Environmental and Social Report 2007™

TOKYO ELECTRON LIMITED
Environment, Health & Safety Center
2-30-7 Sumiyoshi-cho, Fuchu City,
Tokyo 183-8705, Japan
Tel: +81-42-333-8249
Fax: +81-42-333-8477
http://www.tel.com
Published: October 2007

Mixed Sources
Product group from well-managed
forests and other controlled sources

Waterless printing, which does not generate
hazardous effluents, is adopted for this report. It
is printed with volatile organic compound(VOC)-free inks on FSC-certified paper containing materials from properly managed forests.

TOKYO ELECTRON LIMITED
PR45-163

TEL Values
Tokyo Electron Limited (TEL) summarized the values and codes of conduct of the Tokyo ElectronGroup as TEL Values in April 2006. We will share TEL values with all employees of the Group aroundthe world, which will drive us toward new growth in the future.
TEL Values

TEL Values

Pride

Challenge

We take pride in providing high-value products
and services.

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

● We offer our customers cutting-edge
technological products, along with the highest
level of quality and technical service, in the
pursuit of total customer satisfaction.

● We view changes as opportunities, andrespond to them flexibly and positively.
● We are tolerant of failure, and consider it
important to learn from the process and results.

● We consider profit to be an important measureof value in our products and services.

TEL Values

TEL Values

TEL Values

Ownership

Teamwork

Awareness

We will keep ownership in mind as we think things
through, and engage in thorough implementationin order to achieve our goals.

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

We must have awareness and accept
responsibility for our behavior as respectful
members of society.

● We always have an awareness of problems,
and tackle challenges with enthusiasm and asense of responsibility.

● We create a workplace with an open
atmosphere and positive communication.

● We strictly comply with laws and regulations
and the rules of society.

● We establish relationships of trust with ourbusiness partners in order to facilitate mutual
growth.

● We give top priority to safety, health, and theglobal environment.

● We make decisions quickly, and do what we
consider to be the best course of action.

● We strive to become a company that local
communities hold in high esteem.

Editorial Policy

Scope of Reporting

Environment and Safety Activities Milestones

We have prepared this environmental and social report
to introduce our activities, in particular our environmental, health, and safety (EHS) activities, as intelligibly as
possible. Key features of the report are as follows:■ Organizations covered: Tokyo Electron GroupJapan• Tokyo Electron Limited• Tokyo Electron AT Limited• Tokyo Electron Tohoku Limited• Tokyo Electron TS Limited• Tokyo Electron Kyushu Limited• Tokyo Electron Technology Development Institute, Inc.
• Tokyo Electron Software Technologies Limited• Tokyo Electron FE Limited• Tokyo Electron PS Limited• Tokyo Electron BP Limited• Tokyo Electron Agency Limited• Tokyo Electron Device Limited
United States• Tokyo Electron U.S. Holdings, Inc.
• Tokyo Electron America, Inc.
• Tokyo Electron Massachusetts, LLC.
• TEL Technology Center, America LLC.
Europe• Tokyo Electron Europe Ltd.
• Tokyo Electron Israel Ltd.
Asia
• Tokyo Electron Korea Limited• Tokyo Electron Korea Solution Limited• Tokyo Electron Taiwan Limited• Tokyo Electron (Shanghai) Limited• Tokyo Electron (Shanghai) Logistic Center Limited(Company names as of August 2007)

May 1994 Standardization, Environment and Safety
Center (Environment, Health & Safety
Center) establishedMar. 1996 Product Safety Subcommittee (Tokyo
Electron Group Product EHS TechnicalCommittee) launched
Apr. 1996 Environmental Subcommittee (Tokyo
Electron Group EHS Committee) launched
Dec. 1997 Sagami Plant acquires ISO 14001 certification (and subsequently other plants alsoacquire the certification one after another)
Sep. 1998 Tokyo Electron Group Credo and Principles
on Environmental Preservation establishedNov. 1998 Tokyo Electron Group Credo and Principles
on Safety & Health establishedJun. 1999 Safety First policy establishedDec. 1999 “Health, Safety, and Environment” added
to the Management Philosophy
Apr. 2000 Environmental accounting introduced
Apr. 2000 Unified safety training system “Safety2000” implemented
Dec. 2000 First Tokyo Electron Group environmental
report publishedOct. 2001 Environmental training introduced in facilities not yet certified under ISO 14001
Dec. 2002 Tokyo Electron Group Internal Assessmentmutual auditing by environment or safety
representatives from each facility started
Oct. 2005 Energy-Conservation Task Force starts
activities to promote energy-saving products
May 2006 Tokyo Electron Group Credo and Principles
on Environmental Preservation revised● In “Commitment by Top Management,” the Chairman
and President of TEL express their opinions on what
the semiconductor industry should do to protect thenatural environment and solve the problems of society as well as on the roles and missions that theTokyo Electron Group should fulfill in the industry
from a global perspective (see pages 4 and 5).
● On the feature pages, the Tokyo Electron Group’sbusiness and products are explained in relation to
the entire semiconductor manufacturing process inan easy-to-understand manner with the use of illustrations (see pages 6 and 7).
● We invited our customers and suppliers to a roundtable meeting, focusing on reducing the environmental impact caused by the semiconductor manufacturing process, which is one of the main targets to beachieved by the semiconductor industry as part of its
social responsibility (see pages 8 to 13).
In preparing this report, we referred to theEnvironmental Reporting Guidelines (Fiscal Year 2003
Version) issued by Japan’s Ministry of the Environment
and to the 2002 Sustainability Reporting Guidelines
published by the Global Reporting Initiative.
We hope that we can promote communication
with all stakeholders of the Tokyo Electron Groupthrough this report and incorporate their opinions into
our future activities. We look forward to receiving youropinions and comments.

■ Period covered: Fiscal year (FY) 2007
(April 1, 2006 to March 31, 2007)■ Areas covered: Environment, society, and economy

TOKYO ELECTRON Environmental and Social Report 2007

Corporate Profile

Contents

Company name: Tokyo Electron Limited (TEL)TEL Values, Editorial Policy, Scope ofReporting, Environment and Safety
Activities Milestones

2

Corporate Profile

3

Commitment by Top Management

4Address: TBS Broadcast Center, 3-6 Akasaka 5-chome,
Minato-ku, Tokyo 107-8481, Japan
Tel.: +81-3-5561-7000
Established: November 11, 1963
Capital: ¥54,961,190,000 (as of May 1, 2007)
Main products: Semiconductor production equipment and flat
panel display (FPD) production equipment
Employees: 1,015 (non-consolidated, as of May 1, 2007)
9,932 (consolidated, as of May 1, 2007)

Net Sales and Ordinary Income (Consolidated)(Billions of yen)
Net sales

Ordinary income

HIGHLIGHT● TEL’s Products and Business6● Roundtable Meeting with Stakeholders
Green Fab—Requirements for a Good
Semiconductor Factory

8

851.9
673.6

635.7

MANAGEMENT REPORT

529.6
460.5

-0.2

21.1

2003.3

2004.3

0

65.6

75.9

2005.32006.3

Net Sales by Division(Consolidated) (Billions of yen)Computer networks

China 4.7

1.1

SE Asia

4.6

Europe 5.6

Electronic components

88.2
FPD production
equipment

100.7

North
Japan
America Year ended
36.8

Year ended
on March 31,
2007

12.4 on March 31,
2007
Korea

14.4

Semiconductor production
equipment

Capital Expenditures andR&D Expenses

Group Employees(No. of persons)Taiwan

21.5

642.6

● Compliance

15

EHS REPORTNet Sales by Region(Consolidated) (%)

Other

19.1

2007.314● EHS Management

16● EHS Activity Goals and Results

18● Details of Environmental
Impact/Environmental Accounting

19● Product-Related Initiatives for theEnvironment

20● Environmental Initiatives inTransportation

23● Environmental Initiatives by
Our Suppliers

24● Plant and Office Initiatives for theEnvironment

26● Health and Safety

30(Billions of yen)

10,148
8,945

R&D expenses
Capital expenditures

9,877
9,129

SOCIAL REPORT

8,942
56.9
50.1 44.1 43.8 49.1
27.1

0

0
2003. 2004. 2005. 2006. 2007.
4
4
4
4
4

12.3 11.0 9.8 13.3

2003. 2004. 2005. 2006. 2007.
3
3
3
3
3

● Relationship with Employees

32● Communicating with Society

33● Comments from a Stakeholder

35

3Corporate Profile

143.9● Corporate GovernanceCommitment by Top Management

Development of Modern Civilization at the
Expense of the Global Environment

4
Commitment by Top Management

I am afraid that the global environment is approaching a criticalpoint in recent years. Looking back on our history, humanbeings have been approaching nature in two different ways.
Some pursued sustainable development in harmony with nature
while others just fought against nature. Especially in the modernage, people went to extremes to conquer nature and almost
destroyed it. Particularly in the advanced countries, modern civilization has been developed at the expense of the global environment, and I am afraid that the earth’s capacity to replenish
and repair itself is near its limit.
In turn, the development of modern civilization has, however, forced us to recognize the importance of the environment.
For example, as a result of humankind achieving its dream ofspace flight, it has become possible for us to view the earth
from an objective viewpoint outside the planet, and we are now
widely aware that the earth is vulnerable even to minor risks.
It is becoming increasingly difficult to maintain the global
environment in a stable manner, and so we have no time towaste: we must act rapidly to restore the global environment
using the knowledge we have accumulated as our civilization
has developed and the wisdom cultivated based on our experience of living in harmony with nature.

Providing Environment-Friendly, Cutting-Edge
Manufacturing Process and Semiconductor
Production Equipment in Response to theIncreasing Role of Semiconductors
As a key to restoring the global environment, it is important toencourage the newly industrializing countries (NICs), who are
involved in improving their economies and the living standardsof their people, to pursue development in a way that will not further damage the environment. The center of semiconductor production is now shifting from the United States and Japan to the
Asian region, and it will then shift to the NICs. When thesecountries develop the semiconductor industry in their countries,
it is essential that they incorporate the concept of EHS (environment, health and safety) into their economic development toprotect the environment, and I believe that it is the Tokyo
Electron Group’s mission to provide these countries with environment-friendly and highly economical and productive semiconductor production equipment and technology.
It is also important to ensure the safety of our products. We
will provide our customers with semiconductor production
equipment together with the know-how needed to use theequipment in a safe manner.
We are now entering the era of the ubiquitous network society. In the future, devices utilizing semiconductor technologies
will be more widely used in society, which will improve the efficiency of society and contribute to reducing environmental
impact in its various aspects.
Semiconductor manufacturers are now attributing more
importance to the design and development of software in orderto manufacture next-generation semiconductors. Society is
increasingly demanding that manufacturers of semiconductor
production equipment and materials take charge of developing
semiconductor manufacturing process technologies.
Tokyo Electron Group will further contribute to the creationof a society where people live in harmony with the global environment by providing environment-friendly, cutting-edge semiconductor manufacturing process technologies.

“As semiconductors and flat panel displays (FPDs)
become part of the social infrastructure, themission of semiconductor production equipment
manufacturers is becoming increasingly important.”
Tetsuro Higashi
Chairman & CEOTokyo Electron Limited

Dramatically Improving the Performance of Our
Equipment Will Eventually Contribute to the
Growth of Developing Countries

I participated in the Davos meeting1 in January 2007. Many sessions focusing on global warming were held during the meeting,and I felt strongly that the problem is attracting a great deal ofattention on a global scale. To solve the global warming problem, technology will play the most important role: I believe thatdrastic technological innovation will be necessary in solving the
problem.
As for semiconductors, society expects us to supply semiconductor production equipment that enables semiconductor
manufacturers to produce high-performance and highly environmentally efficient semiconductors at low cost. The semiconductors thus produced and used in electronic devices andautomobiles will contribute to reducing the power consumed
globally, and eventually to the solution of the global warming
problem.
In the future, we intend to actively cooperate with companies whose efforts are contributing to reducing the power society
consumes by providing energy-saving devices such as power
semiconductor devices and solar panels.
One of the fundamental requirements in the development of
more energy-saving semiconductor production equipment inour core business, and one that our deveroppers are now widely
aware of, is that we have to reduce the environmental impact
caused by the equipment while it is in use. Based on this recognition, the design for safety is as important as environment.
It is also important to raise the environmental and safety
standards of the entire industry. At the Davos meeting, I talked
with some top executives of leading semiconductor production
equipment manufacturers from overseas and we agreed on
the necessity of giving active support to SEMI 2 to shareenvironment- and safety-related technologies across the industry.

Semiconductors will play an important role in the growth of theworld’s developing countries. In the IT industry, which focuseson software, you can start up a business with a small investment. Also, a lot of people in developing countries will be able
to learn regardless of distance and time if they use communication devices and technologies based on PCs, which use semiconductors. To this end, I believe it vital that we expand the useof semiconductors.
To achieve these objectives, however, semiconductor prices
need to be reduced substantially, while semiconductor manufacturers, who are our customers, need to make a profit. In support of this, we will make strenuous efforts to improve theperformance of semiconductor production equipment.
I am proud that TEL is part of the semiconductor industry,
which can make a great contribution to society at large in theways I have described here.
1. Davos meeting: Annual meeting of the World Economic Forum held in Davos,
Switzerland, where the world’s corporate managers, politicians, and economists
gather to discuss global politics and economy
2. SEMI: Semiconductor Equipment and Materials International, an international
industrial association of semiconductor/FPD production equipment and materials
manufacturers“We will support our customers indeveloping semiconductors by providingthem with more energy-saving equipment.”

Kiyoshi Sato
President & COO
Tokyo Electron Limited

5
Commitment by Top Management

The Mission of Tokyo Electron Group Is to
Provide the Equipment to Manufacture HighPerformance Semiconductors Efficiently

HIGHLIGHT

TEL’s Products and BusinessWe provide semiconductor and flat panel display (FPD) production equipment.

HIGHLIGHT

As a leading supplier of semiconductor production equipment,
the Tokyo Electron Group has been developing, manufacturing,and selling a wide range of products since its foundation in 1963.
The company also leverages specialized technologies developed
for the semiconductor production equipment market to engage in
the area of flat panel display (FPD) production equipment.
The manufacture of semiconductors and FPDs involves some
200 to 300 manufacturing steps, and for each of these steps, different types of production equipment are required. The Tokyo
Electron Group develops, manufactures, and sells semiconductor
and FPD production equipment and many of its products hold theworld’s top share in their respective markets.
In fulfilling the environmental aspect of our role in society, we
help our customers reduce the environmental impact caused by
the manufacture of semiconductors and FPDs at their plants.
Furthermore, we are committed to contributing to the productionof more energy-saving semiconductors and FPDs with higher
performance through the provision of excellent semiconductor
and FPD production equipment, aiming to contribute eventuallyto the creation of a society where everyone in the world will haveequal access to knowledge and information.

