorough prevention)

Recruit and develop world-class human resources regardless of nationality, age, gender, etc., in order to realize an optimal organization and optimal placement of the appropriate personnel to execute our business strategy
Conduct a diversity-conscious talent pipeline (plan for developing human resources) for succession planning and achieve the goal of increasing the ratio of female managers¹ to 8% globally and 5% in Japan (by fiscal year 2027)
Implement initiatives to make the ratio of female recruits equal to or greater than the general ratio of females in each region■ Create an organizational structure where even those from outside of Japan can take on corporate roles through the use of technology and shared global human resources systems■ Implement a personnel exchange program for engineers at overseas subsidiaries and domestic manufacturing sites■ Share the message of top management's commitment to promoting diversity and inclusion and its continued dissemination■■

Diversity and inclusion■

Career development■

Work-life balance
Health and safety
GovernanceManagement Foundation
Build a strong managementfoundation that underpins
our business activities

■

■
■

■

■

Risk management■■

Compliance■

Environmental
contribution of products■

Environmental
management■■

Foster a culture of learning and development in the workplace through (1) Leader development a culture of business ethics and compliance (2) Provision of personalized global learning opportunities (3) Support for careerdevelopment throughout working life
Reach at least 70% take-up rate of annual paid leave
Increase the percentage of employees receiving specific health guidance to 60% (figures based on the results of medical checkups up to the end of fiscal year 2024)
Reduce the number of workplace injuries per 200,000 work hours Target: TCIR is less than 0.50
Continue to improve on issues identified in evaluations of the effectiveness of the Board of Directors
Further strengthen the PDCA cycle
Continue to implement internal education programs
Implement company-wide risk management tools
Continue to foster a culture of business ethics and compliance (1) Strengthen efforts to continuously communicate the CEO message and foster a culture of business ethics and compliance (2) Continue to improve and implement acompliance program² based on compliance risk assessments (3) Systematic implementation and effective review of various compliance training programs
Reduce per-wafer emissions of CO2 by 30% (by fiscal year 2031, compared with fiscal year 2019)
Reduce the amount of the use of wooden packaging materials by 50% (packaging for semiconductor production equipment, fiscal year 2024)
Reduce CO2 emissions of overall logistics (own delivery) by 10% (by fiscal year 2027)

Reduce total CO2 emissions at plants and offices by 70% (by fiscal year 2031, compared with fiscal year 2019)
Rate of 100% renewable energy usage at plants and offices (by fiscal year 2031)
Reduce energy consumption by 1% YoY at each plant and office (per-unit basis)■ Maintain water consumption (per-unit basis) at each plant and office at the fiscal year 2012 level in Japan and at individual base year levels overseas■■■

Implement supply chain sustainability assessments for the following percentages of suppliers
Material suppliers: Covering at least 85% of our procurement spend
Logistics suppliers: 100% of customs-related operators
Staffing suppliers: 100% of employment agencies and contracting companies (internal contractors)■ Implement supply chain BCP assessments for the following percentages of suppliers
Material suppliers: Covering at least 85% of our procurement spend■

Supply chain
management

1 Include experts in the number of managers 2 Compliance program:

Refer to Compliance System on p. 39

TOKYO ELECTRON SUSTAINABILITY REPORT 2022

About Tokyo Electron

Sustainability Management

Product Competitiveness

Customer Responsiveness

Higher Productivity

Management Foundation

TEL FOR GOOD

13

Data

169 Targets of the SDGs
Material Issues

Relationshipwith theSDGs

Actions under 169 Targets

Listed Pages

Priority Issues
Promote inclusive and sustainable industrialization
Enhance resource use efficiency and expand the introduction ofclean technologies and environmentally sound technologies■ Support scientific research in the industrial sectors of all countries
and enhance technological capabilities■

Product
Competitiveness

Customer
Responsiveness

HigherProductivity

Tackling technologicalinnovation

9.2/9.4/
9.5

Solutions that create
value for customers

9.4/9.b

Improvement ofcustomer satisfaction

9.4

■

13.1

12.5

P. 18

P. 21

Diversify industries and create added value in products
Enhance resource use efficiency and expand the introduction ofclean technologies and environmentally sound technologies■ Prevent and reduce the generation of waste and reduce waste
through recycling and reuse■■Continuous improvementof business operations

8.2

Quality management

8.2

12.2/12.4/
12.5

Improvement ofcustomer productivity/
yield

8.2

12.2/12.4/
12.5

P. 26
Raise economic efficiency through diversification, technologicalenhancement and innovation
Reduce environmentally sound chemical substances and waste■ Prevent and reduce the generation of waste and reduce waste
through recycling and reuse
■

P. 28

■

P. 28

5.1/5.5/
5.b/5.cDiversity and inclusion

P. 24

16.2/16.7

P. 42
■

5.5

Career development

Work-life balance

3.9

Health and safety

3.9

8.2

17.16

10.2/10.3

Reinforce global
partnerships toachieve sustainable
development

P. 42

P. 44

P. 45
Promote gender equality and ensure equal opportunity andequalities of outcome■ Ensure equal opportunity and equalities of outcome byencouraging suitable legislation and taking other measures■ Reduce organic chemical substances and air, water, soil and otherpollution■ Reduce corruption and bribery in all forms■ Reinforce resilience and adaptive capacity to climate changerelated hazards and natural disasters■

GovernanceManagement
Foundation
Risk management

16.5

Compliance

Environmental
contribution of products

3.9

Environmental
management
Supply chain
management

5.1

P. 31

P. 36

P. 39

13.1

P. 53

13.1

P. 47

16.2

P. 55

TOKYO ELECTRON SUSTAINABILITY REPORT 2022

About Tokyo Electron

Sustainability Management

Product Competitiveness

Customer Responsiveness

Higher Productivity

Management Foundation

TEL FOR GOOD

Data

14

Value Creation Model
We will make the most of the capital we own and continue to provide new value that contributes to the resolution of issues and development of industry and society through the development of a value chain in our business activities
in R&D, procurement and manufacturing, sales and installation and maintenance services.

INPUT (investment capital) FY2022

OUTCOME (created value) FY2022

Financial capital
Net assets
1,347.0 billion yen
Equity ratio
Total assets

70.5%
1,894.4 billion yen

Intellectual capital
R&D sites 12 total (6 in Japan and 6 overseas)
R&D investment 158.2 billion yen
Broad-ranging knowledge and technologicalcapabilities in semiconductor and flat panel
display (FPD) manufacturing processes
Customer requests and technology trends
Equipment-related data accumulated through AI
and knowledge management
Systems and know-how for promoting digitaltransformation

Human capital
Number of employees 15,634
Proportion of engineers 67.1%
Personnel able to perform globally
Human resource development through TEL
UNIVERSITY

Social and relationship capital
Relationship of mutual trust with customers built
through many years of performance records
Solid cooperative working relationships with
suppliers
Foundation for business activities in local
communities

Natural capital
Energy consumption 100,265 kL
Water consumption 1,417,000 m3

The driving forces behind our Company
Abundant technological capabilities cultivated as an industry leader
Absolute trust from customers based on our reliable technical services
Challenging spirit of our employees who are capable of flexibly and rapidly
adapting to changes in the environment

Installation and
Maintenance
Services
Support the stable
operation of equipment
and provide prompt andaccurate high-valueadded service

Sales
Propose optimal
solutions as the sole
strategic partner

Research andDevelopment
Continuously
strengthening R&D tocreate innovative andunique technologies ina timely manner

Procurement andManufacturing
Efficiently
manufacturing highquality products backed
by a sustainablesupply chain

OUTPUT
Semiconductor Production Equipment/
FPD Production Equipment
Field Solutions

Manufactured capital
Cumulative number of equipment installations Approximately 82,000 units (annual
shipment volume of approximately 6,000 units)
High-quality and high-reliability products incorporating leading-edge technologies
Safety-first operation (TCIR) 0.30
Optimized and efficient production system
Observing equipment delivery and installation schedules
Intellectual capital
Innovative, high-value-added unique technologies
Product lineup with No. 1 or No. 2 semiconductor production equipment market shareand proposals that leverage thisNumber of patents owned 19,572
Highly efficient and high-quality service
Human capital
Retention rate1 96%
Improvement in desire for growth and demonstration of the challenge spirit inemployees, who both create and fulfill Company value
Building of relationships of trust with stakeholders by employees with a high levelof engagement
Ratio of female managers 5.5%
Social and relationship capital
Percentage of respondents who selected “Very Satisfied” or “Satisfied” in thecustomer satisfaction survey2 100%Rate of improvement after supply chain sustainability assessment 31.5%(compared to FY2021)
Number of TEL FOR GOOD programs 155
Creating employment opportunities in and paying taxes to local municipalities andnations where we carry out business activities
Natural capital
Per-wafer CO2 emissions 10.7% reduction (compared to FY2019)
Renewable energy consumption 230,218 MWh
Energy consumption at plants and offices per net sales 26% reduction (comparedto FY2021)
Waste material recycling rate 98.1%

IMPACT (impact on industry and society)
Financial capital
Returning generated profit to stakeholders■■

Continuing proactive investment for growth bybuilding a solid financial foundation

Manufactured capital
Contributing to improved productivity incustomer product manufacturing (utilization
rate and yield)■■

Contributing to the growth of the semiconductor and FPD markets

Intellectual capital
Contributing to the further development ofindustry and society through semiconductor
and FPD technological innovation■■

Contributing to the building of fair and soundmarkets that respect intellectual property

Human capital
Creating a workplace environment replete withdreams and vitality that enables employees torealize their full potential■■

Improving value provided to stakeholders

Social and relationship capital
Contributing to the value creation andcontinuous growth of customers

■

■

■

Maintaining soundness and strengthening
competitiveness throughout the entire supply chain
Contributing to the revitalization of andsustainable development in local communities

Natural capital
Contributing to the preservation of the global
environment through environmentally friendly
products and business activities as well as
collaboration with suppliers■■

Realization of Vision and Practice of Corporate Philosophy

Manufactured capital
Manufacturing sites 9 total (6 in Japan and3 overseas)
Manufacturing-related capital investment, suchas new plant buildings and manufacturing
equipment
Increasing of production capacity and leveling
Many years of know-how and provenperformance in manufacturing operations

Financial capital
Net sales 2,003.8 billion yen
Operating margin 29.9%
Net income 437.0 billion yen
ROE 37.2%
Total annual dividend 219.3 billion yen (payout ratio: 50%)

Contributing to customer manufacturing ofsemiconductors and FPDs that have a low
environmental impact as well as customer
business activities

1 Calculated using data on turnover rate 2 For each question, average score is calculated for all customers who responded

TOKYO ELECTRON SUSTAINABILITY REPORT 2022

About Tokyo Electron

Sustainability Management

Product Competitiveness

Customer Responsiveness

Higher Productivity

Management Foundation

TEL FOR GOOD

15

Data

Product
CompetitivenessResearch andDevelopment

P. 16

Tackling TechnologicalInnovation

P. 18

SDGs Initiatives
■

■

■

■

■

■

■

■

■

■

Create innovative technologies and contribute to
the development of a sustainable society
through the promotion of innovation
Promote inclusive and sustainableindustrialization
Promote scientific research and improve
technological capacity in the industrial sector of
every country

Contribute to the reduction of environmental
impact company-wide by providing products
and services that are conscious of theenvironment
Improve resource use efficiency and expand theintroduction of clean and environmentallyfriendly technologies
Strengthen global partnerships for sustainable
development

Create the best, high-value-added equipment with innovative technology in a timely manner through the development of product marketingand the global promotion of R&D with an eye on future generations
Boost competitiveness by assigning personnel at research, development and production sites worldwide, including corporate headquarters, topromote intellectual property (IP) management, and by building IP portfolios aligned with technology and product strategies
Continuously strive to reduce the environmental impact of equipment and provide technology that contributes to the development of devices
with even lower power consumption, to preserve the global environment
Strengthen product competitiveness by deploying digital transformation, through the use of digital technology as “leverage” to improve added
value and efficiency
TOKYO ELECTRON SUSTAINABILITY REPORT 2022

About Tokyo Electron

Sustainability Management

Product Competitiveness

Customer Responsiveness

Higher Productivity

Management Foundation

TEL FOR GOOD

Data

Research and Development
Overseas Subsidiaries

With the evolution of ICT, electronics are more and more indispensable to people’s lives. In addition, there is anincreasing need to realize both the development of a data-driven society and preservation of the global
environment, with the growing demand for semiconductors and displays, which is the base of ICT and
increasing global awareness of the environment. The performance required of semiconductors and displays isalso becoming more diversified.
In order to contribute to the development of a dream-inspiring society, Tokyo Electron is engaged in R&D
with an eye on the future to capture changes in society, including innovations in manufacturing technology andthe pursuit of ultra-efficient productivity.
Market Heading toward Diversification

Customization

Improved performance through transistor integration

OS

CPU* + Memory

Multifunctionality

Communication systems

Mobility systems

Healthcare systems

Robotic systems

AI systems

PC/mobile
systems

Applications increase as manufacturing technologies diversify

Development &Production Group

Corporate Innovation Division

Research and Development for the Future

Moore's Law

16Hyper-mass
Pursuit of ultra-efficient productivity*C PU: Central Processing Unit. A semiconductor chip that serves as the brain of a computer.

Development System
As semiconductor production technology grows more diverse and in order to bring high-value-added products tothe market in a timely fashion, we have built a system that promotes R&D and technological innovation for the
next generations with collaboration between the Development & Production Group and the Business Group.
In addition, we share technology roadmaps spanning multiple generations for the future with our customers,
and by working with relevant divisions across the Company we accelerate the development of equipment withsolutions that anticipate market needs.
Specifically, the Corporate Innovation Division, which is headed by the CEO, along with the development
divisions of the manufacturing sites in Japan and the marketing departments of business units, are leading
efforts to enhance process integration capabilities and promote digital transformation* (DX) using AI
technology. In addition, in January 2022 we established the Digital Transformation Promotion Department tofurther strengthen the promotion of DX.
Furthermore, as demands from society escalate with regard to the environment, health and safety, theGlobal Environment and Safety Council is playing a central role in promoting the review and formulation ofbasic policies, and each of our manufacturing sites in Japan are also building a development system that takes
into account the environment and health and safety.

CEO
Corporate Senior Staff(CSS*)Development & Production 1st Division
Development & Production 2nd Division
Development & Production 3rd DivisionCorporate Production Division* CSS: Composed of the Vice President and General Managers of Tokyo Electron, Presidents from overseas subsidiaries

Shift Left
We are focused on using the Shift Left approach, investing resources such as technology, personnel and expense into
the early processes of product development. Through this approach, we are endeavoring to develop various
technologies and conducting research for multiple future generations in order to realize the technology roadmaps
we have created with customers.
In fiscal year 2022, we continued working on using less space for equipment, which is one thing our customers
require. By optimizing the layout of equipment in cleanrooms, we enhanced the productivity per unit area of
equipment, and also contributed to reducing environmental impact. Furthermore, through activities for E-COMPASS*,
an initiative for building sustainable supply chains, we are also pursuing more efficient product development from anenvironmental perspective in partnership with our suppliers.
Through promoting the Shift Left approach we gain an understanding of customer needs at an earlier stage, and byreflecting the information obtained from feedback into our R&D and proposing superior products, we are contributing
to maximizing yield for customer devices and capacity utilization of their mass production line equipment.
We are also promoting on-site collaboration for early delivery of evaluation equipment to customers’ fabs anddevelopment and research laboratories, and are working to accelerate the process in which R&D is reflected in mass
production equipment as well as to optimize development efficiency.
Shift Left■

Joint development of technology roadmaps spanning multiple generations■

Promotion of early engagement

■

■

■

*

E-COMPASS: Refer to E-COMPASS Initiative on p.46

Maximization of yield for customer devices and equipment operating rate fromearly stages of mass production, and also reduction of environmental impact
Promotion of improvement in work efficiency and per person productivity, andfurther increase in investments into human resources and development
Increase in equipment efficiency per unit area by achieving higher productivity andusing less space

Product Marketing
We are endeavoring to further enhance the productivity of product development by having our sales
departments and product marketing departments appropriately fulfill their respective roles.
Our sales departments are responsible for ensuring that products and services are provided based on solid
relationships of trust with customers.

* Digital transformation:

Refer to Strengthening of Product Competitiveness through Digital Transformation (DX) on p.18 andrefer to Higher Productivity through Digital Transformation (DX) on p.26

TOKYO ELECTRON SUSTAINABILITY REPORT 2022

About Tokyo Electron

Sustainability Management

Product Competitiveness

Customer ResponsivenessMeanwhile, our product marketing departments work to plan and realize products that meet the futureneeds of customers in target markets, such as development planning to increase the value of products andservices, and the examination of value-adding mechanisms. In conducting these initiatives, in addition toconsidering new products and functions based on the seeds of our development divisions, they also formulate
plans for optimal collaboration including tie-ups with partner companies and consortiums.
Our sales departments and product marketing departments work together in developing product marketing
activities that anticipate market needs and contribute to customers’ products, and in doing so, help improve
our product competitiveness and promote our Shift Left approach.

Higher Productivity

Management Foundation

Consortiums
Tokyo Electron Development Sites

Korea(as of April 1, 2022)■■

Survey & analysis

Responding and adjusting tochanging circumstances■

Projects uniquely plannedby the development
divisions are examined,
commercialized andassessed to see if there isvalue in functionalization

Imec

■

Tokyo Electron Kyushu

EUV and high-NA EUV: Extreme Ultraviolet. Ultraviolet radiation (ultraviolet rays) in the wavelength range of 1 to 100 nm. High-NA EUV refers to nextgeneration EUV.
Refer to Lithography Process on p. 5
BRIDG: Bridging the Innovation Development Gap (BRIDG) provides the physical foundry infrastructure and collaborative process to connect challenges
and opportunities with solutions making commercialization possible.
TEL Technology Center, America: Our R&D center in the U.S.
Front-end/Back-end: In semiconductor device production, the beginning section of the manufacturing process where the device element isformed is called the front-end (FEOL), and the latter section is called the back-end (BEOL) where the wiring is traditionally accomplished.

BRIDG

National Institute of Advanced
Industrial Science and Technology

IME
TaiwanSetting of target market

We have focused on collaborative efforts with domestic and international consortiums and academic institutions(universities) to enhance our R&D capabilities and to create leading-edge technologies for a very long time.
Today, we continue our engagement in a wide range of areas from applications to product development. In the areaof EUV and high-NA EUV1 lithography processes2, this is achieved through collaboration with imec located in Belgium.
Furthermore, we participate in a global research hub for hardware development of next-generation AI in the U.S. stateof New York, and have formed a partnership with BRIDG3, which is a non-profit public-private partnership located in
the U.S. state of Florida, as well. At our research center in TEL Technology Center, America4, advanced R&D in the areasof front-end, back-end5, and advanced packaging process areas are being carried out daily.
Additionally, we collaborate with the National Institute of Advanced Industrial Science and Technology (AIST), one of

SUNY Poly/
NY CREATESTokyo Electron Technology Solutions

CEA-Leti

Target segment &plan setting

Collaboration with Consortiums and Academia

45Tokyo Electron Miyagi

Singapore

Led by product marketing (New products & shared technologies)

2
3

Japan

Belgium

Future needs/seeds analysis* CIP: Continuous Improvement Program1

France(technology and collaboration)

TEL Technology Center, America
TEL Manufacturing andEngineering of America

TEL Magnetic Solutions

Product promotion
Collection of necessary technologicalinformation

Development of new
products/functionsU.S.

TEL Technology Center Korea
Ireland

Led by sales (Expansion of existing products & CIP* technology)

Promotion & hearings

17

Data

Japan's largest public research institutions. There we leverage AIST's world-class research environment and personnel
to enhance our own development by conducting MRAM1 and 2D material-related research. We do this to address theneeds in the field of semiconductor technology development, which is becoming increasingly diverse.
From fiscal year 2022, we are also participating in iSyMs2, an open consortium led by the Tokyo Institute ofTechnology and the University of Tokyo, to broaden the scope of our collaboration. We have also been working with
SRC3, a globally known U.S. consortium, and contributed to the production of the Decadal Plan for Semiconductors4
published in October 2020.

Roles of Sales Departments and Product Marketing for Product Development■

TEL FOR GOOD

TEL Technology Center, Taiwan

12

MRAM: Magneto-resistive Random Access Memory
iSyMs: Industry-University Consortium for Integrated System-Materials

3
4

SRC: Semiconductor Research Corporation. An advanced research and technology consortium active in the semiconductor industry.
The report that explains the potential of semiconductors over the next 10 years and the challenges that must be overcome to realize the vision.

■ Joint Research Selection Program with Academic Institutions

Since 2018, we have been conducting a joint research selection program with academic institutions. The aim is
to discover and collaborate on advanced elemental technology research pertaining to semiconductors. Under
this program, 23 themes have been selected over the past four years, and a variety of joint research projects are
currently underway.
Although applicants are free to propose any research topic, we adopt proposals that (1) meet our technologicalneeds and show original perspectives and ideas only possible in academia and (2) are expected to improve ourtechnical and planning capabilities and contribute to the expansion of our business domain in the future.
Technical advisors selected from our development divisions, business units (BUs) and manufacturing sites inJapan are responsible for selecting the topics, with subsequent joint research activities managed by theadministrative staff. The research period is up to three years but is extendable if valid results are confirmed
during the regular term.
We will continue to promote the selection program in order to contribute to the development ofsemiconductor-related technologies and devices, as well as to the advancement of science and technologies byrevitalizing research activities in academia.
TOKYO ELECTRON SUSTAINABILITY REPORT 2022

About Tokyo Electron

Sustainability Management

Product Competitiveness

Customer ResponsivenessIntellectual Property Management
We are promoting intellectual property (IP) management based on the fundamental principles that IP
protection supports business activities and leads to an increase of corporate profits.
In order to achieve sustainable growth in the semiconductor industry, where the growth is driven bytechnological innovation, we are globally expanding our R&D activity including industry-academia
collaborations. As well as at corporate headquarters, we have allocated IP professionals at R&D and production
sites around the world to evaluate projects from various angles such as R&D and marketing perspectives, andwe are striving to enhance our competitiveness through building IP portfolios aligned with our technology andproduct strategies.
In 2021, the number of inventions created in Japan was 1,269 and 225 in other countries. The global patentfiling rate has been approximately 70% for 10 consecutive years, and the approval rate of the filed patents hasreached 79% in Japan and 83% in the United States. As proven by these statistics, we maintain our competitive
advantage in the IP domain at the global level. Over the last two years, we have collaborated with partnercompanies and research institutes such as universities around the world and have succeeded in filing 43 joint
patent applications together with 15 companies and 16 organizations.
As a result of these activities, we were selected as one of the "Clarivate Top 100 Global Innovators 2022." In
this award, Clarivate, a global information service company, makes an original evaluation based on patent data,and once a year selects “companies or institutions providing new value to the world with capabilities,
consistency, incredible creativity, and new thinking.”

Higher Productivity

Management Foundation

TEL FOR GOOD

18

Data

using 3D system integration techniques which leverage bonding technology. Also called “heterogeneous
integration4”, 3D system integration technology combines and packages a variety of different materials such as
silicon and non-silicon elements, CPUs and DRAMs5, analog and other electronic components.
In AI technology, development of analog neural devices6 and nonvolatile resistive random access memories7
which mimic the energy-efficient human brain function is well underway. Our film deposition technology
contributes to this development.
By combining and applying these technologies, we will be able to further reduce power consumption andimprove computing efficiencies in a variety of devices.
Realizing next-generation computing requires the development of AI chipsets with an even higher processing
speed and greater energy efficiency. By taking maximum advantage of a wide range of technologies andtechniques from semiconductor production, we are working to create high-value-added equipment that canhelp meet one of the next-generation computing needs of bringing computer performance closer to that of thehuman brain. We are expanding the technological areas in which we can contribute by developing new materials
and boosting the performance of chipsets through 3D system integration equipment offerings, which in turn
optimize the power efficiency of semiconductors by realizing next-generation computing requirements.
We are also working on the development and application of quantum computing technology for the next
generation and beyond.
1
2
3
4
5

SoC: System on a Chip, a design technique in which many or all of the functions required for system operation are mounted on a single semiconductor
chip, or a chip built using this technique.
GPU: Graphics Processing Unit, a dedicated electronic circuit designed to manipulate and modify memory to speed up the generation of images used
for displays.
NPU: Neural network Processing Unit, a processor dedicated to AI that incorporates a neural network that is modeled after the human cranial nervous
system.
Heterogeneous Integration: Packaging that unites different kinds of chips
DRAM: Dynamic Random Access Memory. A type of semiconductor memory used in the main storage unit (or other electronic devices) of a computer
as a large-capacity working memory
Analog neural devices: Electronic devices capable of continuously changing resistance
Nonvolatile Resistive random access memory: Random access memory that uses nonvolatile resistive memory elements.

