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Toyota Industries in Focus

Passion for Nurturing New Businesses
Toyota Industries regards the Electronics and Logistics Solutions businesses as two major pillars
of future growth, and is aggressively channeling management resources to them.

Electronics BusinessCorporate Technical Center
The Corporate Technical Center engages in a wide spectrum of
research and development (R&D), ranging from powerelectronics parts for automobiles to radio tuner modules,
wireless LAN modules and organic light-emitting diodes (OLEDs).
The Center functions as Toyota Industries’ R&D facility and its
production base for electronics parts, so accumulating a diverse
assortment of know-how in electronics parts manufacturing.
A product representative of those developed andmanufactured by the Center is a DC-DC converter. Incorporating
our know-how in the development of control devices for electric
forklift trucks, the converter is fitted in Toyota Motor
Corporation’s Prius hybrid car. A key device in hybrid cars, theconverter down-converts the high-voltage current of the mainbattery to a lower DC current to supply the electronic control unit
(ECU) — the heart of a hybrid car — and other in-car devices.
We foresee a steady rise in demand for hybrid cars in tandemwith growing demand for environment-friendly vehicles. TheCenter will make unceasing efforts to establish a solid position asa manufacturer of power sources for hybrid cars.
Another product that epitomizes the Center’s involvement inR&D of cutting-edge technologies is a world-class white OLEDthat achieves a high balance between superb color reproduction,

DC-DC converter for the Prius

Radio tuner module

Wireless LAN module

White OLED

OLED display

brightness and life span. The Center has also developed
prototypes of an OLED backlight for LCDs and an OLED display(white OLED + color filter), both of which are applications ofOLED technology. These prototypes have been displayed atvarious exhibitions since October 2003 and have earned wideacclaim.
To further strengthen the Electronics Business, Toyota
Industries plans to establish a base in Anjo, Aichi Prefecture,
Japan, for consolidating R&D and production of electronics
products. A major portion of electronics-related R&D andproduction handled by the Center is currently undertaken at theKyowa Plant (Obu, Aichi Prefecture), but we intend to graduallytransfer these functions to the new location. As a first step, weplan to construct a new Electronics Wing for R&D andproduction of electronics products.
Seeking to further expand its business, the Corporate
Technical Center will advance the level of its technology
development and accelerate its R&D activities in new fields withgrowth potential.

ANNUAL REPORT 2004 — TOYOTA INDUSTRIES CORPORATION

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Toyota Industries in Focus

Low-Temperature Polysilicon TFT-LCD Panels
ST Liquid Crystal Display Corp. (“ST-LCD”) was established inOctober 1997 as a 50-50 joint venture with Sony Corporation to
manufacture low-temperature polysilicon TFT-LCD panels.
Blending Sony’s outstanding LCD development capabilities andToyota Industries’ expertise in quality control and manufacturing
technology, ST-LCD has built an optimal production system tomanufacture high-quality, high-performance LCD panels.
Because our investment is not a majority stake, we account for
ST-LCD as an affiliate by the equity method rather than as asubsidiary. Nevertheless, we regard ST-LCD as one of the core
operations of our Electronics Business.

Low-temperature polysilicon TFT-LCDs

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ST-LCD will make an additional investment of ¥10.0 billion toaugment its production facilities. This will enable ST-LCD to
increase its monthly production capacity to 40,000 panels (600 x720mm) from April 2005.

Semiconductor Package Substrate BusinessToyota industries is engaged in the business of semiconductor
package substrates, which are essential components of PCs,
digital still and video cameras, mobile phones and smart cards.
In 1998, we established TIBC Corporation (“TIBC”), a joint
venture with Ibiden Co., Ltd. TIBC manufactures space-efficientand lightweight ball grid array (BGA) plastic package substrates
as well as flexible printed circuit (FPC) substrates.