Front End
Wafer Processing Process

6
TEL’s Products and Business

Front End
Wafer Manufacturing Process

TEL manufactures
equipment in cooperation and collaboration
with suppliers.
((Example)

TOKYO ELECTRON Environmental and Social Report 2007

Used inn Elecctron
nics ProdniPr
P uctsu
HIGHLIGHT

7

TOKYO ELECTRON Environmental and Social Report 2007

TEL’s Products and Business

Back End
Assembly Process

HIGHLIGHT
Roundtable Meeting with Stakeholders

Green Fab1—Requirements for a Good Semiconductor Factory
On June 27, 2007, we invited some of our stakeholders to a roundtable meeting to discuss therequirements for a good semiconductor factory. Specifically, we invited representatives of the following companies engaged in the upstream and downstream semiconductor manufacturing
processes: semiconductor manufacturers, relevant equipment and component manufacturers, and acompany engaged in the design and construction of clean rooms.
1. Green Fab: Meaning a factory/manufacturing process that is comprehensively environment-conscious

Collaboration from the Upstream throughDownstream Processes Is Essential

HIGHLIGHT

8
Roundtable Meeting with Stakeholders

Green Fab—Requirements for a Good Semiconductor Factory

Mr. Honma: I would like to comment in my capacity as someone
engaged in building semiconductor factories and production
systems. As a result of the shift from 200-millimeter wafers to 300millimeter wafers, the power consumed by semiconductor production equipment is increasing, and we are now required to save evenmore energy. For the environment, it is important to eliminate
duplication and waste in semiconductor factories from a comprehensive viewpoint, but the environmental efficiency of individual
parts and equipment in the semiconductor factory has already
improved dramatically, and so we can no longer expect substantial
improvements in environmental efficiency from them. In the past,
semiconductor production equipment manufacturers and component manufacturers were independently developing products withlower environmental impact, including more energy-saving products downstream of the supply chain. From now, however, I believethat the three parties—semiconductor manufacturers, semiconductor production equipment manufacturers, and component manufacturers need to collaborate more fully by exchanging informationthat will enable us to reduce the environmental impact resulting
from the manufacture of semiconductors.
Mr. Iwaida: I agree with Mr. Honma. I also feel strongly that thesethree parties together will be able to implement effective measures.
Our company manufactures pneumatic devices used in semiconductor production equipment. Usually, we seldom have the opportunity to talk directly with the semiconductor manufacturers who
are the end users of our products. We are only informed of the situation at the end user via the semiconductor production equipment

manufacturers. However, when we have the rare opportunity to visit
the factory of a semiconductor manufacturer, we often find room
for improvement at the factory, something which only component
manufacturers would be able to see. For example, the pipe on afreezer might be too long and coiled up. Although the freezer isworking hard to keep the temperature below zero, the long pipe is
continuously giving out heat beside the freezer. Reducing this typeof waste would help reduce the environmental impact of the factory,
and roundtable meetings like this one are very useful for thispurpose.
Mr. Urano: I think it necessary for all the companies involved in the
upstream to downstream steps to collaborate to reduce the environmental impact generated over the entire semiconductor manufacturing process. Our company deals with exhaust systems,
Participants in the Roundtable Meeting● NEC Electronics Corporation

Mr. Michio Honma● Elpida Memory, Inc.

Mr. Kazuhiro Tada

● Sony Corporation

Mr. Junichi Aoyama● Edwards Japan Limited

Mr. Chiaki Urano● Edwards Japan Limited

Mr. Masaharu Miki

● SMC Corporation

Mr. Katsuro Iwaida● Taisei Corporation

Mr. Tomoo Gocho● Taisei Corporation

Mr. Tsutomu Kobayashi

Roles Played in the Semiconductor Manufacturing Process by Participating Companies
We develop and manufacture semiconductors
in semiconductor factories.

Design and construction of clean rooms

Taisei
NEC Electronics

Elpida Memory

Sony

What is a clean room?
A clean room is a controlled space where theamount of fine dust and particles in the air,which are unacceptable in the manufacture ofsemiconductors, is kept within predefinedvalues. In a clean room, humidity and temperature are also regulated.

Semiconductor production equipment

Tokyo Electron

Temperature controller
Direction controller

Gas scrubber

Pump

Pneumatic devices andtemperature controllers

Gas scrubbers and pumps

SMC

What is a gas scrubber?
A gas scrubber removes various gases used in the semiconductor manufacturing process ina safe manner.

What is a temperature controller?
A temperature controller is a device
used to cool the inside of semiconductor production equipment.

TOKYO ELECTRON Environmental and Social Report 2007

Edwards

Semiconductor Manufacturers Need to DiscloseMore Information
Mr. Urano: I have long thought that Japanese semiconductor manufacturers do not seem willing to disclose information. For example,
when constructing a new semiconductor factory, they will not disclose any information about which components from which manufacturers they are going to use in the new factory. After the individual pieces of equipment and components are delivered, piping
routes are worked out on a case-by-case basis. As a result, thefacility area in the clean room is like a jungle of pipes and signal

Mr. Iwaida: Information is really important. We component manufacturers manufacture products according to the specifications
given by our customers without knowing the entire process flow.
However, the specifications do not always reflect the reality. For
example, we once made a temperature controller with a coolingability down to minus 30 degrees centigrade. We delivered it to theend user’s factory and found out that the factory did not actuallyneed that much cooling ability. If we say that a temperature controller with a cooling ability of minus 20 degrees centigrade is likethe engine in a luxury car, a temperature controller with a coolingability of minus 30 degrees is like the engine in a fighter aircraft. If
we had the right information, we would not have had to make thiskind of pointless effort.
Mr. Kobayashi: In the future, we would like to provide our customers with clean rooms equipped with a function to reduce chemical pollutants, which will in turn reduce the load on the filters. We
also want to offer energy-saving technologies for air conditioning
systems. However, there are limits to what we can do working on
our own. If we have opportunities to exchange information like attoday’s meeting, I think we will be able to propose more ideas andtechnologies for energy conservation.
TOKYO ELECTRON Environmental and Social Report 2007

9
Roundtable Meeting with Stakeholders

Mr. Tada: How about showing the process developers the adverse
effect of increasing gas flows by using the check list that can beused for a design review?

Mr. Kobayashi: I completely agree with Mr. Urano. In designing aclean room, we have to predict the rate of operation according togiven specifications. We are not provided with practical data about
the clean room, including data on cooling water, air conditioning
load, and exhaust air. If we are given more practical data, we will beable to contribute more to energy saving. For example, there are
two methods of cooling: one uses water and the other uses air forcooling. If air is used for cooling, the energy consumed will be fiveor six times as large as the energy required for water cooling.
However, we are not given the relevant information. Without theappropriate information, we cannot decide whether it is really necessary to use air for cooling, whether water could be used instead,or whether the air in the clean room should be used for the air cooling. If these kinds of problems with information disclosure aresolved one by one, I believe we can contribute substantially to
reducing the total environmental impact generated by semiconductor factories.

Green Fab—Requirements for a Good Semiconductor Factory

Mr. Komiyama (TEL): I am in charge of managing the clean roomsin the Tokyo Electron Group. It is true that process engineers working on semiconductor production equipment tend to increase gas
flows to improve the process and as Mr. Urano has pointed out,
this might impose an extra load on the exhaust system.

cables. I believe it important for semiconductor manufacturers todisclose more information in order to reduce their environmental
impact and to improve the performance of the equipment.

HIGHLIGHT

including vacuum pumps and gas scrubbers. Recently, various
process gases have been introduced in the production process andI am afraid that the exhaust system is regarded as a “dust box” into
which any kind of gas can be put and eventually rendered harmless.
However, if different kinds of gases are mixed without being sorted
out, they can easily solidify and this may cause the vacuum pump
to halt. To prevent this, more nitrogen gas need to be injected. This
will impose an extra load on the gas scrubbers and will result in an
increase in environmental impact. However, if the production
process is improved and the types of gases used and their flows
are limited, the problem can be alleviated.

HIGHLIGHT

10

Michio Honma

Kazuhiro Tada

Junichi Aoyama

Chiaki Urano

NEC Electronics
Corporation

Elpida Memory, Inc.

Sony Corporation

Edwards Japan Limited

We Need to Overcome Organizational
Boundaries to Reduce Our Environmental
Impact.

Roundtable Meeting with Stakeholders

Green Fab—Requirements for a Good Semiconductor Factory

Mr. Honma: In reducing the environmental impact caused by ourfactories, we face the problem of organizational boundaries—eachorganization, department, and employee foolishly limits the scopeof their jobs and tend not to think beyond the range of their own
jobs. We may need to remove these boundaries if we want to makemore improvements.
Mr. Gocho: I fully agree with Mr. Honma’s opinion that we need toovercome organizational boundaries. In the construction industry,
too, we have boundaries between the building and civil engineering
sectors and between the sections working on air conditioning andstructural designing. In the past, many people would express theiropinions of the job being done by other departments, but now thisis rare, perhaps because their scope of work is too clearly defined.
As a designer and constructor of clean rooms, in the future wewould like to ask semiconductor production equipment manufacturers questions like “Is it really OK to set the temperature of thecooling water at 25 degrees centigrade?”
Mr. Ibuka (TEL): There are indeed organizational and personnel
boundaries. I think it necessary to create a model of collaboration
between organizations based on the concept of “total optimization.”TOKYO ELECTRON Environmental and Social Report 2007

No One Has a Comprehensive Overview of the
Factory Equipment.
Mr. Kaneko (TEL): I am afraid semiconductor factories are producing substantial amounts of wasteful exhaust. Also, there are somecases in which semiconductor production equipment can actually
be operated using only around 60% of the specified amount ofenergy. So I think it is important for us semiconductor production
equipment manufacturers to study how we can reduce wasteful
operations.
Mr. Aoyama: When we build a new factory, the department incharge of construction gathers data on cooling water, facilities, andelectricity separately from those who will run the factory and fixes
the specifications based on that department’s experience and intuition. But in fact, no one knows the real electrical capacity required.
There is no one who can oversee the construction in a comprehensive way. In the power industry and the steel manufacturing industry, some companies have started to monitor the efficiency of theirequipment while it is in use in real time to maintain high efficiency
over an extended period. In the semiconductor manufacturingindustry as well, things need to be done not only to ensure the perfect finish on a wafer but also to improve the efficiency of the semiconductor production equipment.

Masaharu Miki

Katsuro Iwaida

Tomoo Gocho

Tsutomu Kobayashi

Edwards Japan Limited

SMC Corporation

Taisei Corporation

Taisei Corporation

HIGHLIGHT

Mr. Urano: In order to make the entire semiconductor manufacturing process more energy-saving, it would be necessary to take theexhaust system, valves, and cooling system into considerationfrom early on in the design stage, in addition to making individualcomponents capable of saving greater amounts of energy by adopting pumps and temperature controllers that use lower amounts ofenergy. This will also limit the unnecessary use of gas and contribute to energy conservation.

11

2

Use of Life Cycle Assessment (LCA) to
Promote Energy Conservation
Mr. Aoyama: We can use LCA to do this. Using LCA, we can get acomprehensive understanding of the effects of an improvement.
For example, we can identify the reduction in CO 2 emissions
throughout the process achieved by introducing a gas scrubber.
Comprehensive measures can be taken more easily for new production lines and so the construction company can make a comprehensive proposal on an energy-saving line in addition to justsimply constructing a new building. Of course we can also makeexisting lines more energy-saving using LCA. When our company
renovated a factory, we implemented measures to substantiallyreduce power consumption and the money we invested in this ini-

tiative will be recovered over a relatively short period.
Mr. Ibuka (TEL): I regard LCA as a “double-edged sword,” which
can simultaneously help and hinder us. With LCA, any semiconductor manufacturer can identify the amount of energy used and sounless we, in proposing the use of LCA, are first past the post withthe use of LCA, our competitors will make good use of LCA to gaincustomers. So it is important to encourage information sharing,
while at the same time remaining vigilant of the effect that information sharing may have on competition in the market.
2. Life Cycle Assessment (LCA): Method to assess the environmental impact of a
product throughout its life cycle from production to recovery and reuse.

Encouraging Discussions between Upstream
and Downstream Companies
Mr. Honma: I have been participating in a variety of improvement
projects recently and this experience has helped me to recognize
one thing. There are multiple layers in the supply chain for semiconductors, and it is not really necessary to encourage collaboration between companies on two layers that are far apart from eachother in the supply chain. Usually, a lot of improvement can bemade by collaboration between companies in two adjacent layers.
However, it is essential to have a consultant who questions the status quo of the entire supply chain. I believe small improvements
can produce great results if they are implemented in the form ofprojects.
Mr. Ibuka (TEL): We held individual forums with suppliers on
PFC gas.3 Open forums with these companies and the forums
held by industry associations are indeed effective.

TOKYO ELECTRON Environmental and Social Report 2007

Roundtable Meeting with Stakeholders

Mr. Kaneko (TEL): It is true that semiconductor manufacturing factories do not pursue total optimization from scratch: instead, they
seem to want to pursue energy conservation and environmental
friendliness by simply combining optimal components. For example, they think that they can reduce their energy use simply by
improving the performance of individual components.
Semiconductor manufacturers need to manage their factories in amore comprehensive manner and semiconductor production equipment manufacturers must have the strength to put proposals tosemiconductor manufacturers and persuade them to accept their
proposals. Otherwise, semiconductor production equipment manufacturers cannot show a good example to the manufacturers of
their equipment components. The three parties must rely on mutualcommunication and understanding to ensure the consistency of thefactory facility as a whole.

Green Fab—Requirements for a Good Semiconductor Factory

Mr. Miki: Pump manufacturers think that energy conservation canbe achieved by skillful pump layouts and skillful piping configurations. Energy-saving can be implemented efficiently if it is started
back at the initial stage of construction of the factory and we havebeen putting forward proposals to do this for the last 10 years. But
our proposals have not yet been widely accepted.

HIGHLIGHT

12

Kiyoshi Komiyama

Munetsugu Yamanaka

Masaki Kaneko

Shigehito Ibuka

Joji Hoshi

Leading Edge Process
Development CenterTokyo Electron Limited

Development Planning Dept.
Tokyo Electron Limited

Environment, Health &Safety CenterTokyo Electron Limited

Environment, Health &Safety CenterTokyo Electron Limited

Environment, Health &Safety CenterTokyo Electron Limited

Mr. Honma: It would be better to draw a clear line between information that must be kept confidential and technologies that can betransferred. In other words, there are topics that can be discussed
in a relatively open manner at the meetings of JEITA4 or SEMI and
those that should be discussed among limited participants, forexample by members of a consortium.

