TOKYO ELECTRONSUSTAINABILITYREPORT 2020

Cover photo: Rose (England, U.K.)
The cover photo shows flowers of the countries and regions in which we do business.

Akasaka Biz Tower, 3-1 Akasaka 5-chome,
Minato-ku, Tokyo 107-6325, Japan
Tel: +81-3-5561-7402
www.tel.com
TEL is a trademark or registered trademark of Tokyo Electron Limited in Japan and other countries.

PR58-122

Contents
Editorial policy
The purpose of this report is to communicate to all stakeholders the responsibilities and roles that Tokyo Electron (TEL) has
in society, and the various activities it implements toward value creation. The report clarifies priority themes, short- andmedium-term goals, and SDG initiatives for each of five material issues. It describes global initiatives aimed at developing
and resolving issues for industry and society. Data sets are included at the end of the report, with an accompanying thirdparty assurance report attached for those items that are considered to be of particularly high importance.
TEL remains committed to understanding the demands of all of its stakeholders and to disclosing information in atimely and transparent manner. For more detailed information, please consult our official website.

URL

Editorial policy

1

Contents

2

Tokyo Electron’s business
CEO’s message

3
5

CSR-oriented operations
Identifying material issues
CSR goals and results

7
9
11

Value creation through business

13

Product
competitiveness

About product competitivenessResearch and development
Tackling technological innovation
Environmental contribution of products

15
16
19
20

Responsiveness tocustomers

About responsiveness to customers
Solutions that create value for customers
Initiatives for field solutions
Ensuring safety for customers
Improvement of customer satisfaction

21
22
23
25
26

Higher productivity

About higher productivity
Promotion of improved productivity
Software development initiatives
Quality management
Improvement of quality in the value chain

27
28
28
29
30

People andworkplaces

About people and workplaces
Human resource management/Diversity and inclusion
Employee growth
Work-life balance
Health and safety

33
34
34
36
37

Management

About management foundation
Corporate governanceRisk management
Compliance
Respect for human rights
Supply chain management
Environmental management

39
40
43
45
46
48
49

TEL FOR GOOD (social contribution activities)

53

www.tel.com/csr/

Scope of disclosure
Website:Update rate

www.tel.com/csr/

Sustainability
ReportInformation volume

Scope
This report covers the entire Tokyo Electron group (34 consolidated companies),with some exceptions (indicated in the content).
Reference guidelines
Global Reporting Initiative (GRI): Sustainability Reporting Standards
Environmental Reporting Guideline 2018, Ministry of the Environment, Government of Japan
Published dateJuly 2020 (Next report: August 2021)
Period covered
Fiscal year 2020 (April 1, 2019 to March 31, 2020), some content also covers fiscal year 2021
Contact
Akasaka Biz Tower 3-1 Akasaka 5-chome, Minato-ku, Tokyo 107-6325, JapanCSR Operations
Tokyo Electron Limited
Tel: +81-3-5561-7402
URL

1

foundation

Inquiry point URL: www.tel.com/contactus/

TOKYO ELECTRON SUSTAINABILITY REPORT 2020

Data
Performance summary: Social
Performance summary: Environment

55
58

Independent practitioner’s assurance report
Corporate profile

61
62

TOKYO ELECTRON SUSTAINABILITY REPORT 20202

Tokyo Electron’s businessTokyo Electron (TEL) operates worldwide as a leading company in semiconductor and flat panel display (FPD) production equipment.
TEL contributes to developing a sustainable society through its business.

Sales by region (consolidated)

Number of employees by region (consolidated)
Other
Other
35.6 billion
billion yenyen (3.2%)(3.2%)
35.6

EuropeEurope58.8
58.8 billion
billion yenyen (5.2%)(5.2%)

Korea
Korea
154.8
154.8 billion
billion yenyen (13.7%)(13.7%)

EuropeTEL Magnetic
SolutionsTokyo Electron
EuropeU.S.

Tokyo Electron (Shanghai)Tokyo Electron (Shanghai) Logistic CenterTokyo Electron (Kunshan)

TEL Manufacturing andEngineering of America

Tokyo Electron Korea

TEL Solar Services

North
North America
America
205.8
205.8 billion
billion yenyen (18.3%)(18.3%)TEL Technology Center,
America

1127.2 billion yen

13,837(Fiscal(Fiscal year
year 2020)
2020)(Fiscal(Fiscal year
year 2020)
2020)

Asia
Tokyo Electron Israel

TEL Venture
CapitalTokyo Electron India
Tokyo Electron
Taiwan

China
China
249.2
249.2 billion
billion yenyen (22.1%)(22.1%)

TaiwanTaiwan261.1
261.1 billion
billion yenyen (23.2%)(23.2%)

Tokyo Electron U.S. Holdings
Tokyo Electron America

Tokyo Electron (Malaysia)

EuropeEurope528528 (3.8%)(3.8%)

North
North America
America
1,714
1,714 (12.4%)(12.4%)

Asia
Asia
3,495
3,495 (25.3%)(25.3%)

Japan
Japan
8,100
8,100 (58.5%)(58.5%)

Japan
Japan
161.8
161.8 billion
billion yenyen (14.4%)(14.4%)* Fractions smaller than 100 million yen omitted. (Percentages are round off to one decimal place.)

Tokyo Electron
Singapore■ Wafer process (Front-end) ■ Assembly and Test process (Back-end)

Semiconductor manufacturing process and TEL main products
Deposition

Tokyo Electron Technology Solutions

ThermalProcessing System
TELINDY PLUS TM

Tokyo Electron Miyagi: Head office
Tokyo Electron Kyushu: Regional office, branch office, sales locations, field service

Etching

Cleaning

Plasma Etch System
Tactras TM

Single Wafer
Cleaning System
CELLESTATM -Lithography(Photoresist coating, Development)

Japan

Single Wafer
Deposition System
Trias + TM

Atomic Layer
Deposition System
NT333 TM

Coater/Developer
CLEAN TRACKTM
LITHIUS ProTM Z
Photoresist

Silicon dioxide film Silicon nitride film

Tokyo Electron (head office)

Wafer

Repetition

Tokyo Electron FE
Tokyo Electron BP
Tokyo Electron Agency

Oxide/Nitride film deposition

Exposure

Photoresist coating

Development

Etching

Ashing/Cleaning

Isolation Formation/Gate Formation

Interconnect Formation

Completed Transistor
Before Wiring
Gate ElectrodeTesting

Packaging/Inspection

TEL’s changing business
Single Wafer
Deposition System
Trias TM

Plasma Etch System
Tactras TM

Metal film

Wafer Bonder/
DebonderSynapseTM V/
Synapse TM Z Plus

Wafer Prober
PrecioTM/PrecioTM XL

Metal film

DRAM

Wafer/Dicing Frame
Prober
WDF TM 12DP+

Logic(Billion yen)

1,400

3D NAND

Intermetal dielectric film

Completed
Semiconductor
Packaging

CMOS image sensor

Completed Integrated Circuit

1,200

Contact Formation

Interconnect Formation

Wafer Probe Testing

Wafer Bonding/Thinning/Debonding

Inspection

Packaging/
Assembly

1,000
800

FPD production equipment

600

Established development/
manufacturing functions

400

Distributor of other suppliers’
products

200
0

1963

1970

1980
Trading company

3

TOKYO ELECTRON SUSTAINABILITY REPORT 2020

1990
Changing to manufacturer

2000

2010
Globalization

2020

Innovation and new growth(FY)

FPD Coater/Developer
ExcelinerTM

FPD Etch/Ash System
ImpressioTM

FPD Etch/Ash System
BetelexTM

Inkjet Printing System for
manufacturing OLED displays
EliusTMTOKYO ELECTRON SUSTAINABILITY REPORT 2020

4

CEO’smessage

Dear stakeholders,
On behalf of Tokyo Electron (TEL), I would first like to express my sincere gratitude for your continued
support and patronage.
I would also like to express our heartfelt sympathy to everyone who has been affected by the spread of
COVID-19.
People across the world are now facing an unprecedented battle against infectious diseases. And
amid this battle, the shift toward a data-driven society is picking up speed, including the growing useof remote work arrangements, distance learning, video streaming, and remote medicine. The world isfurther applying technologies such as IoT, AI, and 5G toward building a society that is strong and resilient
under all situations. As such, we expect to see the aggressive implementation of new information andcommunication technologies which are supported by semiconductor technology. Furthermore, together
with semiconductors, displays—which translate data into visual form—are becoming even more important.
As an industry leader for production equipment of semiconductors and flat panel displays, Tokyo
Electron’s Corporate Philosophy is “We strive to contribute to the development of a dream-inspiring
society through our leading-edge technologies and reliable service and support.” We will maintain our
Corporate Philosophy by continually pursuing and expanding world-class profits in the medium- to longterm through utilizing all management resources to create technologies with the high added value foundnowhere else in the world.
In addition to the three pillars established in our medium-term management plan—productcompetitiveness, responsiveness to customers, and higher productivity—we have identified two material
issues: people and workplaces, which is a source of corporate growth, and management foundation, which
relates to corporate governance and compliance. In fiscal year 2020, we are reviewing our annual andmedium-term goals for each material issue and conducting various activities toward achieving these goals.
In addition to accelerating the reduction of our CO2 emissions activities in relation to our products andfactories and offices, we carried out human rights due diligence within the group and our suppliers, and webegan working in earnest to identify and remediate any human rights issues.
In fiscal year 2014, to promote sustainability management in accordance with international frameworks,
we became a signatory to the United Nations Global Compact and began implementing Sustainable
Development Goals (SDGs) initiatives. Then in fiscal year 2016, we became a member of the Responsible
Business Alliance (RBA) and focused on expanding CSR activities in our supply chains.
Moving forward, to properly fulfill our mission and responsibilities, we will continue to aim to remain acompany that is loved and trusted by all stakeholders by promoting sustainability-focused management
and contributing toward addressing issues of industry and society as well as their development.
Your continued support and patronage are very much appreciated by all of us at TEL.