Tackling Technological Innovation

6
7

Research and Development for Next-Generation Computing

Strengthening of Product Competitiveness through Digital Transformation (DX)

Demand for semiconductors is increasing on a global scale and production is expected to grow even further inthe future. Under such conditions, an unchecked increase in power consumption due to the growing use of
semiconductors may lead to an energy supply risk in the market. In modern-day computing, focus for edge
devices is placed on lower power consumption, but for the server-side the focus is more on performance rather
than power consumption. This is in response to the market needs. Therefore in the future, we may need torethink the balance of Power usage, Performance, Area of silicon, Cost and Environmental impact (PPACE) of
our devices in order to address this energy issue. At Tokyo Electron, we recognize these and other issues and areworking to resolve them through our semiconductor production equipment business.
One solution to the power efficiency problem is to place memory devices closer to logic devices(computational circuits). By shortening the electrical pathway, one can reduce the electrical resistance andthereby reduce power consumption during information transfer between the devices. Optimization of device
architecture using this technique is effective, and development in this area has been gaining momentum inrecent years.
Additionally, for logic devices, SoCs1 that take advantage of the computing characteristics of CPUs, GPUs2 andNPUs3 and distribute computational tasks to the most efficient circuits are increasingly popular. This SoC
architecture can be built by a monolithic process that does not use bonding technology, but can also be built

DX, which is expanding globally across all industries, is accelerating in the semiconductor and flat panel display
production equipment industries as a method to resolve a variety of issues that are becoming more complex
every year.
Yield

Data application and Use
Opportunities

HVM*

C
Ramp up

A S hortening businessprocesses for researchand development

BA* HVM: High Volume Manufacturing

Time

Accelerating the customer proposal
process based on accurate simulations

B S hortening the time to

Reduced mechanical error difference,
automatic adjustment functions

C Improving productivity/

Predictive maintenance, fault detection,
process adjustment functions via
monitoring and analysis functions

mass production

R&D

Examplesproduct yield

TOKYO ELECTRON SUSTAINABILITY REPORT 2022

About Tokyo Electron

Sustainability Management

Product Competitiveness

Customer Responsiveness

Having positioned DX as an important part of the solution for the demand for further miniaturization andmulti-layering of semiconductors, we formulated the TEL DX Vision in January 2021 to become “a global
company where all employees drive enterprise value creation sustainably through activities such as value
addition and efficiency improvements by leveraging digital technology.” We will make full use of a variety ofdigital enablers*, aim to resolve high-level problems via a cycle of 1) monitoring, 2) analysis and prediction,3) control and 4) autonomy, and further strengthen the competitiveness of our production equipment.
* Enablers: People, organizations, factors and means that enable success and achievement of objectives

Digital Enablers■■■

Added Value Creation / Improved Capital Efficiency

High-performance computing
Cloud infrastructure
AI technology, IoT, xR*

Surrounding Environment■■

Progress in data sharing andcollaboration in supply chains
High expectations of robots
and AI and support of humans❸ Control

Feedback to
the realworld❶ Monitoring

Achieving Goals■

Issues of a higher dimension

Visualization❹
Autonomy

Issues of a higher dimension

Autonomous
learning anddecision-making■■■

Quality
Cost
Speed

■
■

Productivity
Energyconsumption❷ Analysis and Prediction
Analysis and prediction with digitalized data

* xR: Extended Reality. Collective name for Virtual Reality (VR), Augmented Reality (AR), Mixed Reality (MR) and Substitutional Reality (SR).

■ Example Initiative

We use AI-based machine learning to adjust film coverage by plasma-enhanced atomic layer deposition(PE-ALD)* in order to ensure film deposition with even thickness around the nanosheet structure. As a resultof using AI to collect experimental data and optimize the analysis and process, we have established an
optimal process for film deposition with high coverage in a short time without damage such as patterncollapse or deformation. Through the use of AI, the amount of wafers and energy used in development isminimized, and engineers are able to engage in high-value-added work without being bound by conventional
ideas and practices.

Higher Productivity

Management Foundation

TEL FOR GOOD

Data

19

Support for Evolving Displays
In recent years, with the development of ICT, newwork options that are not bound by time or place,such as remote work, have expanded. As a result,
there have been dramatic changes in areas such as
lifestyles and health awareness.
Amid this change, displays are expected tocontinue to develop and support people’s daily lives
as an interface between people and data. For
example, organic light emitting diode (OLED) displays
have evolved to be lighter, thinner and with a higher
image quality, and are expected to be used for computers and tablets as well as large screens for televisions
and other devices. The key to this widespread use is the establishment of production technology using large
substrates, and improving technology to control production defects as well as reducing environmental impact
in the manufacturing process are important issues. Larger substrates will contribute to improved production
efficiency and reduced manufacturing costs.
Our product lineup in the flat panel display (FPD) market includes the ImpressioTM and the BetelexTM FPD
etch/ash systems, the ExcelinerTM FPD coater/developer and the EliusTM inkjet printing system for
manufacturing OLED displays.
ImpressioTM and BetelexTM use PICPTM1, a plasma module with improved energy efficiency, reducing power
consumption by up to 20% and achieving precise processing and stability during the mass production process.
In addition, PICPTM Pro, which was released in 2021 and designed for high-definition displays, enables both yield
improvements and mass production stability by reducing the generation of microscopic particles.
The ExcelinerTM, equipped with our original Air Floating Coater, permits higher throughput2 while maintaining
excellent film uniformity and saving chemical consumption.
We will continue contributing to the further development of diverse display products, tackling effective
technological innovation based on market needs such as improving productivity and yield and using energy andmaterials more efficiently.
1
2

PICPTM: A plasma module that produces extremely uniform high-density plasma on panel substrates
Throughput: Processing ability and data transfer amount per unit of time

* Plasma-enhanced atomic layer deposition (PE-ALD): Atomic layer deposition is a thin-film deposition technology that uses continuous vapor-phasechemical reactions. PE-ALD is a method of applying plasma to activate a reaction on the substrate.

Result with engineer-created recipe

Result using machine learning

Pattern collapse/
deformation

No damageExcellent coverage
Lack of coverage

Evaluation
period3 weeks

Evaluation
period
1 day

Source: Tokyo Electron Technology Solutions Limited / Tokyo Electron Limited
Comparison of exploration results of a film coverage process in a simulated nanosheet structure using a 300 mm PE-ALD system, conducted by ahuman engineer and machine learning respectively.

TOKYO ELECTRON SUSTAINABILITY REPORT 2022

About Tokyo Electron

Sustainability Management

Product Competitiveness

Customer Responsiveness

Higher Productivity

Management Foundation

TEL FOR GOOD

Data

Customer
Responsiveness20

Solutions that Create
Value for Customers

P. 21

Initiatives for Field
SolutionsP. 21

Ensuring Safety for
Customers

P. 23

Improvement of
Customer Satisfaction

P. 24

SDGs Initiatives
■

■

■

■

■

■

■

■

■

Contribute to customers that manufacture cutting-edge devices by maintaining an accurate and timely grasp on customer needs andproviding innovative technologies for future generations■

Contribute to customer innovation and value
creation through the proposal of optimal
solutions and innovative technologies
Diversify industries and create added value for
products
Improve resource use efficiency and expand theintroduction of clean and environmentallyfriendly technologies

Ensure sustainable forms of production andconsumption throughout product life cycles byconsidering safety and the environment
Support the stable operation of various
generations of equipment while further
improving productivity and promoting reuse andrecycling
Prevent waste generation, and reduce waste byreusing and recycling

Propose optimal solutions that contribute to value creation for customers as a production equipment company with a diverse product range
Make full use of state-of-the-art AI and digital technologies and provide high-value-added maintenance service that support the stable
operation of equipment
Continuously develop the PDCA cycle to further enhance customer satisfaction, a key management theme since our founding■

Build strong relationships of trust by
strengthening global partnerships withcustomers
TOKYO ELECTRON SUSTAINABILITY REPORT 2022

About Tokyo Electron

Sustainability Management

Product Competitiveness

Customer Responsiveness

Solutions that Create Value for Customers
Systems for Creating Value for Customers

In fiscal year 2022, amid ongoing travel restrictions and other measures due to COVID-19, the transition toward adata-driven society advanced even further and the semiconductor market reached its largest scale ever. As a result,the semiconductor production equipment market, in which Tokyo Electron participates, also grew significantly. In
conjunction with this growth, we received more requests and inquiries from customers than ever before.
Our Account Sales Division is promoting new technology development to meet the needs for nextgeneration leading-edge technology in fields such as memory, logic and foundry. In addition, the Global Sales
Division responds to the needs of more than 100 customers in Japan and overseas who deal incommunication devices, image sensors, power devices and other products for the rapidly growing Chinese
market, and the industrial IoT market.
These two divisions cooperate with business units and global sites that deal in equipment and respond torequests for not only leading-edge devices but also essentially all device applications. As well, they help
customers with issue resolution and value creation by providing optimal solutions with an eye to the future.
In addition, we have been working to strengthen the front-line functions that connect our customers' sites
and our Company in order to accurately grasp the issues and requirements of our customers in their productdevelopment and manufacturing operations, and provide this as feedback to our main development andmanufacturing sites in a timely manner. Going forward, we will accelerate R&D by carefully confirming andadjusting long-term technology roadmaps, including key technologies, with customers. Furthermore, we willassign highly skilled customer engineers to our customers' sites and work to improve equipment utilization
rates and understanding of the customers’ potential needs.
In addition, we are working to improve the technical skills and interpersonal skills of our more than 4,700
field engineers worldwide, install equipment at overseas subsidiaries and enhance information sharing andin-house coordination related to improving work efficiency using the work-time management system in orderto further improve product quality and stability in our service and support activities. We aim to provide
customers with high-value-added services by utilizing our wealth of knowledge and systems to propose
customized solutions for the various challenges they face.

Proposing Customer Solutions Leveraging a Broad Portfolio of Products
We are practicing product development initiated from the customer perspective in order to meet the needs ofproduction sites, such as improved yield and improved equipment efficiency per-unit area through enhanced
productivity and smaller footprints. Each division works in close collaboration with one another, such as our AccountSales Division, which identifies customer demands for next-generation technology and beyond, and our Corporate
Innovation Division, which reviews the integration of those demands into products.
In addition to developing leading-edge technologies, we are also continuously improving the performance of ourmass production equipment, so that we can proactively respond fast and suitably to the needs of our customers
spanning multiple generations.

Higher Productivity

Management Foundation

TEL FOR GOOD

In proposing solutions to customers, we leverage abroad portfolio of products, including those used in the Cleaningseries of each patterning process requiring advanced
technological capabilities, such as Deposition, Coater/
Developer, Etch and Cleaning. By providing not only
manufacturing equipment but also optimal solutions
including systems and software, we will support ourcustomers in their pursuit of productivity and quality
improvement in semiconductor manufacturing, thereby
helping them to optimize their manufacturing
Etch
processes and enhance their competitiveness.

21

Data

TELINDY
PLUS™

EXPEDIUSTM-

Deposition
Trias +TM

CELLESTATM-

NT333TM
EXIMTM

EpisodeTM UL

TactrasTM

CLEAN TRACKTM
LITHIUS ProTM Z

Coater/Developer

Initiatives for Field Solutions
Field Solutions BusinessAs demand for semiconductors increases in various fields, such as medicine, finance, transportation andmanufacturing, the miniaturization and integration of CPUs and memory devices to achieve higher
performance is further advancing. To meet this demand, it is becoming an extremely important issue for ourcustomers to improve the utilization rate of their equipment.
At Tokyo Electron, we are striving to further enhance our field solutions business by promoting knowledge
management in field service, continuously improving the skills of field engineers and strengthening our global
support system through the Total Support Centers (TSCs)* to ensure that the equipment we ship will operate
stably in the market for a long period of time.
Furthermore, in order to comply with various regulations, such as overseas travel restrictions due to
COVID-19, we are developing remote maintenance support and educational tools, and are striving to develop ahigh-value-added field solutions business that contributes to our customers' business operations.
*

TSC: Total Support Center. Refer to p. 22

TOKYO ELECTRON SUSTAINABILITY REPORT 2022

About Tokyo Electron

Sustainability Management

Product Competitiveness

Customer Responsiveness

Higher Productivity

Management Foundation

TEL FOR GOOD

22

Data

Initiatives to Reduce Environmental Impact

Knowledge Management

In order to meet the needs of customers producing IoT-related products, etc., we are developing andproducing a new reengineered equipment based on the previous generation of 200 mm wafer-compatible
equipment. The reengineered equipment replaces old units and components with new ones while
maintaining compatibility with existing processes, and achieves the same level of performance as the latest
equipment in terms of transfer and other aspects, thereby helping customers improve productivity andreduce their environmental impact.
As part of our efforts to reduce environmental impact, we are also deploying LEAP*, a support service that
extends the life cycle of our equipment.
Support for semiconductor production equipment, which consists of tens of thousands of parts, typicallyends seven to eight years after discontinuation. The main reason for this is due to the discontinuation of partsor the difficulty in maintaining safety and quality. This has led to the promotion of replacement with newer
equipment and the discarding of older equipment. In response to customer needs and in consideration of theSDGs, we began redesigning discontinued parts, and by strengthening and restructuring our support system,
including repairs, we are now able to provide extended life cycle support for equipment to more than 15 years
after discontinuation. Through these new support services, we are working to reduce equipment disposal andcontribute to the continuous use of equipment over a long period of time.

We promote knowledge management1 throughout the entire Group so that it can deliver high-quality technicalservice swiftly. In the area of field service, we have built Service CRM2 so that we can create a database andcentrally manage customer equipment support and trouble histories. Operation of Service CRM has begun inJapan and is currently being rolled out globally.
Our knowledge management tools allow comprehensive searches of equipment history of multiple systems
to be performed, thereby contributing toward shortening response time when there are problems. Equipment
Records is a tool that allows batch searches of information such as equipment work histories and parts
replacement histories based on equipment serial numbers, while Knowledge Search enables users to enter
keywords of equipment-related problems to carry out batch searches of files and documents saved in the
database based on past trouble information.
In fiscal year 2022, we worked on making the equipment database multilingual to support Korean andChinese in addition to Japanese and English. This enables our global active field engineers to utilize theknowledge management tools with greater effectiveness. We will continue to promote efforts to manage thevarious systems throughout the entire Group using One Platform3 to increase work efficiency and strive tofurther improve our customer responsiveness.

* LEAP: Lifecycle Extension and Availability Program

Knowledge Management Tools

Equipment Records
Comprehensive
Search ofEquipment History Serial
Number Axis

Total Support Center
Total Support Centers
We established Total
Support Centers (TSCs) inJapan, the United States,
China and Europe tosupport overseas
companies through ourglobal network centeredSupport from a global network of TSCs
around Japan.
At each TSC, dedicatedrepresentatives maintainand utilize a database of
information about
customers’ equipment andexamples of similar incidents to strive for better support, and at the same time, conduct remote support service
by operating TELeMetricsTM and other systems. In fiscal year 2022, we continued to establish a system where
TSCs around the world support each other, taking advantage of time differences in each region, and strove tostrengthen our global network. Through these initiatives, we respond to inquiries and problems from customers
around the world with even greater speed and precision.

Knowledge SearchMulti-equipment Database

Comprehensive
Search ofTrouble Information

Equipment History Trouble Axis

WisdomService CRM

BKM

Parts Order History

Best Known Method
Trouble Shooting
ManualOverseas Report
Serial Number Search

123Symptom Search

Knowledge management: Management approach to promote internal company sharing of tacit knowledge held by individuals, in order to encourage innovation andto improve overall productivity
Service CRM: Service Customer Relationship Management
One Platform: An initiative to manage information using a standardized database and system.
Refer to Continuous Improvement of Business Operations on p. 26

TOKYO ELECTRON SUSTAINABILITY REPORT 2022

About Tokyo Electron

Sustainability Management

Product Competitiveness

Customer ResponsivenessRemote Support System
We promote remote support service using
TELeMetricsTM to minimize any downtime of
production equipment, to detect abnormal operation
before any major defect occurs and to support thestable operation of equipment.
In addition, with the growing need to support
on-site field engineers remotely due to travel
restrictions and various regulations around the world
arising from the COVID-19 pandemic, we are
Using smart glasses (image)developing an advanced remote support system. Thissystem not only allows audio and video from acustomer’s manufacturing site to be shared in realtime but also enhances the confidentiality of information.
In fiscal year 2022, we added unique functions such as information protection, restricted image transmission
and phone translation to our existing smart glasses* system to make remote support more convenient. At thesame time, we are striving to further improve support quality, such as adding the option of tablet devices
according to the environment of our customers.
Unique Features Added by Tokyo Electron
Information Protection

Restricted Image Transmission

Phone Translation

Security feature for protecting
information in case of loss or theft

Information security feature
whereby only necessary images are
sent

Feature that converts voice to text
and displays a translation(multilingual support)

Dangerous Area Function
Function that warns the wearer
when approaching a preset
dangerous area

* Smart glasses: Worn like an ordinary pair of glasses, smart glasses can display images and digital information through the glasses

Engineer’s Skill Up
In fiscal year 2019, we established our training operations center to enhance the training structure and promote
globalization of field engineers. The center establishes a company-wide common skills management systemthat meets the standards of SEMATECH (a U.S. consortium for the joint development of semiconductors). The
system helps us to deploy the most suitable human resources to provide customers with service based on an
objective measurement of the skills of our engineers.
In fiscal year 2021, we began providing education for expert engineers to improve the skills of engineers at
our overseas subsidiaries. The education includes training programs that enable technical support engineersfrom overseas to learn not only technical support but also acquire advanced skills related to development in apractical manner at our manufacturing sites in Japan. Furthermore, we also conduct training for field engineers

Higher Productivity

Management Foundation

TEL FOR GOOD

Data

23

of our Global Data Engineering Team, established in fiscal year 2021, to develop data analysts specializing indigital transformation (DX)*.
In fiscal year 2022, field engineers who have acquired DX skills developed a program for the continuous
improvement of business operations and are rolling it out globally. By linking this program to the field
information database, it became possible to automatically update, analyze and visualize field information.
* Digital transformation:
Refer to Strengthening of Product Competitiveness through Digital Transformation (DX) on p.18 andrefer to Higher Productivity through Digital Transformation (DX) on p.26

Ensuring Safety for Customers
Providing Information to Customers

Tokyo Electron is committed to providing sufficient safety information on its products so that customers cansafely use them.
All products purchased by customers come with a TEL Safety andEnvironmental Guidelines manual. The manual describes examples of potential
risks associated with using our products together with the methods for averting
those risks, as well as safety measures applied to products and recommended
methods for product disposal. It is divided into such categories as chemical,
electrical, mechanical and ergonomic, and is available in 12 languages* to ensurethat customers around the world can understand the content accurately.
In addition to this manual, customers are also provided product-specificmanuals tailored to the relevant product specifications.
If new safety warnings are identified after the product ships, we promptly
TEL Safety and Environmental
report to the affected customers. In addition, we also strive to ensure that
Guidelines
necessary information is communicated, particularly for customers to whom wedeliver products that involve the use of hazardous chemicals or high-voltage electricity.
* 12 languages: Japanese, English, German, French, Italian, Dutch, Russian, Portuguese, Korean, Traditional Chinese, Simplified Chinese and Finnish

Global Expansion of Training for Customers
We establish training centers all over the world, mainly at our development and production sites, and provide
customers with training on equipment operation and maintenance so that products can be used safely. In fiscal
year 2022, demand for web-based training (WBT) and remote training* increased as a result of continuing
difficulty in holding equipment training on-site because of COVID-19. Under such a situation, we provide remotetraining for much of our equipment and strive to further enhance training content, such as by filming footage
from easy-to-see angles beforehand and using some of them as video content. In addition, we are working to* Remote training: A training course, although remote, where trainees interact with the instructor in real time while viewing actual equipment through theirmonitors

TOKYO ELECTRON SUSTAINABILITY REPORT 2022

About Tokyo Electron

Sustainability Management

Product Competitiveness

Customer Responsiveness

improve the content and quality of not only remote training but also WBT by sharing the equipment and methods
we introduced with each training center.
Furthermore, taking into consideration the difficulty in overseas travel, we are also expanding our equipment lineup
at the training centers of our overseas companies.
Going forward, we will continue to give priority to customer safety as we promote further development of ourtraining environment.

Safe Design of Equipment
Taking the entire product life cycle into consideration, we carry out product risk assessments as early as possible inthe development phase. We implement safe equipment design1 to reduce the risks posed to humans by
incorporating the assessment results in the design.
We conduct global surveys of increasingly strict laws and regulations and conduct compliance checks throughthird-party assessment bodies to ensure conformity with international safety standards, SEMI S22 and CE marking3on the equipment we ship.
We have also established a system to comply with safety regulations of the regions where our equipment isdelivered while working with overseas companies.
1
2

3

Safe equipment design: A design concept that eliminates the cause of the machine's harm to humans through the safe design of the machine
SEMI S2: A set of environmental, health and safety guidelines for semiconductor production equipment. It is used mainly by the leading manufacturers ofsemiconductor equipment in the United States and Europe, not only for semiconductors but also as safe procurement guidelines for electric and electronic
device manufacturing equipment around the world.
CE marking: When exporting into the European Union (EU), CE marking defines rules for displaying a CE mark as proof that the equipment is safe andcomplies with EU-defined rules (directives)

Higher Productivity

Management Foundation

TEL FOR GOOD

Data

24

service, for improvement at the level of practical business operations.
Improvements are also made continuously to all aspects of the survey method, including the questions
asked, the analytical methods used and the overall operation of the survey activities.
In fiscal year 2022, two additional questions were added to the existing TEL CS Survey, and the survey was
conducted as Advanced CS Survey in order to analyze the results from a new perspective. Approximately 1,400
individual customers (76.1% response rate) responded to the survey, giving an average score of three or higher(“Very Satisfied” or “Satisfied”) for all survey questions*. The percentage of respondents who gave evaluationsof “Very Satisfied” or “Satisfied,” which is our annual sustainability goal, improved by 3.3 points from 96.7% in
fiscal year 2021 to 100%. On the other hand, we are promoting Shift Left, which is an early-stage improvement
initiative, such as promptly responding to customers who gave a score of 1 ”Very Dissatisfied.”
We will continue to work as one company-wide on activities through the CSSP so that we can continue toachieve our annual sustainability goals.
* For each question, average score is calculated for all customers who responded

Improvement Example
In the TEL CS Survey conducted in fiscal year 2018, many requests for improvements to the software were
made. Since then, the System Software Innovation Division has focused on surveying and analyzing related
questions and sharing the results with related parties in an ongoing effort to resolve issues for each product.
PDCA activities are conducted to exchange opinions across products, study improvement measures, and reporton progress.
As a result of our sincere efforts to incorporate customer feedback by introducing development support
tools, improving development simulators, setting various KPIs related to business progress and implementing
improvement plans such as measurement, we were able to achieve over three points on all software-related
questions in the fiscal year 2022 survey, which is our annual sustainability goal.
PDCA Cycle

Improvement of Customer Satisfaction
Customer Satisfaction Survey

Tokyo Electron conducts its own Customer Satisfaction Survey (TEL CS Survey) every year with the goal of
making continual improvements based on customer feedbacks.
Percentage of responses
The survey started in fiscal year 2004, aimed at just athat indicated Satisfied orlimited number of divisions. It was expanded to include all
Very Satisfied
semiconductor production equipment divisions in fiscal
year 2014, and later the flat panel display production
equipment division and overseas subsidiaries in fiscal year
2016. Currently, it is implemented company-wide as a partof the Customer Satisfaction Survey Program (CSSP).
In the CSSP, a survey with specific questions is conducted at the same time each year, and the information
obtained from the survey is analyzed by business unit (product), account (customer) and function (software,development, etc.), and the results are shared with relevant divisions, such as sales, equipment/plants andCS Survey activity
preparation

Conduct surveyof customers

100%

Feedback to customers
Implement improvement
activities in each division
Confirm progress ofimprovement activities

Analyze and reportsurvey results
Investigate improvement plan

TOKYO ELECTRON SUSTAINABILITY REPORT 2022

About Tokyo Electron

Sustainability Management

Product Competitiveness

Customer Responsiveness

Higher Productivity

Management Foundation

TEL FOR GOOD

Data

HigherProductivity

25

Promotion of Improved
Productivity

P. 26

Productivity
Improvement in the
Value Chain

P. 27

SDGs Initiatives
■

■

■

■

■

■

■

■

Promote productivity, continuously increase
management efficiency, contribute to thedevelopment of the industry and society andcontribute to sustainable economic growth
Increase economic productivity throughdiversification, technological improvement andinnovation
Promote streamlined business operations andquality management throughout the value
chain, ensuring sustainable forms of production
and consumption
Use environmentally appropriate chemical
substances and reduce waste

Continuously increase productivity throughout
the entire supply chain by strengthening global
partnerships with suppliers

Promote the standardization and automation of operations and improve productivity along the entire value chain, such as through thedevelopment of an enterprise resource planning system and the integration of business systems in each division and the unification of databases
Recognize the importance of quality management and strive to further improve business efficiency by implementing quality focus operations
Implement quality improvement activities and continuously increase productivity throughout the entire supply chain through collaboration
with suppliersTOKYO ELECTRON SUSTAINABILITY REPORT 2022

About Tokyo Electron

Sustainability Management

Product Competitiveness

Customer ResponsivenessPromotion of Improved Productivity
Continuous Improvement of Business Operations

Tokyo Electron is introducing a new enterprise system (ERP1) to further improve productivity and quality. The
new ERP, being operated across operational and national boundaries, is aimed at creating the following fivebenefits: (1) compliance with the new revenue recognition standards2 in Japan; (2) management decisionmaking with quick response to change; (3) large improvements in business operation efficiency; (4) utilizationof globally integrated information with an eye toward digital transformation3; and (5) realization of ultimate
work style reform.
In fiscal year 2022, we started with introduction of the new ERP at headquarters, and we completed (1)compliance with the new revenue recognition standards. From fiscal year 2023 onward, we will take fulladvantage of the knowledge gained in the process of introducing the system at headquarters, and gradually
introduce the system at manufacturing sites in Japan and at overseas subsidiaries. In addition, with the aim ofrealizing a globally integrated system, we will work with our partner companies to improve operations, increase
efficiency, and develop functions to further enhance system performance.

