TEL’s Credo on Environmental Preservation

TEL’s Safety and Health Credo< TEL’s Credo on Environmental Preventation >< TEL’s Safety and Health Credo >The Tokyo Electron Group believes that preserving and continuously improving the global environment is one of the mostimportant objectives for mankind, as well as our business.
Based on this credo, we are determined 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 andboard members at TEL. Our profit delivery date requirements,
and time limitations must not be met at the sacrifice of humanlife and the safety of our facilities and equipment.

< TEL’s Principles on Environmental Preservation include: >1. Continuous Improvement
TEL recognizes that the products we manufacture affect theenvironment, and therefore, we, with our customers andsuppliers, shall continually strive to minimize the environmental impact of our processes and operations.
2. Knowledge
TEL continually strives to enhance its understanding of the
impact that TEL’s operations have on the environment, andthe responsibility that this entails. In addition, TEL aims togain a quantitative grasp of environmental factors, and theimpacts resulting from our activities and operations.
3. Performance Criteria
As well as strictly observing mandatory environmental
laws, treaties and agreements, TEL strives to enhance its
own environmental management system and improve global environmental preservation programs by the proactive
establishment of its own aggressive environmental performance criteria.
4. Disclosure
TEL shares information about its environmental concepts
and principles, as well as the progress of our ongoing contributions toward environmental protection with employees
and the general public.
5. Partnership
TEL actively participates in environmental protection activities practiced by our customers, suppliers and local communities.

< TEL’s Principles on Safety and Health Preservation include:>
1. Continuous Improvement
TEL is conscious that the factors that affect the safety andhealth of customers and our employees exist at the stage ofmanufacturing, transportation, installation, use, maintenance and service of our products, and based on this awareness, we shall continually strive to eliminate factors that
impede the safety and health of our products.
2. Knowledge
TEL continually strives to enhance our understanding ofsafety and health and improve these conditions for all people working in our sites. In addition, TEL aims to gain qualitative and quantitative grasps of safety and health factors
on TEL Group activities and operations.
3. Performance Criteria
As well as strictly observing mandatory safety and healthlaws, treaties and agreements, TEL strives to enhance its
own safety and health management system and improveglobal safety and health programs by the proactive establishment of aggressive safety and health performance criteria.
4. Disclosure
TEL shares information about its safety and health credo,
policies and the progress of our safety and health activities
with all board members and employees, and publish thegeneral public our progress as the need arises.
5. Partnership
TEL actively participates in safety and health activities practiced by our customers, suppliers and communities.

September 25, 1998

Editorial Policy
Tokyo Electron (TEL) has published an environmental report every year since FY 2001 to
describe our efforts in the issues of the environment, health and safety and our social contribution activities. In addition to those topics,
this year our report also covers our social activities. We have prepared this report to be as
easy as possible to read and understand sothat our readers can get a good grasp of TEL’s
activities. Our goal in publishing these reports
is to expand the scope of communication witheveryone affected by or otherwise concernedwith TEL. All readers are invited to tell us youropinions and impressions of this report andTEL, so that the editors can more adequately
address your concerns in future reports.
In the planning of this report, we haveused the Environmental Reporting Guidelines(2003) released by the Japan Environmental
Ministry and the 2002 Sustainability Reporting
Guidelines of the Global Reporting Initiative(GRI), an organization that provides international sustainability report guidelines.

2

TOKYO ELECTRON Environmental and Social Report 2005

November 27, 1998

Scope
Organizations covered: Tokyo Electron Group<Japan>Tokyo Electron Ltd., Tokyo Electron AT Ltd., Tokyo Electron Kyushu Ltd.,Tokyo Electron Software Technologies Ltd., Tokyo Electron FE Ltd.,Tokyo Electron Device Ltd., Tokyo Electron BP Ltd., Tokyo Electron Agency Ltd.
<North America>

Tokyo Electron U.S. Holdings, Inc., Tokyo Electron America, Inc.,Tokyo Electron Massachusetts, LLC., TEL Technology Center, America, LLC.,
Supercritical Systems, Inc., Timbre Technologies, Inc.
<Europe>Tokyo Electron Europe Ltd., Tokyo Electron Israel Ltd.
<Asia>

Tokyo Electron Korea Ltd., Tokyo Electron Taiwan Ltd.,Tokyo Electron (Shanghai) Ltd., Tokyo Electron (Shanghai) Logistic Center Ltd.
(Company names as of August 2005)
Period covered: April 1, 2004 to March 31, 2005
Areas covered: Environment, Society and Business
Updated reports on our environmental and social activities will be issued every year.

Contents

Corporate Profile
Company Name: Tokyo Electron Limited (TEL)
Address: 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 April 1, 2005)
Main products: Semiconductor production equipment, flat
panel display (FPD) production equipment
and computer networks.
Employees: 1,026(non-consolidated, as of April 1, 2005)
Net Sales and Ordinary Income (Consolidated)(billion yen)
723.8

Net sales

Ordinary income

460.5

119.2
0

2001.3

-19.4

-0.2

21.1

2002.3

2003.3

2004.3

65.6
2005.3

Net Sales by Division(Consolidated)(billion yen)

Net Sales by Region(consolidated)

Computer
networks 16.0

SE Asia
6.4

Other 1.2

Electronic
components
86.2

(%)
Europe 4.9

China
6.6
Japan
36.6

North America
9.9
Semiconductor and
FPD Production Equipment
532.2

Korea
13.4
Taiwan22.3

Group Employees

Capital Expenditures andR&D Expenses
Capital expenditures(persons)
10,720(billion yen)

10,171
10,269
8,942
8,945

52.9
49.4

R&D expenses
53.8

50.1
44.2

43.9

30.9

2001.4 2002.4 2003.4 2004.4 2005.4

2001.3

2002.32

Corporate Profile, Contents, Environment and
Safety Activities Milestones .................................

3

Commitment by Top Management .....................

4

Management Report

.
.
.
.
.
.
.
.
.
.
.
.
.
.
.

Corporate Governance ..................................

6

Compliance ....................................................

7

Highlights

635.7
529.6
417.8

TEL’s Credo on Environmental Preservation,
TEL’s Safety and Health Credo,
Editorial Policy, Scope ..........................................

12.3

11.0

9.9

2003.3

2004.32005.3

TEL’s Products ...............................................

8

TEL’s Business ............................................... 10

Environmental Report
EHS Management ......................................... 12
EHS Activity Goals and Results .................... 13
Environmental Accounting ........................... 14
Our Approach to Reducing CO2 Emissions in
the Semiconductor Industry ......................... 15
Sales, Development and Design Staff Share
Their Views .................................................... 16
Product-related Initiatives for the Environment 18
Plant and Office Initiatives for the Environment 22

Social Report
Health and Safety .......................................... 26
Relationships with Employees ..................... 28
Communication with Stakeholders ............. 30
Comments from Stakeholders ..................... 31

Environment and Safety Activities Milestones
May1994 Standardization, Environment and Safety Center (Environ-ment, Health & Safety Center) establishedMar 1996 Product Safety Subcommittee (TEL Product EHS TechnicalCommittee) launched
Apr 1996 Environmental Subcommittee (TEL EHS Committee) launched
Dec 1997 Sagami plant acquires ISO 14001 certification
Feb 1998 Tohoku plant acquires ISO 14001 certification
Mar 1998 Saga plant acquires ISO 14001 certification
Mar 1998 Kumamoto and Koshi plants acquire ISO 14001 certification
May1998 Yamanashi plant acquires ISO 14001 certification
Sep 1998 TEL Group Credo and Principles on Environmental Preservation established
Nov1998 TEL Group Credo and Principles on Safety & Health establishedJun 1999 Safety First policy established
Aug1999 Ozu plant acquires ISO 14001 certification
Dec 1999 “Health, Safety and the Environment” added to the Management Philosophy

Apr 2000 Environmental accounting introduced
Apr 2000 Unified safety training system “Safety 2000” imple-

mentedDec 2000 First TEL Environmental Report publishedApr 2001 Product life cycle assessments started
Oct 2001 Green procurement launched
Oct 2001 Environmental training introduced in facilities not yet cer-tified under ISO 14001
Apr 2002 Original “TEL Eco-Activity” (environmental management

system based on ISO 14001) begun
Dec 2002 “TEL Internal Assessment” mutual auditing by environ-ment or safety representatives from each facility started
Apr 2003 Lead-free Task Team activities started
Jul 2004 Yokohama office of Tokyo Electron Device acquires ISO

14001 certification
Mar 2005 Miyagi plant acquires ISO 14001 certification

TOKYO ELECTRON Environmental and Social Report 2005

3

Commitment by Top Management
Semiconductors in Modern Society
and TEL’s Commitment

Semiconductors in the Future
and the Role of TEL

The Japanese semiconductor market is worth about five trillion yen per year, only about 1% of the national gross domestic product (GDP) of 500 trillion yen. Still, considering otherfields in which semiconductors have become indispensable –transportation, communications, finance, healthcare and education – semiconductors affect half the overall economy. It is
no exaggeration to call semiconductors one of the driving
industries in Japan.
When one considers the effects of semiconductors on
our lives in realms besides economy and industry, it is abundantly clear that the semiconductor industry and related businesses, the sector to which our company belongs, have apowerful influence on society.
Semiconductors are part of the base of the modern information society. Not only do they stimulate the economy, they
help to make our lives more convenient and comfortable, andthey inspire dreams and hopes throughout society. Semiconductors must continue supporting the base of society, so thatthe ease and comfort we enjoy can be extended throughout
the world in the future.
It is also essential for us in management to keep the four
elements of environment, health, safety and quality in mind
as we pursue business activities. It is to be expected that, inthe short term, there will be trade-offs between these four
elements and concerns for technological development andsales. We must clearly direct our employees to strive for thefour elements. In the long term, there is no contradiction
between these four elements on the one hand and technicalprogress and the advancement of civilization on the other.
Showing that these goals are compatible is an important roleof management.

The fundamental structure of semiconductors has changed little in spite of the continuous evolution wrought since they
were first invented. Microprocessing technology has been thechief driving force during that evolution.
The fundamental structure of semiconductors was wellchosen and has needed few major changes for several decades. But now, it is running into several limits imposed by the
structure, including energy consumption due to heat generation and problems in trying to increase calculating speeds significantly beyond the current level. As semiconductors andthe added value they bring spread around the world and cometo impact every aspect of our lives, people will, more thanever, depend on them for solutions to problems like reducing
energy consumption and raising the efficiency of electronic
products. It is crucial to develop semiconductors which
require even less energy to operate, while operating at evengreater speeds.
In order to develop the next generation of semiconductors, we believe that industry must move away from themodel in which each enterprise tailors itself to perform one
function in isolation from other functions, and toward a modelthat aims to integrate expertise from many sources. Under
this model, different nations and enterprises will lend theirindividual strengths to new partnerships. As a maker of semiconductor production equipment, we expect our role in theadvancement of semiconductor technology to expand far
beyond its present scope. TEL will never forget its duties as aleader of this industry to support and accelerate the coming
technological innovation. Our stakeholders can count on ourvery best efforts to achieve a society that is both comfortable
and inspiring for its members.

Tetsuro Higashi
Chairman & CEOTokyo Electron Limited

4

TOKYO ELECTRON Environmental and Social Report 2005

Efforts at Equipment Design Stage
Drastically Reduce Environmental Burden
We at TEL are quite aware of our social responsibilities to preserve the environment and maintain safety. We have been
charged with this by the commitment of CEO Higashi. As the
COO of the company, I would like to describe our plans forour environmental and safety activities.
Of the various stages in the life cycle of a piece of semiconductor production equipment, more energy and materials
are consumed during mass production of the semiconductor
itself than at any other stage. It is very important to consider theenvironment and safety during design of semiconductor production equipment in order to reduce its environmental burden.
Let me give two specific examples of our approach tothis problem. One directly addresses reducing the energy
consumption. This equipment does not actually operate all thetime; much of the day is spent waiting. It is desirable toreduce the amount of energy consumed while equipment ison stand-by; the energy savings would be considerable. Ourcurrent development and design programs are going forward
on that assumption. The second approach addresses the generation of greenhouse gases while the equipment is in operation. Up until now, we have required removal of these gases
and used substitutes which pose a lighter environmental burden, but future designs will call for development of equipment which re-compresses and circulates gases.
TEL will not only pursue such designs in response torequirements from customers but also strive to conceive newideas on our own, in order to reduce the environmental burdenof our semiconductor production equipment during operation.