Toshiki Kawai
Representative Director, President & CEOTokyo Electron Limited

5

TOKYO ELECTRON SUSTAINABILITY REPORT 2020

TOKYO ELECTRON SUSTAINABILITY REPORT 2020

6

CSR-oriented operations
Tokyo Electron’s Corporate Philosophy

Participation in global initiatives

We strive to contribute to the developmentof a dream-inspiring society through ourleading-edge technologies and reliable
service and support.

TEL is a corporate member of the United Nations Global Compact and the Responsible Business Alliance (RBA1), both global
CSR initiatives, whereby the company strives to build a sustainable management foundation from a global perspective.
The United Nations Global Compact● An international initiative for sound globalization and sustainable societies● TEL signed in 2013

CSR policy

1
RBA: Rebranded fromthe Electronic Industry
Citizenship Coalition(EICC®) in October 2017

RBA
● A CSR promotion group focused on the electronics

industry

2
TCFD: Task Forceon Climate-related
Financial Disclosures● TEL signed in 2015

The CSR operations of Tokyo Electron (TEL) are initiatives that realize TEL’s Corporate Philosophy. We pursue sustainable
operations from the viewpoints of corporate governance, legal and regulatory compliance, and business ethics while
creating new value through our products and services. Based on these efforts, TEL implements CSR activities to help
address social issues. We will continue to pursue CSR activities to build stakeholder trust, improve corporate value and, by
doing so, promote the growth of a sustainable and dream-inspiring society.
The Ten Principles

Advancementof dream-inspiring society

Sustainable operations
Material issues

Through business activities

Reinvest

Contribution to
the solution ofsocial problems

Distribute toshareholders andemployees

Improvementof corporate
value

Creation of new value

Human
RightsLabourPay taxes
Environment

CSR-oriented operations

Distribution of profit
AntiCorruption

CSR promotion framework
TEL implements sustainability management, which is integrated into thebusiness strategy from a medium- to long-term perspective of corporate valueenhancement. Three groups have been established to promote CSR activities.
The CSR Management Council, the highest decision-making body regarding CSR,
conducts discussions regarding the policy for the entire group, and important
projects. Based on this, the CSR Global Committee discusses, that progress
management regarding activities for achieving CSR targets along with thepromotion of global projects, and shares best practices. At the CSR Monthly
Meeting, information on activities is shared with representatives from eachdivision, and collaborative systems are built to tackle cross-division themes.
We are also working to strengthen our CSR structure by appointing officers
in each division across the company to be in charge of understanding the CSR
policy and goals and promoting CSR.

3
DJSI (Dow Jones
Sustainability Index):
An ESG (environmental,social and governance)
investment index by
S&P Dow Jones IndicesLLC. The Asia Pacificcovers companies inthat region.

Framework (five sections)
Principle 1:

Businesses should support and respect the protection ofinternationally proclaimed human rights; andPrinciple 2: make sure that they are not complicit in human rights abuses.
Principle 3: Businesses should uphold the freedom of association and theeffective recognition of the right to collective bargaining;
Principle 4: the elimination of all forms of forced and compulsory labour;
Principle 5: the effective abolition of child labour; andPrinciple 6: the elimination of discrimination in respect of employment
and occupation
Principle 7: Businesses should support a precautionary approach toenvironmental challenges;
Principle 8: undertake initiatives to promote greater environmental
responsibility; andPrinciple 9: encourage the development and diffusion of environmentallyfriendly technologies.
Principle 10: Businesses should work against corruption in all its forms,
including extortion and bribery.

LABOR

MANAGEMENTSYSTEMSHEALTHand SAFETYETHICS

5
FTSE Blossom Japan
Index: An index
that reflects theperformance ofJapanese companies
that have demonstrated
strong ESG practices.
6
MSCI World ESG
Leaders Index:
Companies that havehigh ESG performanceare selected from
the MSCI Global
Sustainability Index,
an ESG investment
index developed by
Morgan Stanly CapitalInternational (MSCI).

In addition, TEL has expressed its approval of the recommendations offered by the Task
Force on Climate-related Financial Disclosures (TCFD2) and is pursuing initiatives basedon the framework of governance, strategy, risk management, indicators and targets
relating to the impact and opportunity that climate change presents to its business.

Evaluation from third-party institutions
CSR Global Committee

TEL’s CSR activities have received high appraisal from evaluation organizations in various countries, and we have been
selected as a constituent stock under leading global ESG investment indices, including DJSI3 Asia Pacific 2019, FTSE4 Good
Index4, FTSE Blossom Japan Index5, MSCI World ESG Leaders Index6, MSCI Japan ESG Select Leaders Index7, and MSCI Japan
Empowering Women Index (WIN8).

9

Conference name

Participants

CSR Management Council







CSR Global Committee

CSR Monthly Meeting

Chairman of the Board
President & CEO
Directors and Managers
Chief CSR Promotion Director
Heads of related departments
CSR officers of affiliates and overseas companies
Person in charge of CSR at each division

Function














4
FTSE4Good Index:
An index related
to environmental
performance andcorporate social
responsibility developed
by FTSE Russell.

ENVIRONMENTAL

Decide company-wide CSR policy
Discuss important matters
Manage progress of activities for achieving CSR
goals
Implement global projects
Share best practices
Share information on CSR activities
Discuss cross-division CSR initiatives

In addition, once a year, we invite employees from around the world to submit
examples of CSR in the workplace, with outstanding initiatives being awarded
the CSR Promotion Award by the Representative Director, President & CEO.
Throughout the group, we are promoting CSR activities through our daily
business activities in order to aid in the development and to resolve issues inindustry and society, and to contribute to the achievement of SDGs.

9

Meeting frequency
Twice annually

Twice annually

Monthly

7
MSCI Japan ESG SelectLeaders Index: An index
featuring companies
with high ESG
performance selectedfrom its parent index(MSCI Japan IMI Top
700 Index: Top 700
securities based on free
float-adjusted market
capitalization). The
Index targets 50% of
the free float-adjusted
market capitalization
within each GICS sectorof the parent index.
8
MSCI Japan Empowering
Women Index (WIN):An index developedby MSCI featuring
companies withexcellent gender
diversity selected fromits parent index (MSCI
Japan IMI Top 700
Index).

Initiatives for Sustainable Development Goals (SDGs)
The SDGs are a universal set of goals to achieve by 2030, which wereunanimously adopted by the United Nations Sustainable Development Summit
in 2015. TEL conducts activities on a group-wide level, and for each CSR fiscal
year and medium-term goal, and material issue, it has clarified the SDGs it isworking toward through business.
Tokyo Electron supports the SDGs

9
Please check the link forthe logo’s disclaimer.
https://www.tel.com/
csr/review/

CSR Promotion Award Ceremony

7

TOKYO ELECTRON SUSTAINABILITY REPORT 2020

TOKYO ELECTRON SUSTAINABILITY REPORT 20208

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 national
governments, but also by the private sector. While keeping an eye on trends in the United Nations Global Compact and
RBA, 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: The
approach 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 recognizing
productivity 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

1
IR roadshows: A tourof IR activities pitcheddirectly to shareholders
and investors
2
STQA: 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 roadshows1
Interviews

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
products
Become 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 2020

10

CSR goals and results

1 Number of training sessions attended per person in fiscal year 2019 was revised from 11.6 down to 9.4 due to changes to theindicator by the inclusion of non-regular employees
2 An indication of the risk of lifestyle diseases in years, based on the results of health checkups
3 TEL uses the Audit & Supervisory Board System
4 At least one third of directors are outside directors
5 GRC: Governance, risk management, and compliance
6 Per-unit basis: Calculated using complex weighting of the number of developed evaluation machines, units produced, floorarea, and labor-hours for each district

FY2020

FY2021

Material issues

Priority themes

Annual goals


Tackling technologicalinnovation

Product
competitivenessEnvironmental
contribution of
productsEnsure that 20% or more (three-year moving average)of all equipment models are new products for next
generation technologies
Maintain the previous year’s global patent application
rate

Reduce per-wafer emissions of CO2 by 20% by fiscal
year 2025 (as compared with fiscal year 2014)

ResultsResponsivenessto customers



Improvement ofcustomer satisfaction
Quality management

HigherproductivityCareer development

Work-life balance









Maintained the previous year’s rate
(Achieved 81.2% in fiscal year 2019 and 79.8% in fiscal year 2020)

With growth of the logic device and foundry businesses, and resumed
investment in NAND in the second half of the fiscal year, increased usage of TEL
equipment by main customers

Increased by 6.3% from the previous fiscal year

Get 3 points (“Satisfied”) or more on 100% of customer
satisfaction survey items



Achieved 93.3% (increased by 8.9% from the previous fiscal year)

Utilize knowledge and strengths within the groupPromote and implement front-loading and traceability

Double percentage of female managers by fiscal year
2021 from 1.8% in fiscal year 2018
Increase number of training sessions attended perperson by 10% from the fiscal year 2019 level

Annual goalsReach at least 70% take-up rate of annual paid leaveReduce gap between health age2 and actual age by 1.5 points
by fiscal year 2021 (as compared with fiscal year 2018)

Ensure that the number of workplace injuries per
200,000 work hours (the total case incident rate) is
less than 0.5

Product
competitiveness

Reduced by 16% in fiscal year 2020 as compared with fiscal year 2014
(Chose roadmap and equipment models for achieving goals for each coreproduct)

Achieved 22.9%

Increase sales in field solutions business from the fiscal
year 2019 levelImprovement ofcustomer productivity/
yield

Diversity and inclusion

People andworkplaces

Increase TEL’s value to customers

Solutions that create
value for customers


Priority themes

Tackling technologicalinnovation

Material issues

Responsivenessto customers
Improvement ofcustomer satisfaction

Continuous
improvement ofbusiness operations

Higherproductivity

Quality management

Improvement ofcustomer productivity/
yield

Achieved 2.0% in fiscal year 2020
8.3 training sessions attended per person: Reduced by 11.7% from the previous
fiscal year¹ (Some group training sessions canceled due to the new coronavirus
disease COVID-19)