Higher Productivity

Sales CRM
(Opportunities
and Forecast)

Scheduler(Plan)

Customer
Investments Opportunities

Forecast■ IT System ■ Key Processes
Warehouse
Supply Chain
Manufacturing
Management
Management Execution System
System(Procurement) (Manufacturing)(Warehouse)

Product
Lifecycle
Management(Design)

Production Production
Planning Preparation

DesignBooking

Procurement Manufacturing

DeliveryStart-up

Global Trade
Management(Export)Technical
Acceptance

Sales

Service CRM(Fieldsupport)

Warranty

Post-sale

ERP (Sales, Inventory, Accounting)

TEL FOR GOOD

26

Data

In manufacturing operations, our current initiatives include labor saving in production through a system thatlinks BOM2 to MES3, and transforming production performance into a Digital Twin4.
Furthermore, to respond swiftly to customer requests and market fluctuations, we have built a production
system that centralizes all information related to production, and have developed an IT infrastructure with
manufacturing execution system (MES) and a supply chain management (SCM)5 system.
By utilizing the wide range of data aggregated through these systems in each business operation, we areworking on optimizing and streamlining production planning as well as visualizing delivery dates of parts bystrengthening information coordination with our suppliers. We are also promoting comprehensive
improvement of business productivity by achieving stronger coordination between sales planning andproduction/procurement/inventory planning.
Additionally, in our manufacturing and logistics operations, where we deal with a wide variety ofcomponents, we are also working on labor savings and efficiency improvements by establishing automatedwarehouses, introducing a warehousing navigation system and promoting automated inspections.
1
2
3

Overview of the New Enterprise System

Management Foundation

4
5

Safety First: Company slogan that prioritizes the safety of every person connected with our business activities
BOM: Bill Of Materials. This shows the hierarchical structure of the product and includes basic information of each part, including which parts are used toassemble the product.
MES: Manufacturing Execution System. A system for understanding and managing production processes and for providing instructions and support toworkers.
Digital Twin: A "Twin in digital space" refers to a technology that copies and replicates various data collected from physical objects in the real world onto
a digital space.
Manufacturing execution system (MES) and a supply chain management (SCM): Refer to Continuous Improvement of Business Operations on p.26

Higher Productivity through Digital Transformation (DX)We aim to enhance product competitiveness and improve capital efficiency in various operational processes—
from the product planning stage to maintenance—by promoting DX.
Image of DX Usage
Development of applications that contribute to corporate value creation using DX infrastructure

1
2
3

ERP: Enterprise Resource Planning. A system that integrates the core business operations of an enterprise, such as accounting, personnel,
production, logistics and sales, for better efficiency and centralized information.
New revenue recognition standards: New Accounting Standard for Revenue Recognition that establishes rules for calculating sales in financial
statements, and which became applicable to listed companies, etc. from April 2021
Refer to Strengthening of Product Competitiveness through Digital Transformation (DX) on p.18 andDigital transformation:refer to Higher Productivity through Digital Transformation (DX) on p.26

Product Life Cycle
Planning

Prototype

HVM*

SupportModification

A: Increased Profit

Application

D: Extension of Lifetime Value
B: Accelerated Market Launch

Initiatives for Higher Productivity
As a manufacturer of semiconductors and flat panel display production equipment, we are committed tocontinuously improving productivity while remaining focused on safety and quality in operations along theentire value chain.
Specifically, under the slogan “Safety First1,” we are striving to improve the safety and work environments ofevery person connected with our business activities, and at the same time, we are building quality management
systems and pursuing quality improvement throughout the value chain in order to understand the true needsof our customers and to achieve the world’s best quality. We are also conducting company-wide activities forcompliance with safety and environmental laws and regulations and to make software development more
efficient and smarter.

DesignProfit

C: Reduced Development Costs

Cost

Data
Applicationand UseTime

Digital skill improvement, Digital awareness and culture creation, and Construction of DX Infrastructure

DX
Infrastructure
Skill
Improvement

Awareness andCulture Creation

Environment Creation(Governance and Data Infrastructure)* HVM: High Volume Manufacturing

TOKYO ELECTRON SUSTAINABILITY REPORT 2022

About Tokyo Electron

Sustainability Management

Product Competitiveness

Customer Responsiveness

Higher Productivity

In our DX activities, regarding the 13 risks*, we implement a risk management PDCA cycle that includes
formulating and executing measures to minimize these risks, monitoring the state of management andsupporting and promoting risk management activities of the various departments.
We are building a system that allows appropriate risk management at the right time through real-timemonitoring of risks, control measures and implementation state across the entire Group while collaboratingwith the overseeing organizations in our headquarters. The purpose is to conduct fast risk detection anddecision-making from the perspectives of data and digital technology utilization.
Furthermore, we are also making clear the human resources necessary for the promotion of DX and areformulating and training plans to develop the respective skills needed. In parallel, we are also carrying out
human resource development to provide all employees with a minimum level of DX knowledge.

Data science

Ability to understand and utilize data science, such as data processing, AI
and statistics

Data engineering

Ability to give meaningful shape to data science for our efforts to create
corporate value, and to implement and operate in line with targets

Data
engineering

Businessplanning

TEL FOR GOOD

Data

27

Quality Policy
1. Quality Focus
	Focusing on quality to satisfy customers, meet production schedules and reduce required
maintenance even with temporary cost increases.
2. Quality Design and Assurance	Building quality into products and assuring in-process quality control, from the design anddevelopment phase throughout every process.
3. Quality and Trust	When a quality-related problem occurs, working as a team to perform thorough root cause
analyses and resolve problems as quickly as possible.

Skill Training Plan for DX Promotion

Data science

Management Foundation

4. Continual Improvement
	Ensuring customer satisfaction and trust by establishing quality goals and performanceindicators and by implementing continual improvement using the PDCA cycle.
5. Stakeholder Communication
	Listening to stakeholder expectations, providing timely product quality information andmaking adjustments as needed.

Business planning Ability to evaluate issues and their context, implement measures toresolve them and link this to business (earnings)

Systematically train human resources to utilize data science in our businessWe will continue to focus on the promotion of DX and utilize digital technology to improve productivity in everythingfrom accelerating the speed of development, improving productivity and quality and enhancing business efficiency
to reforming work styles.
*

13 risks: Risk Management Initiatives on p.37

Productivity Improvement in the Value Chain
Approach to Quality

We define our approach to quality in the following way: “The Tokyo Electron Group seeks to provide thehighest-quality products and services. This pursuit of quality begins at development and continues through all
manufacturing, installation, maintenance, sales and support processes. Our employees must work to deliver
quality products, quality services and innovative solutions that enable customer success.” We strive toimplement this policy.

We strive to implement self-process assurance systems1 by carrying out strict quality-related risk managementand development/design inspections beginning at the development stage, and also by ensuring thoroughverification of customers’ operations using simulations. We have also built an important component traceability
system to strengthen our information environment.
Specifically, to prevent various types of non-conformances, we built a system that allows One Platform2
to view information such as past problems, adjustment values used during manufacturing and assembly andimportant component inspection information from suppliers, and have successfully strengthened our risk
management (FMEA3).
By thoroughly implementing these self-process assurance system and prevention measures, it createstime for employees to focus on high-value-added business operations and promotes initiatives for Shift
Left4 (front-loading).
1
2
3
4

Self-process assurance systems: Refer to Ensuring Self-process Assurance Systems and Promoting Shift Left on p.28
One Platform: A platform that makes it possible to easily view multiple different systems as seamless information sources, in order to effectively andRefer to Initiatives for Higher Productivity on p. 26
efficiently achieve traceability.
FMEA: Failure mode and effects analysis. A method to identify, prevent and mitigate risks in advance.
Shift Left:
Refer to Shift Left on p.16 andrefer to Ensuring Self-process Assurance Systems and Promoting Shift Left on p.28

TOKYO ELECTRON SUSTAINABILITY REPORT 2022

About Tokyo Electron

Sustainability Management

Product Competitiveness

Customer ResponsivenessManagement System
To provide consistent, high-quality products, we have built and are implementing quality assurance systems
under the leadership of the CEO. All manufacturing companies in the entire Group have attained certification in
the latest quality management system, ISO 9001. In addition, we conduct regular internal audits as well as
neutral and fair audits by third parties for each manufacturing company of the Group to contribute toward
maintaining and improving our quality management systems.
ISO 9001 Certified Plants and Offices
Company Name

Plant/Office Name

Certification
Date

Fujii Office/Hosaka Office

September 1994

Tohoku Office

December 1994

Tokyo Electron Technology Solutions

Tokyo Electron Kyushu

Koshi Office

March 1997

TEL Magnetic Solutions—

November 2009

Tokyo Electron Miyagi

Taiwa Office

September 2012

Tokyo Electron Korea

Balan Plant

September 2011

TEL Manufacturing and Engineering of America

Chaska Office

Tokyo Electron (Kunshan)—

March 2013
May 2018

Process Improvement Activities
The production sites of our customers require limited variations in quality between equipment, accurate
process repeatability and high productivity. To provide products that match such customer needs, we focus onprocess improvement activities (PCS1) using a statistical method.
We create control diagrams for the information of various types of critical components (components directlyin contact with wafers and components that directly affect the process of systems, such as components thattransfer mechanical, thermal, electrical or electromagnetic energy to wafers) and analyze variations to quickly
detect and respond to changes in manufacturing processes. By undertaking such PCS activities together with
suppliers handling specific critical components, we work on the suppression of component quality variability
and maintenance/improvement of manufacturing processes that produce quality products to help provide
products surpassing customer expectations.
In addition, manufacturing processes handling new critical components need constant review andimprovement. Our products comprise several tens of thousands of components, and the task to select specificcomponents from these and carry out regular aggregation and analysis require many man-hours.
To optimize and streamline this task, we reexamine our operational flow, including the adoption of
automation, and improve our systems by collecting information from customers, holding discussions among

Higher Productivity

Management Foundation

TEL FOR GOOD

Data

28

our manufacturing sites in Japan and interviewing our suppliers. By continuously carrying out these activities
that are based on the concept of Shift Left, we are striving to improve our productivity further.
■ Example Initiatives

At Tokyo Electron Technology Solutions (Tohoku), design of experiments2 based on statistics is used to establish
quality metrics for critical components and the level of quality activities is being improved together with
suppliers.
The best quality metrics established using the designs of experiments are set as the targets. Conditions thatgive rise to variations in inspection, adjustment and other values in the manufacturing processes of criticalcomponents are strictly managed using PCS activities to seek accuracy and stability in the manufacturing
processes.
In the future, we will promote the automation of processing—from collection to assessment—of suppliers’
data regarding quality and detect the state of quality in real time to further improve the manufacturing
processes of critical components.
1
2

PCS: Process Control System
Design of experiments: A branch of applied statistics that aims to design efficient experimental methods and properly analyze the results

Ensuring Self-process Assurance Systems and Promoting Shift Left
In order to improve the quality of products, it is important to prevent non-conformance from occurring in
upstream processes and to ensure thorough quality control in each process so that nonconforming products—
if they occur—are not allowed to flow into later processes. From this perspective, we promote activities
focused on self-process assurance systems. In particular, we aim to further improve quality by implementing
thorough risk detection and mitigation measures (FMEA1) from the initial stages of product design, as well as
carrying out thorough inspections in each process and conducting verification using simulation.
These activities for in-process quality control make it possible to create high-value-added technologies andproducts in the upstream processes by improving the precision of each process and reducing reworking costs2,
and at the same time, lead to the promotion of the Shift Left3 concept.
We are also promoting Product Lifecycle Management (PLM) by using in-process quality control tocomprehensively manage and analyze all processes from product planning, development, design andproduction through to service in an effort to facilitate the earlier release of products, enhance operational
efficiency, improve quality and reduce costs.
1
2
3

FMEA: Refer to Approach to Quality on p.27
Reworking costs: Costs incurred by going up the chain of processes and reworking when there is non-conformance
Shift Left: Refer to p. 16

TOKYO ELECTRON SUSTAINABILITY REPORT 2022

About Tokyo Electron

Sustainability Management

Product Competitiveness

Customer Responsiveness

Higher Productivity

Management Foundation

TEL FOR GOOD

Data

29

Measures to Prevent Quality Problems from Occurring and Recurring

Initiatives with Suppliers

To comply with ISO and EN1 safety standards and achieve higher safety levels, we have established its own

Continuously improving quality based on strong(%)
38
partnerships with suppliers is essential for providing
40
high-quality products quickly to the market. Since fiscal
year 2001, we have conducted our unique Supplier Total
Quality Assessments (STQA) in an effort to ensure our
22
suppliers properly understand the level of quality expected
20
from them.
Before starting a new business with suppliers, we
conduct an STQA via self-assessment to evaluate theirproduct quality, costs and information security. The
0
BeforeAfterassessment also includes their corporate social
responsibility initiatives, including human rights, ethics,
safety, and the environment. If a risk is identified in this assessment, we visit the supplier and confirm the area of
non-conformance on-site. Once our approaches to quality and other important related issues have been sharedwith the supplier, we request that they plan and implement improvement measures and provide continuous
support until all of them have been completed. In addition, we also conduct audits once every three years for
suppliers who handle important components and for suppliers where quality issues have been found.
We also hold regular meetings with the leaders of various manufacturing sites in Japan who use STQA to sharesupplier-related information and discuss measures to resolve issues.

design rules for each product. At the same time, we have developed systems for manufacturing products,
which include safety considerations. We also have other systems in place for responding to issues such as
equipment design and production non-conformance and any occupational incidents.
In the event of an incident, we use our TIRS2 incident reporting system to distribute information to safety
and quality personnel in each division and officers and management, including senior management. An incident
investigation is also conducted immediately to identify the cause and plan preventive measures.
We use a proprietary system called QA-BOX3 to share information on equipment quality and any major
non-conformance across all quality departments in accordance with our operating rules. Measures obtained
from the results of an incident investigation are promptly applied, not only to the problem equipment but also
to relevant equipment operated by other customers. At the same time, after finding the root cause, revisions
are also made to the current design standards and processes to perpetually prevent the occurrence of major
non-conformances.
For departments that become subjects of incident investigations, we validate repercussions to otherequipment and commonalities and share the issues and countermeasures at regularly scheduled QA-BOX
meetings together with the heads of quality assurance divisions. This allows us to examine various approaches
to prevent similar non-conformances. The common policies determined at the regular meetings are quickly
deployed across the entire Group and reflected in the respective equipment. This helps to reduce nonconformances caused by equipment.

Component Appearance Defect Rate

■ Example Initiatives

Incident Information:

Information Sharing:Operations and Information Flow:

Tokyo Electron GroupManagement
Incident
Reporting
System (TIRS)

Fire
Department
PoliceDepartment

CustomerContact Point

Customer
Report and Workplace
Recovery

Permanent Measures

1
2
3
4
5

Service
Division

Defective Quality
Reporting System(Q-VICS4)
Operations
Divisions
Safety Division
Quality Assurance
Division

Relevant Divisions
Investigation of causes and development ofrecurrence prevention measures
Investigate and
Identify Causes
Confirm Spread

Determine Measures
Establish
Implementation Plan

The quality assurance division of Tokyo Electron Technology Solutions is strengthening the acceptanceinspection process to allow signs of component non-conformance to be discovered early. Component
appearance defects from scratches and dents make up approximately 40% of all non-conformances discovered
during acceptance inspection. As a result of efforts to improve and strengthen component appearance, such as
working with suppliers to find the causes and selecting appropriate packaging materials, the target value of 130
ppm (130 nonconforming products in every one million products) was achieved in fiscal year 2022 even though
the number of shipments increased. Going forward, we will continue to strengthen cooperation with suppliers
and undertake continuous improvement activities.

Issue FCN5
Share with Group
Companies(QA-BOX)
Reflect in DesignStandards
Revise Standards
Notify Revision

EN: European Norm. Uniform standard for the European Union complimenting parts of technical standards not stated in European Commission directives(“New Approach” directives)
TIRS: TEL Incident Report System
QA-BOX: Tool for the sharing and horizontal deployment of important quality-related information within our Group companies
Q-VICS: Quality Valuable Information Chain System
FCN: Field change notice. Refers to the general recall noticeTOKYO ELECTRON SUSTAINABILITY REPORT 2022

About Tokyo Electron

Sustainability Management

Product Competitiveness

Customer ResponsivenessManagement
Foundation

Higher Productivity

Management Foundation

TEL FOR GOOD

30

Data

Corporate
Governance

Risk
Management

P.31

P.36

Respect for
Human Rights

Human
Resources

Diversity andInclusion

P.40

P.42

P.42

TEL Values

Employee
GrowthWork-life Balance

P.43

P.43

Health and
SafetyEnvironment

P.45

Compliance
P.39

P.44

Supply Chain
Management

P.46

P.55

SDGs Initiatives■

Create a work environment where employees
can work in good health and with peace of
mind

■

■

■

■

■

■

■

■

Build a highly effective corporate governance system to realize medium- to long-term growth,strengthen risk management and thoroughly enforce compliance to ensure that operational
decision-making and supervisory functions are exercised sufficiently
Maintain high ethical standards and expand human rights due diligence (impact assessment andremediation) and grievance processes based on the Group-wide Human Rights Policy to practicerespect for human rights
Strive to create new value by respecting the individuality and values of each employee and cultivating
their individual capabilities, and encourage work styles in sync with their respective lifestyles
Strive to achieve medium- and long-term environmental goals for products, plants and offices
and promote E-COMPASS through partnerships with suppliers to reduce environmental impact
throughout the value chain

■

■

■

Promote gender equality and ensure equal
opportunity and fairness of outcomes■

Enhance engagement and build a work
environment that respects human rights anddiversity while maximizing individual abilities■

Practice motivation-oriented management
based on the idea that “Our corporate growthis enabled by people, and our employees bothcreate and fulfill company values.”
Ensure equal opportunity and fairness ofoutcomes through the appropriate promotionof relevant laws and regulations, etc.

■■

Promote activities to reduce environmental
impact through our business and contribute to
the preservation of the global environment
Reduce toxic chemicals and air, water and soil
pollution
Strengthen resilience and adaptability to
climate-related and natural disasters
Build a highly effective corporate governancesystem while strengthening risk management
and thoroughly enforcing compliance in orderto build a strong and sound managementfoundation
Prevent all forms of bribery and corruption

Build a management foundation that
underpins business activities by strengthening
global partnerships

Develop sustainable operations in accordance with global standards throughout the entire supply chain

TOKYO ELECTRON SUSTAINABILITY REPORT 2022

About Tokyo Electron

Sustainability Management

Product Competitiveness

Customer Responsiveness

Higher Productivity

Corporate GovernanceCorporate Governance System
Basic StanceTokyo Electron regards building corporate governance structures as important for achieving success in global
competition, realizing sustainable growth. To that end, we have built a structure for utilizing to the maximum
the worldwide resources we possess and have worked to incorporate a wide range of opinions to strengthen
our management foundation and technology base, establishing a governance structure capable of ensuringthat we attain global-level earnings power. We established the Corporate Governance Guidelines* and outlined
the corporate governance structures that we have developed and reinforced ahead of other companies.
*

Corporate Governance Guidelines

Further Development of Corporate Governance
We use the Audit & Supervisory Board System, which consists of a Board of Directors and an Audit &Supervisory Board, and have achieved effective governance based on the supervision of management by the
Audit & Supervisory Board.
In April 2022, we transited to the Prime Market of the Tokyo Stock Exchange and took the following actions

Management Foundation

TEL FOR GOOD

31

Data

reinforcing corporate governance to respond to the expectations of capital markets including compliance with
the Corporate Governance Code and to enhance corporate value even further.
(1) Changed the composition of the Board of Directors to three inside directors and three outside directors(2) Appointed a majority of outside directors to the Nomination Committee and Compensation Committee,
including their respective chairpersons(3) Introduced a Corporate Officers system, under which corporate officers, as the highest decision-making
body on the executive side of the Group, are responsible for the entire Group management and businessexecution(4) Established the Corporate Officers Meeting and appropriately delegated authority from the Board of
Directors to the executive side to conduct prompt decision-making and agile operational execution(5) Corporate officers attend Board of Directors meetings and apply the details of Board deliberations tobusiness execution in an appropriate and speedy manner
By establishing a Board of Directors that performs its supervisory functions and a robust business execution
system in the semiconductor production equipment industry, where technological innovation is rapid andmarket changes are active, we will further promote growth-oriented group management on a global basis,
expand short-, medium- and long-term profit and achieve continuous corporate value enhancement.

Changes in Corporate Governance (Since CY1998)
1998
Outside Directors(ratio)

1999

2000

One

2001

2002

2003

Two

Term of Office
Changed from Two Years
to One Year

Discretionary
Committees

Nomination
Committee

2019

2020

Two

2022

Four of Twelve Directors(One-third)

Three of Six Directors(One-half)

Three

Two
Corporate Officers
System Introduced

Chairperson:
Outside Director

Compensation
Committee Established
Stock Option System
Introduced

2021

Executive Officer
System Introduced

Nomination Committee
Established
Chairperson:
Outside Director
Disclosure ofCompensation ofIndividual Representative
Directors

Medium-term
Performance-linked
Compensation System
Introduced

Evaluating theEffectiveness of theBoard of Directors
Sustainabilityrelated Disclosures

2018

One

Corporate Directors& Executive Officers

Director
Compensation

2017

Three

Diversity(Female & Foreign
Nationals)

Compensation
Committee

2016

Start of Evaluation(Self-evaluation)
Environmental andSocial Report Issued

Majority of Members are
Outside Directors
Majority of Members are
Outside Directors

Stock-based Compensation
System for Outside
Directors Introduced

Clawback Policies, Stock
Ownership Guidelines
Introduced

Involvement ofThird-party
Organizations

Sustainability
Report Issued
Integrated Report
IssuedTOKYO ELECTRON SUSTAINABILITY REPORT 2022

About Tokyo Electron

Sustainability Management

Product Competitiveness

Customer Responsiveness

Higher Productivity

Management Foundation

TEL FOR GOOD

32

Data

Corporate Governance Framework

Shareholders' Meeting
Appointment or Dismissal of Corporate Directors

Management& Supervision

Nomination Committee
Compensation Committee

Appointment or Dismissal of Audit & Supervisory Board Members

ReportAudit

Board of Directors

Audit
Audit & Supervisory Board

Cooperate

Appointment
or Dismissal

Independent Auditors

ReportProposal & ReportSupervision

Audit

Report Cooperate

Cooperate

Business Execution
Corporate Senior Staff (CSS)

Representative Director, President & CEO

ReportGlobal Audit Center

Corporate Officers Meeting

Audit

Business Ethics Committee
Sustainability Committee

Audit

Risk Management Committee
Information Security Committee
Export Trade Control Committee

Business Execution Organization (All Divisions/All TEL Group companies)

Nomination
Committee

Composition: One inside director and two outside directors
Chairperson: Outside director
Number of Meetings: 12 in FY2022
Deliberation Topics: A ppointment and dismissal of corporate directors and the CEO,candidates of independent outside directors, status of successor
development, other topics

Corporate
Officers
Meeting

The highest decision-making body on the executive side; established in June 2022
Composition: Six corporate officers
Inside directors who are not corporate officers and inside Audit & Supervisory Board
members also participate
Chairperson: CEO
Meeting Frequency: Once a month in principle

Compensation
Committee

Composition: One inside director and two outside directors
Chairperson: Outside director
Number of Meetings: 10 in FY2022
Deliberation Topics: P olicies concerning determination of individual compensation forcorporate directors and others and the details of compensation,compensation of individual remuneration, etc. of representative
directors, other topics

Corporate
Senior Staff(CSS)

Reviews progress management and implementation of management plans from a global
perspective
Composition: Executive officers, management executives of overseas subsidiaries and others
Meeting Frequency: Once a quarterly

Committees
on theExecutive SideBusiness Ethics Committee
Investigates the revision and revocation of the Code of Ethics and verifies the status of practicein accordance with the Code of Ethics
Proposes and supports training and educational programs relating to business ethics

Board ofDirectors

Composition: Three inside directors and three outside directors
Corporate officers also attend meetings to give explanations and reports, etc.
Chairperson: Inside director (non-executive)
Number of Meetings: 12 in FY2022■■

Sustainability Committee
Sets sustainability goals (short-, medium-, and long-term) and implements measures toachieve themImplements company-wide projects (the environment, human rights, RBA, etc.)■■

Audit &
Supervisory
Board

Composition: T wo full-time Audit & Supervisory Board Members and three outside
Audit & Supervisory Board members
Chairperson: Full-time Audit & Supervisory Board member
Number of Meeting: 9 in FY2022

Risk Management CommitteePerforms and shares information on company-wide risk management
Promotes initiatives to address individual risk items in collaboration with risk owners■■

TOKYO ELECTRON SUSTAINABILITY REPORT 2022

About Tokyo Electron

Sustainability Management

Product Competitiveness

Customer ResponsivenessEstablishment of the Director Compensation System
Basic Policy on Director Compensation
The entire Group emphasizes the following points in its basic policies on compensation for corporate directors
and Audit & Supervisory Board members.
1. Levels and plans for compensation to secure highly competent management personnel with global
competitiveness2. High linkage with business performance in the short term and medium-and-long term increase of
corporate value aimed at sustainable growth
3. Securement of transparency and fairness in the decision process of compensation and appropriatenessof compensation

Higher Productivity

Management Foundation

TEL FOR GOOD

33

Data

Advanced Initiatives Relating to Director Compensation■ Shareholding Guidelines
We have established the Shareholding Guidelines (effective July 1, 2021) to further ensure that management’s
interests align with those of stakeholders in pursuit of sustainable enhancement of corporate value. We have
set targets for management to hold Company shares equal to the following within five years after the effective
date of the guidelines or appointment.
Directors

Goals

CEO

3 times

Inside Directors, Corporate Officers

Fixed basic compensation(annual amount)

Outside Directors
Executive Officers

2 times
1 time1 time■ Clawback Policy

Role of the Compensation Committee
To secure transparency and fairness in management and the appropriateness of compensation, the Compensation
Committee, which is chaired by an independent outside director, utilizes advice from an external expert who attends
all meetings, compares compensation levels with companies in Japan and overseas and analyzes the latest trends
and best practices in Japan and overseas (such as reflecting ESG in compensation). The committee then proposes tothe Board of Directors a compensation system that is the most appropriate for the Group and individualcompensation amounts for the representative directors based on the basic policies on compensation.