Consideration for Safety
and Management of Employees
As semiconductor production equipment has become larger
and larger, operators increasingly must work in high locations
and handle heavy components. Since the processes of semiconductor production also require use of materials which are
toxic to the human body, operators must take many precautions in order to protect themselves. Safety procedures mustbe accounted for during equipment design and the builder ofthe equipment needs to have a thorough knowledge of actual
work operations in the semiconductor production plant. TEL
employees are required to get thorough training in safety sothat they will be familiar with proper procedures.
The semiconductor industry is subject to much higher
fluctuations in demand than other industries, so the systems
must be flexible, able to accommodate both peak and bottom
volumes of sales. When a maker is increasing its workforce
during busy periods and cutting back during slowdowns, newemployees cannot amass much knowledge or experience inthe technical realm or in environmental and safety measures.
Thus, an essential part of our programs is to make all thetasks associated with development, manufacturing, start-up
and process assessment as efficient as possible. Needlesslabor, which hampers programs to improve quality, must be
eliminated. The goal in our new designs will be to allow variation in production volume with a constant number of employees.

Future Approaches tothe Environment and Safety
The conventional business model for making semiconductor
production equipment has been to design that equipment inresponse to each customer’s needs. This has delayed standardization. In recent years, however, TEL has begun to standardize equipment platforms and the modules which are integrated into the platforms. We look forward to speeding up
this process, as it will pay off in increased quality and in more
effective environmental and safety measures.
Our approaches are spurring activities throughout theindustry to improve environmental performance and safety.
TEL will continue to lead these efforts by example and, aspart of the process, to address a wide range of issues.

Kiyoshi Sato
President & COO
Tokyo Electron Limited

TOKYO ELECTRON Environmental and Social Report 2005

5

Man a g e m e n t R e port

Corporate GovernanceManagement at TEL emphasizes enhancement of corporate value
while earning the trust of all of our stakeholders (people who have a stake in our success).

Our Approaches to Corporate GovernanceInternal Control System
and Risk Management System

Reflecting the ongoing globalization of management practices, TEL’s fundamental policy is to strictly observe
standards for corporate ethics and to comply with laws
and regulations. We are also dedicated to establishing andreinforcing internal control and risk management systems,
and to maintaining the transparency and objectivity of ourbusiness activities. The primary objective of this policy is
to conduct our business in a way that prioritizes the creation of corporate value while earning the trust of shareholders and all other stakeholders.

All activities at TEL are based on adherence to the highest
standards of corporate ethics and compliance with laws,
regulations and international rules. To accomplish this, wehave named a director to oversee ethics and establishedethical standards and we are taking measures to see thatthese standards are strictly observed. Reflecting the evengreater importance we now place on internal control andrisk management systems, we have upgraded the internal
audit functions of the Global Audit Center. We have also
added to the General Affairs Department’s crisis management functions, such as taking measures targeting business risk and operational risk.

On Our Corporate Governance System
TEL is implementing its corporate governance systemwith the following three goals:
1) Ensuring the transparency and soundness of business operations; 2) facilitating quick decision-making andthe efficient execution of business operations; and 3)
building an effective system for the timely and suitabledisclosure of information.
We have adopted the corporate auditor system. TEL has aboard of directors with twelve members, including two external
directors, and we have four corporate auditors, two of whom
are from outside the company. In addition, we have separated
the functions of the directors from those of the executives whooversee business operations. The compensation of representative directors is determined by the Compensation Committeethat is part of the board of directors. In addition, the Nomination Committee selects director candidates for submission to
the general meeting of shareholders and a CEO candidate to beelected by the board of directors. Both committees consist of
three members of the board of directors, excluding the Chairman and President. In April 2003, we adopted the executive
officer system to further clarify the roles of the board of directors and executives in charge of business operations.

Changes to Dividend Policy
and Executive Compensation System
TEL has adopted a new dividend policy with the goal of a
20% pay-out of consolidated net income from the fiscal
year ended March 2006. Beginning with the fiscal yearthat ended March 2005, we also eliminated retirement
allowances (which were fixed compensation) from thecompensation of directors, statutory auditors and executive officers. This action was aimed at achieving further
gains in corporate value and management transparency.
Along with this revision, a part of the compensation for
directors, auditors and executive officers has been linked
to operating results, with an upper limit of 3% of consolidated net income. As a result, the portion of compensation that is based on results more clearly corresponds toconsolidated net income and compensation is moreclosely connected to consolidated performance and shareprice.

Corporate Governance System
General Meeting of Shareholders
Board of Directors

Nomination Committee
Compensation Committee
Chief Business Ethics Director

Statutory Auditors

ChairmanPresident
Request for improvements

Audit

Audit and
improvement
reports

Confirm the progressof improvements
and give instructions

Executive Officers
Request for improvements
ReportMonitoring
ReportRisk Management Function

Business Dept.
Audit

6

Checks and balances

TOKYO ELECTRON Environmental and Social Report 2005

Audit

Monitoring
ReportAdministrative Depts.
Audit

Independent Auditor

Internal Audit Dept.
(Global Audit Center)Ma n a g e m e n t R e port

Compliance
TEL is determined to carry out sound business activities in accordance with
its corporate ethics and compliance with the law.

TEL’s Approach to Corporate Ethics
and Legal Compliance

Information Disclosures Concerning
Compliance and Emergency Management

Trust is and will always be the lifeline for TEL. The fundamental requirements for maintaining trust are rigorous
conformity to our ethical standards and compliance withthe law, by our employees as individuals, and by each of
our organizations. Our ethics are stated as ethical restrictions on behavior, and legal compliance means to remain
within legal restrictions. Both are necessary in order tomaintain progress of the company in the right direction,
like two wheels of a cart.

We have begun providing information about complianceand risk management over the company intranet. Those
messages contain information on a wide variety of topics,
including division of tasks, compliance programs, BCP*1,
C-TPAT*2, management of personal information, personalsafety confirmation system, and ethical standards.

Setting Ethical Standards
We believe that common standards must be applied
throughout our divisions in order to create the globally
excellent company that we envision for ourselves. We
established specific ethical standards in 1998 to clarify ourapproach; at the same time, we established the Ethics
Committee to oversee the implementation of those standards. We have created a booklet titled “Improving our ethics consciousness” (revised in 2002, 2003 and 2004) anddistributed it to our employees in recent years.
Ethical standards at TEL*1 BCP: Business Continuity Plan
*2 C-TPAT: Customs Trade Partnershipagainst Terrorism, an anti-terrorism
program under the auspices of the
US Homeland Security Department,
Bureau of Customs and Border Protection

Compliance and risk management
websiteHotline Established
If a employees member has witnessed speech or behavior which violates ethical or legal compliance standards,
the member can use a special mailbox as a hotline toreport it. The only people allowed to access the contentsof the mailbox for ethical concerns are the ethics chairman
and members of the Ethics Committee. The confidentialityof all information in those messages is guaranteed. The
chairman and committee are committed to protecting thereporter’s privacy while investigating the complaint fairly
and honestly.

1

Competitors

2

Reciprocal Transactions

3

Conflict of Interest

4

Giving and Receiving Gifts

5

Political Contributions Prohibited

Protection of Personal Information

6

Antisocial Movements and Organizations

7

Environment

8

Safety9Respect for Human Rights

Identity theft is becoming a major social problem. This has
spurred calls to companies to take all appropriate carewith the personal information they hold. TEL is very conscious of the law specifying protection of personal information, which went into effect in April 2005, and has
released a basic directive and regulations for protection of
personal information. We are moving as quickly as possible to establish detailed rules and finalize a security management system for guarding that information.

10 Harassment
11 Improper Use of Company Assets
12 Investment in Stocks
13 Handling Trade Secrets
14 Execution

Compliance Training
TEL has instituted a web-based compliance training system in which every employee is required to participate sothat each will be able to correctly understand what compliance is and to do their tasks with the right attitude. This
training presents the topics of compliance in the context
of corporate activities, compliance issues in day-to-day
activities, directives for risk management, and our compliance regulations. Courses were completed by about 6,300
employees in FY 2005.

TOKYO ELECTRON Environmental and Social Report 2005

7

Hi g h ligh t s

TEL’s Products
With its semiconductor production equipment, TEL provides a foundation for the digital network era.

TEL Semiconductor Technology is All around Us
Many processes are required to produce semiconductors on thin silicon wafers. In the digital network era, finished semiconductors are used not only in personal computers and home electronics but in cars and many other common conveniences. Semiconductors are found in virtually every appliance now and used in every facet of our lives. In its role of developing and building
the most advanced semiconductor production equipment, TEL is part of the basic support system for the modern society.

TEL Offers Semiconductor Production Equipment
TEL’s Major Products

Thermal Processing Systems

Coater/Developers

Plasma Etch Systems

TEL’s Equipment is Used for Producing Semiconductors
Semiconductor Production Processes
Layers are added to and then removed from the surfaceof the wafer, over and over again.

Silicon wafer

8TOKYO ELECTRON Environmental and Social Report 2005

Flow of Materials in TEL
TEL needs a great variety of the earth’s resources to do its business. At the right is a figure showing how these materials flow through TEL’s manufacturing plants and office facilities. The environmental burden is especially heavy during
process assessment. This is because assessing the correct functioning of the equipment requires much electric power
and various gases and chemicals. During process assessment, the equipment is observed while it performs the verysame processes for which it will be used by the customer.

Input

..
..
.
.

OutputFY 2005, relative to FY 2004

Electric power
247,100 MWh (+6.0%)
Gases
794 km3(+11.0%)Fuel
2,780 kl(-3.8%)
3Water
1,004 km(-1.0%)
Chemical substances 11.3 t(-22.1%)(Class 1 materials under PRTR law)
Paper (copy paper)
377 t(+7.4%)

..
..
..
.

FY 2005, relative to FY 2004

TEL
plants and offices
in Japanand overseas

Total output of products
21,841 t
CO2
104,110 t (+5.3%)
NOx
11.4 t(+2.7%)
Wastewater
994 km3 (-1.0%)
Total wastes
11,029 t (-9.7%)
Total recycled resources
10,597 t (-6.7%)
Total amount incinerated and sent to landfills 431 t (-49.1%)

Semiconductors Made by TEL’s Equipment are Used
Almost Everywhere
Products Using Semiconductors

Digital video cameras

Digital still cameras

Automobiles

Auto Wet Stations

Mobile phones

Thin-screen TVs

Semiconductor

PCs

Silicon wafers
with inscribed patterns

TOKYO ELECTRON Environmental and Social Report 2005

9

Hi g h ligh t s

TEL’s Business
TEL is striving to obtain accurate estimates of and then reduce the environmental burden
and safety hazards posed by its business activities.

Reducing Environmental Burden and Safety Hazards in Each Stage
This page describes the full course of development of EXPEDIUS, one of TEL’s core products which we will use as a typicalexample of an auto wet station. The figure below shows the process, from the first meeting to discuss specifications to theoperation of the actual equipment as it produces semiconductors on our customer sites. The figure highlights approaches taken
for reducing the environmental burden and safety hazards. Those must be considered essential factors throughout this process.

TEL

2 Process assessment

Development and Manufacturingof Semiconductor Production Equipment

Following the customer’s specifications, we test andobserve the operation of the equipment while it is performing the semiconductor production processes the customer requires. We seek to reduce the amount of purewater used when EXPEDIUS cleans wafers with fluoric
acid and alkaline chemicals (see p. 20).

1 Specifications meeting
Requests from customers concerning semiconductor production equipment mention
more than cost and delivery schedule – customers are also deeply concerned about
throughput (for productivity) and yield (forquality). In addition, there are increasing environmental and safety requirements recently.

4 Procurement
Some parts of our equipment are standardized components,
but most are special-order. TEL believes in practicing green
procurement from suppliers of components used in the EXPEDIUS. This includes procuring components that contain nolead or other harmful substances (see p. 20 - 21).

* EXPEDIUS is developed and manufactured at the Saga plant of Tokyo Electron Kyushu Ltd.

10TOKYO ELECTRON Environmental and Social Report 2005

The auto wet stations handled by our Surface Preparation Systems (SPS) BU clean
wafers with pure water and a variety of chemicals. These remove particles and contaminations from the surface of the wafer while it is processed into semiconductors. The cutting-edge auto wet station EXPEDIUS reduces the amount of chemicals used and its highdegree of product standardization allows shorter delivery and start-up times. It has been
well received by our customers.