Diversity and inclusion

Achieved 72.6% (67.2% in fiscal year 2019)

Increased by 0.03 points as compared with fiscal year 2018













Health and safety







Improve on issues identified in evaluations of theeffectiveness of the Board of Directors


Examined and confirmed TEL’s ideal organizational structure3 and composition of
directors4, and partial revision of its director and executive officer compensation
system, in meetings of the Board of Directors and internal committees
Finished examining revisions to the criteria for discussion by the Board of
Directors, and establishment of a new executive committee to improve thedecision-making process of the Board of Directors, and will implement changes
from fiscal year 2021
Revised internal control systems and group company controls through a projectto enhance the risk management framework
Held offsite meetings of the Board of Directors and held discussions about mediumto long-term management strategies, and CSR and GRC5 initiatives and issues

GovernanceRisk managementCompliance







Managementfoundation

Compliance







Environmental
management

11

TOKYO ELECTRON SUSTAINABILITY REPORT 2020

Reduce energy consumption by 1% from the fiscal year
2019 level (per-unit basis6) at each factory or offices









Finished reorganizing internal hotline and establishing a hotline for suppliers,
etc. at group companies overseas
Survey of recognition among employees concerning internal hotline was not
implemented, and will be carried over to fiscal year 2021
Revision of TEL's Code of Ethics, conduct of basic annual training, and pledges
were not implemented, and will be carried over to fiscal year 2021

Managementfoundation

Become the best andsole strategic partner

Achieve evaluations of “Very Satisfied” or “Satisfied” for 100% of customer satisfaction
survey responses

Target a 10% improvement in operational efficiency as a medium- to long-term goal,
achieve centralized data management through adoption of a new ERP8 system, and build
a business foundation where employees can focus even more on higher value work
(1) Expand implementation of CRM9 and PLM10, and (2) adopt new ERP during fiscal year 2021

Constantly pursue
higher management
efficiency

Check the impact of important non-conformance item on other equipment andthoroughly implement recurrence prevention measures
Promote Shift Left11 (front-loading) activities for quality(1) Increase engineer time for high value work in upstream processes, and(2) Implement medium- to long-term action plans to continue to enhance quality
assurance activities
Double the percentage of female managers and experts (with same roles andresponsibilities as managers) by fiscal year 2022 from 2.0%12 in fiscal year 2019
Foster a culture of learning and development in the workplace through(1) Leader development programs, (2) provision of personalized global learning
opportunities, and (3) support for career development throughout working life

Maximize dreams
and drive

Reach at least 70% take-up rate of annual paid leave
Reduce gap between health age and actual age by 1.5 points by fiscal year 2021 (ascompared with fiscal year 2018)
Reduce the number of workplace injuries per 200,000 work hours. Target: TCIR (the total
case incident rate) is less than 0.5.
Continue to improve on issues identified in evaluations of the effectiveness of the Boardof Directors
Promote an integrated risk management system throughout the group,(1) Adopt Control Self Assessment (CSA), and (2) establish and operate a risk management
committee
Achieve 100% recognition among employees concerning internal hotline
Revise Code of Ethics, conduct basic annual training, and achieve pledge rate of 100%
Conduct a compliance awareness survey
Reduce energy consumption by 1% from the fiscal year 2020 level (per-unit basis) at eachfactory or offices

Environmental
management

Build a managementfoundation forincreasing value

Maintain water consumption (per-unit basis) at factories and offices at the fiscal year
2012 level in Japan and at individual base year levels overseas

Achieved goal at 6 of 11 factories or officesSupply chain
management

Reorganize internal hotline and establish hotline forsuppliers, etc., at group companies overseas (ongoing)
Achieve at least, 90% recognition among employees
concerning internal hotline
Revise Code of Ethics, conduct basic annual training,
and achieve pledge rate of at least 90%

Reduce per-wafer emissions of CO2 by 20% by fiscal year 2025 (compared with fiscal year
2014)

Health and safetyGovernanceAchieved 0.23

Create strong next
generation products

Increase sales-in-field solutions business by 5% or more from the fiscal year 2020 levelWork-life balance

Maintain the previous year’s global patent application rate (±10%)

Relevant
SDGs

Ensure that 20% or more (three-year moving average) of all equipment models are new
products for next generation technologies

Increase TEL’s value to customers

Career development

People andworkplaces

Medium-term goals

Solutions that create
value for customers

Decided company-wide response policy for material non-conformance mattersand expanded to relevant divisions (12 of 12 matters completed)
Front-loading
Reviewed processes for responding to nonconformities to reduce man-hours
Re-examined best practices for quality assurance activities
Traceability
Examined systems for tracking status and processes for partsEnvironmental
contribution of
products

7 Per-unit basis: Calculated based on floor area and labor-hours, etc. for each district
8 ERP: Enterprise Resource Planning
9 CRM: Customer Relationship Management
10 PLM: Product Lifecycle Management
11 Shift Left: Refer to p. 17 and p. 31.
12 Senior specialists were included in the 2.0% figure in fiscal year 201913 BCP: Business Continuity Plan

Maintain water consumption at the fiscal year 2012 levelaccording to per-unit basis7 set at each factory or officesAchieved 9 of 13 goals

Implement supply chain CSR assessments for 80% ormore of suppliers (procurement volume basis)Achieved 80% or more of our procurement spend

Supply chain
management
Implement supply chain CSR assessments for the following percentages of suppliers.
Material suppliers: Covering at least 80% of our procurement spend
Logistics suppliers: 100% of customs-related operators
Staffing suppliers: 100% of employment agencies and contracting companies (internal
contractors)
Implement supply chain BCP13 assessments for the following percentages of suppliers.
Material suppliers: Covering at least 80% of our procurement spend

TOKYO ELECTRON SUSTAINABILITY REPORT 2020

12

Value creation through business
Through activities along the entire value chain, Tokyo Electron (TEL) effectively utilizes its management resources to offer products andhigh-value-added services that are conscious of innovative technologies, productivity improvement, and reducing environmental impact
in the semiconductor and flat panel display (FPD) production process. The semiconductors and FPDs produced by our customers arefound in various products on the market, including mobile devices, audio/visual equipment, and data servers. These products play a central
role in the data society, which is growing ever more quickly with the spread of technologies including IoT, AI, and 5G, helping to build amore convenient and affluent society. Through our business operations, we contribute to the resolution of social issues, development ofsociety, and the achievement of SDGs.

Initiatives in the value chain and material issues

Procurement
and production

Sales

Service

Capital throughbusiness
activities

IoT/AI/5G
Product competitiveness

Development
andproduction,
sales, andserviceexpertise

Products and services

・Research and development

・Tackling technological innovation

Semiconductors/FPDs

・Environmental contribution of products

Responsiveness to customers

・Solutions that create value for customers
・Initiatives for field solutions

Transportation

・Ensuring safety for customers

Intellectual
property

・Improvement of customer satisfaction

Higher productivity

・Promotion of improved productivity
・Software development initiatives
・Quality management

・Improvement of quality in the value chain

Personnel able
to perform
globallySocial Networking

People and workplaces

・Human resource management
・Diversity and inclusion
・Employee growth

Leading-edge semiconductor/
FPD production technology

Finance

Maximizing productivity
Reducing environmental
impactValue provided to society
by customers

Providing value tocustomers throughMedicine

Actualization of Corporate Philosophy

Research anddevelopment

Value provided to customers and society

Contributing to development and to solving the
problems of society and industry

TEL’s capital

products and services

・Work-life balance ・Health and safety

Relationships oftrust withcustomers andsuppliers

13

TOKYO ELECTRON SUSTAINABILITY REPORT 2020

Management foundation

Manufacturing

・Corporate governance ・Risk management
・Compliance ・Respect for human rights
・Supply chain management

・Environmental management

TOKYO ELECTRON SUSTAINABILITY REPORT 202014

Research and development

Product
competitivenessResearch and development for the future
As lifestyles and business models undergo dramatic changes in the era of IoT, it is anticipated that the use of semiconductors
will expand in all industries, and there will be demands for even more advanced technologies. In an age where electronics
are a more familiar part of people’s lives, and there is an ever-growing need for semiconductors, Tokyo Electron (TEL) is
continuously engaged in rigorous discussion regarding new, necessary technologies and TEL’s contribution. TEL Technology
Vision 2030 summarizes these discussions, and is distributed within our company in order to provide information and seek
feedback. In addition, our entire company is committed to research and development in the future.
Increase and growth of semiconductor applications–2020

202X- Expansion of IoT technologies

Cloud server

Smart Manufacturing2030 To the world where people and all thesocieties are linked together

Smart Transport
Diversification

Integration

Smart Health

Medium-term goals

Smart phone

Smart Energy Care

PC

Create strong next generation products
Development system
As the transition to a data society accelerates due to the spread of IoT, AI, and the 5G, demand for semiconductors and flat panel displays
is increasing, as is the requirement for their diversification and high performance. Tokyo Electron promotes leading-edge research anddevelopment to meet the fast-changing demands for technological innovation through product marketing, and provides equipment andservices to meet various applications. We also continuously strive to reduce the environmental impact of our products, factories, and offices. By
providing technology that contributes to the development of devices with even lower power consumption, we endeavor to preserve the global
environment. We will contribute to the further development of industry and society through the timely creation of the best, high-value-added
products with cutting-edge technology, and continuing to provide the best service supporting those products.

