Research and development

Product
competitivenessResearch and development for the future
As lifestyles and business models undergo dramatic changes in the era of the IoT, it is anticipated that the use of
semiconductors will expand in all industries, and there will be demands for even more advanced technologies. As
electronics become even familiar for people, semiconductors become a larger part of everyday life. In readiness, Tokyo
Electron (TEL) formulated and released the TEL Technology Vision 2030. TEL is continuously engaged in rigorous debate
regarding technology for the future and TEL’s contribution, and is actively communicating the results of this within thecompany.
TEL Technology Vision 2030

Technology for
GrowthSociety will experience a communications revolution due to the introduction of 5G next-generation communication standard,
while the coming age of IoT linking everyday objects will see the advancement of big data processing by AI, together withdiversifying services which use it, and semiconductors and FPD plays a central role in these developments. It is important thatTokyo Electron (TEL) promotes leading-edge research and development to meet various demands for technological innovation, andprovides equipment and services to meet expanding applications. TEL strives to preserve the global environment by recognizing
environmental impact throughout the value chain, and offering products that are conscious of reducing this impact. The company
will contribute to the further development of industry and society through the timely creation of high added-value and competitive
next-generation products.

Medium-term goals (1)Ability to
ExecuteSolution provider forthe semiconductor industry

Solution provider for all industries withconnections to semiconductors

Employee
Vitality

Now

2030

Development system
TEL attaches weight to promoting technology development and technology innovation for the next generations, andhas built a system in which its Development & Production Divisions collaborate with Business Divisions to bring highvalue-added products into the market in a timely fashion. In 2018, TEL established the Corporate Innovation Division,
which strives to further strengthen process integration capabilities maximizing TEL’s strengths in deposition and etching
technologies, based on its wide lineup of semiconductor production equipment. Under this new structure, TEL has been
accelerating technological innovation as well as cross-functional development.

Create strong next-generation products
Front-loading
Priority themes, Main activities:

SDGs initiatives■Aim to build a more sustainable society by promoting further
innovation through innovative technology

Tackling
technologicalinnovation

Environmental
contribution of
products■Contribute to the reduction of environmental impact ona global level by providing products and services that areconscious of the environment

TEL is focusing on front-loading, investing resources (including technology, personnel, and money) in the early processesof product development. The company shares its technology roadmap with customers who aim for next-generation andnext-next-generation research and development and beyond, and is engaged in development of the various technologies
required for its realization. TEL proposes its unique technologies to promote on-site collaboration for early introductionof evaluation units at customers’ plants and research and development laboratories, aiming for acceleration andmaximum efficiency of technology development and conversion to mass production equipment.

Front-loading

Advanced field solutions

 Sharing of multi-generation technology roadmap with Business deployment utilizing the industry’s largest

customers Promotion of early engagement
 Maximization of yield for customer devices andequipment operating rate from early stages of mass
production, and also reduction of environmental impact Promotion of improvement in work efficiency and perperson productivity, and further increase in investments
into human resources and development

number of products delivered(69,000 units) TELeMetricsTM remote maintenance Predictive maintenance using machine learning■R&D
R&D for the future, front-loading, collaboration with consortia,
IP management■Tackling technological innovation
Integrating analog and digital, leveraging AI technology,
responding to developments in display■Environmental contribution of products
Products that contribute to a sustainable society, initiatives
concerning environmental laws and regulations related to
products

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TOKYO ELECTRON SUSTAINABILITY REPORT 2019

Industry, innovationand infrastructure

Climate action

TOKYO ELECTRON SUSTAINABILITY REPORT 201916

Product competitivenessTackling technological innovation

Intellectual property management
In its intellectual property-related activities, TEL’s basic policy is to contribute to increased corporate revenues by
supporting business activities through appropriate protection of intellectual property (IP). IP personnel assigned at
R&D/manufacturing sites and headquarters assess each project from various angles including R&D and marketing
perspectives, building IP portfolios aligned with technology and product strategies in an effort to boost competitiveness.
In 2018, in order to uphold the company’s worldwide advantage in the IP field, TEL maintained a global patent application
rate* of approximately 70% for the eighth consecutive year, and achieved high patent approval rates (83% in Japan and
85% in the United States). TEL is also increasing patent application in China in line with changes in market circumstances.
To increase IP awareness, TEL continuously educates its engineers, who are the foundation of TEL’s R&D strategy,
and in total around 4,200 engineers have become inventors. Additionally, because TEL often handles highly confidential
information including technological information of its customers and collaborative partners, the company also focuses on
confidential information management education.
Cumulative number of technology inventors