Masaaki Hata
General Manager
Surface Preparation Systems BU,
Tokyo Electron Limited

Customer’s facility(a semiconductor production plant)

3 Design
We design our equipment according to the specifications given by
the customer and the country in which the equipment is to be used.
The effort we make in this stage to accommodate environmental
and safety concerns pays off later in lower burden imposed by
the equipment. EXPEDIUS offers a much smaller“footprint” than its previous models, saving space inthe customer’s facility. Future goals are to continue
reducing the amount of lead in the equipment and tofurther standardize the specifications (see p. 20).

7 Start-up and inspection
The equipment is started up in the customer’s plant. It is essential
to follow procedures – our motto is “Safety first” – when handlingthe dangerous substances used in this equipment. Several piecesof equipment are brought into the customer’s plant. Sometimes,
start-up must be carried out on a 24-hour time schedule, withteams trading shifts, as necessary.

6 Shipping and delivery
We have begun using low-emissions trucks for deliveries to domestic customers. For overseas customers, equipment is packed in wooden frames and isusually air-delivered. Scrap lumber from the wooden
frames is recycled and other measures are taken tominimize the environmental burden in this stage.

5 Manufacturing
An important feature of our units and modules is how easy
they are to integrate and to dock with each other; this reduces
the environmental burden involved in assembly and inspection. The wastes generated during those stages are all recycled. Pure water is recirculated and cleaned in the Saga plant ,reducing our water usage and lengthening life of components
used to produce pure water (see p. 23 - 24). Another important factor to consider is safety (see p. 26 - 27).

8 Production of semiconductors
Semiconductor production equipment is operated 24 hours a
day for the constant production of semiconductors. Customers allow only brief stops of the equipment for maintenance,
so it must be possible to perform all maintenance work properly in a very limited time. We are also keenly aware that,
according to life cycle assessment, a great portion of the total
environmental burden of our equipment occurs during semiconductor production. Reducing that burden is a top priority.

About the auto wet station EXPEDIUS: Very fine impurities such as particles and dust cause fatal damage to semiconductors, which contain extremely fine circuitry on their surfaces. From the time the wafers are firstbrought into clean rooms until production of the devices is completed, they are cleaned with hydrochloric acid, sulfuric acid, fluoric acid, pure water and other substances before and after every single process in orderto remove the unwanted substances. Different kinds of cleanings are required before and after the different processes, so the versatile auto wet station EXPEDIUS is capable of a variety of cleaning methods.

TOKYO ELECTRON Environmental and Social Report 2005

11

En vir o n m e n t a l R e p ort

EHS Management
TEL’s environmental, health and safety initiatives have spread across the globe.

EHS Activities for Improving
the Environment, Health and Safety
TEL is firmly aware how important it is to undertakestrong and continuous environmental, health and safety(EHS) initiatives, and the entire group is constantly conducting such activities. Our Management Philosophy
emphasizes these topics in the following sentences: “TheTEL Group places the highest consideration on the global
environment, as well as the safety and health of its
employees, customers and every person connected,
directly or indirectly, with our business activities. We
believe that keeping safety, health and the environment
foremost in our thoughts will build trust in our businessand result in long-term profit growth for the company.”

EHS Promotion System
Our EHS system takes the form of three pillars: “Product
EHS,” which advances EHS priorities in our products ingeneral; “Customer-site EHS,” which advances those priorities during and after start-up of our products; and“Factory and Office EHS,” which concerns TEL’s facilities.

Global EHS Committee* Committee Chairman: President of TEL(EHS activities
in each region)

In order to strengthen our EHS management system, we
are increasing the monitoring that verifies the system
function and results. Monitoring is done within plants andoffices, within the Group, or by third parties. We are especially focusing on the TEL Internal Assessment, a programof mutual EHS evaluations by representatives of many
plants and offices, which was instituted in FY 2003. In FY
2005, the three topics of Product EHS Compliance, Product EHS Performance, and Environmental Performanceand Legal Compliance were added to the earlier programs,
which focused on labor safety and health. These measures have reinforced ourability to check the environmental and safety performance of individual piecesof equipment as well as toallow plants to check eachother’s environmental management.
On-site assessment

Environmental Risk
Management

TEL’s EHS Promotion System

Factory
andOffice EHS

EHS Activities Monitoring System

Customer-site EHS

Product EHS(EHS activities
at customers’ facilities)(EHS activities
for TEL’s products)

EHS Management System
TEL is pursuing certification under ISO 14001 at all ourplants. In FY 2005, one each of our manufacturing plants
and offices acquired certification.

All our plants use the Plan / Do / Check / Action(PDCA) cycle for product improvements. This cycle ismandated under the ISO 14001 standard for reducing
environmental burden. Estimates of risks to the environment are also determined in accordance with this system
and measures are taken for designs which have especiallyserious environmental burden. There are some issues
which we are addressing in advance of environmental law.
We believe that taking action on global warming in accordance with the Kyoto Protocol is the most important issue
for the near future.

Abiding by the Law
ISO 14001-qualified plants and offices
Company nameTokyo Electron AT Ltd.
Tokyo Electron FE Ltd.

Tokyo Electron AT Ltd.

Tokyo Electron
Kyushu Ltd.
Tokyo Electron
Device Ltd.

12

Certification
date

Certification number

Sagami plant

December
10, 1997

1110-1997-AE-KOB-RvA

Tohoku plantFebruary
19, 1998

1118-1998-AE-KOB-RvA

Yamanashi plants(Fujii/Hosaka area)May
15, 1998

1124-1998-AE-KOB-RvA Rev.1

Miyagi plantMarch
1, 2005

01245-2005-AE-KOB-RvA

Saga plantMarch
12, 1998

1119-1998-AE-KOB-RvA

Kumamoto/
Koshi/Ozu plants

March
26, 1998

1120-1998-AE-KOB-RvA Rev.1

Yokohama officeJuly14, 2004

EC04J0144

Plant/officenameTOKYO ELECTRON Environmental and Social Report 2005

TEL operates in strict obedience to the law. 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 2005, wewere not subject to legal actions of any kind with regard
to environmental accidents, violations, fines or complaints.

Envir o n m e n t a l R e p ort

EHS Activity Goals and Results
TEL has set goals for EHS activities and is promoting those activities throughout the group.

Goals and results for EHS activities in FY 2005
Action plan in FY 2005

Results

Health and safety

EHS management

Plans and goals for FY 2006 onward

Page in report

Performed for newly-developed equipment

Continue to perform

P18

Implement lead-free solder in products

Identified issues in customer’s plants, prepared
investigations for technical standards, etc.

Address issues, prepare for start of production in
January 2006

P20

Green procurement

Surveyed components at suppliers for hazardous substances in accordance with guidelines
on substances banned or subject to reductionin products and with JGPSSI* survey

Construct system enabling creation of component
database with survey results and use of the database during component searches or ordering

P21

Reduce energy consumption(1% decrease in CO2 emissions per unitof sales, as based on Law Concerning
the Rational Use of Energy)

Actual CO2 emissions increased, but fell 12%
per unit of sales since previous year

Continue to promote energy conservation and aim
to get closer to 1997 level of energy consumption
per unit of sales

P22

Zero emissions

Accomplished at four plants in Kyushu region
and in Yamanashi, Tohoku, Miyagi and Amagasaki; recycling rate for the entire groupraised to 96%

Promote zero emissions and waste reduction programs in regions other than manufacturing plants

P23

Continue tracking the amount of chemicals used that are subject to PRTR
reporting

Determined amounts of relevant substancesused, identified where they are emitted to, andtracking for the group overall from this fiscal year

Continue surveys

P25

No accidents requiring 4 or more days
off; 30% reduction in injury accidents
from previous fiscal year

Some accidents required employees to take 4
or more days off; there were increases both inrate and absolute number of injury accidents
over previous year

For FY 2006, set goals for accidents requiring
emergency measures, office accidents, ergonomically caused accidents, etc. and work to reducethemP26,27

Continue TEL Eco-Activities(simple EMS) at office facilities

Acquired ISO 14001 certification at Tokyo
Electron Device Yokohama office

Examine introduction of web-based environmental training

P12,29Introduce occupational safety andhealth management systems in manufacturing plants

Promoted risk assessments at plants where
they had not been introduced yet

Execute meaningful risk reduction plans, verify
their effects

EHS mutual assessments

Added and performed checks addressing environmental performance and product EHS to the existing
EHS mutual assessment procedures for work safety

Promote activities at overseas offices

Began tracking state of safety training in Asia
via the web

Perform assessment in each region using assessment methods to which new elements have been
added
Investigate how environmental training is conducted; introduce into new regions; track state oftraining via the web

Product initiatives
for the environment

Environmental
activities
at eachplant or officeEvaluation

Perform life cycle assessments

Achieved target

Achieved 80% of target

Achieved less than 80% of target

Safety and the environment:
critical considerationsin the development stage

–

P12
P29

* JGPSSI: Japan Green Procurement Survey Standardization Initiative

This section summarizes safety and environmental initiatives in the

As the awareness of product standardization
has grown, we have created a foundation
for building in eco-friendliness and reducing
the physical burden to workers.

year ended March 2005 from the viewpoint of managers in the field.

Until recently, TEL’s approach to each customer’s order was to create a

In the realm of safety, TEL has reviewed the safety of each type ofcompletely new design meeting the customer’s needs in his order for

production equipment it provides. TEL has been designing and devel-

semiconductor and FPD production equipment. Now, however, we

oping its production equipment based on the safety standards promul-

have begun to promote standardization. Our designs employ common

gated by SEMI*, among other sources, but the latest review also con-platforms, and a variety of modules are assembled onto the platforms.

sidered safety during start-up, maintenance and other times when the

It is essential to standardize equipment in order to further the goals ofequipment is not actually running. Another item considered was the

production equipment safety and protection of the environment, so we

importance of reducing equipment weight in order to lessen the physi-

see our current efforts as simply preparation for reaching further objec-

cal burden imposed during start-up and maintenance. Although thistives. There is plenty of room for further standardization. This process

objective is in direct conflict with the recent trends to larger sizes andwill be continued for equipment, designs and components.

weights of semiconductor production equipment, TEL is emphasizing

Meanwhile, we are tackling another issue, that of cutting employ-ergonomic engineering in its design inees overtime. One example of this is thatorder to reconcile these opposing goals.

whereas extra workloads once fell on a

As for the environment, customers

certain few departments or employees,

are increasingly requiring that we reduce

now, as the spirit of “kaizen” spreads

not just equipment voltage but overall

from the management to employees,

environmental burden. TEL is aware that

there is much more equality in the shar-the environmental burden of our products

ing of the workload.

is greatest during equipment operation,
and we are working to mitigate this burden by starting at the design and development stage.

Masaki Kaneko

Hirofumi Kitayama

Director
Environment, Health & Safety CenterTokyo Electron Limited

President andRepresentative Director
Tokyo Electron AT Limited* SEMI: Semiconductor Equipment and Materials International: An international industry group consisting of manufacturers of semiconductor and FPD production equipment and materials

TOKYO ELECTRON Environmental and Social Report 2005

13

Envir o n m e n t a l R e p ort

Environmental Accounting
TEL uses environmental accounting in its business management to determine
the costs and benefits of its environmental activities.

Our Approach
to Environmental Accounting

Environmental Preservation Costs

Environmental accounting is a management tool used tofind the costs and benefits of a company’s environmental
activities. TEL has implemented an environmental
accounting system to quantify the costs of its activities
that concern environmental protection.
In FY 2005, the sixth year since the introduction of ourenvironmental accounting system, we worked to further
improve the accuracy of our data on investments andexpenses for equipment needed for environmental activities. We are determined to continue initiatives to preserve
the Earth’s environment in the years to come.
Our environmental accounting complies with theEnvironmental Accounting Guidelines (2002 edition) andthe Environmental Accounting Guidebook published by
Japan’s Ministry of the Environment.