Main activities

SDGs initiatives■ Create innovative technologies by promoting innovation, to help
build a sustainable society

Research anddevelopment

Tackling
technologicalinnovation

Environmental
contribution of
products■ Contribute to the reduction of environmental impact on a global
level by providing products and services that are conscious of
the environment■Environmental contribution of products
Medium- and long-term environmental goals, Products that
contribute to a sustainable society, Initiatives for productenvironmental laws and regulations

15

TOKYO ELECTRON SUSTAINABILITY REPORT 2020

Market heading toward diversification

Customization

Moore’s Law

Moore’s Law

Multifunctionalityス

Improved performance through transistor integration■Research and development
Research and development for the future, Development
system, Shift Left, Product marketing, Intellectual property
management, Collaborating with consortiums■Tackling technological innovation
Research and development for next generation computing,
Promoting digital transformation (DX), Addressing
advancements in display

With advances in the performance of semiconductors resulting from miniaturization technology, the emergence of
new devices due to manufacturing technologies capable of accommodating more flexible designs, and the growth of amarket requiring large volumes of devices in step with the development of IoT, the semiconductor market is becoming
increasingly diversified. Consequently, amid the need for diversification in manufacturing technologies, TEL promotes
technology development and technology innovation for the next generations, and has built a system in which its
Development & Production Divisions collaborate with Business Divisions to bring high-value-added products into themarket in a timely fashion.
Led by our Corporate Innovation Division, which was established in 2018, we have also been implementing further
enhancements to our process integration capabilities, such as deposition and etching technologies, based on our widelineup of semiconductor production equipment. In January 2020, we established TEL Manufacturing and Engineering ofAmerica to optimize manufacturing functions in the U.S. region and improve operational efficiency.
We are currently working on utilizing AI to strengthen the development of control software further, and in the testing
phase of the manufacturing process, we have succeeded in reducing the number of wafers used from the usual five lots
to just one lot. AI technologies have also made it possible for us to cut liquid chemical use by about 20%, helping us to use
resources more efficiently.

OS

Communication systems

OS

Mobility systems

CPU+Memory

Industry, innovationand infrastructure

Climate action

Partnerships for the
goals

PC/
mobile systems

CPU+Memory

AI systems

PC/Mobile

Healthcare systems

AI

Robotic systems

Applications increase as manufacturing technologies diversify

Hyper-mass
Pursuit of ultra-efficient productivity

TOKYO ELECTRON SUSTAINABILITY REPORT 202016

Product competitivenessTo increase IP awareness, we continuously educate our engineers, who are the foundation of our R&D strategy, and in
total, around 4,300 engineers have become inventors. Additionally, because we often handle highly confidential information,
including technological information of our customers and collaborative partners, we also focus on confidential information
management education.

Shift Left
TEL is focused on advancing the “Shift Left” approach, investing resources (including technology, personnel, and money)
into the early processes of product development. Together with customers who conduct research with a vision beyond
even the next generation and who aim to accelerate the speed of development further, we have created a technology
road map, and are engaged in developing the various technologies required for its realization.
In fiscal year 2020, responding to the growing customer need for production equipment to take up less space, we
succeeded in improving equipment efficiency per unit area by maximizing the use of clean rooms and providing moreproductive equipment. Through proposals of unique technologies, we promote on-site collaboration for early deliveryof evaluation units at customers’ plants and research and development laboratories, shortening the period between
technology development and the conversion to mass production equipment and maximizing efficiency.
Shift Left

Collaborating with consortiums
By collaborating with international and domestic consortiums, TEL is enhancing its own research and development
capabilities, and is working to further develop cutting-edge technologies. With three bases in Japan and additional basesin the United States, Belgium, and Singapore, we collaborate with device manufacturers in Japan and abroad and with
global research institutes to promote research into next generation semiconductor production technology. In fiscal year
2019, we began participating in a global research hub developing next generation AI hardware, and in fiscal year 2020,
we have been promoting collaboration in technologies and applications that speed up evolution, from development tomarket launch. One example has been our cooperation with BRIDG1, a not-for-profit, public-private partnership located in
the U.S. state of Florida.
Our engagement in these consortiums includes the development of cutting-edge processes for existing devices andthe development of manufacturing technology for chips designed for AI computing.

 Joint development of multi-generation technology road map with customers
 Promotion of early engagement
 Maximization of yield for customer devices and equipment operating rate from early stages of mass production,

and also reduction of environmental impact
 Promotion of improvement in work efficiency and per person productivity, and further increase in investments into

human resources and development
 Increase in equipment efficiency per unit area, by achieving higher productivity and using less space

Consortium
Tokyo Electron development sites

Product marketing
TEL is promoting effective product development by having its sales departments and product marketing departments
appropriately play their respective roles. Our sales departments take the lead in making improvements and adding
functions to existing products that have already been delivered, and provide customer feedback to our development
divisions. Our product marketing departments, meanwhile, take the lead in the development of new products, andshare guidelines based on market trends and competitor analysis with the development divisions resulting in productdevelopment that contributes to value creation for customers. They also consider the commercialization of plans andthe addition of functions proposed by our development divisions, and formulate strategies for collaborating with partnercompanies and consortiums. Through their activities, our product marketing departments are helping to effectively
promote our important “Shift Left” approach.

(as of April 1, 2020)

France

CEA-Leti

Expansion ofexisting products& CIP1 technology

Led by sales

Development of new products/functions• Support for product owners• Progress/cost management ofdevelopment projects• Fine-tuning of responses or proposal
to stop development according tochanging circumstances

New products &sharedtechnologies

Target segment & plan setting• Setting of target market• Setting of development content/plans• Feasibility study

Japan

CNSE
BRIDG

Tokyo Electron Miyagi
Tokyo Electron Technology Solutions
Tokyo Electron Kyushu
Taiwan1
CIP: Continuous
improvement program

Led by productmarketing

In its intellectual property-related activities, TEL’s basic policy is to contribute to increased
corporate revenues by supporting business activities through appropriate protectionof intellectual property (IP). IP personnel assigned at R&D/manufacturing sites andheadquarters assess each project from various angles, including R&D and marketing
Cumulative number ofperspectives, building IP portfolios aligned with technology, and product strategies in an
technology inventors
effort to boost competitiveness. In 2018, in order to uphold our worldwide advantage in2
the IP field, we maintained a global patent application rate of approximately 70% for the
ninth consecutive year, and achieved high patent approval rates (83% in Japan and 86% in
the United States). Furthermore, as we globally expand research and development and industryacademia collaborative initiatives related to our business, the number of joint patent applications in collaboration with partnercompanies, universities, and other research institutes around the world has reached 51 applications with 20 companies and 10
organizations in the last two years.

4,300

TOKYO ELECTRON SUSTAINABILITY REPORT 2020

imec

IME

Intellectual property management

17

Belgium

TEL Technology Center, Taiwan

Survey & analysis• Market trend analysis• Competitor analysis• Device process analysis• Needs/seeds analysis

Projects uniquely planned by thedevelopment division are
examined and commercialized,
and assessed if there is value infunctionalization

U.S.

TEL Technology Center, America

Singapore

Involvement in product development by sales departments and product marketing departments

Promotion & hearings• Product promotion• Collection of next, necessary
technological information• Hearings on competitor trends• Collection of device information

Korea

Tokyo Electron Korea
TEL Technology Center Korea

2
Global patent application
rate: Percentage of
invention applications
filed in multiple countries■AI chip development
In cooperation with partner companies in the United States, TEL is participating in the development of AI chips. The
development system we have built is completely integrated, from the architecture stage examining semiconductor
design for AI systems through to incorporation into circuits and physical design, and from manufacturing through to
research on the materials development level. Besides developing software necessary for AI to work, we are engaged in
the development of materials, processes, and equipment geared for manufacturing, leveraging our partner companies’
knowledge of design and architecture.
■Initiatives in Japan
Responding to societal demands regarding energy and labor, TEL is participating in a project that brings together a groupof advanced companies with the science, engineering, humanities, and social sciences departments of Tohoku University,
Kyoto University, and Yamagata University.
The project defines three specific non-competitive areas, namely: (1) edge computing devices for IoT with extremely low
power consumption, (2) hybrid integrated power devices for high-efficiency energy conversion, and (3) intelligent electronics
systems for highly efficient labor-intensive transportation systems, and carries out research activities designed to create
innovative technologies and build a joint industry-academia platform for the development of human resources. Tohoku
University, the lead organization in these research activities and projects, hopes to contribute to creating new, world-leadingindustries by achieving synergies with its competitive project for a center for industry-academia collaboration.
As for project outcomes, as a consequence of developing new processes and process integration technologies in
the manufacture of spin-transfer torque-magnetoresistive random access memory (STT-MRAM2), in a world first, we
succeeded in achieving both high performance and high rewrite tolerance3 in STT-MRAM, thereby contributing to thepractical implementation of STT-MRAM and helping to expand its areas of application.

1
BRIDG: BRIDG is a
not-for-profit, publicprivate partnershipspecializing in advanced
system integration,
microelectronics
fabrication, III-V
materials deposition for
sensors, optoelectronics,
and high-speedtransistors. BRIDG offers
production process
technologies, researchand development
capabilities, and 200
mm microelectronics
fabrication geared
toward systemminiaturization, device
integration, hardware
security, and productdevelopment key toaerospace/defense andthe IoT/AI revolution.
Supported by OsceolaCounty, University ofCentral Florida, Florida
High Tech Corridor
Council, and others,
BRIDG provides thephysical foundry
infrastructure andcollaborative process
to connect challenges
and opportunities withsolutions; “Bridging theInnovation Development
Gap” making
commercialization
possible.