We have enacted a clawback policy (effective July 1, 2021) whereby we can demand a refund of annual
performance-linked compensation and medium-term performance-linked compensation if financial figures arefound to be in need of major correction due primarily to the willful misconduct of an executive director or
corporate officer.
The amount of compensation subject to refund is the excess portion of the performance-linked
compensation received in the fiscal year in which such misconduct was found as well as the three preceding
fiscal years.

Overview of Compensation
The table below provides an overview of the composition of compensation and policies and decision-making
for each type of compensation.
Recipient
Inside Directors

OutsideDirectors

Audit &
Supervisory
Board Members

●

●

●

Cash Bonuses

●

—

—

Stock Compensation-based Stock Options

●

—

—

Medium-term
Performance-linked
Compensation

Performance Share(stock-based compensation)

●

—

—

Non-performancelinked Compensation

Restricted Stock Units(stock-based compensation)

—

●

—

Type of Compensation

Fixed Basic Compensation

Overview of Compensation■■

Determine within the limit of total fixed basic compensation, which has been resolved at the Meeting of Shareholders
For executive directors, amounts are determined according to the scale of job responsibilities by making reference to the job grade frameworks of external expert organizations

Amount is linked to business performance in the relevant fiscal year to raise awareness of enhancing performance in each fiscal year
Consists of cash bonuses and stock compensation-based stock options; the composition ratio is approximately 1:1
Specific amounts and the number of stock options granted are commensurate with the corporate business performance and the results of individual performance evaluations in the relevant
fiscal year
(Indicators of the corporate business performance)
Net income attributable to owners of parent and consolidated ROE are adopted, and the results of comparisons of operating margin and operating margin growth ratio with competitors arereflected on the amount of payment(Individual performance evaluation items)
Contribution to short- and medium-term management strategy targets including ESG■ Profit-sharing type compensation paid commensurate with business performance in each fiscal year, therefore no policy is in place for the payout proportion of fixed basic compensation■ Stock compensation-based stock options are subject to a three-year exercise restriction period to motivate recipients to share a shareholder perspective while contributing to increasing
corporate value over the medium to long term■

Annual Performancelinked Compensation■■

Paid to motivate recipients to contribute to medium- to long-term business performance improvement
If the payout rate is 100%, the payment amount is set at about 30% to 100% of the fixed basic compensation, commensurate with the scale of job responsibilities
The number of shares delivered is determined depending on the level of achievement of performance goals for the covered period (three fiscal years)■ Consolidated operating margin and consolidated ROE have been adopted as the indicators for evaluating business performance■■■

The remuneration system is designed to be more consistent with the expected role of giving advice to management from the perspective for increasing corporate value over the medium to longtermStandard amounts are set at about 50% to 60% of the fixed basic compensation to ensure an adequate balance between cash compensation and stock-based compensation■ Provided in the form of share delivery after the covered period (three fiscal years) has passed■■

TOKYO ELECTRON SUSTAINABILITY REPORT 2022

About Tokyo Electron

Sustainability Management

Product Competitiveness

Customer ResponsivenessEvaluating the Effectiveness of the Board of Directors
Overview of Evaluations of EffectivenessTo further enhance our governance and the effectiveness of the Board of Directors, we have conducted annual
evaluations of the effectiveness of the Board since fiscal year 2016 and have disclosed summaries of the results.
Since fiscal year 2019, we have used external experts as a third-party organization to verify the status ofinitiatives relating to issues identified in the preceding fiscal year, identify future issues and work toward
continuous improvement.

Higher Productivity

Management Foundation

TEL FOR GOOD

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34

The status of activities of the Compensation Committee, discussion points concerning review ofcompensation systems, the status of progress of successor development plan and other matters arereported to the Board of Directors.
■ Overview of FY2022 Evaluation Results

We recognize that the Board of Directors appropriately performs its roles and obligations, generally with a highlevel of effectiveness, and the Board, including the Nomination Committee and the Compensation Committee,functions effectively (the analysis and evaluation by external experts resulted in a similarly high evaluation).
■ Future Initiatives■ Evaluation of the Effectiveness of the Board of Directors for FY2022

Scope of Evaluation Board of Directors Overall (including details of the activities of the Nomination Committee

and Compensation Committee)

Based on the results of the most recent evaluation, we will continuously take action regarding the following
items and work to enhance effectiveness even further.

Process
Survey administered to all
corporate directors andAudit & Supervisory Board
members
Interviews of all corporate
directors and Audit &Supervisory Board members
by external experts

Deliberations atinternal meetings
Report by external
experts

Meetings for exchangesof opinions by outside
directors and outside
Audit & Supervisory
Board members

Discussion andself-evaluation by the
Board of Directors

Evaluation Items

The main evaluation items for evaluating effectiveness are as follows.
Overall effectiveness of Governance System andthe Board of Directors- Roles and functions of the Board of Directors- Size and composition of the Board of Directors- Operational status of the Board of Directors■Composition, roles and operational status of theNomination Committee
Composition, roles and operational status of theCompensation Committee
Further support to outside directors
Roles of Audit & Supervisory Board members

■

■

■
■

Relationship with investors and shareholders■■ FY2022 Initiatives
■

■

■

■

Reinforcement of continuous deliberation concerning medium- to long-term management strategies
Two off-site meetings were held for in-depth discussions on growth strategies, Medium-termManagement Plan, the future governance system and other issues.
Promoting diversity and developing and appointing global human resources
Initiatives and the status of disclosure regarding human capital are reported to the Board of Directors, andwith respect to diversity, the Board discusses, sets and discloses targets for the ratio of female managers
and implement specific measures.
Reinforcement of the internal audit system and collaboration between the Internal Audit Department andthe Board of Directors
The status of implementation of internal audits is reported to the Board of Directors. Also, risk-based audits
are conducted pursuant to the audit map.
Enhancement of information sharing by the Nomination Committee and the Compensation Committeewith the Board of Directors(1) Measures to enhance the effectiveness of the Board of Directors in the 60th fiscal year
Clarify the division of roles and decision-making authority and ensure appropriate checks andbalances between the executive side and the Board of Directors
Conduct appropriate operations of the newly established Corporate Officers Meeting to ensure
effectiveness(2) Continuous deliberation by the Board of Directors to achieve growth over the medium to longterm and continuously enhance corporate value
After clarifying specific timeframes (short-, medium- and long-term), organize targets and strategic
themes and risk issues (deepen discussion relating to medium- to long-term growth strategies)
Continuously address diversity and inclusion(3) Investigate optimal information sharing among members of the Board of Directors and withthe voluntary committees
Ideal state of information sharing on the activities of the Nomination Committee with theBoard of Directors
Establish venues for exchanges of opinions among outside directors and outside Audit &Supervisory Board members
■

■

■

■

■

■

Main Topics for the Board of Directors and Off-site Meetings in FY2022
CEO
Medium- tolong-term growthstrategies
Risks

■

■

■

■
■

Reports on status of business execution by CEO(each meeting)Market environments over the medium to long termand our growth plans
New Medium-term Management Plan and future
growth strategies
Improvement of risk management processes
Legal affairs and compliance

■

■

■

■

■
■

■

Governance■■Future governance system and decision-making
processes
Action policies concerning sustainability anddiversity
Reports on investment in human capital andintellectual property activities
Reports on internal audits■■■

Sharing of CEO missions
Expansion and reinforcement of development andproduction facilities in Japan and overseas
Business innovation projects
Procurement risks
Status of investment targets and crossshareholdings and status of IR activities
Status of the activities of the Compensation
Committee
Status of progress of successor development plan
Closed session on evaluation of representative
directors (corporate directors, excluding
representative directors, and Audit & Supervisory
Board members; once a year)
TOKYO ELECTRON SUSTAINABILITY REPORT 2022

About Tokyo Electron

Sustainability Management

Product Competitiveness

Customer Responsiveness

Higher Productivity

Management Foundation

TEL FOR GOOD

35

Data

Skills Matrix
We define Product Competitiveness, Customer Responsiveness, Higher Productivity and Management Foundation, which supports our overall business activities, as material issues.
We will address priority themes relating to each material issue and achieve expansion of medium- to long-term profit and continuous corporate value enhancement by each corporate director and Audit & Supervisory Board
member demonstrating their skills in global business, governance, sustainability and in particular, the areas listed below.
Definition of Expected Skills

Expected Skills
Name

Corporate
Directors

Corporate
Management

Semiconductor/
FPD

Manufacturing/
Development

Sales/
MarketingToshiki Kawai

●

●

●

●

Sadao Sasaki

●

●

●

●

●

●

●

●

●

Yoshikazu Nunokawa
Michio Sasaki

Outside●Makiko Eda

Outside●Sachiko Ichikawa

Outside●Kazushi Tahara
Kyosuke Wagai

OutsideMasataka Hama

OutsideRyota Miura

OutsideLegal Affairs/
RiskManagement

■

■

■

●
■

●

●

Yoshiteru Harada

Audit &
Supervisory
Board
Members●

Finance,
Accounting/Engagement with
Capital Markets

●

●

●

●

●

●

●

■

●
●

■

●

Corporate Management
Experience of corporate management (experience serving as a representative
director or chairperson/president)
Semiconductor/FPD
Knowledge of semiconductor/FPD-related industries
Manufacturing/Development
Knowledge/experience in manufacturing and development at Tokyo Electron andother manufacturers
Sales/Marketing
Knowledge/experience in sales and marketing at Tokyo Electron and othermanufacturers
Finance, Accounting/Engagement with Capital Markets
Knowledge in financial accounting and M&A, or knowledge/experience inengagement with capital markets
Legal Affairs/Risk Management:
Knowledge in legal affairs, compliance and risk management●●

Diversity of Board Members
Expected Skills of Corporate Directors and Audit & Supervisory Board Members

Independence and Diversity of Corporate Directors

Change in Independent Outside Directors (Unit: persons)

Independent Outside Directors

From June 2019

From June 2021

From June 2022

3
11

4
12

3
6

(27%)

(33%)

(50%)

(Unit: persons)(Unit: persons)

Corporate Management

6

Semiconductor/FPD

6

Manufacturing/Development

5

Sales/Marketing

6

Finance, Accounting/Engagement with Capital Markets
Legal Affairs/Risk Management

54Female Corporate Director

3
6
2
6

TOKYO ELECTRON SUSTAINABILITY REPORT 2022

About Tokyo Electron

Sustainability Management

Product Competitiveness

Customer ResponsivenessEngagement with Capital Markets
Our management actively engages in investor relations (IR) andshareholder relations (SR) activities to contribute to our sustainablegrowth and increase corporate value over the medium to long term.
For IR activities, in addition to quarterly earnings conferences, the CEOand each company's executive appear at Medium-term Management Planannouncement and IR Day events to share our business strategies andgrowth story. Simultaneous interpretation and subtitles are used tobroadcast briefings in Japanese and English in an effort to provide fairdisclosures to overseas investors. The IR Department, which was established under the direct control of theCEO, also supplements explanations as appropriate through individual interviews and regularly reports opinionsfrom investors to management and the Board of Directors so that feedback can be of use in management. In
addition, we actively participate in IR and ESG conferences in Japan and overseas and encourage dialogue withcapital markets through the cooperation of company executives and the IR Department to gain a deeper
understanding of the Group. In fiscal year 2022, we received a Best IR Award from Japan Investor Relations
Association and were selected as a "Most Honored Company" by Institutional Investor magazine in the U.S. forthe seventh consecutive years.
As a part of our SR activities, company executives play a central role in constructive dialogue with our major
investors and proxy advisory firms. In addition to explaining the Shareholders’ Meeting agenda in advance, we
engage in repeated dialogue throughout the year on a wide range of topics including corporate governance, ourpolicies about sustainability-related initiatives, the environment, human rights, and diversity and deepen
mutual understanding.
To encourage active discussion and facilitate smooth and efficient voting at Shareholders’ Meetings, we send
convocation notices at an early stage, and also post notices in both Japanese and English on our website prior
to sending notices and take other measures to provide information to shareholders in a timely manner. In
addition, we analyze the results of the exercise of voting rights, report to the Board of Directors, and use theresults to further enhance engagement with investors.

Risk Management

Higher Productivity

Management Foundation

TEL FOR GOOD

Data

36

We believe accurately understanding the risks and impacts that we may face in our businesses with an eye
on the future, viewing them as opportunities for business growth and appropriately addressing them areessential to sustainable growth as a company that is trusted by society.

Risk Management System
We have established the organization to oversee the entire Group at our headquarters and carry out enterpriserisk management1 to promote more effective risk management. This organization, together with the respective
departments responsible for each operation, comprehensively identifies a wide range of risks associated withour business activities, such as compliance, human resource, labor and business continuity risks, and classifies
those with high impact and probability as our material risks.
In addition to holding management workshops and training for employees and raising awareness companywide, we are also working to strengthen the PDCA cycle and improve the effectiveness of risk management by
formulating and executing measures to mitigate material risks, monitoring the effect of said measures andholding discussions at major internal meetings. Specifically, we review the response status of the Executive
Department and each of the Group companies regarding the identified material risks at the BUGM Meeting,quarterly meetings and the CSS, etc., and decide a response policy at the Corporate Officers Meeting. We ensure
the operating rhythm of this procedure and also report periodically to the Board of Directors.
Additionally, we are continuing to focus on the revision and operation of our BCP, including responses to
COVID-19, and are rapidly executing business continuity measures.
In fiscal year 2021, we introduced CSA2, with each risk owner of the Group further strengthening risk managementin the 13 defined categories. We will continue to implement autonomous and highly effective risk management.
1Enterprise risk management: Group-wide systems and processes related to risk management activities

2

CSA: Control Self-Assessment. Internal risks and controls are evaluated and monitored by those who are actually performing the duties with the goal ofbuilding and maintaining an autonomous risk management system.

Auditing by the Internal Audit Department
The Global Audit Center serves as the internal audit department for the entire Group, conducts audits based onplans, provides instructions and support for making improvements to issues and confirms the progress of these
improvements.
The Group’s internal control over financial reporting during fiscal year 2022 was evaluated as effective by the
independent auditors, the same as in the previous fiscal year.

Approach to Risk Management

Tokyo Electron is building and developing a risk management system to respond appropriately and promptly torisks that are growing increasingly complex and diverse as society and the business environment change. We
identify cross-division and comprehensive risks across the entire Group to build a solid financial foundation
based on the new Medium-term Management Plan that is competitive globally. We make decisions andsupervise particularly material risks at the Corporate Officers Meeting and the Board of Directors, andimplement countermeasures without fail alongside each of the Group companies and related departments.

TOKYO ELECTRON SUSTAINABILITY REPORT 2022

About Tokyo Electron

Sustainability Management

Product Competitiveness

Customer Responsiveness

Higher Productivity

Management Foundation

TEL FOR GOOD

Data

37

Risk Management Initiatives
We have begun to address emerging risks from a medium- to long-term perspective, going a step further than its conventional approach of assessing the current risk management state, identifying known and unknown risks that may
surround the Company in the future and examining mitigation measures.
In fiscal year 2022, the 13 risks identified to date were reviewed and reevaluated from the perspective of their potential to have a significant impact on our operating results, financial condition and cash flow. We then pushed forward
risk management initiatives for each identified risk even further.
Item

Main Potential Risks■

1. Market Fluctuation■■

2. Geopolitics

A rapid contraction of the semiconductor market could lead to overproduction or an increase in deadinventory
A sharp increase in demand could lead to an inability to supply customers with products in a timely manner,
resulting in lost opportunities
Geopolitical tensions could undermine the international order and global macroeconomic conditions, affecting
national and regional security, foreign, industrial or environmental policy. This could in turn lead to supply chain
disruptions or deterioration of the macroeconomic environment, restricting the Company’s ability to operate business

Main Risk Management Initiatives
■

■

■
■

■

3. Research and Development■

4. Procurement, Production and■

Supply5. Safety■

6. Quality■

Delays in the launch of new products or the mismatch of such products with customer needs could lead to a
decline in the competitiveness of productsInterruptions in the Company’s production due to a natural disaster or delays in component procurement due
to deterioration in the business conditions of a supplier or an increase in demand that exceeds the supplier’s
supply capacity could lead to delays in the supply of products to customers
Safety problems with the Company’s products could lead to damage to customers, liability for damages and a
decline in the Company’s credibility

■

■

■

■

■

The occurrence of a product defect could lead to liability for damages, costs for countermeasures and a
decline in the Company’s credibility■■■

7. Laws and Regulations■■

8. Intellectual Property Rights

9. Information Security

■

■

■

10. Human Resources■

11. Environmental Issues

Violations of the laws and regulations of the countries and regions where the Company operates could lead todiminished public confidence in the Company, fines, liability for damages or restrictions on business activities
The inability to obtain exclusive rights to proprietary technologies could lead to reduced productcompetitiveness.
Infringement of the intellectual property rights of third parties could lead to restrictions on production andsales as well as liability for damages
Breaches of information or the suspension of services due to unauthorized access by cyberattack, natural
disasters or other factors could lead to diminished public confidence in the Company or liability for damages
The inability to recruit and retain necessary human resources on an ongoing basis or the inability to create anenvironment where people with diverse values and expertise can play an active role could lead to diminishedproduct development capability or customer support quality
The inability to respond appropriately to each country’s climate change policies, environmental laws andregulations, and customer needs could lead to additional related costs such as for developing new products orchanging specifications, as well as to reduced product competitiveness and diminished public confidence in
the Company

■
■

■

■

■

■

■

■

13. Other Risks
1
2

■

■

Carefully watch the international situation as well as the diplomatic and security measures and industrial policy trends in each country and region
Anticipate the impact of macroeconomic fluctuations and regulations related to product imports/exports or technological development on
the Company’s business and consider countermeasures in advance
Establish the Corporate Innovation Division and build a Group-wide development framework that integrates innovative technology
development with the technologies of each development division
Provide highly competitive next-generation products ahead of competitors by collaborating with research institutions and sharing atechnology roadmap spanning multiple generations with leading-edge customers
Formulate business continuity plans, develop alternate production capabilities, promote the seismic reinforcement of plants, level production,enhance the backup capabilities for information systems, use multiple sources of important parts and maintain appropriate inventory levels
Share forecasts based on demand projections with suppliers and build a system for the stable supply of products
Based on the “Safety First”1 approach, place the highest priority on the safety and health of all people, implement essential safety design with anawareness of risk reduction at the product development stage, promote safety training and establish a reporting system in the event of an accident, etc.
Establish a quality assurance system and a world-class service system
Resolve technical issues from the product development and design stage
Investigate the cause of any defects and implement measures to prevent the same or similar defects from occurring
Monitor the quality status of suppliers, conduct audits and provide support for improvement
Monitor compliance activities at key sites in and outside Japan under the direction of the Chief Compliance Officer
Have assessments conducted by external experts and report identified issues to the CEO, the Board of Directors and the Audit & Supervisory
Board for swift and effective action
Advance the intellectual property strategy, business strategy and R&D strategy in an integrated manner to build an appropriate intellectual
property portfolio
Launch a dedicated security organization and establish an information security system that conforms to international standards by having
security assessments conducted by external experts, etc.
Establish globally standardized rules and regulations for information management and implement response guidelines
Make continuous improvements to work environments and promote diverse work styles as well as health and productivity management(e.g., sharing our visions by management, establishing training plans for human resource who will lead the future, visualizing career paths for
employees and offering attractive remuneration and benefits)
To achieve industry-leading medium- to long-term environmental goals2 that include the net zero target, implement measures such as
reducing greenhouse gas emissions from the use of our products, increasing the ratio of renewable energy usage at plants and offices,
reducing overall power consumption, reviewing packaging materials and promoting modal shift
Provide technologies, etc., that contribute to higher performance and energy efficiency of semiconductor devices through implementation of
our E-COMPASS initiative

The spread of COVID-19 could slow the Company’s business activities or lead to a global economic downturn■

Establish an Emergency Task Force headed by the CEO
Restrict travel to high infection-risk countries and regions, maintain supply chains and thoroughly implement infection prevention measures atplants and offices

Business could be influenced by the global and regional political landscape, economic environment, financial
and stock markets, foreign exchange fluctuations and other factors■

Take appropriate measures to counter such risks■

12. Novel Coronavirus (COVID-19)

Periodically review market conditions and orders received at the Board of Directors and other important meetings, and appropriately adjust
capital investments, personnel/inventory planning and other aspects of business
The Account Sales Division and the Global Sales Division strengthen the sales framework and customer base by grasping investment trendsof customers and responding to a wide range of customer needs

Safety First: Refer to p.45
Medium- and Long-term Environmental Goals: Refer to p.50

TOKYO ELECTRON SUSTAINABILITY REPORT 2022

About Tokyo Electron

Sustainability Management

Product Competitiveness

Customer ResponsivenessInformation Security
As the data-driven society advances and the importance of information security increases, we aim to achieveboth data utilization and information security by promoting digital transformation and other measures, andactively promote measures that protect the entire supply chain from the risk of cyberattacks that target
companies.

Higher Productivity

Management Foundation

TEL FOR GOOD

38

Data

■ Responses to Security Threats

We have proactively introduced advanced technology and established a dedicatedsecurity organization to build a robust monitoring system in order to respond tosecurity threats such as cyberattacks and information leaks.

Main Activities■ Information Security Systems

The Vice President and General Manager, Information Security, run the Security
Committee and implement measures on a global scale. We hold the TEL Group
Information Security Committees twice a year, and Information Security Committees
at each company more than twice a year.

■ Increasing Resilience24

We operate a system that can detect the occurrence of security incidents. We
confirm pre-determined procedures so that we can do the right actions for a swift
response and recovery by implementing incident response training. We also
implement a penetration test* once a year to verify system vulnerabilities.
* Penetration test: A test method for verifying vulnerabilities in networks, PCs, servers and systems.

■ Security at Manufacturing Sites

We implement security measures at each manufacturing site to ensure that the
manufacturing systems that support our business activities are operating safely andstably while maintaining QCD*.

Overview of Information Security
Mechanisms that support
information security activities
Vice President andGeneral Manager,
Information Security* QCD: Quality, Cost, Delivery
TEL Group
Information Security
Committees

Tokyo Electron

Security Monitoring Organization

Information Security Management
Responses to security threats

Information Security
Committees at eachcompany

Early detection ofsigns of potential
attacks

Incident Response Organization■ Information Security Management

We established global information security rules, and conduct security education
twice a year and phishing email training every month for all executives andemployees. We hold seminars twice a year to share the latest situation to all Group
members. In addition, we implement risk assessments and internal audits for eachdepartment of the entire Company to identify risks and strengthen technological,
human, organizational and physical security measures.

Systems established in
preparation for emergencies

Day-to-day activities implemented globally

Human/
Organizations

Technology

Strengthen/Improve
Plan
Do
Act

Check

PhysicalMinimization ofdamage when an
incident occurs

Supply Chain
Security

Customers

24

Suppliers■ Supply Chain Security

We respond to customer requests for security and monitor the security status of our
suppliers to ensure that confidential information and information on our customers
and suppliers that is shared in the course of business activities can be used safely
without a loss of convenience.

TOKYO ELECTRON SUSTAINABILITY REPORT 2022

About Tokyo Electron

Sustainability Management

Product Competitiveness

Customer ResponsivenessCompliance

To practice Tokyo Electron’s Corporate Philosophy, it is vital that each employee performs their daily duties with strong
interest in and a deep understanding of compliance. We established “Tokyo Electron’s Code of Ethics” as a code of
conduct to ensure that our employees are aware of the risks around them and conduct themselves appropriately.
We have built a global system that can directly raise questions and concerns about compliance and business ethics toquickly address potential problems.