Environmental preservation costs (investments andexpenses) for FY 2005 are outlined in the tables and figures below.
The scope of coverage of the data includes TEL plants
and offices in Japan. The investment depreciations infacilities are calculated as expenses beginning with theinvestments made in FY 2000.
Breakdown of Investments

Breakdown of Expenses
Social activity
costs
2.2%

Management
activity
costs
20.8%
Upstream/
Downstream
costs
13.4%

Pollution
prevention
costs
35.4%

Globalenvironmental
costs
30.4%

Pollution prevention
costs 12.9%
Globalenvironmental
costs
1.9%
Resource
circulation
costs
17.4%

Research anddevelopment
costs
51.5%

Management
activity
costs 9.8%

Environmental Protection Costs in FY 2005

Upstream/
Downstream
costs
4.7%

Scope: All TEL facilities in Japan (Sapporo, Tohoku, Miyagi, Akasaka, Fuchu, Yokohama, Sagami, Hosaka, Fujii, Amagasaki, Osaka, Saga, Kumamoto, Koshi, Ozu)
Period covered: April 1, 2004 — March 31, 2005
(1,000 yen)Classifications of environmental costs
1. Business area costs
Itemization 1.1 Pollution prevention costs
1.2 Global environmental costs
1.3 Resource circulation costs
2. Upstream/Downstream costs
3. Management activity costs
4. Research and development costs
5. Social activity costs
6. Environmental damage costs
7. Other costs
Total

Scope of main initiatives(facilities, supplies, leases, depreciation, maintenance, etc.)
Preventing air pollution, water pollution, soil pollution, etc.
Global warming prevention, ozone layer protection, etc.
Efficient use of resources, waste reduction, etc.
Green purchasing, green procurement, etc.
Environmental education, monitoring and measuring environmental impacts, etc.
Product R&D, etc.
Planting trees and vegetation, supporting local environmental activities, information disclosure, etc.
Repairing damage to the natural environment, etc.
Other

Investment amount

Expense amount

56,21830,25925,9590
11,43917,801000085,458656,769
264,232
37,851
354,686
96,436200,506
1,042,573
44,332002,040,616

Economic Benefits of Environment Protection Activities
The results of calculations for the economic benefits of environmental protection activities are shown in the table below.The economic benefits of environmental protection activities are the only environmental accounting items covered in this report.
Economic Benefits of Environmental Protection Activities in FY 2005
Scope: TEL facilities in Japan (Sapporo, Tohoku, Miyagi, Akasaka, Fuchu, Yokohama, Sagami, Hosaka, Fujii, Osaka, Amagasaki, Saga, Kumamoto, Koshi, Ozu)
Period covered: April 1, 2004 — March 31, 2005
(1,000 yen)Classifications of environmental costs

Cost reduction

Profits

14

Benefits relating to electricity and other energy
Water-related benefits
Paper-related benefits
Resource-related benefits
Other benefits
Waste related benefits
Water and soil effluent benefits
Cost reduction subtotal
Resource-related benefits
Waste-related benefits
Profit subtotal
Grand total

TOKYO ELECTRON Environmental and Social Report 2005

Details
Reduced electricity usage
Reduced water usage
Reduced paper usage
Reduced crude oil usage
Reduced waste volume
Reduced waste volume

Amount
40,796
7,478
3,990
1,516
7,594
14,513
132
5,573
87
495
582
4,991

Our Approach to Reducing CO2 Emissions
in the Semiconductor Industry
Global warming poses serious problems to the continued existence of human life on Earth. TEL will respond morestrongly to this issue and work for reductions in our CO2 emissions as our contribution to the solution of thisproblem by the semiconductor industry.

Issues in the Semiconductor Industry
The CO2 emissions by the Japanese electric and electronic
products industry accounts for about 3% of all industrial
emissions (see graph “Emissions Industries in Japan). The
structure of this industry has greatly changed in the past 10
years: manufacturing has moved away from heavy electric
equipment and home electric appliances, which consume
relatively low amounts of energy and involve much assemblyof components, to products requiring high-precision processes. The sector of semiconductor device production is aheavy energy consumer and has gone through a period of
exceptional growth, during which many new production
facilities have been built. The energy consumption far outstrips the preliminary estimates (based on an excerpt from a
Nippon Keidanren report on measures against global warming). It is predicted that CO2 emissions involved with production of semiconductors, liquid crystal displays and plasma
displays will increase, raising emissions for the industry as awhole.
In the wake of the Kyoto Protocol, Nippon Keidanren has
published an environmental action plan. They proposed thegoal of a 25% reduction by CY 2010 in production-caused
CO2 emissions per unit cost, relative to the CY 1990 level,
for the four groups of electric and electronic groups, which
include the semiconductor industry. One of the measuressuggested is to reduce energy consumption in large-scaleclean rooms where semiconductors are produced.
Meanwhile, semiconductor industry groups in the EU,
Japan, South Korea, the U.S. and Taiwan have announced
through the World Semiconductor Conference (WSC) thatthey will reduce emissions of the greenhouse gases PFCs*
by 10% by CY 2010.
As such domestic and international efforts get further
underway, our customers are also stepping up initiatives,
meaning that they also expect more from TEL.
* PFCs: Perfluorocarbons. Gases belonging to this category are used in semiconductor production processes, for silicon wafer etching and for cleaning the chambers of film
forming equipment.

Approaches Taken by TEL
A close look at the life cycle of our semiconductor production equipment reveals that its environmental burden, especially as measured by CO2 emissions, is high during operation (see P.18). Thus, reducing emissions during operation is
the main thrust of our efforts.
The electric power consumption of production facilities(lines) doubled as wafers were upsized from 200mm to300mm. Some tentative forecasts have even warned thatthe growth of energy demand from that sector exceeds thegrowth in power available from electrical generation facilities. The industry has tackled the problem of improving
equipment efficiency in order to reduce energy consumption, but the big gains have already been made, and no great
progress in that realm can be realistically expected in the
future. Hereafter, it will be necessary to pursue energy savings throughout the factory from a variety of viewpoints– not only equipment, but also in methods of accomplishingtasks and by sharing technical information. New efficiency
programs must encompass devices, equipment and facilities. All the departments of TEL – development, design,
manufacturing and management – will pull together as ateam to develop new environmental technology for ourequipment.

Percentage of Total World Carbon Dioxide Emissions
Due to Top 15 Nations (CY 2000)

Others
27.9%

Ukraine 1.5%

U.S.
24.4%

Australia 1.5%
China
12.1%

France 1.6%
Saudi Arabia 1.6%
Mexico 1.8%
S. Korea 1.9%

Russia 6.2%

Italy 1.9%

Japan 5.2%
Canada 1.9%
India 4.7%
Great Britain 2.5%
Germany 3.4%
Source: Oak Ridge National Laboratory
Quoted from Japan Center for Climate Change Actions (JCCCA)
http://www.jccca.org/

Emissions of Industries in Japan (FY 2003)
Automobile
manufacturing 1%

Mining 1%
Others16%

Automobile
components 1%

Steel
36%

Electric/electronics 3% Cement
5%
Paper
6%
Electric
power
Chemicals
7%
15%
Petroleum
9%

Source: Ministry of Economy, Trade and Industry

TOKYO ELECTRON Environmental and Social Report 200515

En vir o n m e n t a l R e p ort

Sales, Development and Design Staff
Share Their Views
TEL employees involved with our TPS (thermal processing system) equipment, one of TEL’s main products, met
recently to discuss how to make this equipment kinder to the environment, a goal which includes energy conservation.

More Customers Looking for
Eco-friendly Equipment
Hoshi: I believe that the biggest challenge TEL is facing
now is the environmental burden of our equipment during
operation, especially its high energy consumption. I lookforward to hearing your opinions today about how we canaddress these environmental considerations, mainly withrespect to energy savings.
Okabe: I am in charge of development of elemental technology. We are the first part of the organization for theprocess of turning a basic component into a product, so
you could say that wehave to be the first to think
about the environmental
impact. Specifically, we
have challenges like creating systems for re-using
expensive or rare gases.
Wamura: I am in chargeof design for mass production, so I mainly deal withcustomer needs like faster production schedules or costsavings. Still, I think it is important to make a real effort tocommunicate environmental concerns to the sales staff
and to the customers, and make sure they understand.
Yasuhara: I am in a project for product quality management and assurance as part of our sales activities. The
perception of quality has changed over the years; recently,
getting the product to have less environmental burden has
come to be seen as one
aspect of quality. For
example, customers see
the effect of equipment on
the environment while it isoperating, and the burdenof the equipment on theenvironment after use, as
an integral part of “quality.”

16

TOKYO ELECTRON Environmental and Social Report 2005

Umeki: There really is atrend to that. We haveheard a lot about this from
customers, that they don’t
just want functionality inthe equipment, they also
want us to reduce theirenergy consumption. They
told us that one strategy
for reducing energy usage
would be to shorten the time from wafer input to output
as much as possible. We developed equipment which did
that, and it did reduce power consumption for wafer handling. Still, a survey by one of the semiconductor producers showed that, of all the systems used by semiconductor producers, TEL’s TPS equipment had the highest
power consumption. For our products to benefit the public, I really feel we are going to have to put more effort
into reducing our equipment’s energy usage.
Wamura: That’s right. We need to increase the value ofour products by taking more consideration of environmental concerns. I think that is the responsibility for us in thedesign department.
Umeki: Also, more andmore requests from customers address not justthe equipment itself, butalso the associated facilities, material gases andwafer treatment methods.We may have a business opportunity here,with “environment” as
the keyword.

Joji Hoshi

Environment, Health & Safety CenterTokyo Electron Limited.

Yu Wamura

TPS Engineering Dept.
Tokyo Electron AT Ltd.

Masaaki Chiba

TPS Engineering Dept.
Tokyo Electron AT Ltd.

Moyuru Yasuhara

TPS Dept.
Tokyo Electron Limited

Tsuneyuki Okabe

TPS Development Dept.
Tokyo Electron AT Ltd.

Makoto Umeki

TPS Engineering Dept.
Tokyo Electron AT Ltd.

(photos at top of p. 16, from left)

Advancing Product Eco-friendlinessby Proactive Marketing
Chiba: I’m in charge of making TEL products lead-free.
We’re running a programwith the goal of removing
all the lead from our products as of 2006. The problem however is that thisraises costs, so we arereally struggling to do thisand meet our other goal,
lowering costs, at thesame time.
Yasuhara: Is it possible that you will be able to get pastthat by changing your approach? When you decrease theenergy usage of the equipment, even if the product’s
price goes up, the energy expense during operation goes
down, so it is quite possible that you have lowered theoverall costs. Eliminating lead works the same way. The
higher costs in the initial investment stage can be recovered in the long run. I feel it is the essential role of thesales force to do a good job explaining this to the customers and convince them it is worthwhile.
Wamura: In order to better differentiate ourselves fromour competitors in environmental issues, we need to be
more aggressive in trying things that other companies are
not looking at yet.

Okabe: I think, in order to do that, the company as awhole needs to put out directives or slogans for attacking
the necessary issues, like safety during development of
eco-friendly products. They should not just follow the current lines of research. They will need a specialized structure for developing such products.
Yasuhara: Up to now, we’ve always developed our products in accordance with our customers’ requests. But thatis changing. We are overhauling the way we develop our
products, with an emphasis on preserving the environment. I think it is completely appropriate for TEL tochange over to a kind of manufacturing that we can beproud to describe to our customers.
Hoshi: I really support the proactive style of business,
which reflects TEL’s attitude toward the environment, and I support a continuingemphasisonenvironment-friendliness.
We are not waiting for ourcustomers to ask, we aremaking these changes on
the basis of our own ideas.
This is a good thing.
Meeting time: 1:00 – 3:30 PM, Thursday, June 30, 2005
Place: Headquarters Conference Room, Tokyo Electron Limited

In response to the exchange of opinions
This was a conversation among members involved in our TPS
equipment, but as I listened to the lively discussion, I felt the members were looking more at our industry than just at our equipment.
There was some discussion of reducing environmental burden, mainly by reducing energy consumption of the equipment,
and I felt that every one of the members had a direct sense of
how many human and financial resources the entire semiconductor industry is devoting to the environment. I must also note thateveryone seems to share a consciousness that the business ischanging from the old model of manufacturing according to therequests of semiconductor producers to a model whose technology is led by the equipment makers, on the basis of the knowledge and skills they have built up, and a model that is responsive
to environmental concerns.
The Development and Marketing divisions of TEL have been
cooperating closely in studies to reinforce environmental concerns at the design stage since 2004.

Masaki Kaneko

Director
Environment, Health & Safety CenterTokyo Electron Limited

TOKYO ELECTRON Environmental and Social Report 200517

En vir o n m e n t a l R e p ort

Product-related Initiatives for the Environment
TEL’s efforts to reduce the environmental burden of our products use a variety of approaches, including life cycle
assessment (LCA) and lowering the power requirements of clean rooms.

