Enhancing
product
competitivenessMedium-term goal

Create highly competitive next-generation products
Priority themes

Technology innovation
aimed at creating value

Environmental
contribution of products

Relevant SDGs
Industry,
innovation andinfrastructure

15TOKYO ELECTRON SUSTAINABILITY REPORT 2017

Climate action

TEL’s research and development
Pursuing innovation for the future
TEL is holding lively discussions regarding technology for the future as well as its contribution in order to prepare for a new era ofgreater familiarity with electronics and greater reliance on semiconductors. Using our technologies, we will add to the development ofsemiconductors with increasing importance across all industries, contributing to a richer, more vibrant society.

Solution provider for
all industries
Solution provider for thesemiconductor industry

NowFuture

Global development sites
Japan

Tokyo Electron Yamanashi
U.S.

Tokyo Electron Kyushu
Korea

Tokyo Electron Tohoku

TEL Technology Center Korea

Tokyo Electron Miyagi

TEL Technology Center, America

TaiwanTEL Technology Center, Taiwan

Singapore

IME
Tokyo Electron development sites (as of April 1, 2017)

R&D organization

R&D expenses(billion yen)

Representative Director, President & CEO100

73.2
Development& Production1st Division

Development& Production
2nd Division

Development& Production
3rd Division

Development& Production
4th Division

Technology
StrategyDivision

ThermalProcessing
SystemEtch System

Coating/Cleaning, etc.
Wet Etch
SystemTesting andFPD Dry
Etch System

Leading-edge
Semiconductor

78.6

71.3

76.2

83.8

500

2013

2014

2015

2016

2017

(FY)

TOKYO ELECTRON SUSTAINABILITY REPORT 201716

Enhancing product competitivenessTechnology innovation aimed at creating value
Innovative manufacturing technologies that support semiconductor evolution –3D NAND–
Mass production of 3D NAND chips, achieved through developments in manufacturing technologies,
not only enables higher performance for electronic devices such as computers and smartphones, butalso contributes to reduced energy usage. For example, if the huge number of hard disk drives1 used indata centers could be replaced by 3D NAND solid state drives,2 we could expect considerable savings in
power consumption.
As demand for 3D NAND increases, we are focused on developing technologies that support thesenext-generation products. The density3 of semiconductors is usually increased by reducing circuit linewidth. However, the circuit line width of NAND devices is currently around 15 nanometers4 resulting
in an extremely low number of electrons being stored in each cell (memory element). Therefore weare reaching the physical limit of what is possible by reductions in line width. As a solution to further
increase density, semiconductor chip cells are stacked three-dimensionally in 24 layers or 48 layers
to create a 3D NAND structure using shared pillar electrodes. This creates a need for manufacturing
technologies that are completely different from previous technologies.
One of these technologies is multilayer formation technology, which is used to create the threedimensional structure. 3D NAND requires the ability to lay two different layers on top of each other andthen continue building up the layers, but difficulties include how to uniformly create two different layers
on 300 mm wafers and how to control reaction to gases used in the formation process. Advanced
etching technologies specific to 3D NAND are also required to etch high aspect ratio5 holes (greaterthan 100 nanometers in diameter and 2.8 micrometers6 in depth) in the multilayer wafers.
As a comprehensive manufacturer of semiconductor production equipment with a wide range ofproducts, we are using our accumulated technologies to develop products that solve these various
technical issues.

2D NAND

17TOKYO ELECTRON SUSTAINABILITY REPORT 2017

3D NAND

1 Hard disk drive (HDD): A typeof external storage device forrecording and retrieving data
2 Solid state drive (SSD): A
semiconductor disk drive using
NAND flash memory as a recording
medium. With their high speed
and low power consumption, SSDs
dramatically reduce running costs,
so demand for use in data centers isincreasing.
3 Density: The number of transistors
per semiconductor integrated
circuit
4 Nanometer: 1 billionth of a meter
5 Aspect ratio: Ratio of depth andwidth of patterns formed on wafers
6 Micrometer: 1 millionth of a meter

Making semiconductor production equipment more intelligent –AI–TEL is using AI* to make the semiconductor production equipment it manufactures more intelligent.
Semiconductor production equipment uses various fabrication processes in a nanometer-level worldthat is invisible to the human eye. We are working on visualizing this nanoscale world through thepower of data and AI helping us to understand the condition of our equipment. We are also currently
developing a range of applications that use AI to analyze the vast amounts of digital data comingfrom the equipment, including operating logs, sensors, and measurement data, to avoid unexpected
downtime, maintain equipment performance during operation, and achieve uniform accuracy whenprocessing wafers.
We already offer a TELeMetrics™ remote diagnostic service via the Internet for real-time monitoringof our semiconductor production equipment. Going forward, we will continue to evolve the equipment
to enable it to conduct self-diagnostics, adjustments, and autonomous operation.

