Identifying material issues
Viewing social trends from a global perspective, Tokyo Electron (TEL) uses the following process to identify important andpriority material issues (key issues) to be addressed for the medium- to long-term enhancement of corporate value.

Stakeholder engagement
TEL learned about stakeholder opinions and requests through ongoing dialog, before sorting through them and reviewing
the important themes to be addressed.

Issues awarenessStakeholders

Communication opportunitiesSocial environment
While uncertainty in the global economy is increasing, humans are also faced with various social issues, including
abnormal climate conditions and natural disasters, human rights issues and conflicts between states, cyber-terrorism,
and the spread of infectious diseases. Climate change and inequality in human rights, in particular, are pressing issues forthe global community, and there are strong calls for further action, not just by international, organizations, and nationalgovernments, but also by the private sector. While keeping an eye on trends in the United Nations Global Compact andRBA, and taking recommendations from third-party organizations into consideration, TEL recognizes social issues that
may affect business along the value chain, and is striving to eliminate risks in its business activities and to create newvalue.

Shareholders/investors







CustomersSuppliers

Risks and opportunities
TEL examined the risks and opportunities closely related to sustainable business development in consideration of social
issues and social/business environments such as SDGs.

Social trends

Risks for TELEnvironmentHuman rightsGovernance and complianceEvolution of technology

Supply chain management

Information security







Failure to comply with laws and regulations
or industry codes of conduct
Increases in business costs

Difficulties in recruiting and loss of talent
Damage to corporate image

Lack of oversight and supervisory functions
for management
Ethics and compliance violations
Delays in development of cutting-edge
technology
Lost business opportunities

Weakening of supply system
Loss of business continuity

Loss of core information
Suspension of business operations

Opportunities












Promotion of environmental management
Improvement of product environmental performance and creation ofbusiness opportunities

Technology conference
Customer satisfaction survey
Individual technology collaboration







Production update briefing
Partners day
STQA2 audit

Employees

*Data science: Theapproach of using data
to extract new scientificand socially beneficial
knowledge

Localcommunities



Governments/associations

Employee meetings
Global engagement survey
Career interest survey (Japan)Community contribution activities
Tours of factories and offices
Environmental debriefings

Industry group activities
Collaboration with various initiatives



Relevant material issues

Medium- and long-term growth scenario and associated measures
Sharing of market perspectives and improved accuracy ofbusiness forecasts
Further initiatives for corporate governance







Understanding of diverse application needs
Proposal of high-value-added solutions
Comprehensive and optimal solutions



Sharing of higher-quality, timely information
Improvement of own processes through compliance with quality
standards
Sharing of management messages, direct dialog
Support for medium- to long-term career development for employees
Creation of opportunities for promoting and recognizingproductivity in the working environment and the spirit ofchallenge among diverse employees
Contribution to development of the next generation of humanresources and to elimination of poverty problems
Coexistence of company with communities
Promotion of environment conservation











Creation of innovation leading to the resolution of social issues
Initiatives targeted at climate change and respect for human rights
Building of sounder supply chainsProduct competitiveness
Higher productivity
Management foundation
Product competitivenessResponsiveness tocustomers
Higher productivity

1IR roadshows: A tourof IR activities pitcheddirectly to shareholders
and investors
2STQA: Supplier Total
Quality Assessment

Higher productivity
Management foundation

People and workplaces
Management foundation

People and workplaces
Management foundation
Product competitiveness
People and workplaces
Management foundation

Analysis and selection
TEL has ascertained the social and business environment, considered the risks and opportunities, and put in order theopinions and requests of all stakeholders. We have deliberated material issues from the perspectives of their importanceto both the building of a sustainable society and importance to the business to lead to increasing TEL’s corporate value.
As a result, continuing on from last year, we have defined our material issues as people and workplaces, which are important
as a resource for creating value, and management foundation, which concerns corporate governance, compliance, theenvironment, human rights, and other issues, in addition to product competitiveness, responsiveness to customers, andhigher productivity, which are items identified for enhancement in the medium-term management plan.

Examination of validity
With regard to the defined material issues, an examination of validity was conducted at the review council, which included external experts.

Improvement of employee engagement
Creation of new values through respect for human rights

Development of highly effective governance system
Implementation of sincere and fair business practices

Business issues
With the spread of IoT, AI, the 5G next generation communication standard, and data science*, everything is becoming
networked, and we are transitioning to an era of big data at an accelerated pace. Applications are expanding forsemiconductors and flat panel displays that support social infrastructure, and the need for technological innovationis also growing as demand increases. Amid such circumstances, given that our business is semiconductor and FPD
production equipment, we must, while maintaining an accurate grasp on technological trends and customer needs,
promote cutting-edge research and development, and turn this into products for the market. It is also becoming
increasingly important for us to provide high-value-added services that help improve the productivity of delivered
equipment, such as remote maintenance and predictive maintenance.

Earnings announcements, medium-term
management plan briefings
IR conferences, IR roadshows1Interviews

Key opinions and requests
Key opinions and advice obtained from Review Council
 An outstanding strong point in the management and progress of priority themes and annual goals for material issues is TEL’s constant effort to improve
effectiveness by conducting annual reviews based on changes in the business environment and feedback from stakeholders
 Developing indicators that show the degree of contribution to achieving medium-term goals and SDGs could be effective for enhancing competitive
advantage and corporate value Further initiatives are expected for realizing the Corporate Philosophy of “We strive to contribute to the development of a dream-inspiring society
through our leading-edge technologies and reliable service and support.”

Generating innovative products and services
Maintaining competitive advantage

Establishment of a sustainable production system
Strengthening collaboration by building relationships of trust

Identified material issues

Material issues

Product
competitivenessEstablishment of a robust information infrastructure
Improvement of information literacy
Material issues

Responsiveness tocustomers

Importance to society

Higher productivity

Medium-term goals

Create strong next generation
productsBecome the best and sole
strategic partner
Constantly pursue higher
management efficiency

Priority themes











People andworkplaces

Maximize dreams and drive







Importance to business

Managementfoundation

Build a managementfoundation for increasing value









Tackling technological innovation
Environmental contribution of products
Solutions that create value for customers
Improvement of customer satisfaction
Continuous improvement of business operations
Quality management
Improvement of customer productivity/yield
Diversity and inclusion
Career development
Work-life balance
Health and safety
GovernanceRisk management
Compliance
Environmental management
Supply chain management

TEL sets fiscal year and medium-term goals taking into consideration its five material issues and associated priority themes.
9TOKYO ELECTRON SUSTAINABILITY REPORT 2020

TOKYO ELECTRON SUSTAINABILITY REPORT 202010