Reducing the Environmental Burden of Products

Efforts in LCA

TEL has examined the life cycle environmental burden
imposed by the products we manufacture and sell. The
life cycle includes the manufacture of our products, theiroperation and disposal. We determined that operation is
the stage at which our equipment has the most severe
environmental burden. Therefore, we are giving highest
priority to reducing the burden at that stage and are pursuing several avenues for accomplishing that. In addition to
the effort to eliminate toxic substances from the raw
materials we use, we are approaching the goal of environment-friendliness from every possible angle, including
reduction of energy consumption throughout our customers’ clean rooms.

As part of our activities to reduce environmental burden,
TEL employs LCA to make an objective assessment ofthat burden imposed by our equipment. The LCA data wehave amassed for our products and ways in which wehave applied the data in design have elevated TEL to therole of a leader in LCA in our industry.

Organizations for Reducing
Environmental Burden
TEL has established an Eco Design Working Group (WG)
under the Product EHS Technical Committee to pursue
the reduction of environmental burden as measured bylower energy consumption and lower resource usage.
Each of our Business Units (BU) and divisions has compiled LCA data on the new products. The pictures they
have developed of those products are quite instructive
and will help to direct programs to improve those products
and the course of development of our next generation of
products. We have also instituted a task team to direct our
reduction of lead content. They have been charged withthe goal of a completely lead-free product line in 2006. We
have also notified our suppliers of specific targets forgreen procurement, in order to decrease the environmental burden of our raw materials.
Requests from customers for better performance inthe environmental, health and safety fields have grown inrecent years. It is more and more important to incorporate
the concepts of EHS in the initial stages of development
and design of each product. This is called “Design forEHS.” The globalization of our business activities is also
driving us to adapt our products to the requirements of different countries’ laws and regulations. We will continue
our proactive Design for EHS initiative in order to meetthis challenge.

Example of LCA
An LCA of one of our main products, the Telius™ plasmaetch system, showed that 98% of the total CO2 released
during the life of the equipment was generated during
equipment operation. The operation stage also accounts
for about 50% of its total gas emissions and 30% of totalenergy usage. Subsequently, it was found that replacing
the conventional etching gas with one of a lower global
warming coefficient, would reduce CO2 emissions by 70%
from the original volume. Nevertheless, the substituteetching gas is both toxic and flammable. Besides the dangers it poses during use, it must be detoxified, which
increases costs, and special precautions must be taken in
handling it.
* Plasma Etch System: This uses a plasma to
etch (remove) a thin film from the surfaceof the wafer, following the pattern of thedesired circuit.

TeliusDistribution of CO2 Emissions as Found by LCA(%)

98.05%

1.19%
0.68%
Material
Assembly
manufacture* Operating life assumed to be 10 years
00.05%
Equipment
transport

0.03%
Disposal

Equipment
operation*

Details of Environmental Burden during Operation(CO2 Equivalent)(%)

Organization for Promoting Product EHS

50.3%

Product EHS Technical Committee
29.5%
Product Safety WG

Eco Design WG
Lead-free Task Team

18

TOKYO ELECTRON Environmental and Social Report 2005

10.9%
0

Exhaust Electricity Cooling
gas

5.2%

1.8%

1.2%

N2 Consumables Dry
gas
air

0.8%
0.3%
Hot
Process
exhaust gases

Approach to Reducing Energy Consumption
during Operation- Initiatives in the Clean Room Reducing the energy consumed during operation of ourequipment is one of the most important issues facing TEL. It
is also important for our customers and for the entire industry, with the Kyoto Protocol in force as of February 2005.
TEL sees five strategies for reducing energy consumption during equipment operation: (1) Reducing the energy
consumption of the equipment itself, (2) reducing theenergy consumption of peripheral devices, (3) using equipment in ways that conserve energy, (4) reducing the energy
consumption of the clean room, and (5) overall clean room
management (planned, appropriate operation). These strategies will be reflected in future technological development.
In addition, cooperating with customers and equipment
makers is absolutely essential in order to realize clean
rooms that operate with better energy efficiency, andtherefore TEL looks forward to cultivating close three-way
ties to roll back energy consumption during equipment use.
Approach to Reducing Energy Consumption during Operation
5. Overall clean room management (planned, appropriate operation)
4. Reducing the energy consumptionof the clean room

Speeding up the wafer transfer
The mechanism, which used to move in the horizontal andvertical directions independently, was re-designed, resulting in a 15% reduction in wafer transport time.

Faster re-pressurizing to ambient pressure
Formerly, the de-pressurized interior of the reactor was
returned to ordinary atmospheric pressure by injection of
nitrogen over a relatively long time, in order to minimize
travel of particles (specks of dust and wastes). Recently,
however, we have installed soft back-fill injectors (nozzles
with multiple holes), which allow rapid pressurization withnitrogen without picking up particles. This has shortened
work time by 65%.
ReactorCooling 2. Reducing the energy consumption
equipmentof peripheral devices

Vacuumpump

Soft back-fill injectors

1. Reducing the energy consumptionof the equipment itself

N2 pressurization

3. Using equipment in ways that conserve energy
ExhaustExample of Energy-conserving Operation of
Semiconductor Production Equipment
Energy consumption by the semiconductor production
equipment manufactured and sold by TEL can be lessened by shortening the cycle times*1. Let us take the
ALPHA(␣)-8SE thermal processing system*2 for example.
We set a goal of a 20% reduction incycle time between 1997 and 2002.
The time required in 1997 was 279
minutes (for a standard 150 nm process of dichlorosilane-SiN); after many
improvements, this was lowered to
165 minutes in 2002, a considerable
reduction. The actual improvements
are listed below.

Reducing the electricity consumed by
reducing cycle times
In addition to the techniques mentioned above, we haveupgraded control of the heaters. The energy consumed fora single cycle has been reduced 41% from the 1997 level.
These technologies are being used in current 300mm
wafer processing systems.
Progress in Reducing Energy Consumed
during a Single Wafer Cycle
(kWh)

66.2
11%
4.1%
24.9%

Depressurization,
heating

Film formation
process

Re-pressurization,
power-down of heater

Wafer output

26.8%
48.4
8.8%
21.5%

*1 Cycle time: The time required to treat a wafer*2 Thermal processing system: A system which producesoxidized layers, nitrided layers, etc. on a wafer

Wafer transfer,insertion

15.6%
ALPHA(␣)–8SE

0

10.5%
97(␣-8S)

9.6%
6.7%
00(␣-8SE)

1.8%

41.5%
38.7
8.8%

1.8%
15.4%
6.0%
6.7%
02 – present(␣-8SE)

TOKYO ELECTRON Environmental and Social Report 200519

En vir o n m e n t a l R e p ort

Product-related Initiatives for the Environment

Lead-free Initiativein FY 2005. They are still pursuing these activities with thegoal of initiating lead-free production in January 2006; currently, we have training courses in lead-free solder at TEL
and suppliers’ facilities.

The nations of the European Union (EU) are committed by
the WEEE*1 and RoHS*2 Directives to eliminate lead, mercury, cadmium and other toxic metals and materials fromconsumer electric products by June 2006. Semiconductor
production equipment is not included under the scope ofeither directive, but TEL has instituted a program to eliminate lead on its own initiative. It has formed a task teamof representatives from Group companies, BUs and Divisions to promote the introduction of lead-free solder. The
team investigated issues at suppliers, technologicalaspects of lead-free solder, and manufacturing processes*1 WEEE:Waste Electrical and Electronic Equipment*2 RoHS:Restriction of the use of certain Hazardous Substances in electrical and electronic equipment

Lead-free Implementation PlanFY 2004

Targets
Apr

Jul

Oct

FY 2005
Jan

Apr

Jul

Oct

FY 2006
Jan

Apr

Jul

Oct

FY 2007
Jan

Apr

Jul

Formation of Lead-free Task Team, start of its activities
Policy announcements (to suppliers)
Consideration of technology and materials to be adopted
Supplier survey, cooperation and action plan
Study of measures with OEM makers
Assessment of board and module units
Assessment of combined boards and modules
Production preparation
Production

To be implemented after 2006

TOPICS
Approach to reducing environmental burdenin new products
TEL is reducing the environmental burden in each type of equipment it produces, as appropriate for the environmental characteristics of the equipment. The auto wet station, one of our main
products, uses a large volume of pure water during the processes to remove dust and contamination adhering to the wafer surface. Reducing this consumption was one of the goals during thedevelopment of the new auto wet station EXPEDIUS. A newwater-saving specification has
been set for the supply flow
during stand-by, which reduces water consumption by 15%
compared to the previous model.
Next, a valve was added to thepure water supply line to provide intermittent supply, and
EXPEDIUS
this allowed a 70% reduction

20

TOKYO ELECTRON Environmental and Social Report 2005

compared to earlier models. Other new features we are working
on at present are control of exhaust air during standby (to reduce
the load on the air conditioner of the clean room), shortening of
the cleaning time with pure water, and cleaning with a lowerpower unit.
Reducing pure water usage during stand-by(%)
Approx.15% savings

Approx.70% savings

0

Earlier model

Water-conserving
specification

Intermittent supply

Green Procurement
Examining the burden of the components and raw materials making up the product is an integral part of the effort
to reduce the environmental burden of our products. TEL
obtains the materials and components for our main products, our semiconductor and FPD production equipment,from outside vendors. In order to reduce our products’environmental burden, therefore, we follow our own Green

Procurement Guideline* and purchase raw materials andcomponents preferentially from suppliers who are aggressive in reducing their products’ environmental burden. In
the future, we intend to procure materials only from suppliers who meet certain environmental standards.
* Green Procurement Guideline: A TEL document setting standards and targets forchemicals, energy conservation, packaging, resource conservation, recycling andinformation disclosure.

Green Procurement Action Plan
Theme

FY 2004

FY 2005

FY 2006

FY 2007

FY 2008

Survey/Improvement guidance

Survey/Improvement guidance

Survey/Improvement guidance

Survey/Improvement guidance

Survey/Improvement guidanceGreen procurement for equipment and parts
Supplier surveys and guidance
in improving environmental management
Reviewing supplier relationships

Reviewing supplier relationships

Compose lists of materials prohibitedfrom use in productsCollect data and request cooperation on materials
prohibited from use in products

List composition
Data collection/Establish master parts registration

Substitute for parts containing prohibited materials

Promote designs that do not use materials prohibited from use in products

Clarifying Materials Prohibitedor to be Reduced in Products
TEL has formulated Group-wide guidelines banning or
reducing amounts of 16 toxic chemicals in our products. In
the guidelines published by JGPSSI*1, 15 of the banned
chemicals are designated as “Rank A”*2. Six are also listed for regulation under the RoHS Directive. In FY 2005
we stepped up green procurement. Part of this effort wasa survey based on JGPSSI’s survey form which we sent
to our suppliers, addressing toxic substances in their raw
materials and components. Our policy states that we shallsurvey new materials and components as they are adopted. We will register the survey results in a central component database shared throughout the Group and constructa system which will allow component searches and show
how much of each substance of concern is contained in acomponent when it is ordered.
*1 JGPSSI (Japan Green Procurement Survey Standardization Initiative): An association
which oversees green procurement initiatives.
*2 Rank A: A group of substances which have been designated as banned, permitted inlimited amounts, or whose content must be reported, when used in products, byJapanese or other national or international law.

TOP I C S
Introducing shared logistics
Tokyo Electron Kyushu Ltd.’s coater/developer businesshas instituted a program to increase efficiency by sharing
logistics and has decreased its environmental burden as aresult. Its loading efficiency used to be rather low, because
it was using different commercial transporters for each supplier, sometimes forcing transporters to wait when there
were overlapping ship-out schedules.
Since 1999, the company has been using a new modeof logistics in which two transport companies are combined
into a team. One of the companies is designated as the representative, and all transportation duties have been contracted out. The transporters use wide trucks exclusively forshipping TEL products, which eases loading and unloading.
Currently, about 30 of our suppliers participate in this logistics system. This has enabled us to establish a just-in-timesystem, which provides supplies that we need, when weneed them, and in exactly the volume that we need.
Outline of shared logistics
Supplier A

Supplier C

Supplier E

Supplier A

Supplier C

Supplier E

Shared logistics
Supplier B

Substances Banned from Use in Products
Substances banned in products at TEL(16 substances: JGPSSI
Rank A substances + PFOS*)JGPSSI Guidelines
Rank A
Substances (15)Supplier D

Supplier B

Supplier D

RoHS (6)* PFOS: Perfluorooctane sulfonate. This is an intermediate product used as a raw
material to synthesize other substances.

Transporter A Transporter B Transporter C

Team of 2 transport companies

TEL

TEL

TOKYO ELECTRON Environmental and Social Report 200521

En vir o n m e n t a l R e p ort

Plant and Office Initiatives for the Environment– Preventing Global Warming
TEL has reduced its overall energy consumption and is doing its share to prevent further global warming.