TEL FOR GOOD

Data

39

Compliance Initiatives

Implementation
rate for training &pledge of Code of
Ethics (FY2022)

Business Ethics

We have established the Business Ethics Committee to promote
and raise awareness of compliance and business ethics more
effectively together with establishing “Tokyo Electron’s Code of
Ethics” as the standard of conduct for all executives and employees.
In addition, through regular meetings with each of the Group
companies, we discuss and implement measures to promotecompliance.
Our Code of Ethics, which is available in five languages* including Japanese, is distributed not only indownloadable PDF formats but also in the form of a booklet to all executives and employees to ensure
awareness.
In fiscal year 2021, the Code of Ethics was revised and provisions such as personal data protection,
information security and money laundering were added. We are also striving to raise awareness of complianceand business ethics by regularly obtaining pledges from all executives and employees that they understand andcomply with the content.
We have also set up the Disciplinary Committee as a subordinate organization of the Business Ethics
Committee for the purpose of ensuring the implementation of reasonable and appropriate disciplinary action
and proper procedures.

91.6%

Compliance System
Representative Director, President & CEO
GM of Legal, Compliance Unit
Chief Compliance Officer
Compliance Department (Headquarters)

Europe/Israel

Management Foundation

In fiscal year 2022, a third-party evaluation of our global compliance system was conducted by an external
law firm, and we made efforts to further strengthen compliance by identifying items that require improvement.

Approach to Compliance

U.S.

Higher Productivity

Korea

TaiwanChina

Singapore/
Malaysia

Regional Compliance Controllers* Five languages: Japanese, English, Korean, Traditional Chinese and Simplified Chinese

Initiatives for Anti-Bribery and Corruption and for Competition Laws
In order to effectively promote a compliance program that is expected of a global company, we have appointed
a Chief Compliance Officer (CCO) and established a dedicated Compliance Department at our headquarters. The
primary role of the Compliance Department is to formulate and review our practical compliance programs,
establish and implement business ethics, plan and implement education and training, establish and operateinternal reporting systems, and provide advice and support on compliance to each department. It also
cooperates with our Risk Management Department, regularly confirms the observance of laws and regulations
in each country as well as internal company rules at each of the Group companies, and assesses compliancerisks.
Additionally, the persons responsible for compliance who are called Regional Compliance Controllers havebeen appointed at key overseas sites, establishing a system for direct reporting to the COO and ComplianceDepartment.
We engage in improvement activities with the relevant departments as appropriate for the items identified
in yearly operational audits conducted by the Internal Audit Department.

We have established the Group-wide Basic Policy on the Prevention of Bribery and Corruption and regularly
conducts training to promote understanding and awareness. Based on this policy, we have prepared the
Guidelines for Gifts, Hospitality, and Entertainment, which stipulate specific, practical procedures and standards
on monetary amounts, and we have established a thorough process requiring prior approval for cases where
there is a deviation from these standards.
Using questionnaires that we have prepared, we regularly check the status of our suppliers' efforts to prevent
corruption and provide them with feedback on the results and areas for improvement.
We have also established the Group-wide Basic Policy on Competition Law Compliance, and have prepared,
disseminated and enforced guidelines for executives and employees that summarize different types ofviolations in an easy-to-understand format, based on applicable laws and regulations in the countries andregions in which we operate.

TOKYO ELECTRON SUSTAINABILITY REPORT 2022

About Tokyo Electron

Sustainability Management

Product Competitiveness

Customer ResponsivenessCompliance Training
We conduct online and face-to-face training adapted to different levels, for all employees*. We will
systematically expand our comprehensive training program and multilingual support, and reinforce efforts tofoster compliance awareness and practice in the Company.
* Training and seminar topics include basics of business ethics and compliance, anticorruption, export compliance, insider trading prevention, the Act for
Subcontracting, and the prevention of harassment. Some training is limited to certain employees such as department managers or new employees.

Internal Reporting System
Preventing problems from occurring and resolving them quickly when they occur requires a system that allows
employees to raise questions and concerns about business ethics and compliance without reservation or
hesitation and to discuss them fully. We have established an internal reporting system that ensures complete
confidentiality, anonymity and the prohibition of retribution, so that employees can safely and reassuringly
provide information and seek redress outside the chain of command about behavior that is, or may be, inviolation of laws, regulations or business ethics.
Specifically, we have established and are operating the Tokyo Electron Group Ethics & Compliance
Hotline—a global common internal point of contact that uses a third-party system that is also accessible toour suppliers—as well as an external point of contact that allows direct consultation with an outside law firm.
The internal point of contact can be accessed via phone or a dedicated website 24 hours a day, 365 days a year,
and accommodates all languages used by employees.

Higher Productivity

Management Foundation

TEL FOR GOOD

In fiscal year 2022, a total of 95 cases were received via the internalreporting system, of which 19 were recognized as compliance violations.
The reports and requests for advice primarily related to harassment andthe workplace environment. Based on this result, we have conducted
regular education programs for our employees with the goal of preventing
harassment and have provided thorough follow-up with those concernedor involved.
There were no reports or cases of non-compliance that could have
had a serious impact on our business or on local communities.

40

Data

Breakdown of Consultation/
Report Contents
Gift/Entertainment 2%

Other
27%

Workplaceenvironment
29%
Abuse ofauthority
24%* A leniency system has been introduced whereby any disciplinary action may be reduced or exemptedin the event the employee involved in a compliance violation has made a report or sought advice on
their own volition.

Safety/Environment 8%
Information security/Intellectual
property 5%
Sexual harassment 3%
Company asset 2%

Respect for Human Rights
Approach to Human Rights

Global Response to Internal Reports
Board of Directors, Audit & Supervisory
Board Member

Third-party System
Report/Consult

Information Providers

Progress/Results Report

Internal Point ofContact

Progress/Results Report

Follow-up
Redress

Report/Consult

Progress/Results Report
Follow-up

External Point ofContact(Outside Law Firm)

Report

NoticeReport/Consult

Report/Consult

ComplianceDepartment/
Legal,
Compliance
Division of each
Overseas
Subsidiary

ReportRepresentative Director, President & CEO
GM of Legal, Compliance Unit
Chief Compliance Officer

Request for Investigation / Corrective
and Preventative Action

Progress/Results Report

Relevant Divisions,etc.

Reports and consultations received via these points of contact are handled with sincerity and investigations areundertaken in accordance with internal regulations. If a compliance violation is found, disciplinary action is taken inaccordance with the Rules of Employment*, and preventive measures and corrective measures, such as
improvements to the workplace environment, are implemented as necessary.

We at Tokyo Electron are conscious of our corporate social responsibility, and we recognize that it is important
to conduct ourselves with a strong sense of integrity. Based on this recognition, we have firmly upheld humanrights since our founding, as reflected in the spirit of our Corporate Philosophy and Management Policies. Forus, respecting human rights means a significant undertaking, not only to fulfill our responsibility for eliminating
adverse impacts on people caused by business activities but also to respect those people who support ourbusiness activities, and contribute to the realization of a sustainable, dream-inspiring society. We incorporate
the concept of respect into every aspect of our business activities, and strive to nurture a dynamic corporate
culture where each person can realize their full potential.

Human Rights Initiatives
Our Human Rights Policy1, summarizing our approach to human rights specifies five focus areas: Freedom, Equality &Non-Discrimination; Freely Chosen Employment; Product Safety & Workplace Health and Safety; Freedom of
Association; and Appropriate Working Hours & Breaks/Holidays/Vacations.
In preparing the Human Rights Policy, we referred to the United Nations’ Guiding Principles on Business and Human
Rights and the International Bill of Human Rights and the ILO Declaration on Fundamental Principles and Rights at Work
referred to therein, the Ten Principles of the United Nations Global Compact, and the RBA Code of Conduct2.

1
2

Learn more about Human Rights Policy
RBA Code of Conduct: A set of standards established by the RBA for supply chains in the electronics industry for a safe labor environment, to ensure thatworkers are treated with respect and dignity, and that companies take responsibility for environmental impact in the manufacturing process

TOKYO ELECTRON SUSTAINABILITY REPORT 2022

About Tokyo Electron

Sustainability Management

Product Competitiveness

Customer ResponsivenessWe ensure that our executives and employees, as well as suppliers, are fully aware of this content.
Specifically, we publish the Human Rights Policy on our website and also implement online training targeting allof our executives and employees.
We identify human rights risks and conduct human rights due diligence to develop remediation actions every
year. In fiscal year 2022, we unified the survey contents with reference to the RBA auditing standards, andsurveyed 12 companies out of the entire Group in Japan and overseas, including the head office, andapproximately 650 business partners involved in materials, staffing, customs services, packaging, etc.

Higher Productivity

Management Foundation

TEL FOR GOOD

Percentages of Conformance and Potential/Actual Risks (Priority/Major/Minor)1

Internal

Ethics 1%
Management
Systems 1%

Breakdown ofpotential/
actual risks

Priority 1%
N/A 3%
Major

Healthand
Safety
48%

Labor
50%

Suppliers

Initiatives which Align with the United Nations’ Guiding Principles on Business and Human Rights
Minor
10%

Major
6%

Assessment

Remediation

ReportCommitment to respecting
human rights

Assessment of human rights risks
in business and supply chains

Actions to reduce risks basedon assessment results

Regular disclosure of
information

■

■

■

Human Rights Policy
publication
Awareness andimplementation
Education■■

Human rights risk assessment
Human rights impact
assessment■■

Feedback sheet publication
Program development andreview according to issues■■

Conformance 80%

N/A
9%Ethics 1%
Management
Systems 4%

Breakdown ofpotential/
actual risks

Priority 1%

6%Commitment

41

Data

Healthand
Safety
51%

Labor
44%

Minor
11%

Conformance 73%

Publication of the Integrated
Report and Sustainability
ReportPostings on the website

Consequently, potential/actual risks (Priority/Major/Minor)1 turned out to be 17% of our Group companies and
18% of suppliers, with labor- and health and safety-related risks comprising the majority of the risk breakdown.
In the area of labor, items including the formulation of policies and procedures pertaining to thoroughmanagement of working hours and the employment of student workers, interns and trainees were identified asrisks. In the area of health and safety, items including the implementation of evacuation drills for all workers
and deployment of trained emergency response personnel were identified as risks.
With regard to these identified risks and their impact, inside our Group companies we are conducting
checks at each of our sites based on feedback sheets, and implementing a remediation program to review
the execution of working hours management, formulate various policies and procedures, carry out
evacuation drill initiatives, and address ethics and management systems. To our suppliers, using feedback
sheets we provide reports on the potential/actual risks identified in the survey and are working on
remediation activities to reduce these risks.
In addition, the percentage of companies where no potential/actual risks are considered to exist(conformance) was 80% for our Group companies and 73% for our suppliers.

Furthermore, we recognize the importance of having highly effective grievance mechanisms related tohuman rights and are working to establish reporting systems2 for employees and suppliers in Japan and abroad,and to further strengthen the operation of those mechanisms. By adopting highly justified and fair grievancemechanisms, we are identifying adverse human rights impacts at an early stage and building mechanisms tohelp remediate them.
Going forward, in addition to proactively deploying human rights-related initiatives and further enhancing theirefficacy and transparency, we will work to reduce human rights risks in our companies and in our supply chain.
12

Our classifications and definitions of conformance as well as potential/actual risks based on RBA auditing standards are as follows.
Priority: Issues considered particularly serious, which are at significant risk and require immediate priority remediation
Major: High-urgency issues which are at significant risk and require immediate remediation
Minor: Minor issues and risks recognized in each area which require remediation
Conformance: No issues were recognized in each area and requirements are being met
N/A: Indicates that “listed options do not resemble actual circumstances, or that the question is not applicable."
Reporting Systems: Refer to Internal Reporting System on p.40

TOKYO ELECTRON SUSTAINABILITY REPORT 2022

About Tokyo Electron

Sustainability Management

Product Competitiveness

Customer Responsiveness

Human ResourcesTokyo Electron believes that its corporate growth is enabled by people, and its employees its create and fulfill
company values. Based on this approach, we practice motivation-oriented management. We actively invest in our
employees and implement a variety of measures while also providing many opportunities for employees tochallenge themselves to achieve high-level goals by making the most of their individual potential.
These initiatives have led to continuous improvement of employee engagement scores and the maintenance ofhigh retention rates. This has also helped us earn the trust of our customers by ensuring reliable technology.
Our global uniform human resource platform discloses information such as job duties and career opportunities toall employees. Through this, we are implementing autonomous career development and visualizing career paths.
In addition, to promote career development, we are investing in capability development through TEL UNIVERSITY*.
Furthermore, we differentiate employee evaluations based on Company performance as well as employee’s
individual responsibilities and contributions to the Company. Through this, we achieve fair and competitive global
level compensation while striving to attract and retain the best human resources.
TEL UNIVERSITY: Refer to Human Resource Concept at TEL UNIVERSITY on p.43. An in-house education platform that helps employees independently
build their careers and realize their personal goals for their growth and development

Improving employee engagement is essential to maximize corporate performance and achieve sustainablegrowth. Recognizing that employees both create and fulfill company values for us, we have been regularly
conducting engagement surveys since fiscal year 2016 to assess the current state of employee engagement andidentify issues. Based on the results of the surveys, we make improvements to foster a better workplaceenvironment and culture by increasing opportunities for dialogue between management and employees as wellas continuously communicating messages that emphasize safety, quality, and compliance. These initiatives
resulted in an increase in the overall employee engagement score of 12 points from fiscal year 2016 to fiscal
year 2021. In addition, the retention rate* in fiscal year 2022 was 96%, a high level even on a global scale.
* Retention rate is calculated using data on turnover rate.

Score

Reviewingofcircumstances

Implementationof measures■■

Confirmationof effects

Data

42

Diversity and Inclusion System and Initiatives
At Tokyo Electron, diversity and inclusion are management pillars that lead to the continuous generation of
innovation and increased corporate value. We are actively promoting them with the strong commitment ofour management. We have taken on gender, nationality and generation as major themes and set thefollowing goals based on the characteristics of each region. We are implementing various initiatives at eachGroup company.

■

■

■

■

1
2

Regular engagement survey process

Planning formeasuresTEL FOR GOOD

Diversity and Inclusion

Employee Engagement

Improvementof measures

Management Foundation

We will continue these initiatives, such as clarifying career paths and improving operational efficiency
through digital transformation, since we believe that improving employee engagement is important toproviding increase value to our stakeholders.

Human Resource Management*

Higher Productivity

Opportunities for dialogue
between management
and employees
Communication of
messages emphasizing
safety, quality andcompliance

In terms of succession planning, we conduct a diversity-conscious talent pipeline (plan for developing
human resources), and are implementing initiatives to achieve the goal of increasing the ratio of
female in management1 to 8.0% globally and 5.0% in Japan by fiscal year 2027 (as of March 31, 2022:
globally 5.5% and in Japan 2.6%)
Taking into consideration that many of our employees are engineers, we actively invest in the use ofrecruiters and branding to hire female engineers at a level that is equal to or greater than the general
ratio of female engineers2 in each region
We create an organizational structure where even those from outside of Japan can take on corporate
roles through the use of technology and shared global human resources systems
We organize events such as “Diversity and Inclusion Day” and other events with internal promotion
leaders and external experts, create networking opportunities for employees with similar
characteristics and experience, and hold roundtable discussions regarding careers before and after
taking maternity/paternity leave and childcare leave
Include experts in the number of managers
The ratio of females majoring in science or engineering

UP 12 points
Fostering a better
workplaceenvironment andcultureImplementationof measures

TOKYO ELECTRON SUSTAINABILITY REPORT 2022

About Tokyo Electron

Sustainability Management

Product Competitiveness

Customer Responsiveness

Diversity and Inclusion Day
Diversity and Inclusion Day, an online event withsimultaneous streaming for Group companies
worldwide, was held in February 2022.
In his opening speech, the CEO stated “We need toincorporate all wisdom and diverse ideas to maximize
the growth potential of the entire Group. In order to do
this, it is essential to promote diversity and inclusion.” In
addition, members from the U.S. including theDiversity and Inclusion Day
president of Tokyo Electron America spoke about theimportance of diversity and inclusion at a talk session.
From Japan, two outside directors participated in a panel discussion regarding the roles of the Company in a
rapidly changing global society. Through this event, the importance of embracing and making the most ofdiversity was once again confirmed.

Higher Productivity

Management Foundation

TEL FOR GOOD

Data

43

Employee Growth
Global Human Resources System

Tokyo Electron operates in 77 sites in 18 countries and regions. We believe it is important for human resources withdifferent cultural backgrounds, experiences and attributes to share values and work together as one toward value
creation.
In addition to implementing a common global job-based human resource system (GTC: Global TEL Careerpaths) and this system, we are also focusing on global human resource management to promote careeradvancement under a common platform without biases against any country or the Group companies affiliation.
This allows us to respond to changes in business environments and allocate resources in an agile and optimal
manner.

Human Resource Development Concept at TEL UNIVERSITYTEL Values

Systems and Initiatives for TEL Values
A total of 15,634 employees are working at Tokyo Electron, which operates worldwide. We believe that each ofthem maintaining a high level of engagement and demonstrating their full potential will lead directly to our
growth as a company.
By sharing with our employees the direction toward which management is aiming and providing platforms
for direct dialogue through the employee meetings and discussions held at each site, we are striving to build
mutual trust between the organization and individuals. Furthermore, to realize our Corporate Philosophy, weestablished TEL Values, which delineate Tokyo Electron’s values, the mindset that each employee must possess
and the codes of conduct to be passed on to the future. The TEL Values—pride, challenge, ownership,
teamwork and awareness—are being put into practice by our employees all over the world.

We have established TEL UNIVERSITY as an in-house
educational establishment, helping employees toindependently build their careers and realize theirpersonal goals for their growth and development.
Our aim is to create a foundation that enables theorganization and individuals to trust each other andgrow by standing shoulder to shoulder with each
employee and supporting their self-growth andfruitful career development throughout their
Karuizawa Training Centerworking life.
In order to realize our Vision of “A company filledwith dreams and vitality that contributes to technological innovation in semiconductors,” we are focusing on
the development of human resources who are essential to our development and promoting the following
initiatives.

Provision of Global and On-demand Learning Opportunities

TEL Values
PrideWe take pride in providing high-value products and services.

Challenge	
We accept the challenge of going beyond what others are doing in pursuing our goalof becoming number one globally.

Since each employee’s growth is different, we are implementing on-demand education* that allows employees
to learn when they want according to their own needs. In addition to group training, we are proactively utilizing
e-learning programs and providing a common platform from learning from any location in the world.
* On-demand education: Education programs that allow employees to learn at their own convenience, anywhere, anytime

Ownership	We will keep ownership in mind as we think things through, and engage in thoroughimplementation in order to achieve our goals.
Teamwork

We respect each other’s individuality and we place a high priority on teamwork.

Awareness

 e must have awareness and accept responsibility for our behavior as respectfulWmembers of society.

TOKYO ELECTRON SUSTAINABILITY REPORT 2022

About Tokyo Electron

Sustainability Management

Product Competitiveness

Customer ResponsivenessSupport for Career Development
We are expanding our education programs to help employees quickly acquire basic skills. We also provide
information and tools so that employees can gain a more concrete image of their own learning, experience andcareer development.

Leader Programs
In order to nurture the next generation of leaders to support our future, we identify and systematically nurture
staff to take on the role of realizing medium- to long-term corporate value enhancement. We provide nextgeneration management candidates with opportunities to build networks through participation in events suchas external training, to develop a broader perspective, and to receive 360-degree feedback1. In addition,
management, including outside directors, conduct systematic assignment considerations and reviews.

Corporate Education System (TEL UNIVERSITY)
Management

Executives

Leaders

Junior Employees
New Employees

OJT2 programs (new graduates, mid-career recruits)
Manager programs

Mid-level employee programs

Junior employee programs

Leader programs
Compulsory web-based training
Goalbased
Programs

Business skills
Global communication
Employee life support
Technical programs (seminars, workshops)

12Management Foundation

TEL FOR GOOD

Data

44

Work-life Balance
Work Styles

Tokyo Electron has established a work system that enables highly flexible work styles that respond to lifestyles
and social situations, such as the introduction of a flextime system and teleworking to help employees achievea better work-life balance.
In addition, we have created a new workplace by expanding and renovating the office space at theheadquarters in order to realize more productive work styles. We have created an office environment tailoredto each activity, including focus booths for immersing oneself in work by blocking out surrounding lines of sightand sound, spaces dedicated to communication and spaces suitable for online meetings, in order to improve
employee productivity and creativity.

Leave System
Mid-level
Employees

Introductory programs (new graduates, mid-career recruits)
Levelbased
Programs

Higher Productivity

360-degree feedback: Process for collecting feedback from the subordinates, peers and supervisors of employees, as well as self-evaluations by theemployees themselves
OJT: On the job training

Based on the belief that taking appropriate leaveand properly managing work hours also contributes
Refreshment leave
to better employee productivity, we strive toenhance the leave system and promote taking
leave.
Since fiscal year 2019, we have set an annual
sustainability goal of 70% annual paid leave use andhave been conducting promotional activities for employee awareness for planned use of leave.
We are also promoting regular monitoring of leave use status and urging management to improve leave use
rates, ensuring that five days of compulsory annual leave are taken as required by law since April 2019. In fiscal
year 2022, the leave use rates were 64.6% in Japan and 73.1% overseas.
Refreshment leave system aims to provide refreshment for employees and thereby boost their motivation towork, granting special (paid) leave from two weeks to one month per five years of service to employees who
have worked for more than 10 years. This is our unique leave system, and in fiscal year 2022, 512 employees inJapan and 846 employees overseas took this leave.
In addition to the system made available by existing laws, we have an independently built system that allows
employees to adopt a flexible approach to work that accords with diverse life events such as raising children or
caring for family members. Regarding the situation in Japan, we have acknowledged the maximum extension of
the childcare leave period to the day a child reaches three years of age, as well as expanding our provision of areduced working-hours program for childcare to include employees rearing children as far as graduation fromelementary school. In addition to nationally mandated leave to care for a sick or injured child, we haveestablished our own childcare support leave and nursing care leave to support a better balance between workand childcare/nursing care.

1,358 employees

TOKYO ELECTRON SUSTAINABILITY REPORT 2022

About Tokyo Electron

Sustainability Management

Product Competitiveness

Customer Responsiveness

Health and Safety

Health and Productivity Management
For Tokyo Electron to continue to grow, it is important for every employee to lead a fulfilling life and maximize
their performance. Based on the understanding that our employees are the driving force of our business, we
strive to create a healthy and safe work environment.
Besides conducting various medical checkups in accordance with the law, we offer face-to-faceconsultations by designated occupational health physicians for employees who work long hours. We also offer
counseling opportunities supported by external industrial counselors for those who request them.
Furthermore, we are organizing regular line-care1 seminars aimed at management, and, where necessary,
holding liaison meetings with the health officers and health professionals at each Group company in Japan.
Based on the collaborative health2 concept, in cooperation with the Tokyo Electron Health Insurance Society,
we are actively expanding data health3 initiatives, providing employees health guidance and effective
prevention and health promotion according to their individual circumstances while utilizing the examination
data from medical checkups.
As a result of these efforts, the percentage of employees receiving specific health guidance4 remained high infiscal year 2022.
Furthermore, the entire Group in Japan has collectively received recognition as top 500 companies under the2022 Certified Health & Productivity Management Outstanding Organizations Recognition Program5 for thethird consecutive year from fiscal year 2020.
We will continue to promote various initiatives at the global level to maintain and improve our employees' health.
1
2
3
4
5

Line-care: A workplace measure for mental health, in which managers and supervisors take a lead role in responding to requests by workers for advice,with the aim of improving the workplace environment
Collaborative health: Situation where a company actively cooperates with an insurer, such as a health insurance society, to effectively and efficiently
promote the health of its employees and their families
Data health: Refers to a more effective and efficient health care program that is implemented in line with the health status of insured persons, by utilizing
and analyzing the health and medical information held electronically by the medical insurer
Specific health guidance: Health guidance provided for reducing the number of people with metabolic syndrome (visceral fat syndrome) or at risk ofmetabolic syndrome, and for the early detection and early treatment of lifestyle diseases and cancer, etc.
Certified Health & Productivity Management Outstanding Organizations Recognition Program: The program publicly recognizes particularly outstandingorganizations that are practicing health-oriented business management, based on initiatives attuned to local health-related challenges and on healthpromotion initiatives led by the Nippon Kenko Kaigi.

Higher Productivity

Management Foundation

TEL FOR GOOD

Data

45

Safety Management Framework
Based on a culture of “Safety First1,” we continuously carry out activities to promote safety. Specifically, we use
a management system based on OHSMS2 to manage safety and occupational health and implement the PDCA
cycle to reduce the potential risk of work-related incidents and raise the overall level of safety and occupational
health. Moreover, by sharing incident information and information on measures to prevent reoccurrence at the
Global Safety Council and the Manufacturing Companies Presidents’ Council, we promote safety management
as a company-wide initiative.
Safety Management Framework

CEO

Manufacturing
Companies
Presidents’ Council

Development & Production Group

Global Safety Council

Field Safety Promotion
Council
1
2

TEL Group Safety and
Health Committee

Incident Investigation
Committee

Equipment Safety
Working Group Council

Safety First: Refer to Initiatives for Higher Productivity on p.26
Occupational Health and Safety Management System (OHSMS): A management system to improve the overall level of safety and occupational health

Incident Reporting System
In the event of an incident, we operate the TEL Incident Report System (TIRS) to quickly share information withall parties involved and follow up with the relevant department to confirm the incident response as well as toimplement measures to prevent reoccurrence. Through the operation of this system, we will continue to strive
for speedy information sharing and incident response.

