Identifying material issues
Analysis and selection
TEL has ascertained the social and business environment, has considered therisks and opportunities, and made arrangements according to the wishes of all
stakeholders. The company has deliberated material issues from the perspectivesof their importance to both the building of a sustainable society and importanceto the business to lead to increasing TEL’s corporate value.
As a result, the company has defined its material issues as productcompetitiveness, responsiveness to customers, and higher productivity, which
are items identified for enhancement in the medium-term management
plan, in addition to people and workplaces, which are important as a resource
for creating value, and management foundation, which concerns corporate
governance, the environment, human rights, and other issues.

Issues awarenessSocial environment
While steady growth is forecast for the global economy, humans are also faced with various social issues, including
abnormal climate conditions and natural disasters, conflicts between states and cyber-terrorism, water and food crises.
TEL is deepening its awareness of social environments that may affect the value chain as a whole, and social issues witha high degree of relevance to the business, giving consideration to SDGs, the United Nations Global Compact, RBA, andrecommendations from third-party organizations.
Business issues
With the spread of big data1 and AI,2 the dawn of IoT,3 and the introduction of the 5G4 next-generation communication
standard, applications are expanding for semiconductors and flat panel displays (FPDs) that support social infrastructureand demand for technological innovation is also growing. In these circumstances, TEL, whose core business issemiconductor and FPD production equipment, must accurately grasp social trends and customer needs, and consider
them from the early stages of development, in order to provide products for the market in a timely manner. Furthermore,
it is important to provide high-value-added maintenance services for improving the productivity of delivered equipment,
extending service life, and so on.
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Dealing with environmental issues

Evolution of technology

Increased reliance on cyberGovernance and complianceSupply chain management

Opportunities

Failure to comply with laws and regulations
or industry codes of conduct
Increases in business costs
Reduction in customer satisfaction
Lost business opportunities
Loss of core information
Stoppage of business operationEthics and compliance violations
Loss of society’s trust
Weakening of supply system
Loss of business continuity

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Promotion of environmental management
Improvement of product environmental performance and creation ofbusiness opportunities
Generating of innovative products and services
Maintaining competitive advantage
Strengthening of information infrastructure
Networking for productivity improvement
Development of highly effective governance
Sustainable corporate management

TEL learned about stakeholder opinions and requests through ongoing dialogue, before sorting through them andreviewing the important themes to be addressed.
Communication opportunities

Key opinions and requests
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Shareholders/investors

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CustomersSuppliers

Earnings announcement
ESG surveysInterviews
Technology conference
Customer satisfaction survey
Individual technology
collaboration
Production update briefing
Partners day
STQA* audit

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Employees

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Local communities
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Governments/associations

Employee meetings
Global engagement survey
Career interest survey (Japan)

Community contribution
activities
Tours of factories and offices
Industry group activities
Collaboration with various
initiatives

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

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Sharing of higher-quality, timely information
Improvement of own processes through compliance with qualitystandards
Sharing of management messages, direct dialogue
Support for medium- to long-term career development foremployees
Creation of opportunities for promoting and recognizing
productivity in the working environment and the spirit ofchallenge among diverse employees
Coexistence of company with communities
Creation of employment
Revitalization of local economies, such through purchasing andlogistics
Creation of innovation leading to the resolution of social issues
Initiatives targeted at climate change and respect for humanrights
Building of sound supply chains

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

2AI: Artificial Intelligence
3
IoT: Internet of Things
45G: Fifth-Generation
mobile communication
system. It is the nextgeneration wirelesscommunication
system that is currently
becoming standardized.

Key opinions and advice obtained from Review Council
 Integrated thinking is exhibited in the fact that goals are set after identifying material issues which are linked to the medium-term management plan and which
relate to both strengthening management foundation and creating value High-level goals as well as unique indicators are evident, reflecting an eagerness for action Going forward, further improvements are expected, such as combining both outcome indicators and process indicators for goals

Material issues
Material issues

Medium-term goals

Product competitiveness

Responsiveness tocustomers

Higher productivityCreate strong next-generation products

Become the best and sole strategic partner

Priority themes

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Tackling technological innovation
Environmental contribution of products

Solutions that create value for customers
Improvement of customer satisfaction

Relevant material issuesProduct competitiveness
Higher productivity
Management foundation
Product competitivenessResponsiveness to customers
Higher productivity

Constantly pursue higher management efficiencyPeople and workplaces

Maximize dreams and drive

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

Productcompetitiveness● Responsiveness tocustomers● Higher productivity● People and workplaces● Managementfoundation●Examination of validity

Creation of new value through collaboration
Ongoing collaboration by building relationships of trust

Stakeholder engagement

Stakeholders

1
Big data: To record,store, and immediatelyanalyze massive
data groups that are
difficult to record,
store, and analyze withconventional databasemanagement systems
or similar

Material issues

Importance to society

Tokyo Electron (TEL) uses the following process to identify important and priority material issues (key issues) to beaddressed for the medium- to long-term enhancement of corporate value.

Higher productivity
Management foundation

Management foundation
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People and workplaces
Management foundation

Build a management foundation for increasing valueQuality management
Improvement of quality in the value chain

Diversity and inclusion
Career development
Work-life balance
Health and safety
Corporate governanceCompliance
Human rights
Environmental management
Supply chain management

People and workplaces
Management foundation
Product competitiveness
People and workplaces
Management foundation* STQA: Supplier Total Quality Assessment

9TOKYO ELECTRON SUSTAINABILITY REPORT 2019TOKYO ELECTRON SUSTAINABILITY REPORT 201910