Ball Grid Array (BGA)
Plastic Package Substrates

Flexible Printed Circuit (FPC)
Substrates

Since starting mass production in April 1999, ST-LCD has
produced small and medium-sized LCD panels for digital still andvideo cameras, personal digital assistants (PDAs) and mobilephones. In the fall of 2001, ST-LCD invested ¥75 billion toestablish a second production line and now has a monthly
production capacity of 32,000 panels (600 x 720 mm).
ST-LCD’s products offer such basic features as highresolution and low energy consumption. Also, Sony is actively
promoting its system-on-glass technology that integrates thedisplay device and its driver circuits into a single glass baseplate. This product realizes highly reliable, lightweight andminiaturized display modules.
We foresee healthy growth in demand for low-temperaturepolysilicon TFT-LCD panels, primarily for digital still cameras andcamera-equipped mobile phones. To respond to this demand,

TIBC’s package substrates are sold through Ibiden to major
integrated device manufacturers and semiconductor-packagingcompanies mainly in South Korea, Taiwan and Singapore for use
in PCs, mobile phones and other products. TIBC’s FPC
substrates are marketed via Ibiden to SIM-card and smart-card
suppliers mainly in Europe, China and Japan for integration into
credit cards and telephone cards.
In fiscal 2004, TIBC achieved a sharp improvement inbusiness results compared with the previous fiscal year, thanks
to a solid contribution from its high-performance BGA plastic
package substrates, for which it commenced production inOctober 2002, in favorable market conditions for PCs andmobile phones. In fiscal 2005, TIBC expects to sustain a highlevel of production.

ST Liquid Crystal Display Corp.

TIBC Corporation

ANNUAL REPORT 2004 — TOYOTA INDUSTRIES CORPORATIONDetermined to build another pillar of future growth, Toyota
Industries began operations of its Logistics Solutions Business inJapan, through which we provide companies with logistics
solutions covering logistics planning to the operation ofdistribution centers. Our aim is to help customers reduce their
total logistics costs and respond to their needs for logistics
improvements by utilizing our accumulated experience acquired
through the production and sales of such materials handlingequipment as forklift trucks and automated storage and retrieval
systems, as well as our production know-how as exemplified by
the Toyota Production System.
As part of our entry into this field, in March 2002 weestablished Advanced Logistics Solutions Co., Ltd. (“ALSO”), a
wholly owned subsidiary that plans overall logistics operations
and operates distribution centers. ALSO thoroughly evaluates
logistics operations and provides customer-oriented proposals
for optimizing logistics and reducing costs. At the same time,
ALSO provides efficient operation of distribution centers andfunctions as the nucleus of Toyota Industries’ Logistics Solutions
Business.
To achieve solid growth, we intend to develop our Logistics
Solutions Business incrementally, giving due consideration tovarious industry sectors and possible formats for undertaking
logistics operations. In Phase I, we will secure orders for
managing and operating distribution centers on a case-by-casebasis. During Phase II, we will handle all aspects of outsourced
logistics for companies, including logistics management andoperations. In Phase III, we will deploy our information networkand planning capabilities to carry out joint deliveries for multiple

companies as well as for multiple divisions within a single
company. We will operate our Logistics Solutions Business in an
optimal format for each client — undertaking individual orders for
operating distribution centers, carrying out outsourced logistics
for clients through the establishment of joint ventures with them,or securing orders for handling logistics for clients through theestablishment of joint ventures with other logistics companies.
At present, our Logistics Solutions Business is achieving
steady growth in new orders, mainly in the Chubu and Tokyo
Metropolitan regions. Adopting medium- and long-term
perspectives, Toyota Industries is aggressively allocating
management resources to the Logistics Solutions Business andwill spare no efforts to develop this business into one of its future
core businesses.

Toyota Industries in Focus

Logistics Solutions Business

Development of Logistics Solutions Business

Tie-ups with trading companies
Tie-ups with other logistics companies
Tie-ups with customers

Logistics Solutions
Phase III
Jointlogistics

Phase II
All phasesof logistics

Phase I
Logistics
centers

Joint deliveries for multiple divisions within companies
Joint deliveries among multiple companies

Distributor related
Manufacturer related

Distributor related

Procurement logistics,
product logistics,
international logistics

Food wholesalers, convenience stores,
home improvement centers,
sundry goods, drugstoresMarubeni Teion Shokuhin Ryutsu
Fuji Logistics

TF Logistics

Trancom

ALTRAN

Takasue ALT Logistics

Kokuyo Logitem

KTL

These companies are joint ventures formed as a result of tie-ups.

ANNUAL REPORT 2004 — TOYOTA INDUSTRIES CORPORATION29