4,200

*
Global patentapplication rate:
Percentage of invention
applications filed in
multiple countries

Integrating analog and digital
In this era of IoT, when a multitude of devices can connect to the internet, semiconductors are required to process
massive amounts of data quickly and efficiently. At the same time, progress is taking place in the development ofneuromorphic devices, inspired by human neural circuits. Computers used in data centers that use conventionalarchitecture consume tens of kilowatts of power, while the human brain uses only about 20 W. Similarly, whereas theoperating frequency1 of today’s semiconductor devices is 5 GHz, the human brain is believed to run at just several tensof hertz. Neuromorphic devices utilize synaptic connections2 based on analog devices to replace the processing andmemory functions, which had previously been only divided between the digital logic and memory of a conventional
microprocessor. The aim is to achieve a higher degree of information processing with low power consumption.
Furthermore, the development of neuromorphic devices requires an approach of integrating analog to digital. In addition
to conventional pursuit of circuit miniaturization, development is underway of semiconductors that mimic human neuralcircuits, including resistive analog neuro device,3 nonvolatile resistive random access memory4 and so on. Leveraging
its strengths in deposition and patterning technologies, TEL has initiated research efforts into new materials needed forsemiconductors that will be the core of next-generation computing, such as neuromorphic devices, quantum computers
beyond that, as well as manufacturing processes for utilizing these materials.

Collaborating with consortiums
Along with enhancing its own research and development capabilities, TEL is also engaged in the development of cuttingedge technologies in collaboration with international and domestic consortiums. With bases including the United States,
Belgium, and Singapore, TEL collaborates with device manufacturers worldwide and with global research institutes topromote research into next-generation semiconductor production technology. From 2018, TEL is participating in a global
research hub developing next-generation AI hardware. In this consortium, TEL is mainly responsible for development thatraises the added value of software, such as advanced control software, in addition to manufacturing technology for chips
designed for AI computing.
Consortium

Korea

Tokyo Electron development sites

U.S.

Tokyo Electron Korea(as of April 1, 2019)

Japan
Tokyo Electron Technology Solutions
Tokyo Electron Kyushu

Belgium
imec

TaiwanTEL Technology Center, Taiwan
CNSE

France
CEA-Leti© CEA / Pierre Jayet

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TOKYO ELECTRON SUSTAINABILITY REPORT 20193
Resistive analog neurodevice: Electronic
devices capable ofcontinuously changing
resistance4
Nonvolatile resistive
random access memory:
Random access memorythat uses nonvolatile
resistance transformers

Addressing advancements in display

Tokyo Electron Miyagi

IME

TEL is promoting the use of AI and striving to achieve highly stable equipment operation and greater efficiency indevelopment activities. By monitoring the operating status of semiconductor production equipment in real-time, andusing AI to analyze that data, TEL aims to improve equipment operation efficiency such as maintenance of equipment
performance, achieving wafer process uniformity, and avoiding unexpected downtime. TEL’s specialized AI department,
launched in 2017, plays a key role in the development of algorithms and other projects to use AI to analyze the vast
volumes of data output from equipment. From 2018, the company has held AI workshops, aiming to share the latest
technology trends and to boost internal collaboration, to achieve more efficient development activities.

2
Synaptic connections:
A junction formed
between neurons (cells
making up the nervous
system of an animal)
regarded as having
an important role inlearning and memory.

TEL Technology Center, America

TEL Technology Center, Korea

Singapore

Using AI technologies

1
Operating frequency(or clock speed): The
number of signals per
second to adjust thepace of processing ofmultiple electronic
circuits. Indicates theprocessing performanceof the computer. The
higher the frequency,
the more power isconsumed.