Roundtable Meeting with Stakeholders

Green Fab—Requirements for a Good Semiconductor Factory

Mr. Aoyama: Even if each company conducts its own environmental activities, the effects will be limited and I think that we canconduct activities appropriately within the framework of JEITA.
Component manufacturers, too, can more easily engage in environmental activities if they are led by JEITA. Every semiconductor
manufacturer in the world is aware of its environmental responsibilities. We do want to disseminate environmental information andcooperate with equipment and component manufacturers to protect
the environment.
3. PFC gas (perfluorocarbon gas): A greenhouse gas used in the semiconductor
manufacturing process as a CFC substitute(2) high operational productivity; and (3) voluntary contribution toenvironmental and energy conservation. Environment-friendly andenergy-saving functions tend to be low-priority functions, and we
aim to build these undervalued functions invisibly into our products.
Mr. Kaneko (TEL): To make environmental functions invisible
sounds great. To deactivate the equipment if the environmental andenergy-saving functions are removed is also a good idea.
Mr. Tada: Sales of semiconductor production equipment will increasein the NICs in the future and it is highly probable that customers inthese countries will demand that we remove the lowpriority environmental functions due to cost reduction. However, toreinforce the need to reduce environmental impact across theworld, it will be better if we provide these customers with equipment in which environmental functions are inseparably integrated
with the manufacturing process technologies and functions toimprove productivity.

4. JEITA: Japan Electronics and Information Technology Industries Association

Making the Environmental Performance ofEquipment Invisible
Mr. Tada: I think we should make the environmental performanceof semiconductor production equipment invisible. By that, I mean
to incorporate the environmental functions as an integral part of theequipment. For example, we could make the equipment inoperable
if the environmental functions are deactivated. We should meet thefollowing requirements for our products in this order of priority:(1) introduction of advanced manufacturing process technologies;

Pursuit of Profit Will Result in a Reduction
in Environmental Impact.
Mr. Aoyama: Now, I would like to ask one question: what are thebasic requirements for a good semiconductor manufacturing
factory? I think FPD factories in Japan represent the most usefulexample. These factories are excellent in terms of harmony with thelocal environment and also in terms of creating local employment
and returning profit to the local communities in the form of taxes.
Their products do contribute to energy conservation and the factories producing these products help improve the corporate image ofthe companies that own the factories.
Mr. Miki: Generally, good factories input the minimum required
amount of resources and output the maximum values and profits
with low emissions. This is consistent with the concept of GreenFab.
Mr. Iwaida: I agree with the idea that environmental measures willlead to profit making. Many of our users are small factories andsome of them are not environmentally aware. If, however, the mosteffective way to recommend energy-saving products is to show
how much money they can save by reducing their annual power
consumption. The use of energy-saving products will of course
contribute to reducing the environmental impact.

TOKYO ELECTRON Environmental and Social Report 2007

Mr. Aoyama: I referred to FPD factories in Japan as an example ofgood factories. But the general public does not have a specificimage of products manufactured at semiconductor manufacturing
factories. Although semiconductors are incorporated into products
sold on the market and contribute to energy conservation, people
do not have a specific product image for semiconductors, unlike
LCD televisions, for example. So I think it is important to more
widely publicize how useful semiconductors are to society at large.

Mr. Ibuka (TEL): Today we discussed energy conservation in semiconductor manufacturing. I think it is extremely important to publicize more widely the contribution to energy saving using semiconductors. In the semiconductor supply chain, we should remain awareof the importance of highlighting the environmental effectiveness ofsemiconductors to end users in formulating our business strategies.
We have had meaningful discussions today. I hope that we will
have similar opportunities in the future.

In response to the roundtable meeting
The Tokyo Electron Group held its first roundtable meeting for its environmental and social report in 2004, participated in by people responsible
for the environment and safety within the Group. Subsequently in 2005, we held our second roundtable meeting, inviting the Group’s employees
responsible for sales, development, and design. In 2006, we held our third roundtable meeting, and invited our customers. For our fourth meeting
held this year, we invited representatives from Sony Corporation, Elpida Memory, Inc., NEC Electronics Corporation, who are our customers,
Edwards Japan Limited and SMC Corporation, who are manufacturers of components for semiconductor production equipment, and Taisei
Corporation, a designer and constructor of clean rooms. The meeting provided EHS managers at these companies with a great opportunity to
exchange information on comprehensive energy-saving measures for clean rooms.
At the meeting, participants recognized once again the necessity of reducing environmental impact across the entire supply chain and proposals were made by some participants to hold this kind of meeting regularly for information exchange. The meeting was therefore very meaningful.
The meeting also gave us an opportunity to reconfirm how important it is to make reducing the environmental impact generated by the products of
our Group and customers into one of our business objectives. We should make concerted efforts with everyone involved to attain that objective.
We will continue to ask a variety of people for their opinions and examine ways in which we can make it easier for our Group to design environmentally conscious products.
Masaki Kaneko
Director of Environment, Health & Safety CenterTokyo Electron Limited

TOKYO ELECTRON Environmental and Social Report 2007

13
Roundtable Meeting with Stakeholders

Semiconductors Contribute to an Energy-Saving
Society.

Mr. Tada: If the general public becomes more aware of the contribution that semiconductors make to energy conservation, semiconductor manufacturing factories will surely be able to receive
emission rights through the Clean Development Mechanism (CDM)
and Joint Implementation (JI). Semiconductors do contribute to
reducing the environmental impact caused by products such ashome electrical appliances; at least 50% of that reduction is thanks
to the use of semiconductors. The semiconductor industry is therefore entitled to receive emission rights equivalent to the amount of
their contribution.

Green Fab—Requirements for a Good Semiconductor Factory

Mr. Hoshi (TEL): Even if they are not initially designed to promote
environmental conservation or energy saving, other improvements
sometimes contribute to reducing the environmental impact. For
example, downsizing efforts designed to reduce costs might eventually contribute to energy conservation. We are committed to technological development using our experience of achieving strict cost
reduction targets one after another.

Mr. Kobayashi: In June 2007, the Tokyo Metropolitan Government
announced a 10-year project to achieve a 25% reduction in Tokyo’s
CO2 emissions over the 2000 level by 2020. The government also
has an emissions trading plan. What influence do you think these
initiatives will have on the semiconductor industry?

HIGHLIGHT

Mr. Aoyama: I agree with Mr. Iwaida. It is indeed wrong to thinkthat environmental measures and profit are not compatible.
Environmental efforts will help companies make more profit. If you
can make a greater number of products with the minimum amountof materials, you will generate more profit. We must make everyone
understand this obvious fact.

M A N AG E M E N T R E P O RT

Corporate Governance
We are strengthening the corporate governance framework to ensure management thatprioritizes improvements in corporate value.

Fundamental Policy Concerning Corporate
Governance
MANAGEMENT REPORT

14

In order to maximize corporate value and increase shareholder
satisfaction, we think it important to enhance our corporate governance and are committed to complying with corporate ethics andcompliance program. We are also dedicated to imploving and reinforcing internal control and risk management systems, and tomaintaining transparency and objectivity in our business activities.

Strengthening the Framework of Corporate
GovernanceCorporate GovernanceTokyo Electron Group regards the strengthening of corporate
governance as vital to increasing its corporate value for all its
stakeholders including shareholders. To this end, we concentrate on three aspects of corporate governance: 1) ensuring thetransparency and soundness of business operations; 2) facilitating quick decision-making and the efficient execution of business
operations; and 3) building an effective structure for the timely
and suitable disclosure of information.
Specifically, the Board of Directors comprises 13 directors,
including two external directors. The Board has two committees: the Compensation Committee 1 and the Nomination
Committee2. The term of office for directors is set at one year toallow prompt and flexible responses to changes in the management environment. The Board of Directors held a total of 14
meetings in FY 2007. We have four statutory auditors, two ofwhom are from outside the company. We have adopted thisauditing system to improve corporate governance. In FY 2007,
the auditors held a total of five meetings. In the execution ofbusiness, we have introduced the executive officer system toclearly separate the roles of the Board of Directors and of thoseactually executing business operations. We plan and implementbusiness strategies promptly under this system.
1. Compensation Committee: Makes a draft remuneration plan for the Chairman &CEO and the President & COO and presents the draft to the Board of Directors
2. Nomination Committee: Selects candidates for directorships for submission to theannual shareholders’ meeting and a candidate to be elected as president by the
Board of Directors.

To implement measures to manage risks including businessand operational risks, we have established a department incharge of risk management, which creates and revises in-houserules on risk management and conducts risk-related educationand enlightenment activities.

Establishing Even More Effective Internal
Control Systems
Following the enforcement of the new Companies Act, Tokyo
Electron Group decided its basic policies to ensure appropriate
business operations at the meeting of its Board of Directors
held on May 12, 2006. In line with the policies, we have beenreexamining our business risks and establishing even more
effective internal control systems.
Internal control systems
1. Compliance system
2. Risk management system
3. System to ensure the appropriateness of financial reporting
4. System to store and manage information
5. System to ensure the efficiency of business execution
6. System to ensure appropriate business operations of thecorporate group
7. System to ensure the effectiveness of internal audits

Furthermore, in order to establish an internal control system
for financial reporting, which we will launch in the year ending
March 31, 2009 to comply with the Financial Instruments andExchange Law (so-called Japanese SOX), we are creating rules
and manuals, checking our business processes, and preparing
the required documentation.
Corporate Governance Framework
Annual Shareholders’ Meeting

Nomination Committee
Board ofDirectors Compensation Committee
Chief Business Ethics Director

Internal Controls and Risk Management

Chairman

To behave towards all our stakeholders in a responsible manner, we are committed to strengthening an even more effective
internal control system. We have our Global Audit Center forinternal control. This Center conducts internal audits on business operations, compliance, and systems targeting Tokyo
Electron Group’s bases both in Japan and overseas, and evaluates the effectiveness of the Group’s internal control systems.
In addition, the Center makes regular reports to management on the audit results, and exchanges information with theauditors and submits reports to them to strengthen the internal
audit function of the Group.

President

TOKYO ELECTRON Environmental and Social Report 2007

Request for
improvements

Statutory
Auditors

Confirm the progress ofimprovements and give
instructions

Audit and
improvement reports
Request for
Reportimprovements
ReportAudit
Executive Officers

Internal Audit Dept.
(Global Audit Center)

ReportReportRequest for
improvements

Risk Management
Function
Monitoring

Audit

Monitoring

Request for
improvements

Checks and Balances

Business Dept.

Independent
Auditors

Administrative Dept.

Audit
Audit

M A N AG E M E N T R E P O RT

Compliance
The Tokyo Electron Group conducts fair and trustworthy business activities in strict
compliance with corporate ethics, laws, and regulations.

Approach to Corporate Ethics and Legal
Compliance

Establishing Ethical Standards
We believe that common standards must be applied throughout
our divisions in order to create the globally excellent company
that we envision. In 1998 we established a Code of Ethics,
which concretely describes our basic views. At the same time,

I. Principles
1. Compliance with Applicable Laws
2. Acting in Accordance with Social Conscience
3. Maintaining Harmonious Relationships with Local
Communities
II. Honest and Fair Business Activities
II-1 Technology, safety, and the Environment
4. Ensuring Safety and Pursuing Quality
5. Promoting Environmental Preservation Activities
6. Ethics in ManufacturingII-2 Fair Trade
7. Implementing Fair and Open Competition
8. Fair Business with Suppliers
9. Handling of Confidential Information
10. Strict Export/Import Controls
11. Reasonable Exchanges of Gifts andEntertainment within the Bounds for Common
Sense
II-3 Relationship between the Company andIndividuals
12. Prohibition of Conduct Causing Conflicts ofInterests
13. Prohibition of the Improper Use of Company
Assets
14. Prohibition of Conduct of Harassment
III. Being a Good Corporate Citizen
15. Prohibition of Insider Trading
16. Prohibition of Political Activities and Contributions
17. Prohibition of Involvement in Antisocial Forces
18. Respect for Individuals

We established our Compliance Regulations in 2004. The
Regulations, which provide for basic matters concerning compliance, are designed to help those engaged in the business
operations of the Tokyo Electron Group understand fully therelevant laws, regulations, and international rules as well as
in-house rules and act accordingly at all times.
In 2006, we provided all employees in Japan with webbased training on export compliance. Due to the tense international situations, controls on exports from Japan have beenstrengthened and it is becoming very important for all the
departments, including both the sales and service departments
who directly contact overseas customers, and those indirectly
involved in export to understand the basic export rules.
We provide compliance-related information on the intranet
and give employees web-based education to ensure that they all
understand our compliance policies and are more aware of theirimportance, thereby further strengthening our compliancesystem.

Protection of Personal Information
Leakage of personal information has become a social concern inrecent years and companies are required to manage the personal
information they hold in an appropriate manner.
In Japan following the enactment of the Act on theProtection of Personal Information in April 2005, the Tokyo
Electron Group formulated its basic policies and rules on theprotection of personal information. We educate employees on
the implementation of the policies and rules, endeavoring to
make them more aware of these policies and rules. Furthermore
in Japan, we investigated personal information stored on
approximately 13,000 PCs leased to employees and created aledger of personal information to be managed by each Group
company and department. Also, we installed servers to be used
exclusively for storing personal information and prohibited
employees from storing important personal information on theirPCs. Through these measures, we ensure that personal information is managed in an appropriate way.

Implementation of the Code of Ethics** The “Implementation” section provides the specific matters and procedures.

TOKYO ELECTRON Environmental and Social Report 2007

15
Compliance

The Code of Ethics of Tokyo Electron Group
Introduction

Measures to Strengthen the Compliance
SystemMANAGEMENT REPORT

Trust is and will always be the lifeline of the Tokyo ElectronGroup. The fundamental requirements for maintaining trust are
rigorous conformity to our ethical standards and compliancewith the law, by our employees as individuals, and by each of
our organizations. We give first priority to compliance with highethical standards and laws in conducting our business operations.

we established the Ethics Committee as an organization for
actual operations.
In June 2007, in response to the results of a survey conducted on our Code of Ethics and compliance measures in theGroup in 2005, we revised our Code of Ethics, including adding
items and modifying expressions, to make them easier tounderstand and more consistent with the current business environment and sense of ethics.

E H S R E P O RT

EHS Management
The Tokyo Electron Group is globally conducting environmental, health and safety (EHS) activities.

Basic Idea Behind EHS Activities

EHS REPORT16The Tokyo Electron Group conducts EHS activities, regarding
people’s health and safety and the global environment as its
management priorities. In operating our business, we place firstpriority on environmental conservation activities and on healthand safety, aiming to become a group of companies trusted byeveryone involved in our business operations. As a responsible
member of society, we make efforts to contribute to a more
affluent society. In the Tokyo Electron Group Credo and

The Tokyo Electron Group Credo and Principles
on Environmental Preservation

Principles on Environmental Preservation, which we revised in
May 2006, we make it clear that we will develop products in linewith a clearly defined environmental roadmap and verify theenvironment-friendliness of the products at their design, manufacturing, and use stages. The Credo and Principles also clearlystate that the Tokyo Electron Group will disclose the results ofverification and other relevant information to stakeholders via
environmental and social reports and other means.