Initiatives to Safety
On-site Safety Patrols
We conduct monthly health and safety committee meetings at each plant and office to discuss measures for
any workplace safety or employee health issues and to conduct safety patrols. In addition, at least once amonth, a representative from each department conducts safety inspections at manufacturing sites to establish
a system to solve problems on their own initiative.

TOKYO ELECTRON SUSTAINABILITY REPORT 2022

About Tokyo Electron

Sustainability Management

Product Competitiveness

Customer Responsiveness

Risk Assessment and Stop Work Authority
Before we start to work , the work details and the risks are shared with all workers involved, and they eachincrease their safety awareness in an effort to prevent incidents. In addition, effort is also being directed toproviding guidance to safety managers as well as making workers stop work and take corrective action in theevent of an unforeseen incident while on the job.

Safety Education
To help create a safe workplace, we have put in place two education
programs globally.
Basic safety education is basic safety training targeting all
TCIR
employees. It is provided as introductory training for new hires, andthereafter, employees are required to take refresher training once
every three years. Advanced safety education is a more specialized
type of safety training targeted at workers on production lines and incleanrooms. Those who are eligible for this training are required totake refresher training every year. For overseas transferees, the laws and regulations in their previous and future
places of employment are compared, and additional safety education is added as necessary.
Also, to ensure the concept of safe equipment design permeates from design, manufacture and service
operations, we hold a semiannual safe equipment design* seminar at our manufacturing sites in Japan, inviting
an external guest to speak. We also promote our initiatives to prevent incidents, by providing our suppliers andcustomers with safety information as circumstances demand. As a result of having maintained a high priority
on creating safe work environments, TCIR has been maintained at less than the goal of 0.50, with 0.30 in fiscal
year 2022.

0.30

*

Safe equipment design: Refer to Safe Design of Equipment on p.24

Higher Productivity

Management Foundation

TEL FOR GOOD

Data

46

Environment
E-COMPASS Initiative

Pursue Digital × Green change throughout the supply chain

In June 2021, we introduced E-COMPASS (Environmental
Co-Creation by Material, Process and Subcomponent
Solutions) as a new initiative for building sustainable supply
Environmental Co-Creation by Material, Process andSubcomponent Solutions
chains. Under this initiative, we share goals such as reducing
ProvideBest
Products・Best
Technical Service
the environmental burden of procurement and logistics,
Environmental
eliminating environmentally hazardous materials, andPerformanceproactive environmental R&D for equipment with our
suppliers, developing activities accordingly. Furthermore,
we will also openly seek proposals on reducing environmental burden in relation to the environmental
performance of our equipment, manufacturing processes and procurement and logistics, by proactively
adopting superior technology and initiatives we are promoting to achieve these goals.
In fiscal year 2022, we held the E-COMPASS briefing session for suppliers where, in addition to informing
them of the status of our initiatives, we also shared measures for mutual growth through co-creation with our
suppliers. We also conducted the “E-COMPASS Survey” to confirm matters including the state of suppliers’
environmentally conscious product development and the status of their products’ compliance withenvironmental laws and regulations. Based on these results, we will discuss response measures with our
suppliers and aim to further enhance the green performance of the industry as a whole.
We believe that reinforcing partnerships with our suppliers and leadership in the industry are key to thedevelopment of a data-driven society and preservation of the global environment. By utilizing every
management resource at our disposal to promote E-COMPASS, we will actively endeavor to preserve the global
environment throughout the entire supply chain.

Examples of Web-based Education Materials

Environmental Risks and Opportunities
Various environmental issues affect our daily lives and corporate activities. Physical risks, such as rising average
global temperatures, strong winds, disasters and water shortages caused by climate change and abnormal
weather, are expected to damage assets, increase operating costs and impact the supply chain. In addition, legalrisks including stronger environmental laws and regulations, more stringent regulations on greenhouse gas
emissions and the introduction of carbon taxes are expected to lead to higher costs for associated measures.

TOKYO ELECTRON SUSTAINABILITY REPORT 2022

About Tokyo Electron

Sustainability Management

Product Competitiveness

Customer ResponsivenessAt the same time, promoting environmental initiatives leads to more opportunities to sell environmentallyfriendly products and reduce operating costs. We also recognize that providing high-value-added products that
contribute to higher performance and lower power consumption of semiconductors and FPDs leads to thebuilding of an energy-saving society that makes the most of information technology, and thus provides anopportunity to improve corporate value.
Based on the requirements of ISO 14001, we identified and analyzed internal and external issues in relation to
the environment, namely, our relationship with the climate, air quality and water quality. We also clarified theenvironmental needs and expectations of customers, suppliers, governments and employees and identified ourcompliance obligations as an organization. In addition, we define risks and opportunities to address as: (1)environmental management by reducing the environmental impact of our business activities, (2) compliance withapplicable laws and (3) enhancing product competitiveness with the environmental contribution of products.

Higher Productivity

Company Name

Function

Meeting
Frequency

Global Environment
Council

Appointed members by the executives at
headquarters and the Group companies

Set individual goals related to environmental issues,monitor progress, work to achieve our goals

Twiceannually

TEL Corporate
Environment Council

The GM in charge of the environment anddepartment heads, etc.

The promotion of environmental activities across theentire Group, set company-wide goals

Appropriately

Council for the Regular
Reporting ofEnvironmental Activities(Since FY2022)

CEO, corporate directors in charge of theenvironment

Report on matters discussed at the Global Environment
Council and the TEL Corporate Environment Council andreview items for approval

Quarterly

Manufacturing
Companies Presidents’Council*

Corporate directors in charge of theenvironment, etc.

Environment promotion department (Fuchu technology
center)Tokyo Electron Technology Solutions

Fujii Office/Hosaka Office/Tohoku Office

Tokyo Electron Kyushu

Koshi Office/Ozu Office

Tokyo Electron Miyagi

Taiwa Office

Tokyo Electron (Kunshan)
TEL Manufacturing and Engineering of America

May 1998—

March 2013

Chaska Office

March 2013

North Chelmsford Office

May 2018

TEL Technology Center Korea, Balan Plant

July 2014

CO2 Emissions across the Value Chain
Based on our environmental slogan “Technology for Eco Life,” we aim to resolve environmental problems
through leading technology and reliable services, understand the environmental impact generated throughout
our entire value chain and promote business activities to reduce that impact.
Our total CO2 emissions of Scope 1 and Scope 2 is 90 kilotons, while Scope 3 as the sum of upstream anddownstream activities accounts for a total of 29,020 kilotons, approximately 99.7% of the total. Of this, CO2
emissions when using products is 28,254 kilotons, about 97% of the total. This is why we consider thedevelopment of products with low CO2 emissions during operation to be important.
Upstream

Downstream

498 kilotons

Quarterly* At the Manufacturing Companies Presidents’ Council, information is shared on business affairs and issues regarding environment, safety, quality, supply chain
management, etc.

To continuously promote our environmental activities, we began operation of an environmental
management system based on ISO 14001 since fiscal year 1998, primarily at our manufacturing subsidiaries. In
March 2017, the entire Group obtained ISO 14001 certification together, which had previously been obtained ateach plant and office in Japan. In accordance with this certification, we have identified environmental impact
assessments and useful environmental aspects and are executing a standardized group format forenvironmental management programs and internal audit checklists.
In fiscal year 2022, as part of environmental management across the entire Group, we established a total of
approximately 100 environmental goals for different levels and carried out these improvement activities. Any
issues identified through these activities are reviewed by the Global Environment Council and reported to the
Manufacturing Companies Presidents’ Council. We were once again free from environmental incidents,
accidents, violations and legal proceedings in fiscal year 2022.

Certification
Date

Tokyo Electron

90 kilotons

Scope 3 upstream Not from our Group

Monitor and supervise progress related toenvironmental issues

47

Data

Plant/Office NameTokyo Electron Korea

Environmental measures are growing even more crucial. We have established the Environment Promotion
Department at our headquarters, headed by a corporate director in charge of the environment, which oversees
multiple meetings to promote efforts to address medium- to long-term environmental issues across the entire
Group. The details are as follows.
Participants

TEL FOR GOOD

ISO 14001 Certified Plants and Offices

Environmental Management System

Conference NameManagement Foundation

28,522 kilotons

Scope 1, 2 Own emissions

Fuel- and energy-related activities

15 kilotons

Capital goods

172 kilotons

Purchased goods and services

282 kilotons

Employee commuting

Scope 3 downstream Not from our Group

Scope 1

Direct emissions from fuel and gas use

End-of-life treatment ofsold products

12 kilotons

Scope 2

Use of sold products

Business travel

1 kiloton

Indirect emissions from electricity
use and heat purchase

Waste generated in operations

1 kiloton

16 kilotons

74 kilotons

Downstream transportationand distribution

3 kilotons
28,254 kilotons
265 kilotons

Upstream transportation and distribution 15 kilotons

Scope 1: TDirect greenhouse gas (GHG) emissions from use of fuel and gas we owned or controlled
Scope 2: Indirect GHG emissions from use of electricity, steam and heat we purchased
Scope 3*: Emissions from corporate value chains (excluding Scope 1 and 2 emissions), such as producttransportation, employee business travel and major outsourced production processes■■■* S cope 3 is divided into upstream activities, which include emissions associated with purchased or procured products and services, and downstream activities, which
include emissions associated with sold products and services.

TOKYO ELECTRON SUSTAINABILITY REPORT 2022

About Tokyo Electron

Sustainability Management

Product Competitiveness

Customer Responsiveness

TCFD

Higher Productivity

Data

48

We utilize enterprise risk management* to identify a wide range of risks arising in business activities, andclassify “Environmental Issues” including climate change as a key risk having high impact and probability ofmanifestation. We formulate and execute measures to minimize this risk, monitor the effect of said measures
and work to understand the status of risk control, and implement the PDCA cycle for management.
Short-, medium- and long-term company-wide risk management initiatives that related divisions andcouncils recommend are deployed to the facilities and divisions of the Group companies after approval by
the Manufacturing Companies Presidents’ Council, which includes the corporate director in charge of theenvironment.
For Scope 1 and 2 CO2 emissions, in addition to implementing measures to reduce CO2 emissions at our
key manufacturing sites in Japan with high emissions, we are pursuing the adoption of renewable energy on
a global scale. For Scope 3 emissions, we recognize the importance of providing products that generate
fewer CO2 emissions because about 97% of the emissions in our entire value chain are generated during useof products after sale, so we are focusing on development of a range of environmental technologies.
We also formulate business continuity plans (BCPs) in anticipation of natural disasters caused by abnormal
weather and other factors, and take measures with our suppliers to ensure that business operations can be
maintained.

Based on the TCFD recommendations, we examine the risks and opportunities that climate change poses to ourbusiness and take various response measures as we endeavor to make ongoing disclosures.
In fiscal year 2022 , in addition to the previous fiscal year's study, we examined the 1.5°C scenario, which
limits the average global temperature increase to less than 1.5°C above pre-industrial levels.

Status of Initiatives Related to Recommendations of the TCFD
■ Governance
We have established the Environment Promotion Department and the Corporate Sustainability Management
Department at our headquarters, and the entire Group is pursuing initiatives for the TCFD recommendations.
Under the supervision of the CEO, the corporate director and executive officer in charge of theenvironment and sustainability give reports to the Board of Directors on our responses to climate changerelated risks and opportunities and progress toward our goals and conduct reviews.
At the Global Environmental Council, comprised of members appointed by executives of headquarters andthe Group companies, goals are set, progress is monitored and the achievement of these goals is promoted.
We are conducting analysis that takes into account the following points in order to identify medium- tolong-term risks and opportunities that climate change poses for our business.
Location of plants and offices
Occurrence of natural disasters caused by climate change and status of damages
Demands from customers, industries and investors
Government policies and regulations and taxation
Technological trends relating to renewable energy and energy saving
Climate change scenarios predicted by external agencies and research results
Under the 1.5°C scenario we identified transition risks including rising energy costs associated with fuel andenergy taxes, and under the 4°C scenario we identified physical risks such as the impact of abnormal weather.
Also, on the opportunity side we identified proactive initiatives to address climate change through R&D. In
response to these risks and opportunities, we will implement the findings from our scenario analysis into ourbusiness strategies and establish medium- and long-term environmental goals, while also pursuing the
adoption of renewable energy and the reduction of greenhouse gas emissions strategies across the entire
supply chain.
We will increase our resilience (responsiveness to climate change) as a company by periodically reviewing theidentified risks and opportunities and our responses thereto, and ensure that response measures are
implemented.

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■ Risk Management

Initiatives Related to Recommendations of the Task Force on Climate-related Financial Disclosures(TCFD)■ Strategy

Management Foundation*

Risk Management: Refer to p.36

■ Metrics and Targets

We are pursuing the following initiatives for the development of a data-driven society and preservation of
the global environment.
With our semiconductor production equipment technology, we will contribute to enhancing theperformance and reducing power consumption for semiconductor devices being used around the world
Initiatives for our medium- and long-term environmental goals1
In order to achieve our long-term environmental goal of realizing net zero by 2050, we have establishedthe following medium-term environmental goals and are carrying out various activities
・ Reducing our emissions: Reduce total CO2 emissions at plants and offices by 70% (by fiscal year 2031,
compared with fiscal year 2019), a rate of 100% renewable energy usage at plants and offices (by fiscal
year 2031), and reduce energy consumption by 1% YoY at each plant and office (per-unit basis)・ Reducing other emissions: Reduce per-wafer emissions of CO₂ by 30% (by fiscal year 2031, comparedwith fiscal year 2019)・ Reducing the volume of water resources used2 and the environmental burden of logistics3, etc.
We launched “E-COMPASS4” in June 2021 as an initiative to build sustainable supply chains, and arepromoting technological innovations for semiconductors, and reducing environmental impacts

■
■

■

■
■

■

■
■

■

1
2
3
4

Medium- and Long-term Environmental Goals: Refer to p.50
Initiatives to Reduce Water Consumption: Refer to p.52
Logistics Initiatives: Refer to p.54
E-COMPASS: Refer to E-COMPASS Initiative on p.46

TOKYO ELECTRON SUSTAINABILITY REPORT 2022

About Tokyo Electron

Sustainability Management

Product Competitiveness

Customer Responsiveness

Higher Productivity

Management Foundation

TEL FOR GOOD

Data

49

Anticipated Risks and Opportunities of Climate Change Impact and Our Response■■■

Timeline: Short-term = five years or less; Medium-term = 2030; Long-term = 2050
Scenarios used: 1.5°C scenario (1.5°C temperature increase), 4°C scenario (4°C temperature increase)
Scope: The entire Group as well as the entire value chain including upstream and downstream
Type (Scenario)

Timeline of Risk
Manifestation

Anticipated Risks and Opportunities■

Short- to medium-term
Transition Risks(1.5°C scenario)■

Increased energy costs due to taxes levied on fuel and energy: Assuming our greenhouse gas(GHG) emissions and use of renewable energy remain at fiscal year 2022 levels, if a carbon tax*
were applied, we estimate our energy costs would increase by 700 million yen/year by fiscal
year 2026 (assuming a carbon tax of 8,625 yen per ton of CO2) and 2.1 billion yen/year by fiscal
year 2041 (assuming a carbon tax of 23,575 yen per ton of CO2)
Reduced reputation among investors, NGOs and local communities if a response to climatechange and other environmental issues is delayed

Our Response
■

■

■
■

■

Medium- to long-term■

Decreased net sales if we are unable to meet customers’ requirements and demands toaddress the environment

■
■

■
■

Short- to long-term
Physical Risks(4°C scenario)

Impacts on us, our suppliers and customers from abnormal weather (net sales decrease as aresult of supply chain disruptions, operation stoppages, production/shipping delays, and otherfactors)■■■■

Medium- to long-term

Short- to long-term

■

■

■

Opportunities (Common)
Medium- to long-term■■

Increased costs associated with increased air-conditioner and chiller usage due to higher
temperatures
Higher productivity due to environment-related operations streamlining, thus reducing energy
costs
Accelerated drive to create new value, including innovation toward development of low-GHG
products and services, and equipment and technologies that contribute toward the
manufacture of low-power consumption devices
Engaging in proactive initiatives for climate change and creating added-value in products andservices supplied to the market to gain superiority and business opportunities
Securing a competitive advantage and contributing to improved corporate value by building
resilience (responsiveness to climate change) into global operations

■
■

■

■

■

■
■

Promote energy-saving and adopt renewable energy at plants and offices in order to achieve medium-term environmental goals. Furthermore,as a result of adopting renewable energy, the increased burden from fiscal year 2022 levels due to the introduction of a carbon tax will be
reduced by 800 million yen for fiscal year 2026 and 2.2 billion yen for fiscal year 2041 compared to the amounts originally estimated in fiscal
year 2021
Through the activities of our supply chain initiative, “E-COMPASS,” we are promoting energy-saving and the adoption of renewable energy in the
supply chain
We publish the progress of efforts to achieve the medium-term environmental goals in the Integrated Report and Sustainability Report
By expressing our approval of the TCFD and utilizing its framework, we are conducting risk management and promoting information disclosures
Develop semiconductor production equipment technology that contributes to enhanced performance of semiconductor devices and lower
power consumption
R&D for future technology markets
Product development to achieve the medium-term environmental goals (reduce per-wafer emissions of CO2 when products are in use)
Promote our business continuity plans (BCPs) and business continuity management (BCM)
Deploy procurement BCPs to suppliers, and implement BCP assessments
Periodic implementation of training, drills, etc.
Maintain a database of suppliers’ production sites
Enroll in insurance in preparation for disasters resulting from abnormal weather
Promote energy saving at plants and offices
Adopt the use of renewable energy from our own power generation
Promote energy saving and adopt renewable energy at plants and offices in order to achieve medium-term environmental goals
Develop semiconductor production equipment technology that contributes to enhanced performance of semiconductor devices and lower
power consumption
Globally promote the latest in R&D with a focus on the future of semiconductors and electronics to continually supply the high-value-added
Best Products with innovative technology in a timely manner
Develop technology to achieve reduced per-wafer emissions of CO2 when products are in use
Through the activities of our supply chain initiative, “E-COMPASS,” address climate change as it pertains to supply chains, respond toenvironmental regulations and innovate environmental technology* Carbon tax: We referred to the International Energy Agency (IEA) Net Zero Emissions by 2050 Scenario for the increase in tax associated with GHG emissions. 1 U.S. dollar was converted as 115 yen

TOKYO ELECTRON SUSTAINABILITY REPORT 2022

About Tokyo Electron

Sustainability Management

Product Competitiveness

Customer ResponsivenessMedium- and Long-term Environmental Goals
In order to further strengthen its initiatives toward the environment in its products, plants and offices, we have
set the following medium-term environmental goals for fiscal year 2031.
Goals and Initiatives to Achieve Net Zero1
CY2018(Base year)

CY2020CY2026

CY2030CY2040CY2050

Scope 1 & 22 Own emissions

100

Net Zero120

100

1% YoY at each plant and office (per-unit basis)
Main initiatives: Energy saving/creation, recycling, alternative energy, renewable energy use, emissions trading, etc.

90

174

150

60

100

90

Scope 32 Emissions other than own
Products

50% reduction

4

0

90

60

30

45

50
4

50

(%)

250
200

Products

Data

In fiscal year 2022, we identified CO2 emissions during the use of our reference products and set a roadmap
for each product with goals for fiscal year 2031. In addition to the status of electricity, process gases andchemicals, water and other resources used in the production and use of each product, factors such as theeffects of plans to reduce their use and the reduction effects of productivity improvements were also
considered in setting this roadmap. The CO₂ emissions per wafer for products shipped in fiscal year 2022 werereduced by 11% compared to the base year.

Reduce energy consumption by

30% reduction

TEL FOR GOOD

(Kilotons of CO2)

3

Rate of% renewableenergy usage

Management Foundation

Reduction in CO2 Emissions and Rate of Renewable Energy (Electricity) Usage through the Introduction of Renewable Energy

Plants and offices

70% reduction

Higher Productivity

25

Total CO2 emissions for Scope 1 and 2

2
2019

2022

2023

2031

0

Rate of renewable energy (electricity) usage(FY)

Greenhouse gas (GHG)

20% reduction

Ratio of environmentally-sensitive packaging
materials used

50%

10% reduction

5

through modal
shift/joint delivery

Main initiatives: Collaboration with customers and suppliers (improvement of energy efficiency, energy saving
in utility equipment and process development with an awareness of GHG emissions reduction)

1
2
3
4
5

The notation of each calendar year in the figure indicates the fiscal year (e.g., CY2020 is from April 1, 2020 to March 31, 2021)
CO2 Emissions across the Value Chain: Refer to p.47
Total CO2 emissions (compared with fiscal year 2019)
CO2 emissions per wafer (compared with fiscal year 2019)
CO2 emissions

Net Zero

We have started to introduce renewable energy (electricity) at plants and offices in Japan, U.S. and China. As aresult, the ratio of company-wide renewable energy use in fiscal year 2022 was 60%, and CO₂ emissions werereduced by 49% from the base year. In fiscal year 2023, we plan to complete the introduction of renewableenergy at all of our manufacturing sites in Japan, as well as at other overseas plants and offices. Through these
efforts, we expect to achieve a 90% rate of renewable energy usage and a 74% reduction in CO2 emissions forfiscal year 2023. We will continue to develop activities that contribute to the achievement of our medium-term
environmental goals by fiscal year 2031 for our products, plants and offices.
In January 2022, we applied for SBT* certification of our greenhouse gas emission reduction goals, and weplan to receive certification within fiscal year 2023. We are working together as one on initiatives to achieve thefollowing long-term goal by 2050: “As a leading company in environmental management, Tokyo Electron works
actively to conserve the global environment. We strive to contribute to the development of a dream-inspiring
society by proactively promoting the reduction of environmental burden of both our facilities and products. We
strive to contribute to the development of a dream-inspiring society by promoting evolutionary manufacturing
technologies that effectively reduce the power consumption of electronic products.”* Science Based Targets (SBT): The Paris Agreement aims to limit global warming to well below 2°C, preferably to 1.5°C, compared to pre-industrial levels. SBT
is an international initiative to certify greenhouse gas emission reduction targets set by companies for the next five to 15 years, consistent with the levels
required by the Paris Agreement.

TOKYO ELECTRON SUSTAINABILITY REPORT 2022

About Tokyo Electron

Sustainability Management

Product Competitiveness

Customer Responsiveness

Plant and Office Initiatives
Renewable Energy Initiatives

Higher Productivity

Management Foundation

Total Reduction Amount(t-CO2)(Million yen)

4,814

■ Example initiative

At Tokyo Electron Miyagi (Taiwa) and Tokyo Electron Technology Solutions (Fujii, Hosaka), monitors displaying
the energy profile of renewable energy generated from solar panels have been set up at the entrances to theplants. At Tokyo Electron Kyushu (Koshi), renewable energy generation initiatives are being promoted, such as
the sale of generated energy. In fiscal year 2022, a total of 3,890 MWh of renewable energy was generated inJapan.

166

150

2,307

84

100

1,507

60
50

1,000
0

226
198

200

3,350

3,000
2,000

250

3,805

4,000

51

Data

Total Reduction Effect5,000

We have set a medium-term environmental goal of 100% renewable energy sources at our plants and offices by
fiscal year 2031. In fiscal year 2022, we began introducing renewable energy (electricity) at our sites in Japan,
U.S. and China, bringing our use of renewable energy company-wide to 60%. As a result, CO2 emissions dropped
by 49% from the base year of fiscal year 2019.

TEL FOR GOOD

2018

2019

2020

2021

2022

(FY)

0

2018

2019

2020

2021

2022

(FY)

■ Example initiative 1

Initiatives to Prevent Global Warming and Save Energy
We have brought in a number of initiatives to achieve our medium-term environmental goal at plants and offices,
including energy-saving cleanroom operation, setting office air-conditioning at appropriate temperatures,
introducing devices that offer superior energy-saving performance and bringing in renewable energy.
In fiscal year 2022, the introduction of renewable energy (electricity) in Japan, U.S. and China made asignificant contribution, and the CO2 emitted by our energy sources1 was 86 kilotons (49% decrease YoY). In
addition, we managed to reduce by 26% YoY the amount of energy used at our plants and offices per net sales.
An increase in the amount of energy used to develop and evaluate products and increase production meantthat our power consumption was 377 GWh (6% increase YoY).
In fiscal year 2019, we revised2 and shared the per-unit basis for plants and offices in Japan to more
appropriate levels based on the correlation between business operations and energy. As a result, the annual
sustainability goal has been achieved at 7 of the 11 total plants and offices in Japan and overseas.
1

2

The emission coefficient for power consumption in Japan in fiscal year 2022 uses the post-adjustment emission coefficient on a per-electricity supplierbasis, while the emission coefficients for power consumption overseas uses the emission coefficients in Emissions Factors 2019 edition issued by theInternational Energy Agency (IEA).
The per-unit basis is calculated by compound weighting using data on the number of development and evaluation machines, production volume, floor
space, and man-hours in each region.