2
Spin-transfer torquemagnetoresistive
random accessmemory (STT-MRAM):A nonvolatile memory
based on the operating
principle of the tunnel
magnetoresistance(TMR) effect (thephenomenon in whichelectrical resistancechanges dependingon the direction ofmagnetization of two
ferromagnets separated
by a thin insulator ina magnetic tunnel
junction (MTJ) element)using spintronics (theengineering use andapplication of boththe charge and spin ofelectrons in a solid)
3High rewrite tolerance:
Tolerance for an
unlimited number ofdata rewrites

TOKYO ELECTRON SUSTAINABILITY REPORT 2020

18

Product competitivenessTackling technological innovation

Environmental contribution of products

Research and development for next generation computing
As use of the IoT, linking a multitude of devices to the Internet, expands rapidly in society, demand for semiconductors
processing massive amounts of information quickly and efficiently, such as in data collection and management, analysis, andvisualization, is continuing to grow. At the same time, progress is taking place in the development of neuromorphic devices,inspired by human neural circuits. When processing information on computers that use conventional architecture, there
are considerable losses in energy consumption. Such computers used in data centers consume tens of kilowatts of power,
whereas the human brain uses only about 20 W. Similarly, while the operating frequency1 of today’s semiconductor devices
is 5 GHz, the human brain is believed to run at just several tens of hertz. Progress is being made in research and development
on neuromorphic devices modeled on these human brain movements. They utilize synaptic connections2 based on analog
devices to replace the processing and memory functions, which had previously been only divided between the digital
logic and memory of a conventional microprocessor. The aim is to achieve a higher degree of information processing withlow power consumption. These neuromorphic devices require an approach of integrating analog to digital. In addition toconventional pursuit of circuit miniaturization, development is underway for functions that mimic human neural circuits,
including resistive analog neuro device3, and nonvolatile resistive random access memory4. Furthermore, with a focus on
the energy consumed calling memory from arithmetic circuits, much is being done for faster and more energy-efficient
processing capacity by devising a better arrangement of arithmetic circuits and memory.
Leveraging its strengths in deposition and patterning technologies, Tokyo Electron (TEL) has initiated research efforts
into new materials needed for semiconductors that will be the core of next generation computing, such as neuromorphic
devices, quantum computers, logic-memory integration mixing memory with logic (compute-in-memory, memorydriven computing), as well as innovative manufacturing processes for utilizing these materials.

Medium- and long-term environmental goals
1
Operating frequency (orclock speed): The numberof signals per second
to adjust the pace ofprocessing of multiple
electronic circuits
2
Synaptic connections: A
junction formed between
neurons (cells making up
the nervous system ofan animal) regarded ashaving an important rolein learning and memory
3
Resistive analog neurodevice: Electronic devices
capable of continuously

4
Nonvolatile resistive
random access memory:
Random access memorythat uses nonvolatile
resistance transformers

5
Digital transformation:
Digital transformation(DX) refers to theact of utilizing digitaltechnology to transforma product or entire
company while
responding to changes
in society

Addressing advancements in display
As communication devices become more sophisticated and diversein the age of IoT and 5G, higher performance is required for displays
built into those devices. Displays are continuously evolving, in termsof higher image quality, built-in sensors, flexibility of design, and lower
power consumption.
In particular, Organic Light Emitting Diode (OLED) displays, which are used widely in smartphones
and televisions, are expected to expand to various applications including IT and automotive,
because of their high image quality and outstanding design flexibility.
TEL has released EliusTM inkjet printing equipment designed for forming the emitting layer on OLED displays. Elius
can significantly reduce the consumption of materials in the manufacturing process compared with the conventional
evaporation process. It contributes greatly to cut manufacturing costs for medium and large OLED displays. In orderto make the displays compatible with the diverse organic OEL materials that determine their characteristics, TEL isadvancing development that allows swift deployment of cutting-edge knowledge into our device technology.
For the manufacturing process of the thin film transistor (TFT) array, which drives liquid crystal displays (LCD)and OLED displays, we also developed ImpressioTM and BetelexTM plasma etch systems, as well as the ExcelinerTM
coater/developer. Impressio and Betelex use PICPTM 6, a plasma reactor with higher energy efficiency, reduces power
consumption by up to 20%, and achieving precise processing and stability in mass production. Exceliner, equippedwith our original Air Floating Coater, permits higher throughput while maintaining excellent film uniformity and saving
chemical costs.
TEL continues to reduce environmental impact by improving productivity and yield.

19

TOKYO ELECTRON SUSTAINABILITY REPORT 2020

Medium-term goals (2030)
Products

30%

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

Facilities

20%

Total CO2
emissions(as compared with 2018)

1%

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

Long-term goal (2050)
As a leading corporation in environmental management, Tokyo Electron works actively to conserve the global environment.
We strive to contribute to the development of a dream-inspiring society by proactively promoting the reduction ofenvironmental burden of both our products and facilities, and at the same time, providing evolutionary manufacturing
technologies that effectively reduce the power consumption of electronic products.

changing resistance

Promoting digital transformation (DX5)
As the environment for utilizing AI has developed and AI has become a more familiar part of people’s lives, TEL is
expanding the opportunities for AI application, and is continually striving to achieve highly stable equipment operationand greater efficiency in development activities. By monitoring the operating status of semiconductor production
equipment in real-time, and using AI to analyze that data, we aim to improve equipment operation efficiency and to use
resources more efficiently, such as maintenance of equipment performance, achieving wafer process uniformity, cutting
down on test wafers, and avoiding unexpected downtime. TEL’s specialized AI department, launched in 2017, plays a
key role in the development of algorithms and other projects to use AI to analyze the vast volumes of data output fromequipment. Since 2018, we have also been promoting DX across our entire company, not just in development activities
but also in the education of personnel who can utilize digital technology. AI workshops, for instance, have been held toshare the latest technology trends and to boost internal collaboration.

Tokyo Electron (TEL) is working toward the conservation of the global environment by upholding the environment
related medium- to long-term goals detailed the below.

6
PICPTM: Original plasma
reactor developed by
TEL which produces
extremely uniform highdensity plasma on panel
substrates

Products that contribute to a sustainable society
Reduction in CO2 emissions for products
Of the total CO2 emissions from TEL’s value chain, emissions during(%)
product use account for 90%. For this reason, TEL has made it a key
18
16
corporate objective to promote environmentally friendly product16
14
design, and lower the energy consumption of its products. In fiscal
14
year 2020, we set a medium-term environmental goal for the key
121010models of each business unit (BU), namely, to reduce per-wafer
8
CO2 emissions by 30% by fiscal year 2031 (compared with fiscal year2014). Furthermore, in order to achieve this medium-term goal, we
0
(FY)
2020
2018
2019
set an interim goal of reducing per-wafer CO2 emissions for the keymodels of each BU by 20% by fiscal year 2025 (compared with fiscal
year 2014), and we have been promoting specific activities. In fiscal year 2020, we formulated a roadmap for achieving
this goal for our key models, and we established guidelines for calculating CO2 emissions, incorporating the usualenergy and water usage, as well as process gas and chemical substance usage, product footprint, volume, and weight,
reduced frequency of parts maintenance and increased lifespan, and shorter time to equipment launch. Based on theseguidelines, the reduction in CO2 emissions for equipment shipped in fiscal year 2020 in comparison to baseline equipment
was calculated as 16%. We also began examining environmental technology strategies for achieving our medium- andlong-term environmental goals. As we work to further raise environmental awareness, we will continue to incorporate
environmental technologies as an important added value in our technological strategies. We will continue to promotefurther activities for achieving our medium- and long-term environmental goals.

Initiatives for product environmental laws and regulations
In order to comply with each country’s environmental laws and regulations pertaining to products, TEL proactively
collects information and takes appropriate action as required. An example of our efforts for EU REACH1 is that we
properly investigate and disclose information on the presence of any chemical substances in articles. In terms of theformat used for our investigations, we previously used the Article Information Sheet (AIS) format promoted by the Joint
Article Management Promotion-consortium (JAMP2), but since fiscal year 2021, in order to address chemical substanceregulations for concentrations in the parts per billion (ppb3), we have adopted the chemSHERPA4 format, which will
become widespread as the industry/international standard. As for efforts for GHS5 requirements, we provide safety
data sheets (SDS6) when selling chemical products, and we promote the local procurement of chemical products. In
explaining and addressing the frequently revised environmental laws and regulations, we continue to offer “web-based
training for Product Environment Compliance” to all employees, and we provide suppliers with information on therelevant environmental laws and regulations. TEL will continue to rapidly monitor each country’s environmental laws andregulations and strive to take appropriate action.

1
EU REACH: An EU
regulation pertaining
to the Registration,
Evaluation,
Authorization, andrestriction of CHemicals
2
JAMP: Joint Article
Management
Promotion-consortium
3
ppb: One part per billion(1 × 10-9)
4chemSHERPA: A data
entry support tool for
appropriately managing
information on chemical
substances in products
across an entire supply
chain
5
GHS: Globally
Harmonized Systemof classification andLabelling of Chemicals
6
SDS: Safety Data Sheet(Safety Data Sheetrefers to the document
containing hazard
information aboutchemical substancesthat is issued whena company transfers
or provides chemical
substances, products
containing chemical
substances, to anothercompany.)

TOKYO ELECTRON SUSTAINABILITY REPORT 2020

20

Solutions that create value for customers

Responsivenessto customers

Building systems for creating value for customers
The semiconductor market has been expanding rapidly in recent years, driven by IoT, 5G, automotive automation, andother innovations. Tokyo Electron (TEL) is building an organization to realize more effective global operations, providing
the best technologies and services to meet customer needs as the market changes.
Since 2018, we have worked to strengthen our customer responsiveness through two divisions: our AccountSales Division, which leads to new technology development based on the needs of traditional customers of major
semiconductor manufacturers for next generation cutting-edge technology such as memory, logic, and foundry; and our
Global Sales Division appropriately addresses the needs of more than 100 new customers in Japan and overseas in suchfields as electrical appliances, automobiles, medical treatment, and healthcare. By building stronger, close collaborative
relationships with each business unit and moreover with each overseas subsidiary, our respective sales divisions provide
customers with swift, high-quality support and solutions.
We are working to build globally unified systems and structures in order to further enhance and stabilize the qualityof our service and support activities. The Global Service Committee, a regular gathering of the service leaders of eachdepartment and each overseas subsidiary, enhances information sharing and in-house coordination, including improving
the technical skills and interpersonal skills of our more than 4,000 field engineers worldwide, the localization of startups, and improving work efficiency using the work-time management system. Furthermore, through TELeMetricsTM 1,
a remote maintenance service offered through our Total Support Centers (TSCs2), we provide customers with highervalue-added services, by utilizing our wealth of knowledge and range of tools to enable us to propose customized
solutions services for the various challenges they face.