The Tokyo Electron Group
Safety and Health Credo and Principles

EHS Management

The Tokyo Electron Group Credo on Environmental Preservation

The Tokyo Electron Group Safety and Health Credo

The Tokyo Electron Group believes that preserving the global environment and constantly improving it
is one of the most important objectives for mankind as well as its business. Based on this credo, we aredetermined to expand our business by maintaining harmony with the global environment, and thus win
the trust of our many customers, shareholders, employees, and society in general.

Safety and health training are required for all employees and board members of the Tokyo ElectronGroup. Our profit and delivery date requirements must not be met at the sacrifice of human life and thesafety of our facilities and equipment.

The Tokyo Electron Group Principles on Environmental Preservation
1. Continuous Improvement
The Tokyo Electron Group is conscious that products manufactured by the Group affect the environment, and based on this awareness, we, with our customers and suppliers, shall continually strive tominimize the impact of processes and operations on the environment. We will develop products
consistent with a clearly defined environmental roadmap for the Group products, verifying theappropriateness of efforts during design, manufacture, and use. To further confirm the appropriateness of such efforts, we will undertake activities that fully take into account regulatory and industry
requirements and the needs of customers and other stakeholders.

The Tokyo Electron Group Safety and Health Principles
1. Continuous Improvement
The Tokyo Electron Group is conscious that the factors that affect the safety and health of customers
and its employees exist at the stage of manufacturing, transportation, installation, use, maintenance,and service of its products. Based on this awareness, we shall continually strive to improve thesafety and health of our products and eliminate factors that affect human health.
2. Knowledge
The Tokyo Electron Group continually strives to enhance its understanding of safety and health andimprove these conditions for all people working at its sites. To that end, the Group aims to gain aqualitative and quantitative grasp of safety and health factors on its activities and operations.

2. Knowledge
The Tokyo Electron Group continually strives to enhance its understanding of the impact that theGroup has on the environment and the responsibility that this entails. In addition, the Group aims togain a quantitative grasp of environmental factors, and the impacts resulting from its activities andoperations.

3. Performance Criteria
As well as strictly observing mandatory safety and health laws, treaties, and agreements, the Tokyo
Electron Group strives to enhance its own safety and health management system and improveglobal safety and health programs by the proactive establishment of aggressive safety and healthperformance criteria.

3. Performance Criteria
In addition to strict adherence to environmental laws, treaties, and agreements, the Tokyo ElectronGroup will also promote conservation of the global environment by formulating activity plans thattake into account industry standards and various other environmental requirements.

4. Disclosure
The Tokyo Electron Group shares information about its safety and health credo, policies, and theprogress of its safety and health activities with all board members and employees, and will publish
its progress to the general public as the need arises.

4. Disclosure
In addition to ensuring that all employees clearly understand our environmental concepts, policies,
the state of company contributions toward environmental protection, and the state of product-related
environmental efforts, as well as improving levels of awareness, we will disclose relevant information to those outside the company via environmental reports and other means.

5. Partnership
The Tokyo Electron Group participates in safety and health activities practiced by its customers, suppliers, and communities.
November 27, 1998

5. Partnership
The Tokyo Electron Group actively participates in environmental protection activities practiced by its
customers, suppliers, and communities.
May 26, 2006

T O P I C S
Global EHS ConferenceTOKYO ELECTRON Environmental and Social Report 2007▲
The Global EHS Conference▲

The Tokyo Electron Group held its Global EHS Conference in June 2007,
participated by management of the Group and the members of the EHS
Committees.
At the beginning of the Conference, the Chairman and President of
TEL explained the Group’s future direction and plans for establishing asafety culture within the Group and for environmental protection.
Subsequently, the representatives of each district and business unit
(BU) gave presentations and actively discussed EHS-related matters.

EHS Promotion System

Tokyo Electron Group’s EHS Promotion System
Global EHS Committee* Committee Chairman: President of TEL

Customer-Site EHS

Product EHS(EHS activities
in each region)(EHS activities
at customers’ facilities)(EHS activities
for the Group’s products)

ISO 14001-Certified Plants and OfficePlant/officenameCertification
date

Sagami Plant

December 10,
1110-1997-AE-KOB-RvA
1997

Tokyo Electron Tohoku
LimitedTohoku Plant

February 19,
1998

1118-1998-AE-KOB-RvA

Tokyo Electron Kyushu
LimitedKumamoto/Koshi/
Ozu/Saga Plants

March 26,
1998

1120-1998-AE-KOB-RvA

Yamanashi Plant(Fujii/Hosaka
district)

May 15,
19981124-1998-AE-KOB-RvA

Tokyo Electron AT Limited

Miyagi Plant

March 1,
2005

01245-2005-AE-KOB-RvA

Yokohama Office

July 14,2004

EC04J0144

Company nameTokyo Electron PS Limited
Tokyo Electron AT Limited

Tokyo Electron Device
LimitedCertification number

EHS Activities Monitoring System
In order to strengthen our EHS management system, we are
increasing the level of monitoring that verifies the system function and results. Monitoring is done from multiple viewpoints
within plants and offices, within the Group, or by third parties.
We are especially focusing on the Tokyo Electron Group Internal
Audit, a program of mutual EHS evaluations by representativesof many plants and offices, which was instituted in FY 2003.
In FY 2007, in response to an increasing need to manage
chemical substances contained in products across the entire
supply chain and in compliance with the Japanese Industrial
Safety and Health
Act revised in
2006, we added
some new audit
items to ensurethat EHS was
examined appropriately in cooperation▲ On-site Audit
with our suppliers* Primary employer: According to the revised Industrial Safety and Health Act, a primary employer means a primary company that arranges for the employees of its
contractors to carry out a part of the company’s work at one single place in cooperation with the company’s own employees.

EHS Risk Management System
At manufacturing subsidiaries of TEL, environmental and safety
risks are estimated based on ISO 14001 and OHSAS 18001
standards for labor safety and health management systems.
These subsidiaries are implementing measures to eliminate
higher risks first. Also, they are endeavoring to reduce somerisks although they are not yet legally required to do so. We
believe it most important to implement anti-global warming
measures in line with the Kyoto Protocol targets in future EHS
risk management.

Abiding by the Law
The Tokyo Electron Group operates in strict obedience to thelaw. We closely track new environmental laws and emissions
regulations and for some substances have enacted independent
standards that are stricter than legally required. In FY 2007, wewere not subject to legal actions of any kind with regard to environmental accidents, violations, fines, or complaints.

EHS Training
The Tokyo Electron Group offers EHS training under the
principle of “the necessary training for the necessary people.”
Training courses are grouped by rank and are open both toGroup employees and to employees of cooperating companies
who work at the Group’s facilities. An EHS training program isalso a required part of the curriculum for new hires. In addition,in order to further facilitate EHS activities, we provide training
on team resource management focusing on communication
within a team as well as safety training for middle-level
managers.

EHS Training
Environment

Health and Safety● Special training(for internal environmental
auditors, special training on
key environmental aspects ofwork)● ISO 14001-based
environmental training(for manufacturing plants)● Training on environmental
activities (for office facilities)● Equipment-specific training● Customer-specific site entry
training● Safety training for employees
traveling overseas● Advanced safety training● Basic safety training

TOKYO ELECTRON Environmental and Social Report 2007

17
EHS Management

Factory and Office EHS

and partner companies. (The revised law demands the enhancement of safety instructions and messages to be given by a primary employer* to the related contractors.) We will continue tomonitor our EHS management system with this extended scope,
which checks our EHS activities more strictly.

EHS REPORTOur EHS system takes the form of thee pillars: Product EHS,
which advances EHS priorities in our products in general;
Customer-Site EHS, which advances those priorities during andafter start-up of our products; and Factory and Office EHS,
which concerns our facilities.
The Tokyo Electron Group companies, in particular TEL’s
manufacturing subsidiaries, started developing and implementing environmental management systems based on ISO 14001 in
1997, and obtained ISO 14001 certification.

E H S R E P O RT

EHS Activity Goals and Results
The Tokyo Electron Group has set goals for EHS activities and is promoting those activities
throughout the Group.

Goals and Results for EHS Activities in FY 2007
Action item

EHS management

EHS internal Audit

Achievement Plans and goals for FY 2008 onward Page in reportlevel

Goals for FY 2007

Results

Perform EHS internal audit atplants and offices across the
supply chain

Conducted an audit at one site adding a
supply chain-related audit item and madecorrections based on the findings.

Continue to conduct audits

P. 17

Encouraged application to existing
equipment

EHS REPORT18
EHS Activity Goals and Results

Achieve the FY 2008 and FY 2011goals

P. 20-21

Determined the schedule for totally
discontinuing the use of six substances
designated under the RoHS Directive

Achieve the TEL Roadmap indicators

P. 22

Saving energy

Reduce energy consumption(1% decrease in CO2 emissions per unit of sales, asbased on the Act Concerning
the Rational Use of Energy)

Achieved the goal by decreasing CO2
emissions per unit of sales by approx.
17% from the FY 2006 level
Identified the transportation amount as ashipperContinue to reduce energy consumption, more accurately identify theenergy used for transportation, andexamine and promote modal shift

P. 26

Waste reduction

Continue zero emission
efforts at manufacturing
plantsAchieved zero emissions at all
manufacturing plants except one
The recycling rate of the entire Group was
as high as that of the previous fiscal year.

Continue zero emission efforts andexamine reduction in the total amountof wasteP. 28—

Continue to obtain data

P. 29

✕

Continue to pursue the goal concerning injury accidents for FY 2007 andreduce the number of ergonomicallycaused accidents by 25% fromFY 2007

P. 30

Energy-saving equipment

Achieve the TEL Roadmap
indicators

Measures to reduce theuse of regulated chemical
substances in equipment

Clarify the targeted chemical
substances and the policies

Product initiatives
for the environment

Environmental
activities at eachplant or office

Reduction in the number of
injury accidents

300 mm products: Achieved the FY 2008
targets for two products out of six earlier
than planned—

Identified the use and emissions (into theair, water, etc.) of chemical substances
regulated under the PRTR system

Reduce the number of accidents requiring four or moredays off work to zero andreduce other injury accidents
by 30% from the level of theprevious fiscal year

The number and rate of accidents requiring
four or more days off decreased from the
FY 2006 levels but the total number of
injury accidents increased by approx. 20%.

Proper management ofchemical substances

Health and safety** TEL Roadmap: Environmental policies and plans for the Group’s products

Achieved target✕ Achieved less than 80% of target

Achieved 80% of target— Item for which no goal was set“We cannot achieve reform simply by making daily improvements—We will implement energy saving measures setting even higher, innovative targets.”

Haruo Iwatsu
Executive Vice President and General Manager,
Development & Manufacturing

We are now developing our range of next-generation semiconductor
production equipment and in FY 2008, we will have a nearly full lineupof next-generation equipment. I have been encouraging employees todevelop innovative equipment by setting high targets apart from ourdaily improvement targets under the slogan of “reform manufacturingwith visionary next-generation equipment.”
We have been committed to reducing the energy consumed byour equipment, and for our next-generation equipment, we must dramatically increase their environmental performance. We are thus
endeavoring to make semiconductor production equipment that saves
even more energy, but I believe it is also important to improve theyield of semiconductors manufactured using the equipment. Although
it seems that there is no relationship between yield and environmental
performance, an increase in the yield will lead to the elimination ofwasteful operations in the semiconductor manufacturing process,resulting in improvements in the overall efficiency of the process.

TOKYO ELECTRON Environmental and Social Report 2007

Our customers are now attributing more importance to environmentconscious products that save energy and resources than before, and it is
now regarded as a matter of course for our departments to look at environmental efficiency as early as at the product development stage. We
have established a corporate culture in which employees naturally takeenvironmental matters into considerations without being told to set environmental targets.
Also at our manufacturing sites, we make efforts to protect the environment. For example, we are now planning to build a new plant in
Taiwa-cho, Miyagi Prefecture and are examining a design for a plant that
harmonizes with nature, because we want to keep the local natural environment intact as far as possible.
In FY 2007, the Tokyo Electron Group was able to achieve substantial growth and achieved the greatest ever business results far exceeding
the past peak records. Under these circumstances, however, employees
tend to work overtime to meet deadlines. However, I think that employees cannot work creatively if they routinely have to work longer hours. I
therefore encourage employees to try to make it a habit to finish theirwork as early as possible so that they do not have to work overtime.

E H S R E P O RT

Details of Environmental Impact/Environmental Accounting
We fully understand the details of the environmental impact caused by our business
operations and obtain accurate environmental accounting data for use in our business
management.

Details of Total Environmental Impact

Input-Output

Input
FY 2007

OutputComparison
with FY 2006

Electricity 263.70MkWh

Comparison
FY 2007 with FY 2006(+1.9%)

Total product shipment 27,256t (+21.2%)

1,213km3 (+28.0%)

Gas
Fuel

2,618kl(–7.0%)

Water

1,161km3(+30%)

CO2

Tokyo Electron
Group(Domestic andoverseas plants andoffices)

Chemical products 19.8t (+140.2%)(Regulated under the PRTR Law
as Type I chemical products)

Paper (copy paper)

106,040t-CO2 (+4.6%)
11.9t

NOx

(0.0%)

Wastewater

1,149km3 (+6.0%)

Waste

15,333t (+16.3%)

EHS REPORTThe right figures show the material flow at the Tokyo
Electron Group’s manufacturing plants and offices.
The Group causes environmental impact mainly inthe process of evaluating its products. This is because
we evaluate our products using electricity and a range ofgases and chemicals to simulate the actual semiconductor manufacturing process.

Recycled amount 14,919t (+17.3%)377t(+9.9%)
Amount of waste simply incinerated anddisposed of in landfills 414t (–12.8%)

Environmental Accounting

Environmental Protection Costs in FY 2007
(Thousands of yen)

Item

Main initiatives

1. Business area cost

Capital investment

Expense493,584

758,590

Prevention of air pollution, water pollution, soil pollution, etc.

181,372

280,289

1.2 Global environmental costs

Prevention of global warming, protection of the ozone layer, etc.

153,90252,703

1.3 Resource circulation costs

Efficient use of resources, reduction of waste, etc.

158,310425,598

Itemization 1.1 Pollution prevention costs

2. Upstream/downstream costs

Green purchasing, green procurement, etc.

5,538

106,433

3. Management activity costs

Environmental education, monitoring and measurement of environmental impact, etc.

28,214

212,988

4. Research and development costs

Product R&D, etc.

01,839,174

5. Social activity costs

Tree planting and vegetation, supporting of local environmental activities, information disclosure, etc.

052,012

6. Environmental damage costs

Repairing of damage to the natural environment, etc.