Energy Consumption and Energy Consumption per Net Sales(KL crude oil
equivalent)

120,000

The introduction of a system to visualize clearly how much energy is saved at our plants and offices wascompleted at our major manufacturing sites in Japan in fiscal year 2022. Previously, energy consumption data
had to be manually extracted and changes graphed by hand, but integrated management on the cloud has
made it possible to check changes at any time. This has made it easier to check the deployment and effects
of BKM* at each plant as well as study or implement measures.
* BKM: Best Known Method■ Example initiative 2Tokyo Electron Technology Solutions (Fujii) has installed equipment to reduce electrical resistance in thesubstation equipment of some production buildings and saved energy by reducing current loss. As a result,the power consumption of the production buildings where this equipment is installed is expected to be
reduced by approximately 7% per year, and the energy-saving effect for the office as a whole is expected tobe equivalent to approximately 1%.
Changes in Power Consumption(100,000 kWh)

3,500
2,800

2,267

(KL/sales (billion yen))

0.75
85,07480,0000.68
94,746

2,509

2,653

2,947

3,133

2,100

0.8

100,265

1,400

0.6
700

0.5
0.4

0

555

549

523

603

641
Japan
Overseas

2018

2019

2020

2021

2022

(FY)

40,0000.2

Energy consumption (KL crude oil equivalent)
0

2020

2021

2022

(FY)

0

Energy consumption per net sales (KL/sales (billion yen))

TOKYO ELECTRON SUSTAINABILITY REPORT 2022

About Tokyo Electron

Sustainability Management

Product Competitiveness

Customer Responsiveness

Higher Productivity

Management Foundation

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Data

52

Initiatives to Reduce Water Consumption

Initiatives to Reduce Waste

With the growing importance of water resource preservation, we use WRI Aqueduct1 and freshwater resource
quantity indicators to conduct water risk assessments in Japan and overseas. In addition, we confirm the statusof water resource use in the supply chain, rainwater and wastewater management and goal setting with
suppliers once a year.
We have established an annual sustainability goal of maintaining the same water consumption level of thebase year (fiscal year 2012 for plants and offices in Japan and a fiscal year of their choosing for each overseas
operation). Our ongoing efforts to achieve these goals include reusing pure water from our manufacturing
operations, installing water-saving devices, watering lawns with rainwater and implementing the intermittent
operation of cafeteria faucets.
During fiscal year 2022, as a consequence of the operation of new buildings and an increase in water
consumption associated with product development and evaluation, water consumption amounted to 1,417,000
m3, up 1% YoY. However, water consumption per net sales was down 29% YoY. Moreover, in terms of our goals
at each plant and office in Japan and overseas, we achieved 7 of the 14 goals.
In recognition of these efforts, we were selected as a prestigious A List company in the CDP2 Water Security
Category of the survey in December 2021.

As part of its initiatives to reduce waste, we are striving to limit the amount of waste generated and recycle. In
addition to participating in the electronic manifest system1 to ensure proper waste management, we promote
maintaining an appropriate amount of parts inventory, reusing cushioning material and waste separation
activities. Furthermore, we are working to reduce waste processing costs by modifying space used for storing
waste to increase storage capacity and reduce the frequency of collection.
As a result of these initiatives, in fiscal year 2022, we generated 270 tons of incinerated and landfill waste,
and the recycling rate2 was 98.1%, achieving our goal of maintaining a recycling rate of 97% or higher for the
16th consecutive year since fiscal year 2007. In addition, we have also maintained a high level of recycling of
91.0% at our overseas plants and offices.

1
2

WRI Aqueduct: A water risk assessment tool developed by the World Resources Institute
CDP: An international environmental non-profit organization (NPO) founded in the United Kingdom that conducts surveys on climate change and water
security measures on private companies and municipalities and publishes the results

Water Consumption and Water Consumption per Net Sales(thousand m3)(thousand m3/sales (billion yen))

15

1,800

11.6
1,350

1,305

1,397

2

Electronic manifest system: A system for electronically tracking the flow of industrial waste instead of using paper-based manifests (i.e., paper
forms for tracking industrial waste). The system uses a communications network of data processing centers, businesses that generate waste, andwaste collection/disposal companies.
Recycling rate: (Recycled amount / Amount of waste generated) × 100■ Example initiative

Tokyo Electron Technology Solutions (Tohoku) is working to recycle materials from resin pallets used during
the transportation as cargo as well as reduce the CO2 emissions associated with the processing of thesepallets.
Previously, damaged resin pallets were crushed and recycled as the heat energy generated during theprocessing. However, in fiscal year 2022, the material from 20 tons of waste resin pallets was recycled byoutsourcing to a processing company capable of recycling the resin pallets as raw materials. In addition, by
outsourcing the recycling to a processing company closer to the office, the CO2 emissions used to transport
these materials were limited.

1,417

10.0

900

1

10

7.1
5

450

Water consumption (thousand m3)
0

2020

2021

2022

(FY)

0

Water consumption per net sales(thousand m3/sales (billion yen)

■ Example initiative

Tokyo Electron Taiwan has been actively implementing water conservation activities as a countermeasureagainst droughts in Taiwan in fiscal year 2022. We reduced the amount of water consumption at faucets oneach floor (toilets and office kitchenettes) and for watering lawns, as well as setting air-conditioners in offices
at higher temperatures and using automatic on/off functions to reduce the amount of water used for cooling.
As a result, we managed to reduce the amount of water consumption by an estimated 20 m3/day. These
activities resulted in an 11% reduction in water consumption in fiscal year 2022 compared to fiscal year 2021.

TOKYO ELECTRON SUSTAINABILITY REPORT 2022

About Tokyo Electron

Sustainability Management

Product Competitiveness

Customer Responsiveness

Higher Productivity

Management Foundation

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Data

53

Product Initiatives

Initiatives for Product Environmental Laws and Regulations

Products that Contribute to a Sustainable Society

In order to comply with each country’s environmental laws and regulations pertaining to products, we promptly
collect information and promote proactive responses. An example of our response to EU REACH1 is that we
conduct surveys with our suppliers as appropriate on the presence of any chemical substances in articles anddisclose that information to customers. In addition, we have been introducing the chemSHERPA2 format since
fiscal year 2021 and collected information from suppliers on chemical substances in concentrations in the parts
per billion (ppb3). As a response toward GHS4 requirements, we provide the necessary safety data sheets (SDS5)
and labels when supplying chemical products to customers, in addition to promoting the local procurement ofchemical products.
To comply with the frequently revised environmental laws and regulations, we continue to offer “ProductEnvironment Compliance” training to all employees, and provide suppliers with information related to therelevant environmental laws and regulations.
We will continue to grasp each country’s environmental laws and regulations rapidly and strive to respond
appropriately.

FY2031 goal
Of the CO2 emissions from our value chain, emissions during
Product CO2 Emission Reduction
product use account for about 97%. We believe that the low（％）%
energy consumption of products is important as part of our
30
social responsibility as a semiconductor production
equipment manufacturer and are working on
20
environmentally friendly product design. In fiscal year 2022,
we promoted activities based on guidelines for calculating
10.7
CO2 emissions* and a roadmap for key models to reach our10annual sustainability goal of reducing per-wafer CO2
4.6
emissions by 30% by fiscal year 2031 (compared with fiscal
year 2019) for the key models of each business unit. As a
0
2021
2022
2031 (FY)
result, the CO2 emissions of equipment shipped werereduced by 10.7% compared to baseline equipment.
In addition, we use the Green Transformation (GX) Monitor, which captures information on energy use including
electricity, water and nitrogen, as well as equipment operating status, and turns it into a database, to visualize energy
consumption information during product use. Specifically, we have introduced a system that allows us to checkequipment operating status and energy consumption information in chronological order through our intranet, andare planning to expand the scope of this system going forward.
We will continue to work to further raise environmental awareness and incorporate environmental technologies
as important added value in our technological strategies, thus contributing to the reduction of the environmental
impact of society as a whole.

30* In addition to energy and water, the amounts of process gases and chemical substances to use, as well as footprint, volume and weight of products, are now
included.

■ Example initiative

At the TFF Engineering Division of Tokyo Electron Technology Solutions, development is conducted with thelife cycle perspective in mind. Specifically, we define product life cycle costs and clarify relationships with theeffects of development elements. Additionally, we share an environmental technology roadmap with related
divisions and monitor progress while developing environmental products based on this roadmap.

1
2
3
4
5

EU REACH: An EU regulation pertaining to the Registration, Evaluation, Authorisation and restriction of Chemicals
chemSHERPA: A data entry support tool for appropriately communicating information on chemical substances in products across the entire supply
chain, and a common system for communicating information on chemical substances contained in products
ppb: parts per billion (1 × 10-9)
GHS: Globally Harmonized System of Classification and Labelling of Chemicals
SDS: Safety Data Sheet. Refers to the document containing hazard information about chemical substances that is issued when a company transfers orprovides chemical substances, or products containing chemical substances, to another company

Biodiversity
Our business activities are supported by the benefits yielded from biodiversity. We recognize that our businessactivities have not an insignificant impact on biodiversity and thus carry out initiatives to conserve biodiversity.
We set a single fiscal year goal of conducting ecosystem tours or conservation activities at our plants andoffices in Japan at least twice a year. Results in fiscal year 2022 show that events were held a total of 16 times,
attracting a total of 87 participants.
■ Example initiative

Tokyo Electron Technology Solutions (Tohoku) conducts surveys of the natural environment in the areasurrounding the office. In fiscal year 2022, we conducted a survey to determine the impact on the growthand habitats of plants and animals caused by factors such as changes in the surrounding environment due tothe construction of a new building, as well as tree-planting activities and other activities conducted by plants
and offices. As a result, we confirmed that a mountain foothill-like environment with a mixture of trees,
grasslands and ponds is expanding. We also confirmed that many species of plants, mammals and birds arepresent, and that there have been no major changes since the previous survey (2016–2017).
We will continue to maintain the rich natural environment that is home to a diverse range of organisms aswell as contribute to the preservation of plants and animals throughout the entire region.

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Data

54

Management of Chemical Substances

Logistics Initiatives

We constantly monitor and manage our use and release of any chemical substances used in productdevelopment and manufacturing subject to the Japanese PRTR* law. Whenever we introduce a new chemical
substance or change the way an existing substance is used, we check for environmental, health and safety risks
beforehand and conduct appropriate processing after use such as by contracting expert vendors and using
in-house processing facilities. In response to the Fluorocarbons Recovery and Destruction Law, we conduct
simple checks, regular inspections and so on based on law in an effort to monitor the amounts of fluorocarbons
filled and recovered. In fiscal year 2022, none of our plants or offices had fluorocarbon leakages requiring
notification.

As logistics regulations are tightened fromFY2024 goal(%)
the perspective of preventing global
60%
warming and addressing climate change,
there is a growing demand to reduce the40environmental impact of businessactivities. We have been actively
implementing measures such as a modal
20
13.2
shift* in transportation in Japan and
7.8
7.8
5.0
overseas and the adoption of packaging
methods that reduce environmental
0
FY2022
FY2022
FY2022
FY2022
FY2031
impact, as well as promoting activities(Goal)
1Q
2Q
3Q
4Q
designed to reduce the environmental
impact of its logistics.
For logistics in Japan, we calculate and clarify CO2 emissions within the scope defined by the Act on the
Rational Use of Energy. For logistics overseas, we calculate and clarify CO2 emissions for both our Group
companies and also for logistics in which our customers are serving as the shippers.
In fiscal year 2022, CO2 emissions increased relatively both in Japan and overseas due to an increase inproduction and shipments. However, in logistics in Japan, we actively deployed a modal shift which resulted in a
CO2 emissions reduction of approximately 317 tons.
In fiscal year 2022, we promoted the use of reinforced corrugated cardboard packaging to achieve ourannual sustainability goal set in fiscal year 2021. Reinforced corrugated cardboard is lighter in weight, which is
expected to reduce CO2 emissions during transportation. It is also recyclable and has a lower environmental
impact than wood. The rate of reduction of wood use was 9% in fiscal year 2022, and 13% for the quarter fromJanuary to March 2022.
In fiscal year 2023, we set a new annual sustainability goal to further promote modal shifts and joint delivery
and reduce CO2 emissions of overall logistics (own delivery) by 10% (by fiscal year 2027) and are developing
activities that contribute to the achievement of this goal.

* PRTR: Pollutant Release and Transfer Register. A framework for tracking, tabulating and disclosing quantitative data on chemical substances that may behazardous to human health and the ecosystem, including the amounts used and discharged into the environment and the amounts transferred (as part ofwaste) from the plants and offices

Environmental Communication
Our environmental policy requires that we respond appropriately to the expectations of society. We promote
initiatives for the environment while engaging in ongoing communication with all of our stakeholders.
In addition, to better promote environmental communication internally, we provide an environmental
program for new employees and mid-career recruits, plus a refresher program for existing employees. In fiscal
year 2022, approximately 11,000 employees in Japan participated in the refresher program for existing
employees. We plan to expand this program overseas in fiscal year 2023.

Green Procurement
We began implementing our Green Procurement Guidelines in January 2001 and have since promoted green
procurement, prioritizing the purchase of environmentally friendly parts, products and materials, while updating
the content of the guidelines as appropriate. Through these guidelines, we strive to gain the understanding andcooperation of our suppliers with respect to building environmental management systems, monitoring,
reducing and disclosing information on the environmental impacts of business activities, and developing
environmentally friendly products.

Reduction Rate of Wood Use50* Modal shift: Efforts to transform the means of transportation. Refers to the shift of transportation from car and air to rail and ship, which have lower
environmental impacts.

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Customer ResponsivenessSupply Chain Management

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TEL FOR GOOD

Data

55

Responsible Procurement of Minerals (Conflict Minerals)

Principles and System of Supply Chain Management
To build a supply chain that is sound and sustainable, Tokyo Electron has formulated a procurement policy basedon the laws, regulations and social norms of each country, as well as the RBA Code of Conduct, and together with
its suppliers, is implementing activities based on this policy.
To identify issues in the supply chain from a variety of perspectives, we also value ongoing communication withdiverse suppliers, including materials suppliers that handle parts and raw materials, staffing suppliers that provide
services and logistics suppliers that handle physical distribution operations. Under the leadership of the CEO, any
identified issues are shared with relevant divisions and efforts are made to implement concrete measures for
improvement.
We will continue to strive to create value in the supply chain by working to build relationships of trust with our
suppliers, who support our business as partners, and by working together to conduct operations in compliancewith global standards.

We see taking action against conflict minerals (3TG1) obtained through illegal exploitation, which lead to humanrights violations and poor working conditions, as our corporate social responsibility. Our resolute goal is toeliminate the use of raw materials made from these conflict minerals, as well as any parts or components
containing them.
In alignment with this way of thinking, we conduct surveys on potential conflict materials using the CMRT2
and referring to the OECD3 Due Diligence Guidance for Responsible Supply Chains of Minerals from ConflictAffected and High-Risk Areas. In fiscal year 2022, we conducted our eighth annual survey on potential conflictminerals. As a result, we were able to identify 243 RMAP4 conformant smelters, providing us confidence that
3TG sourced from these smelters were conflict-free. In addition, none of the materials we procured were foundto contain 3TG involved in conflict.
1
2
3
4

3TG: Tantalum, tin, tungsten and gold
CMRT: Conflict Minerals Reporting Template. Survey format for reporting conflict materials, provided by the Responsible Minerals Initiative (RMI), which
has established international guidelines on conflict minerals.
OECD: Organisation for Economic Co-operation and Development
RMAP: Responsible Minerals Assurance Process. A program promoted and led by the RMI for auditing smelters/refiners to validate that they do not use
conflict minerals

Procurement BCP

Initiatives in the Supply Chain
Sustainability Operations
To keep track of our suppliers’ engagement in sustainability, we have conducted a sustainability assessment inareas such as labor, health and safety, the environment and ethics since fiscal year 2014. We analyze theassessment results, provide feedback to suppliers and together, promote initiatives for improvement as
required. In fiscal year 2019, we completely revised the content of the survey based on audit standards
stipulated by the RBA, and in addition to materials1 suppliers, included staffing2 and logistics3 suppliers in thescope of surveys.
In fiscal year 2022, we confirmed surveys and conducted that suppliers had implemented measures toprevent any reoccurrence of cases of false reporting that were identified in the previous year’s assessment andmaking efforts for improvement, including establishing committees to oversee these measures.
To ensure that all people in our supply chain can work of their own free will, we have expressly stipulated ourzero-tolerance policy for forced labor and bonded labor, and have communicated this to our major suppliers.

As part of our business continuity plans (BCPs), we collaborate with
Percentage of Supplier Sites byCountry (FY2022)
suppliers on ongoing disaster preparation.
We maintain a database of suppliers’ production sites so that if a crisis
Malaysia 1.2%
Taiwan 1.3%
arises, we can promptly identify impacted suppliers and quickly collaborate
Others 4.8%
U.S. 1.9%
in recovery efforts. During fiscal year 2022, approximately 24,000 supplier
China
3.9%
sites were registered, and we conducted 11 post-disaster impact surveys.
In addition, we conduct BCP assessments* on our suppliers and analyze
their responses to provide them with feedback so that they can promote
improvements in areas of concern. The fiscal year 2022 assessment
identified a 24% improvement in the overall rating level and a 51%
Japan 86.9%
improvement in the overall raw score compared to the previous year.
* BCP assessment: Surveys have been conducted since fiscal year 2013 on suppliers accounting for more than
80% of our procurement spend.

Supply Chain Sustainability Process

Plan
Formulation of
supply chain policies

1
2
3

Do

Check

Act

Notification ofrequests to our
suppliers and appeal
for sustainability
activities

Implementation of
supply chain
sustainability
assessment andanalysis of response

Provision of feedback
based on the results
and requests for
improvements to
suppliers

Materials suppliers: Surveys have been conducted since fiscal year 2014 for suppliers accounting for more than 80% of our procurement spend.
Staffing suppliers: Surveys have been conducted since fiscal year 2019 on 100% of employment agencies and contracting companies (internal contractors).
Logistics suppliers: Surveys have been conducted since fiscal year 2019 on 100% of customs-related operators.

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Management Foundation

TEL FOR GOOD

56

Data

Number of TEL FOR GOOD Activities (FY2022)
By focus area

Expanding TEL FOR GOOD Activities
TEL FOR GOOD is the brand name for Tokyo Electron’s social contribution activities. We use it as a collective term
for social contribution events and various programs, donations and volunteer activities organized around theworld by the entire Group.
In fiscal year 2022, taking importance to society and relevance to our business into consideration, we haveredefined our focus areas as “Technology and innovation,” “Conserving the global environment,” and “Co-creation
with communities.”
With the global implementation of TEL FOR GOOD, we aim to contribute to the resolution of industrial andsocial issues, the development of industry and society and the achievement of the SDGs. We put our Corporate
Philosophy into practice by deepening relationships of trust with stakeholders and contributing to thedevelopment of a sustainable society full of dreams and vitality.

Conserving the
globalenvironment
20
Technology andinnovation
29

Singapore 5
China 3

By region
South Korea
10

UnitedStates13
Co-creation with
communities
106

Europe
16

Japan
89

Taiwan19

Total 155

About TEL FOR GOOD Global Program

Technology andinnovation

Conserving the global
environment

Co-creation with
communities

Fostering innovation throughcutting-edge technologies isessential to the evolution ofsemiconductors and displays.
Through TEL FOR GOOD, wecreate learning opportunities
that foster creativity andsupport highly original R&D
on a global scale.

As climate change becomes
more serious, we strive tobuild a decarbonized society
through TEL FOR GOOD and
our business activities. We
also make efforts to conserve
water resources and maintainbiodiversity. In addition, we
contribute to theconservation of the global
environment by promoting acircular economy.

In addition to contributing to thedevelopment and revitalizationof the communities where we
conduct business throughemployment opportunities andfostering local industries, we
strive for co-creation with
communities through TEL FOR
GOOD, which is rooted in ourcommunities. We also fulfill ourrole as a corporate citizen byparticipating in international
humanitarian aid disasterrecovery initiatives.

In addition to individual TEL FOR GOOD programs, we also conduct the TEL FOR
GOOD Global Program based on common themes across the entire Group.
In fiscal year 2021, the environment and human rights were established as thethemes for the global program and initiatives are being undertaken based onthese themes. By soliciting ideas and opinions from employees and promoting a
program that involves all employees, we strive to help solve social issues whiledeveloping a sense of unity among employees and increasing awarenessregarding social contribution activities.

Activities around the World

Environment

Human Rights

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Examples of Initiatives around the World

Customer ResponsivenessManagement Foundation

TEL FOR GOOD

Honey Farm Sponsor Support for honey farms to maintain ecosystems

Learn more

TaiwanSince fiscal year 2017, Tokyo Electron Taiwan has been conducting arobot contest for university students and graduate students
specializing in science and technology, undertaking the entire processfrom planning to judging and operation. This event, conducted
through industry-academia collaborative initiatives, provides
opportunities for students to improve their skills and exchange ideas
with companies and organizations. In fiscal year 2022, approximately
180 students from 22 universities took part in the contest, which also
saw the participation of 20 employees as event staff.

Tohoku Forum for Creativity Industry-academia collaboration program for resolving social issues

Data

57

EuropeIn recent years, pollinators such as honeybees have reduced
significantly, causing major impact to agricultural production. Tokyo
Electron Europe started supporting honey farms in France and Italy infiscal year 2022 to increase awareness about the importance ofhoneybees as pollinators and to improve this situation. To deepen
knowledge about this support, eight employees from the Grenoble
office in France visited a honey farm, saw the honey production process,and experienced tasks such as cleaning beehives and extracting honey.

Technology and innovation
TEL Robot Combat Robot contest for science and technology students

Higher ProductivityJapan

We have been providing support to the Tohoku Forum for Creativity(TFC) ever since it was established in fiscal year 2014. In fiscal year
2022, the three-year program theme jointly undertaken by us andTohoku University was concluded. At the program’s workshop, under
the theme of “Designing the IoT society to realize ‘Living the Real Me,’”18 Tohoku University students and eight employees participated in the
program to discuss how information technology can contribute tohuman well-being and other issues such as expected social issues.

Co-creation with communities
Club Rainbow Support for children with chronic illnesses

Singapore

In fiscal year 2022, Tokyo Electron Singapore gave support to thecharity organization Club Rainbow. Aimed at the social independenceof children, this organization provides opportunities for children toacquire artistic skills through the creation of charity goods. Besides thepurchase of charity goods and cash donations by 58 employees, 87
sets of stationery were also donated.
Support will continue to be given in the future so that children withchronic illnesses can have opportunities to apply their potential
without being affected by the state of health or family situations.

Conserving the global environment
Tokyo Electron Forest Tree-planting activities to cultivate forests and preserve the environment
As part of its efforts to cultivate forests and preserve the environment,
Tokyo Electron Miyagi has established the Tokyo Electron Forest,
which is an area of about 4.2 hectares of prefectural woodland within
Taiwa-cho, where it has been conducting tree-planting activities since2017. In the past five years, a cumulative total of 239 employees andtheir families have participated in these activities, creating walking
trails and planting approximately 300 saplings. Trees are removed
while planting, and some of them are used as teaching materials at
nearby elementary and junior high schools. Aimed at rejuvenating
forests with many withering trees, these activities help to preserve
regional ecosystems.

Japan

Habitat for Humanity Housing support for the poor

U.S.

Tokyo Electron U.S. Holdings agrees with the purpose of Habitat for
Humanity and provides support to secure housing, which serves as thefoundation for a wholesome life, to break the chain of poverty. A
support activity related to housing construction was conducted inAustin in fiscal year 2022, in which approximately 60 employees took
part and used the provided drawings and materials to complete theframework for housing. The completed framework was delivered to thelocation of planned construction.