Medium-term goals

Become the best and sole strategic partnerTokyo Electron (TEL) helps customers manufacture cutting-edge devices by maintaining an accurate and timely grasp on
customer needs and providing innovative technologies for future generations. As a production equipment company with adiverse product range, we propose comprehensive solutions contributing to value creation for customers. Making full use ofstate-of-the-art AI technologies and knowledge management tools, we also provide high-value-added maintenance services
that support the stable operation of various generations of equipment. TEL strives to further enhance customer satisfaction,
which is a key management theme it has tackled since our founding, aiming to be the best and sole strategic partner forcustomers.

Main activities

SDGs initiatives

1
TELeMetricsTM: Referto p. 24.
2
Total Support Centers(TSCs): Refer to p. 24.

Proposing customer solutions leveraging a broad portfolio of products
Because semiconductors and FPDs are becoming increasingly sophisticated and diverse, in order to meet the needs ofproduction sites, such as improved yield and improved equipment efficiency per-unit area through enhanced productivity
and smaller footprints, TEL’s product development is initiated from the customer perspective.
Two of our divisions work closely together in turning these perspectives into products. Specifically, our AccountSales Division identifies customer demands for next-next generation technology and beyond, and based on these, ourCorporate Innovation Division reviews the requirements and converts them into actual, tangible products.
In proposing solutions to customers, we leverage a broad portfolio of equipment, including those used in the series ofkey patterning processes requiring advanced levels of technology, such as deposition, coating/development, etching, andcleaning. Through total solutions that incorporate systems and software in addition to production equipment, we seek tooptimize the production process. We strive to develop products that help strengthen our customers' competitiveness byachieving a balance between faster and better quality semiconductor production.

■ Contribute to customer innovation generation and value creation
through the proposal of comprehensive solutions

Solutions thatcreate value
for customers

Initiatives forfield solutions

Ensuring
Improvement ofsafety for customer satisfaction
customers■ Ensure a sustainable form of production and consumption
throughout product life cycles by responding to diversifying
needs, considering safety and the environment

Cleaning■Ensuring safety for customers
Improving in-house skills, Information provision, Global expansionof training for customers, Safe equipment design■Improvement of customer satisfaction
Customer satisfaction survey

21

TOKYO ELECTRON SUSTAINABILITY REPORT 2020

TactrasTM VigusTM

EXPEDIUS TM-■Solutions that create value for customers
Building systems for creating value for customers, Proposing
customer solutions leveraging a broad portfolio of products■Initiatives for field solutions
Field solutions business, Development and production of
upgraded models, Work optimization, Knowledge management,
Total Support Center

Etching

Certas LEAGATM

CELLESTATM-

Industry,
innovation andinfrastructure

Responsible
consumption andproduction

Partnerships for thegoals
EXIMTM

CLEAN TRACK TM
LITHIUS ProTM

Coating/development

Trias +TM
TELINDY PLUS TM
NT333 TM

Deposition

TOKYO ELECTRON SUSTAINABILITY REPORT 202022

Responsiveness to customers
Initiatives for field solutions
Field solutions businessKnowledge management

As progressive improvements are made in the performance of CPUs1 and semiconductor memory, as advances are madein miniaturization for mass production, and as transistors used in autonomous driving systems and VR/AR2 become
increasingly integrated, there is a need for semiconductors across a wide range of fields, such as medical treatment,
finance, transportation, and manufacturing. Extending the life cycle of products is another challenge, evidenced by thegrowing demand for the long-term stable operation of semiconductors for automobiles and industry.
Tokyo Electron (TEL) is working to further strengthen its field solutions business to ensure that shipped equipment canoperate stably in the market over a long period. We are engaged in various initiatives to help maximize our customers’
business operations, including promoting knowledge management in field service, continuously improving our fieldengineers' skills, strengthening our global support system through Total Support Centers (TSCs), and expanding upgraded
models.

1
Central Processing
Unit (CPU): A typicalcomponent of acomputer, alongsidememory and hard disks
2
Virtual Reality (VR):Technology thatcreates a virtual world
resembling reality in acomputerAugmented Reality(AR): Technology thatuses computer graphics(CG) and so on to reflect(augment) virtual reality
in the real world

TEL promotes group-wide knowledge management1 so that it can deliver high-quality service swiftly to its customers.
In the area of field service, we have been working on globally implementing Service CRM2 so that we can create a
database and centrally manage customers’ equipment records (support and incident history). Having started in Japan
in fiscal year 2020, Service CRM is being progressively expanded in Singapore and Europe in fiscal year 2021. Accessible
to field engineers around the world, it allows us to increase the volume of operational knowledge data. It enables us torespond to calls from customers faster and more accurately efficiently. In addition, regarding our system that allows
engineers to perform natural language searches (Japanese, English, and Chinese) for information they require from thevast amount of accumulated technical documentation, efforts have been made to improve the accuracy of searches
by utilizing AI in image recognition and natural language processing. As a result, knowledge relating to incidents can bereadily searched, and predictions concerning the cause of events can be made with greater accuracy.
Going forward, as we promote efforts to manage the various systems throughout the TEL group using One Platform3,
we remain committed to further improving the efficiency of our customer responsiveness.

Development and production of upgraded models
In order to meet the needs of customers producing IoT-related products, TEL has established a system for developing
and producing new upgraded models based on previous-generation equipment supporting 200 mm wafers. Upgraded
models help customers to improve productivity and reduce environmental impact by replacing old units and parts withnew ones while maintaining compatibility with existing processes and offering performance in terms of transfer speed
and so on at the same level as the latest equipment. In fiscal year 2021, we began selling upgraded models of ALPHA8SE™ 3 and UNITY™ Me4, systems for peripheral devices that we had previously sold as new equipment. We also began
developing upgraded models of coating/developing equipment and cleaning equipment for 200 mm wafers.
TEL’s lineup of small-diameter equipment

ALPHA-8SE TM i

Upgraded model complete

NS300+ 200 mm
Conversion

CLEAN TRACKTM ACTTM 8

Cleaning System

Coater/Developer

ThermalProcessing System• 150/200 mm• Diffusion• LP-CVD• ALD

Upgraded model under review* All models CUE5 compatible

UNITYTM Me+

3
ALPHA-8SE™: A batch
thermal processing
system that canaccommodate lowtemperature to hightemperature processes
4
UNITY™ Me: A dry etchplatform developed by
TEL for wafers up to
200 mm5
CUE: Certified Used
Equipment

2Service CRM: Service
Customer RelationshipManagement
3
Efforts to manage
systems using One
Platform: Refer to p. 28“Continuous
improvement ofbusiness operations.”

Knowledge management tools
4
BI: Business Intelligence

Multi Database
Trouble Information

Equipment Records(Power BI4)

WisdomKnowledge SearchComprehensive search ofequipment history

Service CRM

Comprehensive search ofequipment history“Serial Number” axis

“Trouble” axis

Parts Order History
Plasma Etch System

Oversea Report• 200 mm
• 150 mm (2021–)• Front/Back scrubber

1
Knowledge
management:
Management approachto promote internal
company sharing of
tacit knowledge held byindividuals, in order toencourage innovationand to improve overall
productivity• 75/100/150/200 mm• l-line, Krf, ArF• SOG/SOD, PI• 100/150/200 mm• Oxide, Nitride, Si, SiC

Serial Number
SearchSymptom
SearchBKMBest Known Method
Trouble shooting manual

Total Support Center
TEL has built a global support system, establishing Total Support Centers (TSCs) in Japan, the United States, and China.
At each TSC, dedicated representatives maintain and utilize a database of information about customers’ equipment
and examples of similar incidents. The TSCs also employ TELeMetricsTM to perform remote maintenance. These systems
facilitate collaboration between the TSCs, field engineers, and plants, helping us to respond promptly and appropriately tocustomer inquiries and any problems that arise.

Work optimization
To improve the work efficiency of field engineers worldwide, and to enhance service quality and streamlining personnel,
TEL uses globally common timesheets to conduct detailed work-time management and analysis for each location andproduct. In addition, intent on further improving work efficiency, we have been particularly focused on reviewing workwhere considerable improvement is likely based on the types of tasks undertaken by engineers and the time taken, suchas work involved in starting up equipment and repair work.

CustomerTSC
TEL eMetricsTM

BKM

Knowledge Search

23

TOKYO ELECTRON SUSTAINABILITY REPORT 2020

TOKYO ELECTRON SUSTAINABILITY REPORT 202024

Responsiveness to customers
Ensuring safety for customers

Improvement of customer satisfaction

Improving in-house skills

Customer satisfaction survey

In October 2019, we established a training operations center to enhance the skills management, training structure, andglobalization of field engineers. Having built a group-wide skills management system in accordance with SEMATECH (aU.S. consortium for the joint development of semiconductors), we deploy the most suitable human resources to provide
customers with service, based on an objective understanding of the skills of our engineers. We are also committed tocontinuously reviewing and improving our training curricula and content from a global perspective, including establishinga system whereby field engineers can choose the training programs they need to attend in order to improve their skills.