00

7. Other costs

Other

0

0

527,3362,969,197

Total

Economic Benefits of Environmental Protection Activities in FY 2007
(Thousands of yen)Classification of environmental costs

Cost reduction

Details

Amount●Benefits related to electricity and other energy

Reduced electricity usage (e.g. benefits from adopting an inverter system on refrigeration equipment)

7,070

●

Water-related benefits

Reduced water usage (e.g. circulating of cooling water)-3,801●

Paper-related benefits

Reduced paper usage (e.g. encouragement of duplex copying and use of electronic media)-5,438●Resource-related benefits

Reduced use of heavy oil and gas-2,736●

Other benefits

Reduced use of liquid nitrogen and copying toners

7,095

●

Waste-related benefits

Reduced waste volume

19,230●Benefits related to release into waters and soil

Reduced release into the sewage system

Total

83
21,503

TOKYO ELECTRON Environmental and Social Report 2007

19
Details of Environmental Impact/Environmental Accounting

Scope: Major plants and offices in Japan (in Sapporo, Tohoku, Miyagi, Akasaka, Fuchu, Yokohama, Sagami, Hosaka, Fujii, Amagasaki,
Osaka, Saga, Kumamoto, Koshi, and Ozu)
Period covered: April 1, 2006 to March 31, 2007
We conduct environmental accounting according to Environmental Accounting Guidelines 2002 and Environmental Accounting
Guidebook II issued by the Japanese Ministry of the Environment.

E H S R E P O RT

Product-Related Initiatives for the Environment
Over its life cycle, semiconductor production equipment has the largest impact on theenvironment when it is in use. Accordingly, we are implementing measures to reduce the energy consumed by the equipment while in use in addition to measures to reduce the use of regulated chemical
substances in the equipment.

Reducing the Total Environmental Impact of Products
Our Approach to Reducing the Environmental
Impact of Our Products
EHS REPORT

20

We believe it is extremely important to promote environmentconscious designs, as we have clearly stated in the revised
Tokyo Electron Group Credo and Principles on Environmental
Preservation. We give priority to the provision of energy-saving
equipment and to reducing or finding substitutes for the regulated
chemical substances contained in our products.

Organization for Reducing Environmental
ImpactProduct-Related Initiatives for the Environment

We have three units established under the Product EHS
Technical Committee. The Product Safety Working Group is
responsible for conducting activities to improve product safety.
The Chemical Substance Measures Team is responsible for
reducing and finding substitutes for regulated chemical substances contained in equipment parts and components. The
Energy-Saving Task Force, which was founded in October 2005,

is responsible for implementing measures to improve theenergy efficiency of our products.
Recently, there are increasing expectations from various
quarters for us to improve and continue our environmental,
health, and safety (EHS) measures. Accordingly, it is becoming
more and more important for us to design and develop productsthat incorporate EHS. In accordance with the globalization of
our business, we also need to pay more attention to the legal
regulations of each of the countries in which we do business.
We will continue to promote “Design for EHS.”
Organizational Structure to Promote EHS Measures for Products
Product EHS
Technical Committee

Product Safety WG

Chemical Substance
Measures Team

Energy-Saving
Task ForceT O P I C S
Modification to Existing Equipment to Reduce Energy Consumption
As was pointed out at the roundtable meeting with stakeholders held
for our Environmental and Social Report 2006, the Tokyo ElectronGroup thinks it important to reduce the energy consumed byequipment purchased by our customers in the past and still in use.
Although we are now developing, manufacturing, and delivering new
products with more consideration given to conserving energy andresources, some of the products that we sold and delivered to customers in the past were not designed with the same consideration for
the environment that is acceptable today.
To rectify this, the Tokyo Electron Group markets products
which can be used to make improvements to existing equipment. For
example, we provide various products designed to improve the environmental functions of the thermal processing system ALPHA(α)-8SE, including the following two products:

pumps. Use of these products may result in an overall reduction inenergy use by around 70%.

Effect of Energy-Saving
Modifications
Energy-saving pumps
Vacuum pipe heaters

Energy use
reduced byaround 70%

1. Improving the heat insulating properties of the pipe heater

2. Energy-saving pumps
Power consumption is reduced by approximately 70% by replacing conventional pumps with highly-efficient energy-saving

TOKYO ELECTRON Environmental and Social Report 2007

Beforeimprovement

After
improvement
ALPHA (α)-8SE▲

It is necessary to keep the inside temperature of some pipes usedin the thermal processing system as high as 100 to 200 degrees
centigrade to prevent substances adhering to the inside surface.
The electricity consumed by the pipe heaters used to control theinside temperature is reduced by 40 to 50% by installing highperformance heat insulators around the heaters.

In addition, we provide products that help reduce the amount ofheat discharged into the clean room by the water cooling mechanism,products that reduce the amount of nitrogen used, and products that
improve the overall process quality and productivity.

▲

CLEAN TRACK™ LITHIUS™

Preventing Global Warming
Energy-Saving Measures for Products

Measures to Save Energy(5) Managing the clean room in an energy-saving manner (planned operation and proper management)(4) Reducing energy used by the clean room

Coolingequipment(2) Reducing energy used by peripheral devices

Vacuumpump(1) Reducing energy used by the product itself(3) Managing the product in an energy-saving manner

Energy-Saving Examples
Referring to SEMI S23, we calculated the total energy consumption, including the use of electricity, nitrogen, waste air, andpure water. These were then converted to give the overall power
consumption, allowing us to calculate the energy consumed in
producing a wafer per unit area. We set reduction targets for eachproduct based on this energy consumption. The following
describes two energy-saving efforts we made to achieve our targets.
Initiative for the Coater/Developer CLEAN TRACK™ LITHIUS™
For the coater/developer, we set a numerical target for reducing
energy use per unit area of wafer compared to our Group’s
baseline year (FY 2000). In FY 2007, we implemented the following: we reduced the standby power consumption using an

1

1

Targets

0.8

0.8

Results

0.8

0.7
0.61

0.56

0
’00 (Baseline year)

’03

’05

’07

’08

auto standby function, reduced the nitrogen gas purge volume;
made appropriate adjustments to the exhaust flow, and optimized the use of cooling water. As a result, we achieved ournumerical target (set at 0.8) with a value of 0.56. In FY 2008, we
will continue our efforts to reduce the overall energy consumption, including further optimization in the use of cooling water.
Based on this initiative, we will also reduce the energy consumed by our new product CLEAN TRACK™ LITHIUS Pro™.
Initiative for the Test System Precio™
The test system (wafer prober) is used to carry out electricaltests on chips while they are on the wafer by contacting thesemiconductors electrodes with probe needles. The system isequipped with heating and cooling functions to enable durability
tests in an environment similar to the actual environment inwhich the semiconductors will be used. Dry air is used for heating and cooling and according to our calculation, the energy
used to produce the dry air accounts for a large percentage ofthe overall energy used by the wafer prober. We focused on theenergy used to produce the dry air and reduced its volume by
up to 60% by the following method. We installed a dew point
meter to monitor and adjust the volume of dry air used to regulate the temperature according to predefined specifications.

Reducing the Amount of Dry Air Used by the Wafer Prober (Image)Dry air

Speed
controller

Volume sensor

Controlling the volume
Monitoring the volume
Dew point
Automatic
meter
volume controller
Constant monitoring of thedew point with a dew point meterTOKYO ELECTRON Environmental and Social Report 2007

21
Product-Related Initiatives for the Environment* SEMI S23: Guide for Conservation of Energy, Utilities, and Materials Used by
Semiconductor Manufacturing Equipment issued by SEMI

Energy Consumed Per Unit Area of Wafer (Comparison with FY 2000)

EHS REPORTTo reduce the energy that our products consume when they areused by our customers, we are examining measures to achieve
the following five targets and will develop the necessary
technologies: (1) reducing energy used by the product itself;(2) reducing energy used by peripheral devices; (3) managing
the product in an energy-saving manner; (4) reducing energy
used by the clean room; and (5) managing the clean room in anenergy-saving manner (planned operation and proper management).
For energy-saving management of the clean room, we needto cooperate with customers and facility manufacturers. This
close cooperation will allow us to make further efforts to reduce
the energy consumed by our products while they are in use. In
addition, we will identify how much energy our products andtheir supplementary devices (e.g. vacuum pumps and coolingequipment) consume in reference to the SEMI S23 standard*,
including the consumption of electricity as well as the consumption of water, dry air, cooling water, and exhaust heat, which will
be converted into electricity using appropriate energy coefficients.

Product-Related Initiatives for the Environment

Management of Chemical Substances
Our Commitment to Reducing the Use ofRegulated Chemical Substances in Products
EHS REPORT

22
Product-Related Initiatives for the Environment

Against the backdrop of growing concerns over the impact that
harmful substances contained in parts and materials have on theenvironment and ecosystem, an increasing number of countries
are regulating the use of these substances in automobiles andelectrical products in recent years. The Tokyo Electron Group ismaking appropriate responses to these movements. For example,
with regard to the RoHS Directive1 that took effect in July 2006, wehave made a written statement demonstrating that the semiconductor production equipment manufactured by our Group falls
outside the scope of the Directive because they are large-scalestationary industrial tools, to which the Directive does not apply.
We have already met all the requirements for China’s RoHS2,
which came into force in March 2007.
In order to meet the regulatory requirements of relevant countries even before they are actually implemented, we established a
Chemical Substance Measures Team, which comprises representatives from our manufacturing department. The team sharesinformation and investigates the use of regulated chemical substances in our products and advises us when to replace products
containing these substances with alternatives in cooperation with
our suppliers. In FY 2007, we fixed the schedule to discontinue theuse of six substances in our products that are regulated by the
RoHS Directive. We are scheduled to start shipping products that
do not contain any of these six substances in October 2008.
1. RoHS: Restriction of the use of certain Hazardous Substances in Electrical andElectronic Equipment
2. China’s RoHS: Officially called “Management Methods for the Prevention andControl of Pollution from Electronics Information Products”

Chemical Substances to be ReducedFirst Priority
Cadmium

Pigments, stabilizers, and resins

Hexavalent chromium

Chrome plating

1. Product Labeling
Products containing chemical substances regulated under China’s RoHS
must carry a label showing the period
during which the product can be used in
an environmentally safe manner. The
Tokyo Electron Group usually sets thisperiod at 25 years.
2. Disclosure of Information on the Use of Chemical
Substances
Information on the use of products containing regulated chemical substances should be disclosed in the product’s instruction
manual and similar documents in the Chinese language. The
Tokyo Electron Group complies with this rule.

System to Reduce the Use of Regulated
Chemical Substances
The Tokyo Electron Group’s Chemical Substance Measures Teamis responsible for reducing the use of regulated chemical substances. The team comprises representatives from TEL’s headquarters and its manufacturing subsidiaries. We share relevant
information through this team and are asking our suppliers tocooperate with us in replacing parts and materials that containregulated chemical substances with alternatives that do notcontain them.
We have established a chemical substances management system based on the principle of not using, purchasing, or sellingparts containing regulated chemical substances. This system isused to register and refer to information on the use of chemical
substances in various parts. This system allows us to check
whether parts to be used in our products contain regulated chemical substances or not and prevents the manufacture or shipmentof products containing these substances. We have adopted the
JGPSSI format for the system, which is a standardized industry
format under the Japan Green Procurement Survey
Standardization Initiative (JGPSSI).

Lead

Solders, paints, electrical wire coating, and free-cutting metal

Mercury

Batteries and fluorescent lamps

PBBs

Resin parts

Future Regulations on Chemical Substances

PBDEs

Resin parts

In Europe, the REACH1 regulation, which mandates safety evaluations of almost all chemical substances sold in the market andregistration of the relevant information, will be enforced and theuse of PFOS2 will also be regulated. Under these circumstances,companies will be increasingly required to fulfill their responsibilities as a manufacturer and follow the precautionary principle. To
comply with these regulations, all the departments of the Tokyo
Electron Group, from those engaged in product development anddesign, manufacturing, materials procurement, quality assurance,and environment and safety will make concerted efforts.

Second Priority
Substances designated as Level A substances in JIG*
(We have already implemented measures for many of these substances.)* Joint Industry Guide for Material Composition Declaration for Electronic Products (JIG)
was prepared by Japanese, American, and European private trade associations andthis Guide lists the chemical substances for which measures should be implemented.
The Guide classifies the substances into Level A and Level B: 16 substances are listed
as Level A substances, including cadmium, hexavalent chromium, lead, mercury,
PBBs, and PBDEs, and more than 400 substances are listed as Level B substances.

Response to China’s RoHS
China’s RoHS, which was enforced in China on February 28, 2007,
is intended to regulate the use of chemical substances in electronic information products sold in the Chinese market. The Tokyo
Electron Group has already made the necessary responses to thisregulation, which requires compliance with the following two rules.
TOKYO ELECTRON Environmental and Social Report 2007

1. REACH: Registration, Evaluation, Authorization and Restriction of Chemicals
2. Perfluorooctanesulfonic acid (PFOS) is used as a water repellent and waterproof
coating and in producing flame-resistant greases and oils.

E H S R E P O RT

Environmental Initiatives in Transportation
The Tokyo Electron Group regards implementing environmental measures in transportation as one ofits priorities. We are committed to reducing environmental impact and promoting the effective use ofenergy and resources in our transportation activities.

Our Approach to Environment-Friendly
Transportation

Packaging Methods for Products
Environmental Impact of Transportation
The Revised Energy Saving Act designates shippers who transport 30 million ton-kilos or more a year as specified shippers
and they are requested to reduce CO2 emissions from the transportation of their cargos.
Freight Transportation Amount(10,000 ton-km)

5,242
4,028

3,837

’05

’06

2,934

The Tokyo Electron Group manufactures and delivers precision
machines, which are generally far larger than ordinary products
and require special packaging methods and skills. What is more,
all of our products are different sizes. Taking the environment aswell as the size and weight of each product into account, we try
to transport our products safely and economically. For example,
we use reinforced cardboard as packaging material to shorten
the time required when opening a package. In delivering large
machines, we use
steel to reduce thepackaging volume
while maintaining
the strength of the
packaging.

0
’04

’07

(FY)

(Calculated for major Group products transported in Japan and based on a given load per vehicle)▲ Packaging using steel

T O P I C SRealizing that CO2 emissions from automobiles account for a large
percent of the overall CO2 emissions during transportation, industries are making a modal shift from transporting freight by truck to
the use of rail and marine transportation.
The Tokyo Electron Group manufactures precision machines,
which require special transportation methods. Accordingly, we used
to deliver our products on individual trucks. However, we studied theuse of rail and marine transportation in cooperation with our shipping agents and transportation companies and verified that rail and▲

Modal ShiftFreight from the Group
being driven onto a ferrymarine transportation is as efficient astransportation by truck in terms of timeand costs, quality and safety. As aresult, we started trial transportation of
our products by ship in May 2007. We
now intend to look at expanding
delivery by ship as part of our proactive efforts to reduce CO 2
emissions in the transportation of our products.