Reducing Energy Consumption

Electrical Consumption

Many of TEL’s manufacturing plants are classified as Type 1
Designated Energy Management Factories under Japan’s
Law concerning the Rational Use of Energy and are promoting energy conservation in accordance with the provisions of the law.
Each plant is working actively with the program andhas established goals for saving energy used by lighting
and office machines, for managing air conditioner temperature settings, and so on. They have also instituted fullmachine shutdowns during three-day weekends and task
efficiency drives to achieve further energy savings.
Koshi plant reduces the volume
of air circulation in its clean rooms
and reduces lighting in logistics areas
during the night and days off. It has
been praised for its approaches, andin February 2005 was presented witha commendation for its efforts in conserving energy by the Kyushu Bureau
of Economy, Trade and Industry Kyushu Bureau of Economy,
Trade and Industry(Electrical Division).

(100,000 kWh)Japan

Heavy Fuel Oil Consumption(kl)Overseas148 160 150

126

1,916

2,345
101
2,181
2,191
2,151
1,858
1,501
1,212
1,206
1,089
0

967 958

0

97 98 99 00 01 02 03 04 05

Kerosene Consumption

908

Gas Consumption

Total Energy Consumption (CO2 Equivalent*1)(t-CO2)(%)

CO2 emissions
Numbers standardized per unit of FY1998 sales *2
Per unit of sales relative to previous year*3
208.0%
193.1%

104.4% 150.9%
95.8%
100.0%

147.5%

89.3%

738
545
364

403 389

62 60 66 70 50 59

74 72 55 59 66 66 63 58 56

97

98

99

00

01

TEL uses perfluorocarbons (PFCs) and SF6 (sulfur hexafluoride), which are greenhouse gases, in dry etching (erosion of a substance without liquid chemicals), washingand other processes during process development and process evaluation. We also use HFCs, which are CFC substitutes, for cleaning the chambers of our assessment equipment and other tasks. Our total usage of greenhousegases in FY 2005 was about 7,500 tons (CO2 equivalent).
We will continue to manage and reduce our usage ofthese gases.

(t-CO2)
10,082
92.8% 87.1%

02

03

04

05

PFCs

Other
18

SF6

Other
56

7,422

6,740
0

(Plants in Japan and overseas)

TOKYO ELECTRON Environmental and Social Report 2005

HFCs

9,162

87.7%

*1 For CO2 equivalent, see the Ministry of the Environment’s “Environmental Activity
Evaluation Program.”*2 Unit of sales = energy consumption/sales (FY 1998 = 100%)*3 Year-on-year ratio = current year emissions per unit of sales/previous year emission per unit of sales

22

97 98 99 00 01 02 03 04 05(Plants in Japan and overseas)

Reducing Use of Greenhouse Gases

45,922 50,488 52,456 65,817 84,761 94,009 95,486 95,487 104,110
097 98 99 00 01 02 03 04 05

0

Greenhouse Gas Consumption

197.0%

78.4%

City gas

168.2%

150.8%
134.7%
105.6%

LPG

1,062
990 990
942

658

0

The utilization rate of TEL’s manufacturing facilities rose thisyear, following the rise the previous year. The total amount ofenergy consumed rose with the increase in our production,
but the energy per unit of sales was reduced. The energy
use per unit of sales (a measure in which the benchmark
1997 level is equal to 100%) met the target reduction of 1%
from the previous year. Efforts for conserving energy will bestrengthened under the impetus of the Kyoto Protocol.

97 98 99 00 01 02 03 04 05(1,000 m3)

(kl)
996

1,838
1,828
1,631

1,881

1,652

Director’s Prize

Energy Consumption

2,430

Other
19

6,682
6,297
1,856
1,284
0

1,468

1,140

03

04

784
322
05
(Plants in Japan)

Envir o n m e n t a l R e p ort

Plant and Office Initiatives for the Environment– Waste Reduction and Recycling
TEL is working to decrease its volume of wastes and improve recycling efficiency in order to decrease its environmental burden.

Approach to Waste Reduction and Recycling

Breakdown of Wastes

The Group is working seriously to reduce wastes, following its policy to generate as few wastes as possible, torecycle as many of those we produce as possible, and to
dispose of the non-recyclable remains properly. There area dwindling number of waste disposal sites, so landfill
fees are rising fast. Reducing wastes is an integral part of
reducing costs.
Specifically, TEL has programs to separate wastes, tofind new recycling services, to manage the certification ofmembers of the waste disposal industry, to verify contractors’ disposal methods regularly, and to modify its own
production processes to eliminate waste. TEL also puts up
easy-to-understand displays in all its plants showing how
to separate wastes. It hascreated and is using training materials in Yamanashi plant which show how
to separate wastes suchas paper, PET bottles,
drink cans, bottles, etc.

Liquid chemicals are the largest portion of the wastes
generated by TEL. Chemicals are used in the development
and evaluation of products and then disposed of. Currently, nearly all of the liquid wastes we generate Breakdown of Volume of Wastes
Drink containers
Kitchen garbage 1%
1%
and dispose of externally
Other
scrap,
6%
are recycled. Some of Wood
Packaging5%
our facilities have also
Plastic 7%
implemented equipment
internally for processing
Paper 7%
Liquids
62%
waste fluids, and these
Metallic/
Product wastes
are working to reduce11%
wastes through internal
processing of their liquid
chemicals.

Waste separation procedures information

Total Waste and Recycling Rate
The amount of TEL waste reaching landfills and our recycling rate are summarized in the table below. We haveraised our recycling rate every year through steady efforts
for more effective use of resources.
We have had a program promoting a goal of an overall
TEL group average recycling rate of 95% by FY 2006; in
FY 2005 we reached a rate of 96.1%, a year ahead ofschedule. In the future, we will emphasize reducing the total
amount of wastes, including those we are able to recycle.

Recycling Rate and Amount of Wastes(t)Amount of wastes(incinerated and landfill)(%)

Recycling rate

96.1%
Target recycling rate 95%
93.1%(FY 2006 target)
69.7%
77.4%
59.9%
55.2%

Zero Emissions
TEL defines facilities where fewer than 2% of wastes areincinerated or sent to a landfill as “zero-emissions facilities.” The entire Group participates in zero-emissions activities. Following up on the successes of the previous year,
zero-emission status was achieved by all five facilities ofTokyo Electron AT (Hosaka, Fujii, Miyagi, Tohoku and Amagasaki) in FY 2005. Facilities besides manufacturing plants
are also working to reach zero-emissions in the future.

T OP I C S
Wastes separated into 31 groups
for recycling at Tohoku Plant
At Tohoku Plant, wastes from the manufacturing processes
and offices are separated into 31 types for recycling. For example, sludge is left after liquids are neutralized; the sludge is thenrecycled for use as raw material for production of stainlesssteel. As another example, cable and controllers were once
excluded from recycling because they consisted of a mix ofplastic and steel, but now they can be recycled. Methods havebeen established for re-using every one of our waste materials.
Examples of Recycled Wastes

49.7%
40.9%

15.3%

Material type
Steel · Stainless steel
Aluminum · Drink containers

Material type
Steel · Stainless steel
Aluminum · Drink containers

Copy paper Vending machine cups
Cardboard boxes
Sludge from dining room waste

Toilet paper
Cardboard boxes
Organic fertilizer
Toner cartridges

Toner cartridges
4,238

4,772

3,189

3,179

3,657

3,938

3,268

0

847

431
0

97

98

99

00

01

02

03

04
05
(Plants in Japan)

Waste fluids

Release into river after neutralization
Feedstock for stainless steel
from neutralization sludge

TOKYO ELECTRON Environmental and Social Report 200523

En vir o n m e n t a l R e p ort

Plant and Office Initiatives for the Environment– Resource Conservation
TEL is encouraging reductions in the amount of resources used.

Our Approach to Resource Conservation

Reducing Water Consumption

We are keeping our use of resources to the lowest possible volume with a procurement program that emphasizes
respect for the environment. We are reducing the amountof copy paper and stationery purchased and used, buying
eco-friendly products and collaborating with manufacturers to recover products that have reached the end of theiruseful life.

TEL’s manufacturing plants are conducting a wide spectrum of activities to reduce the volume of water they consume. We are taking other measures to conserve waterwith systems to recirculate cooling water and other fluids
in all our manufacturing processes, and automatic faucets
in washrooms and other sanitation facilities to eliminate
water wasted by users’ forgetting to turn it off or othercarelessness. TEL has been praised for its initiatives.
Koshi plant was awarded a prize for its conservation ofwater in the Higo area (see “Communication with Stakeholders,” p. 30).

Efforts to Reduce Paper Usage
TEL is addressing the issue of reducing usage of paper.
For example, now we photocopy on both sides of paper,
encourage reduced-size copies and have developed digitalized forms for many kinds of announcements and messages. We are taking other steps to preserve forest
resources as well; for example, we use recycled paper for
all but special uses, and paper cups made from kenaf, a nonforest product. In spite ofthose efforts, however, ouruse of copy paper in FY 2005
rose by about 10% (6,580,000
sheets) over the previous year.
The main reasons for thiswere the increases in sales
and shipments. We will continue reviewing the usage of
copy paper in our facilities, toconsolidate records and forms,
and ultimately, to reduce ourpaper consumption.
Poster urging our employees
to use less paper

Copy Paper Consumption
Manufacturing plants(1,000 sheets)

Office facilities

131,500
19,350107,367
18,30095,78587,634
18,617

94,217
17,41718,184

Water Consumption(1,000 m3)

693
521
0

172
97

Overseasuse
817

Industrial
972
146

770

812
89

527

445

391

290

325

332

390

98

99

00

01

436

Tap water
1,039
62

1,014
64

1,004
106

388

474

486

437

415
357
430
391
107
88
70
67
02
03
04
05
(Plants in Japan and overseas)

TOP I C S
Reducing water consumption
at Saga plant
Saga plant is making great efforts to reduce water consumption during development, evaluation and inspectionsof products. About 90% of its water consumption is forindustrial purposes. It produces the highly pure water itneeds for product inspections from the regular industrial
water supply. Used water is recovered and subjected toreverse osmosis to re-purify it for re-use; this volume isabout 300 tons/day. The plant is pursuing other water
conservation projects, including recirculation of coolingwater in manufacturing
processes, replacing
water-cooled vacuum
pumps with air-cooledmodels, and comprehensive conservation ofwater for personal use.

112,150
89,067

Reverse osmosis system
for recovering water
77,16869,45076,800

Water consumption at Saga plant(1000 m3)

Tap water
272

0

01

02

03

04

207

0

65
02

TOKYO ELECTRON Environmental and Social Report 2005

Industrial water

241

218

209

207

190

189

34
03

28
04

20
05

05
(Plants in Japan)

24

Groundwater

1,004
119

Envir o n m e n t a l R e p ort

Plant and Office Initiatives for the Environment– Management of Chemicals
TEL is working to prevent environmental pollution before it happens by expanding its chemical substancemanagement.

Our Approach to
Chemical Substance Management

Emissions of Class 1 DesignatedChemicals under PRTR Law

The main use of chemicals at TEL occurs in two stages: inthe evaluation of our products’ performance during development and in inspection and evaluation during manufacture.
During the development stage, chemicals are occasionallyused which have never been used before, or in ways inwhich they have never been used. Before such new uses,
the system is built to verify the new substances or methods. The risks to the environment and to industrial safety
are assessed so that the necessary measures can be taken
before the actual applications begin. TEL is changing overto chemicals which pose as little danger or toxicity as possible for use in inspection and evaluation during manufacture.

TEL is continuing its programs to reinforce management of
all chemicals in accordance with the law and has achieved
a better grasp of the amounts which it handles and which
it sends out for disposal. Hydrogen fluoride, one of thesubstances designated in the PRTR Law which we use inhigh volume, is generally used for cleaning test wafers.
Used hydrogen fluoride is removed by specialist contractors or handled appropriately within the company. In thesame way, we also use large amounts of ethylene glycol
as a heat-transfer medium for cooling water, but nearly all
the ethylene glycol is recycled after use. We will continue
to exercise the appropriate level of risk management ofchemicals. Since the amounts we use are increasing, we
will also be looking for ways to reduce our consumption.
* PRTR (Pollutant Release and Transfer Register): A framework for controlling chemical
substances that may be hazardous to ecosystems and human health. It involves
determining, compiling and reporting on the amounts of chemicals used, released
into the environment and contained in waste transferred off-site.