Displays used in personal computers, televisions, and mobile devices have been
constantly evolving, growing in size and resolution. Furthermore, in recent years,
progress has also been made in the adoption of organic EL that is self-luminous andthat offers superior contrast. Such cutting-edge display production is supported byphotolithography technology to create minute electronic circuits on glass substrate.
TEL develops, manufactures, and sells FPD coater/developer equipment and FPD dry
etch system. In 2017, TEL launched a product compatible with production of the world’s
FPD Coater/Developer
largest glass substrate, the Generation 10.5 substrate (2,940 mm x 3,370 mm).
FPD coaters/developers can coat and develop a light-sensitive material known as aphotoresist with extreme uniformity. The air floating coater unit, which was developed
independently by TEL and which was the world’s first to be used in mass production by TEL,
simultaneously realizes stable glass substrate transfer, greater productivity, and improved
uniformity.
The FPD dry etch system etches various thin-film materials using a photoresistdrawn pattern as a mask. Important here is uniform processing in the surface of glass
substrates, which are becoming increasingly bigger. TEL has independently developed
FPD Etch/Ash System
plasma source for large substrates. By assessing and proposing processes suited tovarious film types and processing patterns, the company is contributing to the mass production of high-quality displays.
In the field of organic EL displays, which are now being adopted for smartphones and large-screen televisions, TEL is
striving to provide new technologies for developing even higher resolution and improved productivity for organic EL
displays, under the joint development of inkjet printing equipment with a partner company.
Going forward, TEL will develop and deploy new technologies that contribute to the advancement and expansion of
displays.

TOKYO ELECTRON SUSTAINABILITY REPORT 201918

Product competitiveness

Environmental contribution of products
Environmental risks and opportunities

Products that contribute to a sustainable society

The various issues related to the environment have an impact on our daily lives and on the business activities of companies.
Physical risks, such as rising average global temperatures, strong winds, disasters, and water shortages caused by climatechange and abnormal weather, heighten the risks to businesses, such as damage to assets, increased operating costs, andimpacts on the supply chain. In terms of legal risks, tougher environmental laws and regulations require action at businesssites and with products. At the same time, promoting environmental initiatives leads to more opportunities to provide
outstanding environmentally friendly products, reductions in operating costs, and further improvements in corporate value.
Based on the requirements of ISO 14001, Tokyo Electron (TEL) identified and analyzed internal and external issues in relation to
the environment, namely, its relationship with the climate, air quality, and water quality. TEL also identified the environmental
needs and expectations of customers, suppliers, governments, and employees, as well as the company’s complianceobligations. From this information, TEL has set the following as its risks and opportunities to address: (1) environmental
management by reducing the environmental impact of its business activities, (2) compliance with applicable laws, and (3)enhancing product competitiveness with the environmental contribution of products.

Of the total CO2 emissions from the value chain of TEL, emissions arising from product use account for 88% of its total
CO2 emissions. For this reason, TEL has made it a key corporate objective to promote environmentally friendly productdesign, and lower the energy consumption of its products. In fiscal year 2015, the company established a goal to reduceenergy and pure water consumption by 10% by fiscal year 2019, using fiscal year 2014 consumption as the baseline. To
achieve this goal, the company has worked to reduce energy use and improve overall throughput. As a result, in addition
to achieving the goal for four models prior to fiscal year 2019, TEL achieved its goal for a further four models in the target
fiscal year of 2019.1 Specifically, the company aimed for improved efficiency in Tactras™ Vigus™, plasma etch systemfor 300 mm wafer processing that offers high reliability and high productivity, managing to reduce energy consumption
per wafer by 12%. In addition, the company also achieved above-target energy-saving results for the EXPEDIUS™ series
batch cleaning system, NS300Z scrubber system, and CELLESTA™ series surface preparation system, including improved
throughput and wafer-process optimization. From fiscal year 2020, TEL has set the new medium-term goal of “30%reduction by fiscal year 2031 in comparison with fiscal year 2014 for the key models of each business unit (30% or more
reduction in CO2 emissions when compared with equipment shipped in fiscal year 2014).” With this goal, the company
endeavors to address not only energy and water as done conventionally, but also use of process gas and chemical
substances, to reduce product footprint, volume, and weight, and the frequency of parts maintenance, while increasing
the lifespan, and shortening the launch time of equipment, in order to incorporate its contribution to CO2 reduction.

CO2 emissions across the value chain
TEL recognizes environmental impact throughout the value chain, and develops business activities that are conscious of reducing this
impact. TEL aims to resolve environmental problems through leading technology and reliable services, in line with its environmental
slogan “Technology for Eco Life.”