TOKYO ELECTRON SUSTAINABILITY REPORT 2022

About Tokyo Electron

Sustainability Management

Product Competitiveness

Customer Responsiveness

Higher Productivity

Management Foundation

Performance Summary

Resource Consumption

Environment

Water

Scope for Calculating

The scope for calculating environmental data is the Tokyo Electron Group (27 consolidated companies), andthe calculating period is fiscal year 2022 (April 1, 2021 to March 31, 2022).
Japan:Tokyo Electron Ltd. and six consolidated subsidiaries (including Tokyo Electron Technology Solutions
Ltd., Tokyo Electron Kyushu Ltd., Tokyo Electron Miyagi Ltd. and Tokyo Electron FE Ltd.)
Overseas: 20 consolidated subsidiaries (including Tokyo Electron America, Inc., Tokyo Electron Europe Ltd.,Tokyo Electron Korea Ltd., Tokyo Electron Taiwan Ltd., Tokyo Electron (Shanghai) Ltd. and Tokyo
Electron Singapore Pte. Ltd.)Greenhouse Gas Consumption/Emissions

CO2 by scope

FY2020

FY2021

FY2022Emissions metric (sales) (t-CO2/billion yen)

1.34

1.24

1.38

1.21

0.43

Emissions (kt-CO2)

152

159

155

169

86

Japan

119

127

127

138

65

Overseas

33

32

28

31

21

9

9

11

12

12

Scope 11 emissions (kt-CO2)
Japan, energy-derived

7

7

10

10

10

Overseas, energy-derived

2

2

2

2

2

Scope 22 emissions (kt-CO2)

143

150

144

157

74

Japan

112

120

118

128

55

Overseas

31

30

26

29

19

23,16325,354

22,691

24,45329,020

26

47

59

70

66

Japan - HFCs

3

3

6

5

5

Japan - PFCs

11

18

24

30

30

Japan - SF6

4

11

11

7

11

Japan - Other

8

15

18

28

20

Scope 33 emissions (kt-CO2)
Non-energyderived
greenhouse gas

FY2019Consumption (kt-CO2e) (Japan)

Consumption (kt-CO2e) (Overseas)

—

—

—

—

6

Overseas - HFCs

—

—

—

—

0

Overseas - PFCs

—

—

—

—

1

Overseas - SF6

—

—

—

—

1

Overseas - Other

—

—

—

—

4

8

15

16

17

4

Scope 14 emissions (kt-CO2e)
1 Scope 1: Direct GHG emissions from use of fuel and gas we owned or controlled

Calculation method: Emissions = Σ (fuel consumed × CO2 emission factor)
Emission factor based on Japan’s Act on Promotion of Global Warming Countermeasures
2 Scope 2: Indirect GHG emissions from use of electricity we purchased
Calculation method: Emissions = Σ (purchased electricity × CO2 emission factor)
Adjusted emission factors for the electrical power providers concerned based on Japan’s Act on Promotion of Global Warming Countermeasures wereused as the emission factor for Japan
Emission factors based on values from the Emissions Factors 2019 edition published by the International Energy Agency (IEA) were used as theemission factor for overseas electricity consumption
3 Scope 3: Emissions from corporate value chains (excluding scope 1 and 2 emissions), such as product transportation, employee business travel and major
outsourced production processes. Past category 11 was reviewed.
The entire scope is divided into 15 categories, of which calculations were made for categories 1, 2, 3, 4, 5, 6, 7, 9, 11 and 12. Calculations for categories 8,
10, 13, 14 and 15 were not made as they are either not included in our activities or have already been included in other categories.
4 Scope 1: Non-energy-derived CO2 and greenhouse gases other than CO2
Calculation method: Emissions = Σ (consumption × emission per unit consumption – amount recovered and properly treated) × global warming factor
Global warming factor is based on Japan’s Act on Promotion of Global Warming Countermeasures.
From fiscal year 2022, the value for the amount recovered and properly treated have been reviewed to match actual conditions.

Data

FY2018FY2020denotes data with third-party assurance

FY2019
1,240

1,305

1,397

1,417

Japan

966

1,054

1,098

1,183

1,204

Groundwater

359

363

390

430

440

Tap water

387

422

411

450

479

Industrial water

220

269

297

303

285

Overseas

177

186

207

214

213

Use (t) (Japan)

194

165

132

38

32

denotes data with third-party assurance

FY2018

Electricity

Gas(city gas, LPG)

Fuel(heavy oil A, diesel
oil, kerosene,
gasoline)

FY2021

FY2022

0.63

0.75

0.68

0.50

Consumption (crude oil equivalent) (kL)1,2

75,19981,07485,074

94,746100,265

Japan

59,76565,89770,642

78,12682,703

Overseas

15,434

15,177

14,432

16,62017,562282,274

305,795

317,614354,961

377,432

Japan

226,747

250,911265,293294,652

313,322

Overseas

55,52754,88452,32160,30964,110

3,083

2,991

3,565

3,820

3,796

Japan

1,947

1,948

2,611

2,728

2,738

Overseas

1,136

1,043

954

1,092

1,058

1,040

1,072

1,624

1,667

1,625

1,026

1,055

1,603

1,651

1,612

14

17

21

16

13

3,458

3,834

3,334

4,980

227,523

Consumption (MWh)Consumption (crude oil equivalent) (kL)1

Consumption (crude oil equivalent) (kL)1, 2
Japan
Overseas

PV power
generation
systemPower generation (MWh)Japan
Overseas

Japan
Overseas
Power sales (MWh)3
Japan
Overseas1
2
3

FY20200.67

Purchase (MWh)Renewableenergy(electricity) use
rate

FY2019Consumption metric (sales) (kL/billion yen)

Renewableenergy(electricity)

Power sales

FY2022

1,143

Energy Consumption/Generation
EnergyFY2021

Consumption (thousand m3)

denotes data with third-party assurance

FY2018
CO2 from
energyconsumption

Copier paper

58

TEL FOR GOOD

Power use percentage

0

0

0

0

197,137

3,458

3,834

3,334

4,980

30,386

4,414

4,392

3,804

4,068

3,890

4,414

4,392

3,804

4,068

3,890

0

0

0

0

0

1,386

1,382

1,225

1,285

1,195

1,386

1,382

1,225

1,285

1,195

0

0

0

0

0

2

2

2

2

60

Japan

1

1

1

1

63

Overseas

6

7

6

8

47

Calculated using the conversion factors for fuel, gas and electricity in relation to the "Act on Rationalizing Energy Use"
Past energy consumption and fuel consumption were reviewed
Heat and steam not soldTOKYO ELECTRON SUSTAINABILITY REPORT 2022

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TEL FOR GOOD

FY2018Emissions (kt-CO2)

FY2019FY2020

FY2021FY2018FY2022

122

146

186

152

251

Japan

12

9

9

9

15

Overseas

110

137

177

143

236

Proportion of marine transportation (international)

36.4

35.9

31.9

34.3

33.2

PRTR Class I
designatedchemical
substances

144

119

Ferric chloride

82

84

98

106

85

Hydrogen fluoride and its watersoluble salts

12

11

12

24

22

5

10

13

11

0.0

0.1

0.1

0.1

FY2021

FY2022

1

1

1

1

1

95

96

111

131

108

5

5

10

13

11

14,96013,98914,997

14,465NOx

Emissions (t)

11.5

9.6

11.9

13.0

13.1

13,694

14,208

12,973

13,705

12,927

SOx

Emissions (t)

2.7

2.8

4.0

4.9

4.8

741

752

1,016

1,292

1,538

* VOCs: Volatile Organic Compounds

5,158

6,951

6,228

7,227

5,232

Japan ( Specially controlled industrial
waste)

4,904

6,619

5,911

6,718

4,706

Overseas (Dangerous/Hazardous
waste per country)

254

332

317

509

526

Japan
Overseas
Amount generated (t)Recycling

50.0

14,435

Amount generated (t)Dangerous/
Hazardous
waste

FY2020

FY2022121

Other

FY2019FY2021

101

Amount transported (waste amount) (t)FY2018FY2020100

Methylnaphthalene

Amount of Waste Generated

FY2019Volume handled (t)

VOCs*

Waste

59

Data

Chemical Substances Consumption/Emissions (Japan)

Environmental Impact of Logistics
CO2

Management Foundation

Recycled amount (t)JapanOverseas

Incinerated andlandfill waste

Amount of waste (t)Waterdischarges

Water discharge volume (thousand m3)

Japan
Overseas

Consumption (t)14,211

14,77013,74814,814

14,195

13,561

14,092

12,831

13,587

12,795

650

678

917

1,227

1,400

224

190

241

183

270

133

116

142

118

132

91

74

99

65

138

905

1,006

1,078

1,195

1,194

Japan

759

850

900

1,006

1,009

Overseas

146

156

178

189

185

Other
FY2018
ISO 14001

Number of certified offices

Biodiversity

Environmental
laws andregulations

FY2019FY2020

FY2021

FY2022

9

9

9

11

Japan

5

5

5

5

11
5

Overseas

4

4

4

6

6

Number of ecosystem tours*

22

17

18

18

16

Number of ecosystem tour
participants*

718

595

368

52

87

Number of breaches of environmental
laws and regulations

0

0

0

0

0

Amount of fines for breaches of laws
and regulations

0

0

0

0

0

34,11032,71531,184

28,862

41,352

Total product shipment (t)** Scope: Japan

CO2 from Energy Consumption

Japan

Water Consumption

Overseas

Industrial water (Japan)

Recycling Rate/Generation of Incinerated andLandfill Waste in Japan
Tap water (Japan)

Incinerated and landfill waste
Recycling rate (%): (Recycled amount/Amount ofwaste generated) × 100

Overseas

Groundwater (Japan)(thousand m3)(kt-CO2)

(t)

150

127

119

1,200

138

127

966
800

100

1,054

65
50

0

33

32

28

31

2018

2019

2020

2021

400

2022

186

177

21
(FY)

0

2018

2019

2020

98.9

99.1

99.0

(%)

(t)

100

150

250

213

100

100 1

101 1

1
10
12

13 119
1
24
11
22

50

82

84

98

106

90

133

116

2018

2019

142

118

132

2021

2022

144 1

5
12

5
11

85

285

303

297

269

220

99.2

Hydrogen fluoride and its water-soluble salts
Other

121

479

214

207

500

99.0

Target: Maintain recycling rate of 97% or more

450

411

422

387

1,204

Ferric chloride
Methylnaphthalene

440

430

390

363

359

1,098

1,183

Volume of PRTR Class I Designated Chemical Substances
Handled in Japan

2021

2022

(FY)

0

2020

(FY)

80

0

2018

2019

2020

2021

2022

(FY)

TOKYO ELECTRON SUSTAINABILITY REPORT 2022

About Tokyo Electron

Sustainability Management

Product Competitiveness

Customer Responsiveness

Higher Productivity

Management Foundation

Data

FY2018FY2020Socialdenotes data with third-party assurance

Scope for calculating

The scope for calculating social data is the Tokyo Electron Group (27 consolidated companies), and the calculating
period is fiscal year 2022 (April 1, 2021 to March 31, 2022).
Japan: T okyo Electron Ltd. and six consolidated subsidiaries (including Tokyo Electron Technology Solutions Ltd.,Tokyo Electron Kyushu Ltd., Tokyo Electron Miyagi Ltd. and Tokyo Electron FE Ltd.)
Overseas: 20 consolidated subsidiaries (including Tokyo Electron America, Inc., Tokyo Electron Europe Ltd., Tokyo
Electron Korea Ltd., Tokyo Electron Taiwan Ltd., Tokyo Electron (Shanghai) Ltd. and Tokyo Electron
Singapore Pte. Ltd.)New graduates hired

Career-track recruits

FY2018
Number of regular employees

FY2019FY2021

FY2022

FY2021

FY2022

0

0

0

0

0

Men

0

0

0

0

0

Women

0

0

0

0

0

Percentage of women

19.2

16.1

16.7

17.8

15.3

Number hired

262

239

150

191

400

102

85

42

56

131

Men

85

67

35

49

96

Women

17

18

7

7

35

30–49 yrs. old

156

145

96

123

250

Men

135

119

82

92

202

Women

21

26

14

31

48

4

9

12

12

19
17

12,46913,542

14,022

15,140

Japan

7,268

7,526

7,806

7,921

8,234

Men

3

5

10

11

Rest of Asia

2,218

2,832

3,494

3,796

4,328

Women

1

4

2

1

2

Europe and Middle East

492

513

528

509

578

Percentage of women

14.9

20.1

15.3

20.4

21.3

North America

1,718

1,598

1,714

1,796

2,000

Number of employees
Regular employees
Men
Women
Non-regular employees

FY20197,516

FY2020

FY2021

7,797

8,100

Employees withdisabilities
Female managers1, 2(Entire Group)

FY2022

8,296

50 yrs. old and over

8,661

7,268

7,526

7,806

7,921

8,234

6,292

6,479

6,681

6,722

6,944

976

1,047

1,125

1,199

1,290

Percentage hired (TEL)

2.22

2.18

2.06

2.43

2.32

Percentage hired (Group in Japan)

1.91

2.04

2.01

2.3

2.37

Number of people

—

—

—

—

163

Percentage

—

—

—

—

5.5

Number of people (seniordirectors and above3)

—

—

—

—

10

Percentage (senior directors andabove3)

—

—

—

—

2.2

248

271

294

375

427

Number of people (Japan)

20

22

23

26

46

Men

181

220

263

348

403

Percentage (Japan)

1.8

2.0

2.0

2.2

2.6

Women

67

51

31

27

24

Number of users

156

201

242

313

389

155

196

235

305

376

1

5

7

8

13

31

30

23

23

18

30

28

18

20

15

1

2

5

3

3

100.0

100.0

100.0

100.0

100.0

Reemployment system

Men
Women

Recruitment/Employment (Japan and part of entire Group included)
FY2018
New graduates hired

FY2019

11,696FY2018
Employees(Employment type/
Japan)FY202050 yrs. old and over

Under 30 yrs. old

Composition of Employees (Japan and entire Group)
Regular employees(Region/Entire Group)

60

TEL FOR GOOD

Number hired
Under 30 yrs. olddenotes data with third-party assurance

FY2019FY2020

FY2021

FY2022

Second career support
systemNumber of users
Men
Women

167

199

281

253

209

163

198

280

252

208

Men

131

166

233

207

177

Women

32

32

47

45

31

30–49 yrs. old

4

1

1

1

1

Men

4

1

1

1

0

Women

0

0

0

0

1

Percentage of regular employees who received regularperformance and career evaluations

1P
 ercentage of female managers, calculation method: (Number of female managers/Number of managers) × 100
Include experts in the number of managers from fiscal year 2022
2A
 s of March 31
3E
 mployees of a certain level or position based on the global human resources system

TOKYO ELECTRON SUSTAINABILITY REPORT 2022

About Tokyo Electron

Sustainability Management

Product Competitiveness

Customer Responsiveness

Employeeretention

Retention after three yearsof joining TEL1

93.4

Men

94.3

Women

Turnover2

1
2

FY2019FY202093.0
93.5

Management Foundation

TEL FOR GOOD

FY202193.8
94.6

FY2022

94.1
94.8

denotes data with third-party assurance

FY2018

94.7

61

Data

Work-life Balance (Japan)

Employee Retention (Japan and part of entire Group included)
FY2018Higher Productivity

FY2019FY2020

FY2021

FY2022

Annual paid leaveTake-up rate*

64.3

67.2

72.6

62.5

Refreshment leave

Number of those who took leave

639

605

901

688

512

Men

556

507

773

610

435

95.0

64.6

87.1

88.0

88.6

89.3

93.5

Average service years

17 yrs. 1 mo.

17 yrs. 2 mos.

17 yrs. 2 mos.

17 yrs. 4 mos.

17 yrs. 2 mos.

Paternity leaveMen

17 yrs. 4 mos.

17 yrs. 5 mos.

17 yrs. 5 mos.

17 yrs. 7 mos.

17 yrs. 6 mos.

Childcare leave

Women

15 yrs. 7 mos.

15 yrs. 8 mos.

15 yrs. 11 mos.

15 yrs. 10 mos.

15 yrs. 8 mos.

Employee turnover

103

108

82

87

87

Women (percentage who took leave)

Men

82

88

54

75

69

Women

21

20

28

12

18

Number of those who returned towork after leave

Turnover percentage

1.4

1.4

1.0

1.0

1.0

Men

6

6

8

15

32

Women

38

37

40

39

28

Employee turnover (Entire
Group)

—

—

—

—

589

Men

—

—

—

—

507

Women

—

—

—

—

82

Turnover percentage(Entire Group)

—

—

—

—

4.2

Average in recent five years
Turnover due to personal circumstances

Shorter working hoursystemLeave to care for sick/injured childChildcare support
leave

Women

83

98

128

78

77

Number of those who took leave

180

155

184

148

137

Number of those who took leave

41

56

46

41

70

Men

4

8

12

16

36

37 (92.5)

48 (100.0)

34 (97.1)

25 (92.6)

34 (97.1)

44

43

48

54

60

Percentage reinstated

93.6

93.5

94.1

96.4

95.2

Retention rate

90.0

88.9

93.3

95.0

90.0

Number of those who used

176

153

149

132

110

Men

24

8

11

9

7

Women

152

145

138

123

103

Number of those who took leave

455

517

625

510

547

Men

281

334

428

353

373

Women

174

183

197

157

174

Number of those who took leave

120

129

125

86

80

Men

19

26

26

29

23

Women

101

103

99

57

57

Extended nursing care
leave

Number of those who took leave

3

5

2

2

1

Men

2

2

2

0

0

Short nursing care
leave

Number of those who took leave

Women

Shorter working hoursystem for nursing
care

1

3

0

2

1

47

63

95

110

87

Men

25

38

56

69

57

Women

22

25

39

41

30

Number of those who used

0

2

2

0

4

Men

0

0

1

0

2

Women

0

2

1

0

2

* Take-up rate of annual paid leave Calculation method: (Days of paid leave taken by employees*) / (Days of paid leave provided to employees*) × 100 * Incl.
non-regular employees

TOKYO ELECTRON SUSTAINABILITY REPORT 2022

About Tokyo Electron

Sustainability Management

Product Competitiveness

Customer Responsiveness

Higher Productivity

Social (Other)Management Foundation

62

Data

Governance

Products/Innovation

FY2018FY2018

Total number of incidents of non-compliance with regulationsand voluntary codes concerning the health and safety
impacts of products and services
Active issued
patents(Region/Country)

TEL FOR GOOD

FY2019FY202000Number of active issued patents

16,767

Japan

5,091

U.S.

FY2021

FY202200017,473

18,137

18,692

19,572

5,304

5,348

5,484

5,703

4,321

4,415

4,606

4,822

4,988

Europe

185

179

191

206

167

Korea

2,864

3,076

3,223

3,363

3,731

Taiwan

2,675

2,817

2,948

2,925

3,014

China

1,631

1,682

1,821

1,892

1,969

CY2016*

CY2017*

CY2018*CY2019*CY2020*FY2019FY2020

FY2021

FY2022

Total number of critical incidents notified to the Board of Directors

0

0

0

0

0

Total number of incidents subject to legal action on the basis ofanti-competitive conduct, antitrust activity or monopolistic
practices where the governance body’s involvement was
revealed

0

0

0

0

0

Number of executive officers who received training on
anti-corruption1

13

0

0

15

20

12 (100)

12 (100)

11 (100)

11 (100)

12 (100)

Total number (percentage) of directors who provided instructions
on the body’s policies and procedures in relation to anticorruption1
Total number (percentage) of directors who received training on
anti-corruption1

9 (75.0)0 (0)11 (100)

0 (0)

0 (0)

Payment to industry groups, etc. (thousand yen)2

20,54321,09329,92732,03656,374

Payment to politically affiliated organizations (yen)

0

0

0

0

0

Average tenure of directors

8.04

7.36

4.84

6.09

6.58

99.46

98.24

99.39

98.96

99.50

Global patent application rate

76.1

81.2

79.8

74.3

74.6

Average rate of attendance for Board meetings

Patent application
success rate

Japan

71.5

82.9

83.1

84.9

79.8

U.S.

78.0

85.1

85.5

87.3

83.9

1
2

Scope: Japan
Industry groups were reviewed from FY2022* Calendar year when patents were filed/granted

Compliance
Customers

FY2018FY2018Percentage of respondents who selected “Very Satisfied” or“Satisfied” in the customer satisfaction survey

59.4

FY201984.4

FY202093.3

FY202196.7

FY2022100.0

FY2018FY2022

—

98.8

91.6

Percentage of employees who have consented to theinformation security agreement

99.9

100.0

100.0

99.4

99.9

0

0

0

0

0

100

FY2019100

FY2020100

FY2021100

FY2022100

Social Contribution

Percentage of employees who received training on advanced safety

100

100

100

100

100

Lost time incident rate (LTIR)

0.77

0.40

0.51

0.63

0.66

Spending on social contribution (million yen)*

Number of workplace injuries per 200,000 work hours (TCIR)

0.38

0.20

0.23

0.27

0.30

Cash
donationsbreakdown

Procurement
FY2018FY2019FY2020

FY2021100

FY2022

100

100

100

Rate of improvement after supply chain sustainability assessment

20.7

—*

35.8

23.1

31.5

Rate of improvement after supply chain BCP assessment

21.2

19.4

16.0

20.3

24.4

249 (100)

253 (100)

261 (100)

236 (100)

243 (100)

Number of identified RMAP conformant smelters (rate of identification)

FY2021—* Scope: Entire Group

SafetyPercentage of new important suppliers screened using social criteria

FY2020—Significant fines and non-monetary sanctions for non-compliancewith laws and regulations in the social and economic area

Percentage of employees who received training on basic safety

FY2019

Education on TEL’s Code of Ethics/pledge rate*

100

FY2018FY2019FY2020

FY2021

FY2022

238

281

250

244

170

Charity donations (providing donations/relief
supplies to charity organizations)

13

11

4

13

15

Community investment (charitable expenses
for long-term cause for community)

49

55

68

62

75

Commercial initiatives (charitable expenses
with anticipated effects on business growth)

38

34

28

25

10

* Spending on social contribution activities excluding disaster relief contributions* Unable to compare with previous fiscal year due to comprehensive revisions, including the survey

TOKYO ELECTRON SUSTAINABILITY REPORT 2022

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Sustainability Management

Product Competitiveness

Customer Responsiveness

Higher Productivity

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TEL FOR GOOD

Data

63

Independent Practitioner's
Assurance（TRANSLATION）

Independent Practitioner’s Assurance Report
Mr. Toshiki Kawai,
Representative Director, President & CEO,Tokyo Electron Ltd.

July 26, 2022

Masahiko Sugiyama
Representative Director
Deloitte Tohmatsu Sustainability Co., Ltd.
3-2-3, Marunouchi, Chiyoda-ku, Tokyo

We have undertaken a limited assurance engagement of the CO2 Emissions from energy consumption in Japan, CO2
Emissions by scope in Japan, Energy consumption in Japan, Electricity consumption in Japan, Gas consumption in
Japan, Fuel consumption in Japan, Water consumption in Japan, Female managers percentage in Japan and Annual paid
for the year ended March 31, 2022 (the “Sustainability Information”)
leave take-up rate in Japan indicated withincluded in the “TOKYO ELECTRON SUSTAINABILITY REPORT 2022” (the “Report”) of Tokyo Electron Ltd.
(the “Company”).
The Company’s Responsibility
The Company is responsible for the preparation of the Sustainability Information in accordance with the calculation
and reporting standard adopted by the Company (indicated with the Sustainability Information included in theReport). CO2 quantification is subject to inherent uncertainty for reasons such as incomplete scientific knowledge
used to determine emissions factors and numerical data.
Our Independence and Quality Control
We have complied with the independence and other ethical requirements of the Code of Ethics for Professional
Accountants issued by the International Ethics Standards Board for Accountants, which is founded on fundamental
principles of integrity, objectivity, professional competence and due care, confidentiality and professional behavior.
We apply International Standard on Quality Control 1, Quality Control for Firms that Perform Audits and Reviews ofFinancial Statements, and Other Assurance and Related Services Engagements, and accordingly maintain acomprehensive system of quality control including documented policies and procedures regarding compliance withethical requirements, professional standards and applicable legal and regulatory requirements.
Our Responsibility
Our responsibility is to express a limited assurance conclusion on the Sustainability Information based on theprocedures we have performed and the evidence we have obtained. We conducted our limited assurance engagementin accordance with the International Standard on Assurance Engagements (“ISAE”) 3000, Assurance Engagements
Other than Audits or Reviews of Historical Financial Information, issued by the International Auditing and AssuranceStandards Board (“IAASB”), ISAE 3410, Assurance Engagements on Greenhouse Gas Statements, issued by the
IAASB and the Practical Guideline for the Assurance of Sustainability Information, issued by the Japanese
Association of Assurance Organizations for Sustainability Information.
The procedures we performed were based on our professional judgment and included inquiries, observation ofprocesses performed, inspection of documents, analytical procedures, evaluating the appropriateness of quantification
methods and reporting policies, and agreeing or reconciling with underlying records. These procedures also included
the following:
・ Evaluating whether the Company’s methods for estimates are appropriate and had been consistently applied.
However, our procedures did not include testing the data on which the estimates are based or reperforming theestimates.
・ Performing interviews of responsible persons and inspecting documentary evidence to assess the completenessof the data, data collection methods, source data and relevant assumptions applicable to the sites.
The procedures performed in a limited assurance engagement vary in nature and timing from, and are less in extent
than for, a reasonable assurance engagement. Consequently, the level of assurance obtained in a limited assurance
engagement is substantially lower than the assurance that would have been obtained had we performed a reasonableassurance engagement.
Limited Assurance Conclusion
Based on the procedures we have performed and the evidence we have obtained, nothing has come to our attention
that causes us to believe that the Sustainability Information is not prepared, in all material respects, in accordance withthe calculation and reporting standard adopted by the Company.
The above represents a translation, for convenience only, of the original Independent Practitioner’s Assurance report issued in
the Japanese language.
Member of
Deloitte Touche Tohmatsu Limited

TOKYO ELECTRON SUSTAINABILITY REPORT 2022

About Tokyo Electron

Sustainability Management

Product Competitiveness

Customer Responsiveness

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Management Foundation

TEL FOR GOOD

Data

64

Corporate Profile

Corporate Profile

Financial Data

Company Name:

Number of Employees:

Tokyo Electron Limited

15,883 (consolidated)
1,821 (non-consolidated)

Earnings Release
Security Release

Address:
Akasaka Biz Tower

Number of Sites:

3-1 Akasaka 5-chome, Minato-ku, Tokyo 107-6325, Japan

Japan: 7 companies at 25 sites
Overseas: 20 companies at 52 sites

Established:in 17 countries and regions

November 11, 1963

Worldwide total: 27 companies at 77 sites
in 18 countries and regions (consolidated)

Representative:
Toshiki Kawai
Representative Director, President & CEO(as of April 1, 2022)

Main Business:
Semiconductor Production Equipment Business,
Flat Panel Display (FPD) Production Equipment Business

Capital:54,961 million yen

TOKYO ELECTRON SUSTAINABILITY REPORT 2022