Amounts of PRTR Law Class 1 Chemicals

207
227
260
283
311
Sum

(kg)

Name of Class 1 Designated Chemical

FY 2002 FY 2003 FY 2004 FY 2005

Water-soluble zinc compounds
Acrylic acid
2-Aminoethanol
Ethylene glycol
Ethylene glycol monomethyl ether
XyleneDiphenylmethane-4,4’-diisocyanate
N,N-dimethylformamide
Water-soluble copper salts(except complex salts)
ToluenePyrocatechol
Hydrogen fluoride andits water-soluble salts
Manganese and its compounds

0
0
520
1,500
120
180
0
290

50
0
430
4,000
0
0
0
450

0
0
0
9,144
0
0
0
309

70
20
475
6,353
0
0
14
131

190

120

0

110

620
0

0
30

0
0

5
3

2,470

3,690

4,558

3,553

0
5,890

900
9,670

610
450
14,461 11,344(kg)
AmountReleased

11

Transferred

3,274

Consumed

14

Eliminated1,960

Recycled

6,085

Sum

11,344

Balance of Materials Designated under PRTR Law
Released to atmosphere 1 kg/yr

Released to water 10 kg/yr

TEL

Total handledamount11,344 kg/yr

Wastes 3,274 kg/yr

TEL’s Response to the PRTR* Law

No.
in the law
1
3
16
43
44
63
78
172

Emission points

Disposed of in landfill
on company site 0 kg/yr

Products
14 kg/yr

Recycled 6,085 kg/yr
Eliminated1,960 kg/yr

PCB Storage
TEL reports how much polychlorinated biphenyl (PCB) weare storing and how much we have disposed of to the
local government every year, in accordance with the Law
Concerning Special Measures against PCB Waste. The
PCB-containing equipment TEL is currently storing consists of two transformers and four condensers; they are invery secure storage.

TOP I C SManagement of chemicals in
Yamanashi plant
TEL has a program which tracks chemical substances
before use, during use and after disposal at our Yamanashi
plant (Fujii and Hosaka facilities). We carry out a risk assessment before we commit to incorporating a new substancein our processes. We have established our own list of 16
banned substances (nine organic chlorine solvents andseven heavy metals). An MSDS* is posted on location
while any chemical is in use, and tasks are restricted toapproved personnel when designated substances are being
used. The destinations are fully informed of the contents ofmaterials to be disposed of so that they can be properly
treated. The Hosaka plant monitors the fluorine concentration of its waste water and has a complete system to maintain it within legal levels.
* MSDS (Material Safety Data
Sheet) : A form with warnings
about the toxicity of a chemical material and instructions
on how to handle it safely.
Management of fluorine
concentration in waste water* Quantities were found in tons in FY 2002, 2003 (Plants in Japan)

TOKYO ELECTRON Environmental and Social Report 200525

S o c ia l R e po r t

Health and Safety
Health and safety are corporate social responsibilities and the basis for a comfortable work environment. TEL is
supporting health and safety in every aspect of our corporate activities by giving high priority to the health of ouremployees and customers, and ensuring the safety of our equipment.

For Everyone’s Safety

Management of Injury Accidents

TEL believes that health and safety are essential and ourManagement Philosophy and directives cleave to this principle. It is one of our corporate social responsibilities to seethat everyone involved with the company, beyond its direct
employees and customers, is able to work with or otherwise use its products without fears for their health or safety.
This makes for good business. In other words, the safety ofpeople, equipment and facilities must never be compromised by profits, delivery deadlines or time limitations.
We have published and distributed brochures titled“Introducing Safety First Culture Awareness” and “OurApproach to Safety First” and hope that our customers
and other stakeholders will understand our approaches
and efforts on this issue. (See “Topics.”)

The rate of occupational accidents at TEL increased fromFY 2004 to 2005. Our analysis showed that, as theamount of work increased with our production levels, theseverity of occupational accidents and the number of factors involved in accidents increased. We have recently
been promoting measures against accidents involving
musculoskeletal disorders (such as ruptured disks), sinceergonomic factors are of greater and greater importancenow. The reason for taking more measures against accidents involving musculoskeletal disorders is, as an equipment maker, we know that these will pay off in terms ofimproved safety during equipment design, work methods,
task management and other realms.
Rate of Occupational Accidents(Frequency)

1.82

0

Average for all industries in Japan
Manufacturing industry average in Japan
Electric machinery manufacturing in Japan
TEL
1.79
1.78
1.77

1.85

1.02

0.97

0.98

0.98

0.99

0.35

0.39

0.24
04

05

0.38

0.34

0.36

0.38

0.18

0.15

01

02

03

* Frequency: Number of occupational accidents per one million labor hours
Number of accidents that required the employee to miss work for 4 days or more/totallabor hours⫻1,000,000“Introducing Safety
First Culture Awareness”“Our Approach to Safety First”

TOPICS
Creating “Our Approach to Safety First”
Generally, TEL’s employees work in two kinds of environments: TEL’s plants for manufacturing equipment, and customer sites where we start up and maintain our products. In
order to maintain a safe environment at the workplace whileworking in customer sites, it is essential not only to obtainthe customer’s understanding but also to work in close cooperation with other equipment manufacturers and facility contractors. That is why TEL created “Our Approach to Safety
First.” It explains TEL’s attitudes and details of our activities
in four topics: product safety, preparing for safety during an
emergency, safety in work tasks, and safety training.

26

TOKYO ELECTRON Environmental and Social Report 2005

“Our Approach to Safety First” (an excerpt)
Work Safety – 4: Control of Hazardous Energy
In order to prevent accidents due to unintentional releaseof hazardous energy, we cut off such energy with electrical breakers, valveson hazardous gas
sources, and otherenergy sources suchas robots, and put
locks and tags onwhen work is being
done.
Lock-out and tag-out Example when multiple
workers are at work

Safety Patrol with Site-driven Approach
TEL carries out safety patrols in order to most effectively
secure safety at our customers’ plants and offer superior
technology to them. Safety is only accomplished when
there is both equipment quality and work quality. We see
safety patrols as a measure against any kind of improperly
maintained work environment and facilities, and also, as ameans of improving TEL’s equipment by feedback of datafrom our customers’ work locations.
At Higashi Hiroshima FE station, the model for other FE
stations, TEL has investigated the risks in customer facilities. In line with our site-driven approach, which emphasizes sharing information among all contractors and workers,
we have instituted safety patrols, morning meetings, evening meetings, a “suggestions from the workplace” system and other safety programs. TEL also practices
site-driven safety overseas.
Tokyo Electron Korea’s
Kiheung support team promotes task safety activities,
and in FY 2005 no injury
Hazard forecasting meeting
accidents occurred during
the rapid start-up work
accomplished at the site.

Example of Product Safety (SEMI S8)– Ergonomic Assessment and Design ofEquipment and Tasks
TEL designs all its equipment according to SEMI S8 guidelines on ergonomics in semiconductor production equipment. It calculates the recommended weight limit (RWL)
using the equation developed by the American National
Institute for Occupational Safety and Health for the mostrisky task of lifting heavy objects (assessment of occurrence of back pain) and uses the results in planning the
optimal locations of components and the tasks associatedwith those components. The RWL is calculated using thefactors listed below. The specific content of each task isdetermined by comparing the calculated RWL and actual
component weight.
Factors for Calculating Recommended Weight Limit
H: Horizontal distance from
midpoint between ankles toposition of hands
V: Vertical distance from floor toposition of hands
D: Vertical distance throughwhich object is lifted, fromstart point to finish point

FM: Exponent for frequency
CM: Exponent for combinations
A: Angle between start point andfinish point

Standards for Assigning Tasks
Calculate result

Task assignment

RWL > Actual weight

1 person can perform task

RWL

Actual weight

Actual weight2⫻(RWL⫻0.9)

2⫻(RWL⫻0.9)

Lifting apparatus or 2-person task
Lifting apparatus shall be used

Example of plasma etch system
Kiheung support team(receiving TEL internal award)

Risk Assessment at Facilities
There are always some risks in the workplace: falling while
walking or taking the stairs, burns or scalds during foodpreparation or serving, and so on. Therefore TEL is taking
measures against accidents in the office as well as theplant. We assessed the risks in all our Japanese office facilities in FY 2005. The magnitude and frequency of injuries
were assessed by the same methods as used for conventional tasks in other workplaces.
Measures were then taken for tasks
which were anticipated to have thehighest risks. Some specific examples of the measures: bracing toprevent shelving from falling over,installation of handrails to stairways,
warning signals at automatic doors,and dome mirrors in corridors.
Newly installed handrail

In accordance with the results of the above calculations,the location of the controller for the plasma etch system
has been selected so that a single person can handle thecontroller.
Design of the Controller Rack

Box forcontroller

D

H

Controller

Optimal heightV(from above)
A

TOKYO ELECTRON Environmental and Social Report 200527

S o c ia l R e po r t

Relationships with Employees
TEL’s personnel system and training are designed to foster a company with versatile employees.

Our Approach to Personnel
TEL’s objectives are to energize our company and to foster the personal growth of every employee. We are determined to be a company that fosters versatile people, andwe specifically target these three objectives:(1) No penalizing of employees who fail while taking reasonable risks in creative endeavors.
(2) Rigorous fairness in handling of our personnel.
(3) Fairness in compensation.
TEL’s personnel system emphasizes the nurturing of
employees. This is designed not merely to emphasize performance, but also the processes which resulted in that
performance. The three approaches of ”Competency toassess processes,” “The individual’s role (mission)” and“Results as based on employee’s role (performance)” areexpressions of our goal to perform fair assessments of
employees as based on their contributions. Competency
is not just the objective of assessment and inspection, but
a measure of the growth of the employee’s skills and abilities required for task categories. TEL will always support
our employees in their efforts to improve themselves andprovide them with opportunities to upgrade their skills andadvance their careers.
Concept of TEL’s Personnel System
Company
MissionIndicate company goals
and directions

Performance
Competency
Reward performance
Offer careers and opportunihelping to reach company ties to build skills needed togoals with commensurate meet the company’s goals
compensation

Mission: The individual’s role
Competency: Competency to assess processes
Performance: Results as based on employee’s role
Competency
Obtain expertise, offera professional attitude

Performance
Provide performance thathelps the company reachits goals

Competency
Polish up professionalism
to obtain higher salaries

Employees

Building Employees’ Careers
We have introduced a variety of systems for employees touse in developing their careers. Each employee has aninterview with his supervisor at the beginning of the fiscal
year, when goals are set. This encourages the employee
to adopt the attitude and habit of thinking over his own
career, and it enables the supervisor to see the necessityof nurturing the employee with a medium- to long-term
viewpoint.
Employees fill out a personal survey and a morale survey once a year. In the personal survey, employees
describe any job changes they would like to make, theirhopes and opinions about the company, and advice they

28

TOKYO ELECTRON Environmental and Social Report 2005

would like to ask for. In the morale survey, employees
describe their view of their morale levels, their organizations and their workplaces. The company, business units
and departments all use the contents of both surveys tostudy and plan improvements in the work environment,
organization management, the personnel system, andother aspects of the company. We also have an in-housestaff recruitment system as an opportunity for employees
to develop their careers. Announcements of job openings
and opportunities allow employees wanting further development and departments in need of new faces to match
up with each other. Also, it allows ambitious employees
who want to move from subordinate positions to career
tracks to determine the appropriateness of different positions and pave the way to management.

Approach to Employee Training
TEL offers an employee training program that encourages
our employees to choose their own careers and supports
their efforts to expand their range of competence throughclassroom training, on-the-job training and job rotation.
Our goal is to create a win-win situation for the employee
and the company, where the company grows through theemployee’s self-realization, thus energizing the organization and honing our competitive edge.
The company is determined to nurture:• Talented people who will know how to lead
• Talented specialists who will create value through their
example of expertise• Talented self-starters who know exactly what they wantto learn in life and how to continue studying it• Talented people who will have marketability.

Competency Training
TEL has begun to introduce a training program in response
to our need for competency in every profession and at
every level. “Competency” is a standardized quality, thepossessor of which acts in ways necessary to achieve
excellent results for his profession, job and rank. Whenemployees display high competency, it contributes to theachievements of the organization, benefits the people
around them, and stimulates the organization.
The introduction of competency training will ensurethat our employees know exactly what abilities are expected of them at their own levels in their professions, andwhat kind of training they should receive. Competency isthe basis for advanced performance, so each employee
has visible goals for his or her career and can get a direct
sense of his or her progress and improvement.