453 kilotons
Scope 3 upstream

174kilotons
Scope 1 & 2

6,014 kilotons
Scope 3 downstream

Not from the TEL GroupOwn emissions

Not from the TEL Group

Fuel- and energy-related
activities

Employeecommuting

12 kilotons

12 kilotons

Capital goods

Business travel

150 kilotons

10 kilotons

Purchased goods andservices

Waste generated inoperations

259 kilotons

Direct emissions
from fuel & gas use
Scope 1

24 kilotons
150 kilotons

1 kilotons

Scope 2:
Indirect GHG emissions
from use of electricity,
steam and heatpurchased by TEL

End-of-life treatment ofsold products

2 kilotons

Use of sold productIndirect emissions
from electricity use &heat purchase
Scope 2

Upstream transportationand distribution

5,873 kilotons
Downstream
transportationand distribution

139 kilotons

9 kilotons
Upstream

Scope 1:
Direct GHG emissions
from use of fuel and gas
owned or controlled
by TEL

Downstream

Scope 3:Emissions from
corporate value chains(excluding scope 1 and2 emissions), such as
product transportation,
employee businesstravel, and major
outsourced production
processes*
Scope 3 is divided into
upstream activities,
which include emissions
associated withpurchased or procured
products and services,and downstream
activities, which include
emissions associatedwith sold products andservices

1
Based on TEL’s specificusage conditions

Initiatives for product environmental laws and regulations
In order to comply with each country’s environmental laws and regulations pertaining to products, TEL proactively collects
information and takes appropriate action as required. An example of its efforts for EU REACH2 regulations is that the company
investigates the presence of any substances of very high concern (SVHC) in articles, and disclose information appropriately. As
for efforts for GHS3 requirements, TEL provides safety data sheets (SDS)4 when selling chemical goods. In fiscal year 2019, thecompany partially revised the environmental IT system introduced in fiscal year 2018 in order to continue to share information
more efficiently with its supply chain. In addition, TEL has also continued to offer “web-based training for Product Environment
Compliance” to all employees, providing a description of the frequently revised environmental laws and regulations and productcompliance. The company also provides suppliers with information on the relevant environmental laws and regulations.
TEL will continue to monitor each country’s environmental laws and regulations rapidly, and strive to take appropriate action.

Biodiversity

URL

2
EU REACH: An EU
regulation pertaining
to the registration,
evaluation,authorisation, andrestriction of chemicals
3
GHS: Globally
Harmonized Systemof classification andlabeling of chemicals
4
SDS: Safety Data
Sheet (for chemical
substances, etc.)

https://www.tel.com/csr/environment/office/In carrying out its business activities, the TEL Group has a not insignificant impact on biodiversity, and yet without thebenefits yielded from biodiversity, the company could not sustain its activities. In recognition of this, the Group willdevelop a framework for promoting initiatives in an effort to conserve biodiversity.

Green procurement

URL

https://www.tel.com/csr/environment/green-procurement/

TEL promotes green procurement, prioritizing the purchase of environmentally friendly parts, products and materials.
The total of Scope 1 and Scope 2 of the TEL Group is 174 kilotons, while Scope 3 accounts for a total of 6,467 kilotons,
which is approximately 97% of the total. TEL believes that it is particularly important to develop products with low CO2
emissions during operation, as CO2 emissions from the use of products sold amount to 5,873 kilotons, which is 88% of theoverall total.

Logistics initiatives

URL

https://www.tel.com/csr/environment/product/

As logistics regulations have become more stringent in recent years and the demand for a lower impact on theenvironment rises, TEL has been promoting modal shifts5 and other activities designed to reduce the environmental
burden of its logistics.

Medium- and long-term environmental goals
Medium-term goals (2030)
Equipment

30%

Reduce per-wafer CO2
emission (as compared with 2013)

Facilities

20%

Total CO2
emissions(as compared with 2018)

1%

Reduce year-over-year
energy consumption ateach factory and office(per-unit basis, annual goal)

Environmental communication

URL

https://www.tel.com/csr/environment/office/

TEL’s environmental policy requires that, based on a shared understanding with a broad range of stakeholders, thecompany promotes cooperative partnerships with them, and it takes appropriate steps to live up to their expectations. In
promoting initiatives for the environment, TEL will maintain close communication with all its stakeholders.

5
Modal shift: Efforts totransform the meansof transportation.
Refers to switching themeans of transportationfrom truck or aircraft
to ones with a lower
environmental impact,
such as rail or ship.

Long-term goal (2050)
As a leading corporation 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 ofenvironmental burden of both our products and facilities, and at the same time, providing evolutionary manufacturing
technologies that effectively reduce the power consumption of electronic products.

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