Tokyo Electron (TEL) conducts a customer satisfaction survey (TEL CS Survey) every year with the goal of making
continual improvements based on customer feedback. The survey started in fiscal year 2004, aimed at just a limited
number of divisions. It was expanded to include all semiconductor production equipment divisions in fiscal year 2014, andlater the flat panel display production equipment division and overseas subsidiaries in fiscal year 2016, and currently, it is
implemented company-wide as the Customer Satisfaction Survey Program (CSSP).
Under the CSSP, we survey customers once a year, at the same time each year, and ask specific questions that will leadto improvements on a practical level. Results from the survey are analyzed by product, account (customer), and function(software, development, etc.), and given as feedback to customers. We also share the results with relevant divisions, suchas sales, production, and support, and implement initiatives for improvement. Improvements are also made continuously
to all aspects of the survey method, including the questions asked, the analytical methods used, and the overall operationof the survey activities.
In the customer satisfaction survey for fiscal year 2020, responses were received from approximately 1,400 individual
customers, which is 69.5% of all customers. We received evaluations of three points or higher* on 93.3% of all questions asked.
When we receive an evaluation of one point (Very Dissatisfied), we respond to the customer as quickly as possible aspart of a Shift Left approach to implementing early-stage improvements throughout the survey process. Going forward,
we will continue to aim for three points or higher for 100% of the questions asked, and the entire company will work as
one to implement customer-driven improvements.

Information provisionTokyo Electron (TEL) is committed to providing sufficient information on its products toensure that customers can safely use the products. All products purchased by customers
come with a TEL Safety and Environmental Guidelines manual. The manual describes
potential risks associated with using our products together with the methods for averting
those risks, as well as safety measures applied to products and recommended methods for
product disposal. It is divided into such categories as chemical, electrical, mechanical, andergonomic. The manual is available in 12 languages1 to ensure that customers around theworld can understand the content accurately and safely use the products. Customers are also
provided product-specific manuals tailored to the relevant product specifications.
If new safety warnings become apparent after a product ships, we contact affected
TEL Safety and Environmental
Guidelines
customers individually and share that information with them.
We also pay close attention to safety when delivering products that involve the use of hazardous chemicals or highvoltage electricity. Furthermore, when delivering products to a customer’s new production line, in accordance with TEL
regulations, we thoroughly consider all safety aspects beforehand by checking the customer’s facilities, equipment, safe
work standards, and so on.

Global expansion of training for customers
TEL has established training centers all over the world, mainly at its development and production sites, and is providing
customers with training on equipment operation and maintenance to ensure they are able to use the products safely. In
July 2019, we opened a new training center at Tokyo Electron Korea. Using actual equipment, practical training is beingrolled out at training centers globally, delivered by about 50 dedicated instructors whose skills have been recognizedby our own internal certification system. In addition, we also implement online education as well as on-site training at
customer’s plants.
By conducting online surveys in order to respond more quickly to our customers’ needs, and by collecting and analyzing
customer feedback, we are working to improve the content of our training programs and the equipment used. Goingforward, we will continue to give priority to customer safety as we put effort into further developing our training
environment.

Safe equipment design
Taking the entire product life cycle into consideration, TEL carries out product risk assessments as early as possible in thedevelopment phase. Based on the assessment results, we implement safe equipment design2 to reduce the risks posed tohumans. We also examine and ensure compliance with increasingly strict laws and regulations around the globe, and havea system in place for all safety regulations of the regions where our equipment is delivered.
Equipment shipped from TEL is checked by a third-party inspection organization to ensure that it complies withinternational safety standards such as SEMI S23 and CE marking4. We also obtain Certificates of Conformity (CoC) from
Notified Bodies in Europe in line with the Machinery Directive and EMC Directive5. In addition, we are actively working tocomply with KC Mark, KCs Mark, and other certifications as Korea, China, and elsewhere in the Asian region strengthen
their safety laws and regulations.

25

TOKYO ELECTRON SUSTAINABILITY REPORT 20201
12 languages: Japanese,
English, German, French,
Italian, Dutch, Russian,Portuguese, Korean,
Traditional Chinese,
Simplified Chinese, andFinnish2
Safe equipment design:
A design concept thateliminates the cause of
the machine's harm tohumans through thesafety design of themachine.
3
SEMI S2: This is a set ofenvironmental, health,and safety guidelines
for semiconductor
production equipment.
It is used mainly by theleading manufacturersof semiconductor
equipment in the UnitedStates and Europe, notonly for ICs but also
as safe procurement
guidelines for electricand electronic device
manufacturing
equipment around theworld.
4
CE marking: When
exporting into theEuropean Union,
CE marking defines
rules for displaying
a CE mark as proof
that the equipment
is safe and complies
with EU-defined rules(Directives).
5
EMC Directive: Thisis one of the New
Approach Directives
that apply to the 27 EU
member states. This
directive applies to allelectric and electronic
devices that are at
risk of being disturbed
by electromagnetic
interference or that may
interfere with otherequipment. The current
directive is 2014/30/EU.

*
On a four-point scale,three points or higher
represents “VerySatisfied” or “Satisfied”■Improvement example
As a result of the customer satisfaction survey, issues that would not normally be identified were brought to light,
and persons-in-charge and managers at TEL, who are in direct contact with customers, made improvements with thecooperation of the relevant divisions. This led to improved evaluations of three points or higher for the question relating
to software support for problem-solving, which was one of three questions we focused on during fiscal year 2020.
We believe these improved evaluation scores from customers result from our efforts to enhance support for software
operating across multiple pieces of equipment, which we have been working on for some time.

Percentage of responses
that indicated customer
satisfaction

CS Survey activity
preparation

Feedback to customers
Implement improvement activities
in each division
Conﬁrm progress of improvement
activities

Plan

Do

Act

Check

Conduct survey ofcustomers

93.3%

Analyze and reportsurvey results
Investigate
improvement
plan

TOKYO ELECTRON SUSTAINABILITY REPORT 202026

Promotion of improved productivity

Higherproductivity

Continuous improvement of business operations
As part of its business innovation for productivity and quality improvement, Tokyo Electron (TEL) is tackling system anddata integration across the entire TEL group value chain, such as development and manufacturing divisions, as well as
sales and administration divisions. The primary objective of our project to introduce a new ERP1 system is to integrateeach of our division’s previously discrete business systems, and to aggregate previously disaggregated internal data,
enabling more centralized management. By freely utilizing the aggregated data in each business operation, we can quickly
collect data needed for business decisions, make production schedules more reasonable and more efficient, visualizedelivery dates for parts, and achieve stronger coordination between sales planning and production/procurement/
inventory planning. To make the system fully operational in fiscal year 2024, we are proceeding with introducing thesystem in a way that does not disrupt existing production lines. Given that the system involves business operations
performed by a range of employees, as we seek to bring the system to fruition, we are building an internal framework
for cooperation, sharing the merits of migrating to the new system and updates on progress in a timely manner with all
employees, including the project members.
Overview of ERP system
Sales CRM
(Opportunities and Forecast)Medium-term goals

New system

Customerinvestments

Constantly pursue higher management efficiency

that integrates the corebusiness operationsof an enterprise,such as accounting,personnel, production,

Warranty
ERP1(Sales, Inventory, Accounting,
Production Management)

Forecast

logistics, and sales, forbetter efficiency andcentralized information

Sales

Production
planning

Technical
acceptance2

Production
preparation

Start-up

PLM (product lifecycle
management): The

Deliverytechnique of keeping
track of a single productin a centralized manner,

DesignBooking

Procurement Manufacturing

managing the stages

PLM2 (Product Lifecycle Management)

and processes in an
integrated, crossdivisional mannerwith an aim of overall
optimization

Software development initiatives
Main activities

SDGs initiatives■ Promote productivity, continuously increase management
efficiency, contribute to the development of the industry andsociety, and contribute to sustainable economic growth

Promotionof improved
productivity

Softwaredevelopment
initiatives

Quality
management

Improvement ofquality in thevalue chain■ Promote streamlined business operations and quality
management throughout the value chain, ensuring sustainable
forms of production and consumption■Promotion of improved productivity
Continuous improvement of business operations■Software development initiatives
Streamlining product development, expanding global activities,
Developing smart equipment■Quality management
Quality policy, Management system■Improvement of quality in the value chain
Improvement of quality in the value chain, Raising awareness andskills, Initiatives at the development and design stages, Response
to quality problems, Response to safety laws and regulations,
Initiatives with suppliers

27

TOKYO ELECTRON SUSTAINABILITY REPORT 2020

1
ERP (enterprise resource
planning): A system

Maintenanceand service

Opportunities

Tokyo Electron is striving to improve productivity along the entire value chain, promoting greater standardization, efficiency,
and automation of operations throughout the group, such as by integrating business systems in each division and unifying
databases. Recognizing the importance of quality management, we are enhancing the awareness and capabilities of each
employee regarding productivity by rolling out various educational programs. In addition, we are implementing continuous
quality improvement activities throughout the supply chain in collaboration with suppliers. We will strive to enhance corporate
value, constantly pursuing higher management efficiency by implementing more streamlined business operations and qualityfocus operations.

Key processes

Service (Field-Support)

Streamlining product development, expanding global activities
Since 1995, Tokyo Electron (TEL) has incorporated platform software developed in-house in its semiconductor production
equipment, and has worked on streamlining operations and improving product quality. By standardizing platform
software, we have been able to reduce the hours spent on developing duplicate functions for each type of equipment,
leading to guaranteed real-time3 control and enhancement of our response to new demands and technologies. Having
adopted such concepts as object-oriented4, we are also working on more efficient development of new platform
software for the development of next generation equipment.
In addition, we are engaged in global activities to promote digital transformation (DX) development. As well as sharing
information and various tools among responsible personnel in Japan and overseas, we are expanding a range of training
programs, such as drawing up a data analysis skills map designed to improve DX skills throughout the TEL group.

3
Real-time: The propertyof time limitation until
the completion of work
4
Object-oriented: A
software engineering
theoryDeveloping smart equipment
Decent work andeconomic growth

Responsible
consumption andproduction

Partnerships for thegoals

Amid advances in manufacturing that make the most of innovative technologies
such as IoT and AI, our customers are forging ahead in improving productivity
by taking advantage of visual representations of data, and building smart fabs5
to improve consistency in quality. In this context, we are developing necessary
software and systems for sites producing equipment, such as automation, for
reducing work time. Our specialized development and manufacturing divisions,and business units work in cooperation to develop various functions for smart
equipment, such as simple operation, presentation of the causes and resolutions oftroubles, and autonomous operation through prediction of results.