* Artificial intelligence

Development of high value-added display production technologies–Organic electroluminescent displays–
Organic electroluminescent displays use light-emitting diodes made from organic compounds. Unlike
liquid crystal displays, organic electroluminescent displays emit light themselves when powered
rather than requiring backlights or other light sources. This gives them great potential for use as nextgeneration display devices producing high quality images with low power consumption. The organicluminescent layer of these displays is conventionally formed using vapor deposition in a vacuum, but
our organic electroluminescent display panel production equipment employs an inkjet method to form
this layer. This method enables us to form the layer by applying only the required amount of organic
material to large glass substrates at atmosphere, which improves productivity by reducing material
usage and fine particle contamination. To meet the expected growth in demand in the large panel TVmarket, we will continue developing systems based on these cutting-edge inkjet technologies, including
drying and baking processes after applying the organic material. These systems will contribute toimproved productivity in organic electroluminescent display manufacture and further growth in themarket.

Inkjet Printing System
for manufacturing OLED panels
EliusTMTOKYO ELECTRON SUSTAINABILITY REPORT 201718

Enhancing product competitiveness

Collaborating with international consortiums
TEL collaborates with international consortiums to pursue cutting-edge technologies and enhance its
product competitiveness.
One consortium that we have been collaborating with for many years is Imec.1 Imec includes severalsemiconductor production equipment suppliers as well as major semiconductor manufacturers, thelatter being our important customers. We conduct many different joint research projects with Imec
focused in areas that will lead to future innovations in semiconductors, such as new technologies, newmaterials, and lithography. Within these consortiums, globally leading semiconductor manufacturers
and semiconductor production equipment manufacturers each bring their cutting-edge knowledge tothe table, enabling effective technical innovation for next-generation production equipment.
Our collaboration with Imec has led to other collaborations with industry-leading companies.
For example, we worked with a major optical equipment manufacturer in an advanced equipment
environment to jointly develop EUV2 technologies, a leading-edge technology for lithography. Together,
we also developed immersion ArF,3 a technology that is becoming widely used for fine patternformation.
Collaborations with international consortiums like this also help us develop our own engineers. About
10 of our engineers are currently stationed locally at Imec. By working alongside world-class engineers
and researchers, including our competitors, they are honing their technical skills and better preparing forthe future.

1 Imec: Interuniversity
Microelectronics Centre is aninternational research instituteheadquartered in Leuven, Belgium
2 Extreme ultraviolet lithography(EUV): A next-generation
lithography technology
3 Immersion ArF: Immersion ArF is alithography technology that uses
argon fluoride (ArF) excimer lasers
as the light source and water as theimmersion medium between thelens and wafers

Belgium

Imec

U.S.

SEMATECHFrance© CEA / Pierre Jayet

Albany NanoTech

CEA-LetiConsortiums (as of April 1, 2017)

Protecting and using intellectual property
TEL’s basic policy for intellectual property (IP) is to increase corporate revenues by supporting
operations through IP protection. In line with this policy, we allocate IP personnel to productdevelopment centers and manufacturing facilities where research and development are performed,
as well as to corporate headquarters where our sales and marketing departments are concentrated.
These employees work closely with their departments to develop an IP portfolio that aligns with ourtechnological and product strategies. They also work to minimize the risk of IP disputes by monitoring
the competitive environment.
We file patent applications to protect and use IP effectively in the relevant countries where we andour customers operate. Our global patent application rate4 has remained high, at around 70% for six
consecutive years. In 2015, our patent application success rates in Japan and in the United States were66.5% and 72.3%, respectively.
Under our worldwide structure, we are able to build a strong, strategic portfolio. This strong portfolio
allows us to differentiate our products, enhance our competitiveness, and ultimately increase ourrevenue.