TOKYO ELECTRON Environmental and Social Report 2007

23
Environmental Initiatives in Transportation* Modal shift: A shift from conventional freight transportation by truck to marine andrail transportation for mass transport

EHS REPORTIn April 2006, Japan’s Act Concerning the Rational Use ofEnergy (Energy Saving Act) was revised and regulations ontransportation were strengthened with the aim of reducing global
warming. Accordingly, there are now increasing demands toreduce the environmental impact caused during transportation.
In response, the Tokyo Electron Group has been actively
reducing the environmental
impact caused by the transportation of its products. For
example, we introduced lowemission trucks to transport
our products and started touse returnable containers fortheir delivery. Also, we give
first priority to driving safety
in delivering products to ▲ Reusable covers used for delivery tosuppliers
customers.

In FY 2007, the Tokyo Electron Group’s freight transportation amount within Japan amounted to 52.42 million ton-kilos(weight of major products transported multiplied by their transportation distance) and the freight transportation amount for
TEL alone exceeded 30 million ton-kilos. As a result, we were
designated as a specified shipper under the Energy Saving Act.
Our transportation amount increased because of an increase in
the number of shipments and an increase in the weight per
product.
At present, we calculate our transportation amount in freight
ton-kilos based on a given load per vehicle. In the future, we willmeasure the transportation amount and distance and CO 2
emissions from the transportation of our products in a moreaccurate manner, while examining measures to reduce our CO2
emissions, including a modal shift* to rail and marine transportation. (See the TOPICS below.)E H S R E P O RT

Environmental Initiatives by Our Suppliers
The Tokyo Electron Group collaborates with its suppliers to reduce the environmental impact of its
products. The following describes the initiatives taken by two of our suppliers to reduce environmental impact.

Environmental Efforts at Our Suppliers—HORIBA, Ltd. and HORIBA STEC, Co., Ltd.
HORIBA, Ltd. and HORIBA STEC, Co., Ltd.

Internal Structure of an MFC
HORIBA MFC(Z500)▲

Environmental Initiatives by Our Suppliers* MFC: A variety of gases and liquids are used in the manufacture of semiconductors.
MFCs are used to accurately control the flow volume of these substances. MFCs
perform important functions in semiconductor production equipment, and the quality
and productivity of the entire semiconductor manufacturing process largely depends
on the performance and quality of the MFCs.

Drive power supply
Flow output signal

Flow rate setting signal▲

EHS REPORT24

HORIBA, Ltd. and HORIBA STEC, Co., Ltd. (referred to collectively
as “HORIBA”) have been constantly expanding their business asmeasurement device manufacturers and are currently engaged in
the following four business segments: automotive test systems
business; analytical business; medical diagnostic business; andsemiconductor business. HORIBA mainly supplies mass flow
controllers (MFC*) for use in semiconductor/FPD production
equipment to the Tokyo Electron Group. HORIBA has the world’s
top market share for MFCs.

Control unit
Piezo actuator
Flow sensor

Inlet

Flow control valve

OutletGas input
through the inlet
on the left ismeasured by aflow sensor.
The flow volume is controlled by theflow control valve
using the piezo actuator bymeans of elements that elongate
or contract when a voltage isapplied. The gas is then output
through the outlet on the right.

Establishing an Integrated Management System
HORIBA established an Integrated Management System (IMS)
for quality and environmental management based on ISO standards, and an occupational health and safety management system based on OHSAS 18001. These functioned separately until
June 2004. HORIBA plans to expand the IMS to its group companies.

Approach to the RoHS Directive
HORIBA is working to meet the requirements for RoHS correspondence for its MFCs, in response to requests from its customers including the Tokyo Electron Group and to regulatory
trends in Europe.
In 2004, HORIBA started using lead-free printed boards inthe manufacture of its MFCs and in 2006 discontinued the useof substances regulated under the RoHS Directive in its new
products. At present, HORIBA is working to meet the requirements for correspondence for its existing products. Lead-free
production lines are completely separated from conventional
production lines that use lead, and even the tools and jigs usedTOKYO ELECTRON Environmental and Social Report 2007

for the two types of lines are kept completely separate. HORIBA
inspects samples of the products it procures from supplierswith its own analyzers to check for the use of regulated substances in the products.

▲ Analysis on receiving products fromsuppliers▲ Lead-free soldering production line

Environmental Contribution of MFCs in the
Semiconductor Manufacturing Process
HORIBA contributes to reducing the environmental impact
caused by the overall semiconductor manufacturing process
through its MFCs, whose functions have been improved in
response to the RoHS Directive. Specifically, HORIBA’s MFCs
contribute to a higher semiconductor yield with more precise
flow control and to higher productivity and lower gas consumption through their high responsiveness at all flow volumes. In
addition, HORIBA’s multi-gas and wide-range MFCs can be usedregardless of the gas type and flow volume, and Tokyo ElectronGroup is now examining their use for its products.
(Conventional MFCs can be
Decrease in the Number of Lines
Due to the Use of Wide-Range MFCs
used only for a specified gas
MFCtype and flow volume, and so
Gas A
Gas B
multiple MFCs must be used,
Gas Cwith one MFC each for gas
Gas C
Gas C
type and flow volume.) The
Gas D
use of multi-gas and wideGas D
range MFCs enables us to
Gas A
Gas B
reduce the number of MFCs
Gas C
needed and reduce the
Gas C
Gas C
electricity consumed by theGas Dcontroller.
Gas D

Comments from TEL
In the future, the importance of optimizing the use of processgases will increase and will be the key to conserving resources andenergy and bringing higher productivity to the entire semiconductor manufacturing process. We anticipate that HORIBA will be able
to help us with this optimization by the use of its analysis and flow
volume control technologies.

Environmental Efforts by Our Suppliers—YDK Co., Ltd.
YDK Co., Ltd.

Lead-Free Soldering and Response to the
RoHS Directive
After Tokyo Electron Group conducted a survey on lead-free soldering in September 2003, YDK Iwate District began to train
lead-free soldering trainers following instructions from ourGroup. Subsequently in February 2006, they started lead-freesoldering. YDK Communications in YDK Iwate District attaches“RoHS-compliant” labels to identify its printed boards and other

Higher Productivity and
Improvement Proposals
YDK’s basic policies are (1) toconduct detailed self-checks to
reduce the number of defective
products and (2) regard thoseengaged in the next process ▲ YDK’s manufacturing site
steps as in-house “customers.”
Based on these policies, theVE proposal form tocompany is actively making be used by suppliers
improvements and increasing its
productivity through mechanization, review of the line layouts for the assembly ofunits and the production of assemblies, and the adoption of a“street stand system,” in which only the necessary tools areplaced on a stand for each step in the unit assembly work.
In July 2007, YDK introduced a new production system,
which allowed the company to check order reception and the
manufacture of products and parts on PCs. This helps the company reduce unnecessary stock and wasteful operations.
YDK is also proactive in making improvement proposals
using our Group’s Value Engineering (VE) proposal form whichleads to cost reduction and improvements in quality and productivity for both YDK and Tokyo Electron Group.

Safety Measures
YDK is committed to conducting safety activities, upholding
their motto to “abide by rules to ensure safety” and “make abright workplaces with no accidents.” It holds monthly meetingsof its health and safety committee, conducts disaster risk
assessments, and gives safety-related education and enlightenment to employees to achieve zero workplace accidents.
Comments from TEL
YDK willingly cooperated with us in introducing lead-free soldering. We also anticipate YDK implementing measures to comply
with the RoHS Directive. Proposals from YDK will help us make
improvements so that we manufacture better products.

TOKYO ELECTRON Environmental and Social Report 200725
Environmental Initiatives by Our Suppliers

In response to the increase in its responsibilities to society forenvironmental problems, YDK obtained ISO 14001 certificationin November 2003. As one of its environmental activities, thecompany has introduced packaging materials that can be reused
repeatedly and the reuse of rental waste cloth. It is also replacing
the fluorescent lamps at its
facilities with inverter-type
lamps and reducing theamount of paper used. In
FY 2008, YDK will conduct
environmental activities in a
way that is more integrated▲ Waste cloth collection box for reuse
with its business activities.

▲ RoHS-correspondence label

EHS REPORT

Establishing an Environmental Management
Systemproducts that comply with the RoHS
Directive. YDK will press forwardwith its discontinuance project for
total discontinuance of substances
regulated by the Directive in its products including units and assemblies
in response to requests from Tokyo
Electron Group.

▲YDK Co., Ltd. designs and manufactures information communication devices and semiconductor production equipment. It isalso engaged in the work of cutting parts for precision machines.
YDK includes YDK Mechatronics Tohoku Plant and YDKCommunications in Tono City, Iwate Prefecture (YDK Iwate
District). The Tokyo Electron Group started to commission theprocessing of parts used in its thermal processing systems manufactured at its own Tohoku Plant to YDK in 1982. At present, we
commission the processing of parts, design of equipment, cutting of parts, and assembly of automatic device units to YDK.
Also, YDK designs gas controllers as a contractor at our Group’s
Tohoku Plant and also dispatches its employees to our manufacturing sites. YDK is therefore both a supplier and a cooperatingcompany for our Group. At ourbriefing session on manufacturing
trends held in April 2007, YDKIwate District was commended by
our Tohoku Plant for its highquality unit assembly and drastic
improvement in achieving its ▲ Certificate of commendationfrom Tokyo Electron Groupdeadlines.

E H S R E P O RT

Plant and Office Initiatives for the Environment
The Tokyo Electron Group’s plants and offices are implementing measures to save resources andprevent global warming, and these are introduced in this section.

Preventing Global Warming
Reducing Energy Consumption

Electricity Consumption

EHS REPORTOur Group is committed to reducing energy use in compliancewith the provisions of the Energy Saving Act. Its sites are actively
reducing their energy consumption by setting specific energysaving targets for lighting, OA machines, and air conditioners
through appropriate temperature control.
For example, Tohoku Plant introduced inverters for the air
supply and exhaust fans used for air conditioning. Plant employees had manually adjusted the fans, but after installing inverters,
it became possible to operate
the electric motors more efficiently, resulting in an annual
reduction in the power consumption of approximately
200,000 kWh and a reduction
in CO2 emissions of approxi▲ Installation of inverters
mately 100 tons.

26(100,000 kWh)

Overseas
Japan

Heavy Oil Consumption(kl)

148 160 150

126

2,430

192 165
1,916
1,652

101
2,472
2,396
2,191 2,345
2,151 2,181
1,858
1,501
1,212
1,206
1,089

1,881 1,828 1,838
1,665
1,631
1,604

967 958

0

0’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07(FY)’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07(FY)

Kerosene Consumption

Plant and Office Initiatives for the Environment(kl)

Gas Consumption(1,000 m3)

1,146
1,062
1,014
996
990 990942
908

Gas (overseas)Gas (in Japan)
LPG (in Japan)

154

946

Energy Consumption

364

In FY 2007, as in FY 2006, our total energy use increased due toan increase in production quantities. However, we were able toreduce per-unit energy use and achieved the target of reducing
the energy use per unit sales by 1% compared with the previous
fiscal year. We will continue to improve on our energy-saving
measures.
In FY 2007, in calculating CO2 emissions, we converted
power consumption into CO2 emissions using the emission coefficients specified by each electric power company and started to
identify the use of gas by our overseas sites.

545

150.9

401

Reducing the Use of Greenhouse Gases
other than CO2
We use perfluorocarbons (PFCs) and sulfur hexfluoride (SF6),
which are greenhouse gases, in dry etching, cleaning and otherprocesses during process development and process evaluation.
In FY 2007, we used 21,006 metric tons of greenhousegases (as CO2 equivalent), which is substantially larger than theamount used in FY 2006 (12,643 metric tons). This was partiallybecause the volume of SF6 used for product development andevaluation greatly increased. We will examine replacing thesegreenhouse gases with alternatives.

1,277

135.5

89.3

50,48845,922

92.8
78.4

65,81752,45694,00984,761

87.1

87.7

95,487
95,486

91.9

82.7

13,863

100,941
104,110

18

19

0

’97

’98

’99

’00

’01

’02

’03

’04

’05

’06

TOKYO ELECTRON Environmental and Social Report 2007

6,740

’07 (FY)

1. Calculated based on the guidelines for the calculation of greenhouse gas emissions frombusiness entities published by Japan’s Ministry of the Environment
2. Energy use per unit sales in FY 1998 = 100%
3. Percentage of per-unit energy consumption in the current fiscal year to per-unit energy
consumption in the previous fiscal year
(Plants in Japan and overseas)

3,106

56

104,763

0

30

Other
SF6
PFCs
HFCs

95.8
100.0

Greenhouse Gas Consumption(t-CO2 )112.1

104.4 150.8’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07(FY)(Plants in Japan and overseas)

147.5

137.4 105.6 197.0

738

62 60 66 70 50 59’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07(FY)(%)
CO2 emissions (in Japan)
CO2 emissions (overseas)
Figures based on energy use per unit of
208.0
2
sales in FY 1998
193.1
Energy use per unit of sales in comparison
with the previous fiscal year3
168.2

658

0 74 72 55 59 66 66 63 58 56 110 113

0Total Energy Consumption (in CO2 Equivalent1)(t-CO2 )838

403 389

0

4,681
6,682

3,506
6,297 784

1,856
1,468

1,284
1,140

’03

’04

322

’05

3,236
1,620

’06

3,607

’07 (FY)(Plants in Japan)

Resource Conservation
Our Approach to Resource Conservation

Water Consumption

Copy Paper Consumption(1,000 sheets)
Office facilities
Manufacturing plants

19,35018,30018,184

17,417

16,038(1,000 m3)
Overseas use
Underground water
Tap waterIndustrial water

16,135

77,16869,45076,80069,814

0
’02

’03

’04

’05

’06

’07 (FY)

527

445

391

290

325

332

’98

’99

’00

111

22

146

436

388

390

430

415

357

391

382

429

’01

’02

’03

’04

’05

’06

’07 (FY)

70
106

474

486

437

506

599

521

77,992

0
’01

115
92

107
64

89

112,150
89,067

88
62

67
119

172

’97

(Plants in Japan)(Plants in Japan and overseas)

T O P I C S
At the Yamanashi plant, materials discarded as defective property
and waste materials are gathered prior to waste processing so that
employees can see the actual materials. The objective is to foster anawareness among personnel about the causes of waste materials
and teach them measures to help reduce them. More than 100
employees attended the initial exhibit, which encouraged employees
to ask the question, “Why?” Seeing the actual materials first-handsubstantially raised awareness and encouraged employees to

Scene fromwaste material exhibit▲

Waste Materials Exhibit

address the causesof the problem.
These types ofactivities will be
continued in the
future with theintention of achieving a balance between environmental preservation
and business operations.

TOKYO ELECTRON Environmental and Social Report 2007

Plant and Office Initiatives for the Environment

At our manufacturing plants, various measures are being taken
to reduce the use of water. For example, the plants haveinstalled a water recirculating system to reuse cooling water.
They have also installed automatic faucets in restrooms andother facilities. These touch-free automatic faucets prevent
wastage of water by automatically shutting off the supply when
the hands are removed from the sensor range.