Our Approach to EHS Training

Environmental Training

TEL offers training on the environment, health and safety(EHS) under the principle of “the necessary training forthe necessary people.” These courses are grouped byrank and are open both to Group employees and to
employees of cooperating companies who work on TEL’s
facilities. An EHS training program is also a required partof the curriculum for new hires.

TEL conducts Group-wide environmental training, which is
attended by all classes of office employees, sales personnel, administrators, field engineers, part-time and temporary employees, and so on. The training for manufacturing
plant employees emphasizes the environmental topics in
ISO 14001. Employees involved in critical tasks requiring
special environmental measures receive special training.
Some facilities also offer environmental training in theform of “e-learning” over the company intranet.

EHS Training
Specialized training(for internal environmental
auditors, special training on
key environmental aspects of work)
ISO 14001-based environmental
training (for manufacturing plants)

Equipment-specific training
Customer-specific site entry training
Safety training for employees travelingoverseas
Site leaders’ safety training

Training on TEL Eco-Activity(for office facilities)

Advanced safety training
Basic safety training

Environment

Implementing Safety Training
TEL conducts safety training under the motto of“Safety First.” This consists of training for offices,for clean rooms, for start-up
at customer sites, andother situations, as approEmergency lifesaving classpriate to the employee’s
work. Training content is regularly reviewed and updated,and employees are required to take the updated lectures.
Basic and advanced safety training is offered in the form of‘e-learning’ courses over the company intranet, so employees can take them at convenient times. A unified safetycurriculum is taught to the entire Group. These courses arebeing expanded overseas, beginning with the Asia region.
Safety training directed to site leaders was instituted
in FY 2005. This training
addresses the role and specific safety tasks of the siteleader and includes casestudies for group discussion.
Over 400 employees tookthese lectures in FY 2005.
Training of site leaders

Environmental training for new hires

Web based training

Health and Safety

T OP I C S
Emergency training examines accidents
and near-accidents
People have no opportunities in daily life to see the semiconductor and FPD production equipment supplied by TEL,
so it is quite hard for most people working with such equipment for the first time to anticipate its hazards. Yamanashi
plant provides emergency training to its new employees, inaddition to instructions on how to use tools and testing
equipment, how to handle components, how to operate
lifting equipment, and so on. Emergency training consistsof case studies of accidents and “near misses,” cases
where potentially serious accidents were narrowly avoided.
During this training, employees actually stand at theequipment involved in the potential accident or near-accident, so that they can directly experience the circumstances of the problem. For
example, trainers havethe employees remove a
component and place afinger where it would bein danger of pinching, orfeel what it is like to slip
on a water puddle on
the floor. Employees feelan electric shock from a
low-frequency oscillator.
These experiences help toawaken the employees’
sense of danger in truly
Employees experiencing
a simulated near-accident
hazardous situations.

TOKYO ELECTRON Environmental and Social Report 2005

29

S o c ia l R e po r tCommunication with Stakeholders
Communicating with our stakeholders helps us grow as a company.

Our Approach to Communication

Our Approach to Social Contributions

TEL is proactive in our communications with all of our stakeholders. We share as much information as possible
about our business activities with everyone in order toadvance our environmental, health and safety program.
We find the feedback we receive in the give-and-take ofthese communications is irreplaceable. We have been
publishing environmental reports since 2000. These help
to advance communication and are sometimes used aspart of hands-on learning at
manufacturing plants. We also
provide EHS information on our
website. We will continue to do
our absolute best to further
communications with our stakeCompany introduction
holders.
using an Environmental Report

TEL’s Management Philosophy states that “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 dobusiness.” TEL is engaged in a variety of activities to contribute to society and build relationships of trust with governments and local communities around its facilities. This is truein Japan, of course, as well as overseas. These efforts are
based on the above principles. TEL will expand our activities,
hand in hand with our customers and neighbors.

Sharing Informationin the “EHS Times” and Intranet
TEL publishes an internal bimonthly magazine on theenvironment, health and safety titled “EHS Times” which
gives simple descriptions of the minutes of Group EHS
committee meetings, programs by Group companies ordepartments, and so on. Each company or office also publishes its own public-relations periodical, and these help
keep company employees aware of EHS issues. TEL alsouses its intranet to disseminate information throughout
the company and for information exchanges.

Efforts in JapanTEL receives Higo water resources conservation prize
Koshi plant has been running a water conservation program toincrease use of water circulation systems and other means forsaving water. Our efforts were recognized in FY 2005 in theform of a Higo water conservation prize. This prize is sponsoredby Higo Bank and the Kumamoto Nichinichi Shimbun (newspaper). It is presented to groups who are involved in efforts against
pollution or the depletion of ground water. In FY 2004, Koshi
plant reduced its use of waterat peak times by 40,000 tons
thanks to the recirculation ofindustrial cooling water andvacuum pump seal water, theimplementation of waterlessvacuum pumps and otherwater conservation measures. Higo water conservation prize presented

TOPICS
TEL’s Corporate Philosophy Regarding the Environment
The Tokyo Electron Group recognizes that the preservation and continuing
improvement of the environment is one of the most pressing matters facing society and must be given full consideration in business operations. TEL policies andoperations are designed with the goal of achieving prosperity in harmony withthe environment.
There are numerous examples of this philosophy in action. First, TEL works
with neighboring companies to keep the community safe and clean by adopting
streets that employees clean the area streets of trash as a volunteer group activity during work time. TEL also hosts a Texas Recycles Day Annual Event eachyear to educate employees about recycling at work and has recently joined Clean
Air Partners program to help reduce the air pollution in central Texas. TEL has
won both a Keep Austin Beautiful Award and a Keep Texas Beautiful Award forour both our community and environmental programs. In addition, TEL has signed
to use 100% green energy.
On a very basic level, being a 100% green energy user is straightforward
evidence of TEL’s commitment to protecting the environment. TEL also joined thegreen power program early on as part of our overall corporate philosophy towardsupporting the community as an active corporate citizen, especially in relation to
the environment. Three years ago when we originally joined the program, there
was a slight cost increase for using green power over traditional fuels; yet with

30

TOKYO ELECTRON Environmental and Social Report 2005

the fixed fuel cost as part of the agreement, we’ve actually begun to see a costadvantage to being a GreenChoice champion. TEL also wanted to support thisimportant program for the state of Texas to emphasize the importance of using
renewable energy and to help Austin Energy communicate that message to othercorporations who may follow in our footsteps.
TEL is dedicated to working in accordancewith corporate-wide best practices for the environment because, when it comes to preserving
our environment, everyone is responsible. Yet,
one of the biggest obstacles to renewable energy
is the high capital costs - compared with the fossil-fuel alternatives. Renewable sources that are
fairly competitive to the fossil fuel alternatives
can be encouraged by businesses. TEL is currently doing this by being a part of Austin Energys 100% Green Energy program.
A summary of an interview with Louis Steen, in
Spring of 2004 with Austin Energy, the main electricand alternative power company in Austin.

Louis SteenVP of Marketing
Tokyo Electron U.S. Holdings, Inc.

Comments from Stakeholders
TEL has received outside opinions on the contents of the 2005 Environmental and Social Report and our business activities. We are especially indebted to Mr. Minoru Kagino, a user of our equipment, and Mr. Shu Woei Yu,
a coordinator for users of our equipment in Taiwan, for their suggestions. We will use theirs and others’ suggestions in planning our future activities.

Minoru Kagino

Shuh Woei Yu

Chief Specialist
Engineering Standardization GroupEngineering Planning Division

Vice President and General Director

Semiconductor Company
Toshiba Corporation

The Industrial Technology
Research Institute(1) Thoughts on
TEL’s Environmental Sustainability Report(1) Thoughts on
TEL Environmental Sustainability Report

While the Kyoto Protocol has come into effect in February 2005,
environmental issues have grown more and more serious. I feelthat your company’s policies on environmental preservation arestated in your Environmental Report in a way that is clear andeasy to understand, and your policies are not passive, but very
active in character.
Also, I was impressed by the explanations of the various
items on environmental preservation, and how you are publicizing
the significance of your environmental activities and the relation
between your business and environmental activities.

Congratulations are in order for Tokyo Electron’s fifth publicationof the Environmental Sustainability Report. The report truly
reflects TEL’s commitment to continuous improvement on environmental, safety and health management. It is very encouraging
to learn that TEL now embraces the fundamental principles ofCorporate Social Responsibility as president and CEO Sato* hasstated.

(2) Comments on TEL’s EHS Activities
The semiconductor industry is characterized by greater use ofmaterials with large environmental burden and greater energy
consumption than the rest of the electrical and electronics industries. Its posture on environmental preservation is a very important matter. Your company is actively pursuing very specific activities for the purpose of preserving the environment, on the basisof your policies, without being distracted by the profit that iswithin your grasp. We can see this in the fact that, not only are
you setting equipment specifications and developing equipment in
consultation with each of your customers, you are taking the leadin activities of domestic and international groups like Semiconductor Equipment and Materials International (SEMI) and the Semiconductor Equipment Association of Japan (SEAJ).

(3) Impressions of TEL from Toshiba Corporation
As our company has been building clean rooms over the last several years, we have had a serious problem with requirements forprotecting the environment. Of course, the equipment we use in
the clean room has itself been subject to even stricter demands.
Not only has TEL been completely “can-do” about our suggestions when we have met with you, you have also contributed
immensely to our effort with your ideas and your environmental
measures for new clean rooms. We see you as one of our strong
partners.

(4) Hopes and Expectations for TEL
As the semiconductor industry continues to grow and grow allover the world, it is a critical problem to reduce its environmental
burden, and there is a great social responsibility to take leadershipin those activities. For the environmental measures that we semiconductor producers have to take, we will desperately need thecooperation of our supporting industries. This is especially so forenergy conservation. Usually, equipment has been improved without regard for other affected equipment. But electric power supply facilities in semiconductor factories have been subjected to far
too many specifications in power requirements, resulting in inefficiencies, and this has to be simplified. Equipment makers have todesign their equipment in consultation with the semiconductor
producers. I would like to see development of equipment coordinated with design of factory power equipment.

(2) Comments on TEL’s EHS Activities
TEL’s EHS activities definitely enhance its position as one of theleaders in the semiconductor production equipment industry. The
product-related environmentally benign initiatives benefit both TEL
and its customers. With the worldwide growing emphasis andpractice of cleaner production technologies, TEL’s customers now
have the opportunity to jointly develop environmentally benign
semiconductor production equipment as illustrated in the report.

(3) Impressions of TEL from ITRI’s
The 2004 Environmental Sustainability Report describes TEL’s
products, business, environmental management and social activities. The comprehensive information provided in the report makes
it easy for all interested parties to gain full understanding of TEL’s
EHS management philosophy and achievements. For instance,
the coverage on TEL’s health and safety activities is highly informative.

(4) ITRI’s Expectation forEnvironmental Benignity of TEL Products
It is hoped that TEL can share its products’ environmental benignity features with its customers and other equipment manufacturers. This will further enhance TEL’s leading edge over its competitors.

(5) Hopes and Expectations for TEL
It is hoped that the environmentally benign semiconductor production equipment initiatives can be extended to the flat panel
display industry since this particular business sector faces very
challenging EHS issues. Experiences gained by TEL in the semiconductor industry are very useful in convincing its customers in
the flat panel display industry to adopt the same or similar EHS initiatives. In addition, it is highly recommended that TEL engage inmore international collaboration programs to promote its EHS
management philosophy and share its practices with customers
outside of Japan.
*As of August 2004

TOKYO ELECTRON Environmental and Social Report 200531

Our cover photograph
The cover of this report illustrates TEL’s
determination to act responsibly toward
society and the environment. This reportdetails our professional and environmental
activities, introduces some of our employees and shows some of our contributions tothe community. We hope it will provide acomprehensive picture of our company.
The photograph at the right of the center depicts a program at Tokyo Electron U.S.
Holdings, Inc., a “Take Your Kids to WorkDay” event hosted for the benefit of ouremployee’s children.

Environment, Health & Safety Center
2-30-7 Sumiyoshi-cho,
Fuchu City, Tokyo 183-8705, JapanTE L : +81-42-333-8249
FAX : +81-42-333-8477
http://www.tel.com
Published : October 2005

To facilitate recycling, thisreport was printed using biodegradable soy ink, which
can easily be de-inked.
Cert no. SA-COC-1210

Design and production : Cre-en
43AT-005