19TOKYO ELECTRON SUSTAINABILITY REPORT 2017

4 Global patent application
rate: Percentage of invention
applications filed in multiplecountries

Environmental contribution of products
Products that contribute to a sustainable society
The total CO2 emissions from the TEL value chain (including raw material procurement and productmanufacture, transport, use, and disposal) was calculated according to the GHG Protocol.1 Emissions
arising from product use currently account for 90% of our total CO2 emissions. For this reason, we havemade it a key corporate objective to promote environmentally friendly product design, and lower theenergy consumption of our products, thereby reducing impact on the environment from product use. Infiscal 2015, we established a goal to reduce energy and pure water consumption by 10% by fiscal 2019,using fiscal 2014 consumption as the baseline. To achieve this goal, we are working to reduce energy use
and improve overall throughput. In fiscal 2016, we reached this goal with the Triase+™ EX-II™ TiN Plussystem. In fiscal 2017, we once again achieved the goal earlier than planned with the Precio™ XL wafer
prober, the Certas LEAGA™ gas chemical etch system, and the CLEAN TRACK™ LITHIUS Pro™ Z coater/developer. In addition, the percentage of sales from energy-saving models2 increased in fiscal 2017 to93.9% of total product sales.
To further reduce the overall environmental impact of our products, we must examine our primaryequipment, peripherals, associated facilities, and management at our customers’ factories. Goingforward, it will become increasingly important to improve the operational efficiency of our equipment
and encourage overall energy-efficient operations at our customers’ factories. Therefore, we willcontinue to focus on monitoring and controlling our own energy use. We also plan to demonstrate theimportance of energy saving measures through compliance with SEMI S23, the semiconductor industry
standard for assessing energy conservation.
To meet our goals, we are promoting environmentally friendly manufacturing, development of newtechnologies, proactive measures to contain greenhouse gases, and further reductions in the use ofenergy, water, and chemicals.

1 GHG Protocol: Accounting andreporting standards for greenhousegases (GHG)
2 Based on in-house standards

Percentage of energy-saving model sales in total sales (%)
93.9
87.0
83.1

2015

2016

2017

(FY)

* Changes from last year’s report: Figures have been updated due to revision of the applicable models

Management of chemical substances in products
In order to manufacture environmentally friendly products, TEL has set up a system for managing
hazardous chemicals in products it uses. In addition, we proactively collect information on relevantlaws and regulations in Japan and abroad to properly ensure compliance. We had no legal or regulatory
violations or penalties during fiscal 2017.
When any substance of very high concern (SVHC) is present in our products at a level of 0.1% orhigher, we disclose the information appropriately, based on EU REACH3 regulations. We also provide
safety data sheets (SDS) in accordance with GHS4 requirements. To comply more effectively withregulations such as EU REACH and China RoHS,5 in April 2015, we conducted a survey of our Japanesesuppliers regarding the chemical substances contained in their products based on JAMP AIS.6 In fiscal
2017, we made capital investments to strengthen our IT systems with the aim of enhancing supply chain
management of chemical substances in products we use.
We are also focusing on employee education. We now offer a seminar on Product Compliance withEnvironmental Laws and Regulations to all employees, including not only managers but also staff
members from relevant departments. The seminar consists of an overview of frequently revised
environmental laws and regulations, lectures on target chemical substances, and comprehension tests.
In fiscal 2017, 97% of our employees took the course.
We will continue to closely monitor and appropriately respond to relevant laws and regulations
worldwide, further increasing our efforts to reduce hazardous chemical substances.

3 EU REACH: An EU regulation
pertaining to the registration,evaluation, authorization, andrestriction of chemicals
4 GHS: Globally Harmonized Systemof Classification and Labelling ofChemicals
5 China RoHS: Chinese regulation onmaterials including lead, mercury,cadmium, hexavalent chromium,polybrominated biphenyls (PBBs),
and polybrominated diphenylethers (PBDEs). Businesses arerequired to provide customers withrelevant information on the use ofthese materials.
6 JAMP AIS: Article Information
Sheet (AIS) promoted by the Joint
Article Management Promotionconsortium (JAMP). This sheet
is used to communicate basic
information on regulated chemical
substances contained in products.

TOKYO ELECTRON SUSTAINABILITY REPORT 201720