The entire Group is committed to reducing the use of paper. We
have been encouraging duplex copying, copying at reduced size,and digitization of information and documents circulated among
employees, but in FY 2007, the total use of copy paper by theGroup increased by approximately 10% over the FY 2006

18,61727

Efforts to Reduce the Use of Water

Efforts to Reduce the Use of Paper

EHS REPORT

amount, that is, by approximately 8.3 million sheets. This is partially because of an increase in production quantities and business processing. Also, we have been encouraging the use ofrecycled paper with the exception of some special-purpose
papers, and introduced paper cups made from kenaf, which isan alternative to wood pulp.
We will continue to reduce the use of copy paper in ourbusiness operations by minimizing the number of different
types of records and slips, thereby further reducing the total
paper use.

We are minimizing our use of resources based on the conceptof green procurement, which means to give preference toenvironment-conscious products in purchasing. Specifically, we
are reducing the use and purchase of copy paper and stationery,
and when we purchase them we choose environment-conscious
products. At our offices, we have replaced printer toner cartridges with cartridges made from recycled materials and cooperate with the manufacturers in the recovery of end-of-life cartridges. At some offices, using the intranet, we have establisheda system under which stationery no longer being used by a certain department can be reused by another department.

Plant and Office Initiatives for the Environment

Waste Reduction and Recycling
Our Approach to Waste Reduction andRecycling
EHS REPORT

28

a result of making efforts to attain this target, we achieved arecycling rate of 96.4% in FY 2006 and 97.3% in FY 2007. In
the future, we will focus on reducing our overall generation ofwaste, including recyclable waste.

Plant and Office Initiatives for the Environment

The Tokyo Electron Group is making concerted efforts to reduce
the generation of waste based on the policy of minimizing waste
reduction, recycling generated waste as much as possible, andproperly disposing of unrecyclable waste. In recent years, due
to the lack of waste landfill sites, landfill costs have surged. Thispushes us to reduce the generation of waste to make cost savings.
Specifically, we sort waste for recovery, change our manufacturing processes to generate no waste, use more recycling
companies, check the qualifications of companies that we commission to dispose of waste, and regularly review the final
disposal situation.

Breakdown of Waste
Liquid waste from chemicals used in the product development
and evaluation processes
Breakdown of Waste (%)
accounts for the largest perDrink containers 1
Other 5centage of waste generated
Wood scrap
and packaging
by the Group. At present,materials 3
Plastics 6
most liquid waste is recyPaper 6
cled. Also, some plants have
Metallic/productinstalled equipment to treat
Liquidwaste 8waste 71
liquid waste inside theirpremises. (See the TOPICS below.)

Waste Generation and Recycling Rate
In FY 1999, the Tokyo Electron Group set a target of increasing
the entire Group’s average recycling rate to 95% by FY 2006. As

Zero Emissions
We define plants where less than 2% of waste generated by theplant is incinerated or landfilled as “zero emission plants” andencourage all plants to achieve zero emissions. In FY 2007, all
the manufacturing plants excluding the Tohoku Plant achieved
zero emissions consecutively from the previous fiscal year.
Tohoku Plant was unfortunately not able to achieve zero
emissions because its recycling rate dropped due to debris
generated from repairs to floors. In the future, we will alsoachieve zero emissions at our office facilities.

Recycling Rate and Generation of Waste
Target: Increasing the recycling rate to 95%
by FY 2006

(t)

4,772
3,657
3,189 3,179

49.7

55.2

3,938 77.4
69.7

96.1

96.4

97.3

(%)

93.1
Generation of waste(incinerated and landfilled)
Recycling rate

3,268

59.9

40.9
847
431

469

414

’05

’06

’07 (FY)

0

0

’98

’99

’00

’01

’02

’03

’04

(Plants in Japan)

T O P I C S
New Liquid Waste Treatment Facility
Constructed at the Koshi Plant
As shown in the “Breakdown of Waste” section, liquid waste accounts
for a large percentage of the waste generated by the Tokyo ElectronGroup. In order to reduce the amount of liquid waste to be disposedof, we have been introducing liquid waste treatment facilities at ourplants.
At the Koshi Plant, acid and alkali liquid waste generated from theproduct evaluation process used to first stored in tanks inside theplant and then carried outside the plant by a transportation company
using tankers. After being transported outside, the liquid waste wasthen disposed of by an external company. In November 2006, however,a new liquid waste treatment facility was constructed within the premisesof the Plant and started operation after a trial. Thanks to this facility,

TOKYO ELECTRON Environmental and Social Report 2007

Waste Generated at the Koshi Plant(t)
Other waste
Liquid waste

44

308

50
113

0
Average for Jan. 2007
the first half of
FY 2007

4
57

63

Feb. 2007

Mar. 20078▲ Liquid waste treatment facility

the amount of liquid waste carried outside the plant was reduced
from approximately 300 metric tons per month to 10 metric tons permonth, which resulted in a more than 70% reduction in the total
waste generated from the plant. In addition, the environmental
impact caused by the transportation of liquid waste from the plant to
the outside could be decreased by approximately 70 t-CO2 a year.

Management of Chemical Substances
Our Approach to the Management of Chemical
Substances

Handling of Substances Regulated as Class I DesignatedChemical Substances under the PRTR Act
OtherHydrogen fluoride and its water soluble salts
759
Ethylene glycol

4,558
1,980

0

3,690

1,920
2,470
1,500

4,118
1,439

577

3,553
9,144

4,000

’02

5,799

’03

9,844

4,811
6,353
2,800

’04

’05

EHS REPORTThe Tokyo Electron Group uses chemical substances mainly in developing and manufacturing products. In developing products, wesometimes adopt new chemical substances that were not used
before, or use chemical substances in a way that is different from thetraditional usage. In these cases, we look closely at the development
facilities and methods, assess the environmental and operationalrisks associated with the use of the substances, and implement necessary measures before actually using the substances. As for thechemical substances that we use in our manufacturing processes,
we are replacing dangerous and harmful substances with safer ones.

(kg)’07 (FY)’06* Measures in metric tons for use in FY 2002 and FY 2003

(Plants in Japan)

29

Material Balance of Chemical Substances Regulated under the PRTR Act

According to the provisions of the Act on Confirmation, etc. of
Release Amounts of Specific Chemical Substances in theEnvironment and Promotion of Improvements to the Management
Thereof (PRTR Act), we rigorously control the specific chemical substances regulated under the act and identify the use and emissions ofthese substances on a continuous basis. We use large amounts ofhydrogen fluoride, which is one of the substances regulated under
the PRTR Act, mainly for cleaning test wafers. The hydrogen fluoride
waste is disposed of by an external company specializing in disposal
or we dispose of it in the approved manner within our premises.
Yamanashi Plant uses ethylene glycol as a refrigerant for coolingwater and the amount used increased substantially in FY 2007 due tothe increased production of FPD manufacturing equipment. However,
we recycle almost all the amount we use. We will continue to properly
manage the risk associated with the use of chemical substances.
* PRTR stands for Pollutant Release and Transfer Register. Under the PRTR system,
the use of chemical substances that may be hazardous to human health and theecosystem, their release into the environment, and transfer (contained in waste) tothe outside of the business premises are identified, tabulated, and announced.

Released into the air: 0 kg/year

Release into water: 0 kg/year

TEL

Handled
19,761 kg/year

Products
113 kg/year

Recycled: 9,887 kg/year
Waste: 7,308 kg/year

On-site landfill:
0 kg/year

Removed:2,450 kg/year

Transferred to sewage: 3 kg/year

PCB Storage
Based on the Law Concerning Special Measures against PCB Waste,
we report on the storage and disposal of waste containing polychlorinated biphenyl (PCB) to the governor of the prefecture every year.
The Tokyo Electron Group presently stores two waste transformers
and four waste capacitors that contain PCB in a strict and securemanner.

T O P I C S▲

Evacuation Drills for Employees
Working in Clean Rooms

Evacuating the clean room

The Tokyo Electron Group uses special gasses and liquid chemicals
to test its products during their development and evaluation
processes by simulating the actual semiconductor manufacturing
process. We evaluate our products using special chemical substances in a clean room, which is a special working environment,
and employees working there need to evacuate promptly from theroom in the event of a large earthquake or a fire.
At the Yamanashi Plant (Hosaka), drills to evacuate the clean
room are conducted in preparation for contingencies. In a drill
conducted in November 2006 in preparation for an earthquake,

employees wearing
clean suits evacuatedfrom the clean room
to the outdoors after
the alarm was given.
The number of employees who evacuated was checked by the department and notified to
Headquarters. Through these practical evacuation drills, we share theexperience of risks and identify problems to be prepared for an emergency
at all times.

TOKYO ELECTRON Environmental and Social Report 2007

Plant and Office Initiatives for the Environment

Compliance with the PRTR* Act

E H S R E P O RT

Health and Safety
We are promoting health and safety for all our stakeholders, including employees andcustomers, in every aspect of our business operations, believing that ensuring their health and safety
is one of our social responsibilities and as a basis on which to conduct business in a smooth manner.

Health and Safety

Preventing Accidents

The Tokyo Electron Group believes that one of the Group’s corporate social responsibilities is to ensure the health and safetyof all employees working for the Group, customers who use our
products, and all other stakeholders in its business operations.
In FY 2007, we held safety seminars for middle-level
managers, following those held for top managers in FY 2006. At
the seminars for middle-level managers, the heads of eachdepartment, section, and business group learned about safety,
including case studies and discussions.
Team Resources Management (TRM) training for on-site
work leaders was also held consecutively from FY 2006. One ofthe objectives of this training is to make participants moreaware of the importance of communication and teamwork,
which they regard as a matter of course in their daily operations. In addition, we hold seminars to teach emergency medicalcare, including how to use automated external defibrillators(AED), which we have installed at our sites across Japan.

In FY 2007, the number of occupational accidents at the Tokyo
Electron Group deceased over the FY 2006 level. The work
volume, however, increased in accordance with an increase inproduction quantities, and the number of injuries excluding
minor injuries is on an upward trend.
According to the statistics created by the Group, accidents
caused by ergonomic factors* and accidents that took place atour offices account for approximately 30% of all the accidents
occurring within the Group. From the ergonomic aspect, as
equipment becomes larger and more complex, employees areforced to work in unnatural postures and they have to manhandle heavy objects, bringing new risks. To deal with this problem,
we gave employees training in ergonomics in FY 2007 (see thefollowing page).
* Ergonomic factors mean factors that may cause musculoskeletal disorders in
employees who are engaged in heavy labor, do repetitive movements, or holdunnatural postures over extended periods.

Frequency of Occupational Accidents and Number of Injuries(Number of injuries)(Frequency)
Number of injuries that occurred in the Group100

Average for Japan’s manufacturing industry
Tokyo Electron Group

1.82

1.79
48

33

▲

EHS REPORT30

For the Safety of All

Emergency medicalcare seminar0

Average for all industries in Japan
Average for Japan’s electromechanical manufacturing industry

Target for the number of injuries

1.95

1.77

1.78

1.85

41

37

43

39

1.90

48

1.02

0.97

0.98

0.98

0.34

0.36

0.35

0.99
0.39

1.01
0.40

1.02

0.38
0.38

0.18

0.15

0.24

0.39

0.32

0.18

’01

’02

’03

’04

’05

’06

’07 (FY)

0.37

0* The number of injuries is shown, taking the number in FY 2001 as 100.
* Frequency of occupational accidents: Number of occupational accidents per one million labor
hours = Number of accidents resulting in at least four days absence/Total labor hours ×
1,000,000

Comment from Mr. Hidetaka Takahashi, M.D., an industrial physician who advises the
Health and Safety Committees of the Group’s Yamanashi, Fuchu, and Akasaka sites
on the health and safety activities of the Tokyo Electron GroupMr. Hidetaka Takahashi, M.D.
Industrial physician
Industrial health consultant

The Tokyo Electron Group is enhancing its system to manage thehealth of its employees focusing on overwork, mental health, andmetabolic syndrome, which are topics that are attracting the attention of contemporary society, so that employees can work in good
health and with ease of mind. To this end, business management
plays an important role in cooperation with the staff in charge ofindustrial health.
The Tokyo Electron Group manufactures semiconductor production equipment using special gases and liquid chemicals as well asTOKYO ELECTRON Environmental and Social Report 2007

special work methods. It is therefore especially important that theGroup’s management ensure safety and a good working environment
for its employees. With regard to the working hours of employees
and leveling their work loads, it is necessary to make managers moreaware of their responsibilities. Accordingly, the Group is holding
training sessions to encourage managers to change their ideas andassume more responsibility for the care of their subordinates.
In my capacity as an industrial doctor, I expect each and every
employee to be more aware of the importance of taking their own
responsibility for maintaining their physical and mental health, sothat the entire Group can be committed to creating a safe and comfortable workplace. I will continue contributing to the steady
improvement in health management for the Group’s employees.

Taking an Ergonomic Approach

Improvements Resulting from Introducing Lifter▲▲Web-based basic
ergonomics training* Ergonomics is the study of design for user-friendliness.

T O P I C S
Safety Education Using Virtual Reality and 3D
Image Technologies▲
Educational images created using
VR and 3D technologies▲

We had been providing employees with safety education and risk
simulation experiences using photos and pictures showing accidents
that took place in clean rooms. In addition, in cooperation with
Solidray Co., Ltd., we created images of clean room accidents using
virtual reality (VR) and 3D image technologies. These technologies
enable us to prepare more realistic case study materials and give
employees who usually have no opportunity to enter a clean room
greater awareness of the situation in a clean room and the associatedrisks.
For the future, we are examining how to increase the sample
images and introduce elements of behavioral selection and role-play
to this safety education.

TOKYO ELECTRON Environmental and Social Report 2007

31
Health and Safety

Example of Ergonomic Approach
Reducing Ergonomic Risks for Workers Dealing with
Heavy Objects
As equipment becomes larger, employees are forced to handleheavier parts. The load on employees who handle these heavy
objects will vary depending upon how high these objects mustbe lifted or where they are installed. The Tokyo Electron Groupis implementing various solutions to prevent ergonomic accidents caused while handling heavy objects.
For example, for etching systems, in the past replacement
chambers weighing approximately 70 kg had to be lifted into
position by four employees. However, this work could lead to
accidents or the chamber accidentally slipping. Also, employees
might step on other parts while lifting the chamber into position.
To avoid these, we designed and manufactured a special
ergonomic lifter for these chambers and they are now lifted into
position by the lifter and not by employees. This has reduced
the ergonomic risk and also reduces the number of employees
needed for installation.

EHS REPORT

Basic Ergonomics* Training
In response to an increase in the number of occupational accidents caused by ergonomic factors, we held a basic ergonomics
training seminar on the Web in FY 2007.
This seminar was composed of topics on the ergonomic
environment, examples of accidents caused by ergonomic factors, symptoms of musculoskeletal disorders (MSD) and theirrisk factors, and measures to reduce ergonomic accidents. At
the end of the seminar, participants sat an examination to checktheir level of understanding. The seminar helped employees tolearn that unnatural postures and pressure, heavy objects, andrepetitive movements can cause accidents, and highlighted thethings that thedesigners of facilities and workers
must focus on toprevent accidents.

S O C I A L R E P O RT

Relationship with Employees
We have introduced a variety of personnel programs to energize the Group with new ideas andvision.

Concept of the Personnel System

SOCIAL REPORT

32
Relationship with Employees

The Tokyo Electron Group respects a spirit of challenge andindependence amongst its employees and aspires to be a corporate group in which employees can take on a variety of challenges. Based on this, we are improving the working environment to attain the following three targets: (1) no penalizing of
employees who fail while taking reasonable risks in creative
endeavors; (2) rigorous fairness in handling of our personnel;
and (3) fairness in compensation. Our personnel system isdesigned to motivate the organization and help each employee
develop him/herself. The system does not simply focus on the
results, but also attributes importance to the process leading to
the results. Our goal is to fairly evaluate employees based on
their contribution through the three mainstays of “competency
to assess processes,” “the individual’s role (mission),” and“results based on the employee’s role (performance).”
Competency is not just the objective of assessment and inspection, but a measure of the growth of the employee’s skills andabilities required for task categories. Also, we are constantly
reviewing our personnel system for continuous improvement.

Concept of Our Personnel System

Company
Mission

Performance

Competency

Indicate company goals
and directions

Reward performancehelping to reach company
goals with commensuratecompensation

Offer careers andopportunities to build skills
needed to meet thecompany’s goals

Mission: The individual’s role
Competency: Competency to assess processes
Performance: Results as based on employee’s role

Employees
Competency

Performance

Competency

Obtain expertise and offer a Provide performance that Polish up professionalism toprofessional attitude
helps the company reach its
obtain higher salaries
goals

TEL Values
In April 2006, we summarized the values and action guidelinesof the Tokyo Electron Group into TEL Values (see page 2). TEL
Values show what we valued and will continue to value toward
the future under the following five keywords: Pride, Challenge,

TOKYO ELECTRON Environmental and Social Report 2007

Ownership, Teamwork, and Awareness. Employees of the Group
always keep TEL Values in mind as a driving force toward new
growth in the future.
We conduct a survey on employees to investigate theirawareness of TEL Values and how they are motivated throughthe Values once a year and feed back the results to the employees.

Providing Employees with Comfort in the
Workplace
The Tokyo Electron Group is committed to providing employeeswith a comfortable workplace. For example, in April 2007 we
expanded the scope of our childcare leave system. Specifically,
we extended the period during which employees can take leave*.
In addition, we established a new childcare support system,
under which employees are given special holidays of up to fivedays a year to be with their children until they graduate fromelementary school. These measures support our employees inraising their children while working. In FY 2007, a total of 65
employees took childcare leave.
In addition, we have a “refresh vacation” system so that
employees can refresh themselves both physically and mentally.
Under this system, employees can take from two weeks to one
month holiday when their term of service reaches 10 years, 15
years, or 25 years.
In recent years, mental problems in the workplace are
becoming a serious social concern. In response, we provide
mental health education for our executives and are actively
implementing measures to help employees to look after theirmental health.
* In the past, employees could take childcare leave until their children became one
year old (or one year and six months in some exceptional cases) but now they cantake leave until the end of the April following the date on which their children
become one year and six months (or until their children are three years old in some
exceptional cases).

TEL University
In August 2007, the Tokyo Electron Group established TEL
University to support the development of human resources on a
medium- to long-term basis, based on our belief that employees
are invaluable assets for the Group. TEL University is designed
to provide employees with an opportunity to obtain the knowledge and skills necessary for us to pursue the top position in
the world. What is more, the University is useful in developing
the capabilities of managers and educating the next generationof leaders as well as in promoting exchanges between management and employees and helping employees deepen theirunderstanding of TEL Values.
At TEL University, we help individual employees develop
themselves, and this in turn will energize the Group with new
ideas and vision and help it to grow.

S O C I A L R E P O RT

Communicating with Society
The Tokyo Electron Group attributes importance to dialogue with its stakeholders and will growthrough better communication with them.

The Tokyo Electron Group is committed to conducting its business
operations in harmony with local communities and states “We strive to
become a company
that local communities hold in highesteem” in its TEL
Values. In responseto requests fromlocal governments,
sites within theGroup send lecturers who are experts
in industrial human▲ Participants on a study tour
resources development to local elementary, junior high, and senior high schools.
These sites also offer learning experiences and the opportunity tovisit their plants to local schoolchildren, and provide financial andother support to local events such as festivals and to blood donation activities.
EHS communication meetings are held at the Group’s manufacturing sites inviting representatives of the companies who wecommission to do on-site work. These meetings enable the sites
and their cooperating companies to communicate closely on theGroup’s environmental and safety activities in order to improvethem further.
As an example of communicating with local communities, inYamanashi district we invite children to take plant tours and participate in work experience during their summer vacation. In FY
2007, 30 children who were mainly the children of Group employees participated in the event. In addition, we accept study visits by
local junior and senior high school students to our plant throughout the year. In FY 2007, a total of some 350 students visited theplant from eight schools. And in March 2007, we invited local residents to our plant and 70 people, including children, participatedin a plant tour.
In the survey we conducted after the study tours, participantscommented “I didn’t have any chance to see inside the plant. But thisvisit enabled me to get to know and understand what the plant isdoing” and “If I
have the chance, I
would like to go on
another study tour.”
These activities aresome of the ways
we promote harmony with local communities.

▲ Website page▲

Environmental and Social Report 2006

Sharing Information through EHS Times andthe Intranet
The Tokyo Electron Group publishes the EHS Times, a bimonthly in-house magazine that reports on the discussions in relevantGroup committees and introduces the environmental, health,and safety (EHS) activities conducted by the Group’s companies, plants, and offices in an easy-to-understand manner.
Individual Group companies and sites have their own in-housemagazines and use them to raise employees’ EHS awarenessand share relevant information.
We use the intranet for speedy disclosure and sharing of
EHS information within the Group. The Group’s EHS activities
are also introduced via brochures for shareholders andinvestors and the annual reports.

▲ Website page
Study tour of our plant▲▲

Annual Report 2007

TOKYO ELECTRON Environmental and Social Report 2007

33
Communicating with Society

Communicating with Local Communities

Based on the recognition that it is important to promote dialogue with our stakeholders, the Tokyo Electron Group is actively communicating with them in its daily business operations. In
order to implement measures on the environment and healthand safety, we need to share information with all those related
to our business operations and to give mutual feedback on themeasures we are implementing.
We have published our annual environmental report since2000 and disclose environmental, health, and safety informationon our website. We will continue to disclose information andpromote communication with our stakeholders in many different
ways.

SOCIAL REPORTOur Approach to Communication

Communicating with Society

Our Approach to Social Contribution

Tokyo Electron Nirasaki Arts Hall

The company plans to contribute to the creation and development of culture in Nirasaki City by actively proposing theorganization of (1) events that give citizens opportunities tofamiliarize themselves with science and technology, and (2)activities that will give children the opportunity to dream.

Zero Waste Activities at the Miyagi Plant
Companies in the Tokyo Electron Group and their sites contribute to local communities by conducting local cleanups andcutting the grass. For example, 25 employees of the Miyagi
Plant cleaned the roads around their site on May 30, which falls
on “zero waste” day. In the cleanup activity, the employees alsocleaned the reflecting poles beside the road, contributing to traffic safety. Participants in the activity commented, “The amountof waste was larger than I expected,”“I found a lot of litter that had been
thrown out of car windows,” and “I
was glad to be able to do my bit for
the local community throughthis cleanup.”

Cleanup activity▲

Communicating with Society

Tokyo Electron AT obtained the naming rights for a culture hallowned by Nirasakai City and on April 1, 2006 renamed it Tokyo
Electron Nirasaki Arts Hall. As a way of laying a firm foundationin the community and in support of the city administration’s wish
to utilize the hall for the creation and development of local culture, the company is actively
contributing to local communities by supporting themaintenance and management of local public facilities.
▲

SOCIAL REPORT34

The Tokyo Electron Group states the following: “We place thehighest priority on gaining the trust and acceptance of customers, suppliers, investors, and communities around theworld” and “We therefore strive to be a faithful and cooperative
member of the communities and nations where we do business.” We are engaged in a variety of activities to contribute tosociety and build relationships of trust with governments andlocal communities around our facilities. This is true in Japan, ofcourse, as well as overseas. These efforts are based on theabove principles. We will expand our activities, hand-in-handwith our customers and neighbors.

Tokyo Electron Nirasaki
Arts HallT O P I C STokyo Electron Kyushu Planting Trees to Protect theWatershed
As in last year, in March 2007 Tokyo Electron Kyushu planted trees on Mt.
Tawara in Aso to create a forest to protect the watershed. The planting has
been following a five-year plan (three years to plant seedlings and two
years for them to grow). This year was the second year of the plan and a lotof employees and their family members participated in the second round ofactivities.
Participants planted trees with the slogan “Starting 100 years of forest
with the planting of small seedlings,” which was chosen from slogans proposed by employees at the company’s request. Participants also built amonument carrying the slogan to commemorate the second round ofplanting.
In Kumamoto, tap water issourced from groundwater. The
Aso area where the planting on
Mt. Tawara is being carried out issaid to act as a reservoir for
Kumamoto. In fact, rainfall in thearea permeates into the ground,and becomes an undergroundreservoir from which tap water is▲ Tree planting activity

TOKYO ELECTRON Environmental and Social Report 2007

drawn. It is, however, becoming
difficult to maintain the groundwater at the same level because of thedecrease in the number of trees
and farmland. The planting there- ▲ Planting trees
fore contributes to maintaining water resources and provides a good
opportunity for people to appreciate the environmental situation in the area.
The Tokyo Electron Group has been studying how to grow green
plants both inside and outside its sites. We use Eco-Profiler provided by
Kokusai Kogyo Co., Ltd. to identify how much we can contribute to society
by increasing green land,
and this gives us a guideline for our future activities.
At the new plant that weplan to construct in Taiwacho, Miyagi Prefecture, we
intend to design a plantthat harmonizes with thesurrounding nature.
▲ Data obtained through Eco-Profiler

Recycling box▲

Tokyo Electron U.S. Holdings’s Contribution toSociety▲

Participants in Clean Sweep

SOCIAL REPORTSupporting the Local Clean Sweep Activity
Clean Sweep is held annually as part of Keep Austin Beautiful,and is participated in by all residents to keep the locality clean.
In cooperation with neighboring companies and local communities, Tokyo Electron U.S.
Holdings, Inc. (TEL USHD)
has been supporting thisactivity for more than four
years.

Recycling Promoted by Employees
Employees of TEL USHD follow
the 4R’s (recycle, reduce, reuse,
and rebuy) in their environmental
conservation activities. Employees
bring household waste such as telephone directories, batteries,
and cell phones to the company for recycling. In FY 2007, thefinal volume of waste was reduced by an amount equivalent to
230 trees, 5,100 gallons (approximately 19,305 liters) of petroleum, or 1,200 cubic meters of landfill.

35
Mr. Noriaki Onoue
We received comments on our Environmental andSocial Report 2006 and on our business operations
from Mr. Noriaki Onoue.
(1) Comments on the Environmental and Social Report
After reading the Tokyo Electron Group’s Environmental and Social Report
2006, I was able to understand how serious they are in the environmental
and safety activities they are carrying out as part of their corporate social
responsibilities.
In addition to its EHS activities, the report refers to the Group enhancing its corporate governance framework and compliance initiatives, which I
find noteworthy.
Furthermore, the report is written using easy-to-understand expressions and helpful footnotes, making it understandable even to readers who
are not versed in technical matters.

(2) Comments on the Tokyo Electron Group’s EHS
Activities
The TEL Values, formulated in April 2006 to show the Group’s values andaction guidelines, clearly state, “We give top priority to safety, health, andthe global environment.” Also in the “Commitment by Top Management”
section of the report, both Chairman Higashi and President Sato confirm
their commitment to EHS activities. These writings communicate to me theGroup’s clear and consistent attitude to its EHS activities.
The report contains numerical verification and details product-related,
supplier, and plant and office initiatives. In this way, it introduces the specific activities the Group is involved in based on its corporate philosophy
and gives concrete examples which verify the results.
In future environmental and social reports, I look forward to learning
about the improvements the Group will implement to attain its unachieved
targets.

(3) Kumamoto Prefecture’s Impression of the Tokyo
Electron Group
Kumamoto Prefecture has formulated its Kumamoto Semiconductor Forest
Concept to make Kumamoto a world center for the IT industry. I am sincerely grateful to Tokyo Electron Kyushu for leading this initiative and playing a core role in the plan.

Director, Industrial Recruitment &Location Division
Kumamoto Prefectural Government

As described in Environmental and Social Report 2006, Tokyo Electron
Kyushu’s Koshi Plant in Kumamoto has been trying hard to reduce its water
use and as a result, has received the Higo Water Conservation Prize fromthe Higo Water Conservation Fund. It is clear to me that Tokyo Electron
Kyushu is a company actively engaged in environmental activities on a daily
basis.

(4) Requests and Expectations for the Tokyo ElectronGroup
I hope that the Tokyo Electron Group will have opportunities to publicize theactivities it is carrying out at its sites, such as the efforts made at the Koshi
Plant to reduce water use, because I think that this will help to spread theprogressive activities of the Group to other companies.
Recognizing the limited nature of our resources, Kumamoto Prefecture
is committed to a recycling-based society. We want to create a living environment for our citizens that is in harmony with Kumamoto’s rich naturalenvironment. I hope that the Tokyo Electron Group will continue with its
energetic EHS activities, which are consistent with the policies of ourPrefecture.

Our Response
We thank Mr. Onoue for his frank opinions. Tokyo Electron Kyushu
manufactures its products with the slogan, “Manufacturing the world’s
highest class products in the world’s greatest environment.”
We would like to manufacture the world’s highest quality products
in our Kumamoto, Koshi, and Otsu Plants in harmony with Kumamoto
Prefecture’s rich natural environment, and we are committed to continuing our activities to contribute to the local community.
Akira Miura
President and Representative Directorof Tokyo Electron Kyushu Limited

TOKYO ELECTRON Environmental and Social Report 2007

Comments from a Stakeholder

Comments from a Stakeholder

Environmental and Social Report 2007™

TOKYO ELECTRON LIMITED
Environment, Health & Safety Center
2-30-7 Sumiyoshi-cho, Fuchu City,
Tokyo 183-8705, Japan
Tel: +81-42-333-8249
Fax: +81-42-333-8477
http://www.tel.com
Published: October 2007

Mixed Sources
Product group from well-managed
forests and other controlled sources

Waterless printing, which does not generate
hazardous effluents, is adopted for this report. It
is printed with volatile organic compound(VOC)-free inks on FSC-certified paper containing materials from properly managed forests.

TOKYO ELECTRON LIMITED
PR45-163