Steps in realizing smart equipment

Visualization
Digitization
Collection andconnection ofdata

Controlmeasures
Autonomy

5
Smart fab: A fab thatutilizes digital data
to realize continual,progressive reforms ofoperational processes
and improvements inquality and productivity

Data analysis
Analysis/forecasting

TOKYO ELECTRON SUSTAINABILITY REPORT 202028

Higher productivity■Example initiative
The Software Engineering Department at Tokyo Electron Kyushu is involved in designing, developing, and the testing andpost-release maintenance of control software for coater/developer tailored to customer requests. In addition, it works todevelop competitive software by constantly improving the development process and environment and nurturing humanresources.
The department reviewed and redesigned the configuration and structure of software, mindful of any risk of bugs
that might corrupt a program when making a design change due to the problem of the complexity in upgrading themas a result of years of software revisions. This eliminated complexity and improved maintainability, enabling the team to
respond rapidly to customer needs.
Furthermore, over the years, the department has engaged in PDCA activities to improve the development process.
After identifying that work quality had declined due to past operational practices and preconceptions, and that there
had been a deficiency in sharing information on improvement measures, it renewed its appreciation of the importanceof doing the simple things well. It consequently worked on re-learning the definitions, procedures, and measures ineach step of the development process. It succeeded in reducing the amount of work spent on following up on nonconformance.
In the past, setting the hundreds of thousands of parameters necessary for control software to work in mass
production design relied on veteran engineers' experience. In order to improve this individualized work and to generate
accurate parameters more swiftly, the department developed “HCube”—an auto-generation tool. HCube was put
into action in April 2019, and since then, the department has seen about a 50% reduction in time spent designing new
equipment and upgrading shipped equipment. Other outcomes include a decrease in non-conformance attributable tohuman error. This achievement was also praised in a third-party audit as an endeavor worthy of note.

Average

300

Equipment shipped

Return for modification after shipment
20% reduction

250

To provide consistent, high-quality products, TEL is building quality assurance systems under the leadership of theRepresentative Director and President. We have been promoting ISO 9001 quality management system certification, andall of our manufacturing companies have completed transition to ISO 9001: 2015.
ISO 9001 certified factories and offices
Company nameFactory/Office name

September 1994

Fujii Office/Hosaka Office

Tokyo Electron Technology Solutions
Tokyo Electron Kyushu

Certification dateTohoku Office

December 1994

Koshi Office

March 1997

TEL Magnetic Solutions—

November 2009

Tokyo Electron Korea

Balan Factory

September 2011

Tokyo Electron Miyagi
TEL Manufacturing and Engineering of America
Tokyo Electron (Kunshan)

Taiwa Office

September 2012

Chaska Office

March 2013

Billerica Office1

May 2014—

May 2018

1
The Billerica Office was
relocated in May 2020.

Improvement of quality in the value chain
Improvement of quality in the value chain

Progress: Design staff-hours (per unit as of November 2019)(h)Management system(target 50%)

Tokyo Electron (TEL) believes that making ongoing improvements in all work processes contributes to improved quality
and productivity of products and services. We will continue working hard to promote quality management throughout
the value chain while keeping track of customer needs and strengthening internal and external collaboration.

200
150

50% reduction(target 45%)

100
50% reduction

50
0Improved quality and productivity

No change(target 40%)

(target 75%)
New design

New design(automatic)

Large-scale Large-scale modification
modification(automatic)

Medium-scale
Medium-scale
modification modification (automatic)

Small-scale
modification

Small-scale modification(automatic)

Marketingand sales

Development

DesignProcurement

Manufacturing

Sales

Installation

Maintenanceand service

Value chain

Quality management
Quality policy
Tokyo Electron (TEL) has a quality policy shared by all group companies which it has developed and is rolling out.
1. Quality Focus
Focusing on quality to satisfy customers, meet production schedules, and reduce required maintenance even with temporary cost increases.
2. Quality Design and Assurance
Building quality into products, assure in-process quality control, from the design and development phase throughout every process.
3. Quality and Trust
When a quality-related problem occurs, working as a team to perform thorough root cause analysis and resolve problems as quickly as
possible.
4. Continual Improvement
Ensuring customer satisfaction and trust by establishing quality goals and performance indicators and by implementing continual improvement using
the PDCA cycle.
5. Stakeholder Communication
Listening to stakeholder expectations, providing timely product quality information, and making adjustments as needed.

29

TOKYO ELECTRON SUSTAINABILITY REPORT 2020

Raising awareness and skills
TEL is striving to enhance the awareness of every employee toward quality
QC certification holders
by conducting various education programs. In addition to the basic education
on quality that new employees receive, we have also globally rolled out PDCA
Education and other programs that target all TEL group employees. In PDCA
Education, employees learn about the need for continuous improvement(as of FY2020)
through the four processes of plan, do, check, and act. As of FY2020, 84% of
employees had completed this program.
We also implement our own education program, called TEL 6-Step, for employees closely involved in quality control,
such as developers, designers, quality managers, and service personnel, through which they acquire a problem-solving
model to handle important issues. The program is a modified version of the eight discipline (8D) problem-solving
method2, widely used in quality control, customized to replace our problem-solving process. The program cultivatesthe ability to resolve problems quickly and to take measures preventing recurrence, by thoroughly investigating
the true nature of problems, and determining the technical factors and root causes. As of FY2020, approximately
5,800 employees had attended this program. We also conduct group training targeted at quality control leaders toprovide them exercise-based learning opportunities for resolving quality-related issues to further enhance their work
improvement skills at production and development sites.
Moreover, so that employees can tackle quality improvement autonomously, we advocate QC certification3 andencourage them to acquire fundamental skills. Since fiscal year 2012, the number of QC certified employees has increased
yearly to approximately 2,400 as of FY2020.

2,400

2
8D problem-solving
method: A method forsolving problems inquality improvement
through eight disciplines
or processes
3
QC certification:
Quality management
certification operated
by the JapaneseStandards Associationand the Union ofJapanese Scientists andEngineers. The total
number of certified
people nationwide
exceeds 580,000 (as of
September 2019)TOKYO ELECTRON SUSTAINABILITY REPORT 202030

Higher productivity

Initiatives with suppliers

Initiatives at the development and design stages

1
FMEA (failure modeand effects analysis):
Method to identify,
prevent, and mitigate
risks in advance

Cost

ProfitPromotion of Shift Left (front-loading) and self-process assurance systems
In order to improve the quality of products, it is important to prevent non-conformance from occurring in upstream
processes, and to ensure thorough quality control in each process so that non-conforming products are not allowed
to flow into later processes. From this perspective, TEL promotes “Shift Left” and self-process assurance systems. With
Shift Left, in order to raise the degree of product quality at an early stage, we implement thorough risk detection andmitigation measures (FMEA1) from the initial stages of product design in an effort to suppress the occurrence or outflow
of non-conformance. As for self-process assuranceMarket research/planning
Development/design
Production/sales
Service/maintenancesystems, we carry out thorough inspections in eachprocess and conduct verifications using simulation. In
Improve profit
conjunction with these promotion activities, we are
marginalso focusing on the deployment of Product Lifecycle
Accelerate time-toExtend lifetime
market for products
value of productsManagement (PLM). By deploying and promoting PLM,
we comprehensively manage and analyze all processes
Timefrom product planning, development, design, andproduction through to service, in an effort to facilitate
Reduce development
costs
the earlier release of products, enhance work efficiency,
improve quality, and reduce costs.

Response to quality problems
利益

To comply with ISO and EN2 safety standards and to achieve higher levelsof safety,開発・設計
TEL has established
its ownサービス・保守
design
市場調査・企画
生産・販売
rules for each of its products. As an equipment manufacturer, we have developed systems for manufacturing products,
which include safety considerations. We have other systems in place for responding to equipment design and production
non-conformance and any occupational accidents.
In the event of an accident, we use our TIRS3 accident reporting system to distribute information to safety and quality
personnel in each division, officers, and management, including senior management. An accident investigation is also
conducted immediately to identify the cause and plan preventive measures.
We also use a proprietary system called QA-BOX4 to share information on equipment quality and any major nonconformance across all quality departments within the TEL group. Measures obtained from the results of an accident
investigation are promptly applied, not only to the problem equipment, but also to relevant equipment operated byother customers, and revisions are made to current design standards. In the case of an accident caused by the wrong
cable being connected, for instance, in addition to verifying the position and shape of the slot for inserting the cable andanalyzing the factors that led to the human error, we are working to prevent a recurrence of the accident, such as by
preparing procedures that are easier to understand.
Through QA-BOX, as well as getting relevant
TEL Group
departments collaborating to share data on
Management
issues, remedies, and other accident-related
Seriousinformation, we also assign the right personnel
accident
Fire
Accident
department
reporting
Policeand work hard to prevent accidents fromsystemdepartment
Relevant divisions(TIRS)
Investigation of causes and development ofrecurring.
recurrence prevention measures
Defective
quality reporting
system
Accident-related data accumulated in QA(Q-VICS)
Customer
contact
Customerpoint
BOX is utilized for the cumulative analysis ofOperations
divisions
Safety division
trends to visualize the types and frequency of
Qualityassurance
division
problems for individual equipment, whereby
we implement countermeasures that have
Servicedivision
an immediate impact. As we strive to prevent
problems from recurring and their associatedripple effects, this is leading to a reduction in thenumber of accidents attributable to equipment.
Investigate andidentify causes

Issue FCN5

Report and workplace recovery

Confirm spread

Share with Group(QA-BOX)
Reflect in design
standards

Determine measures

Revise standards
Notify revision

Establish
implementation plan

Permanent measures

Accident information:

Information sharing:Operations and information flow:

Response to safety laws and regulations

2
EN (European Norm):
Uniform standard for
the European Union
complimenting partsof technical standards
not stated in European
Commission directives(“New Approach”
directives)
3
TIRS: TEL Incident
Report System
4
QA-BOX: Tool for the
sharing and horizontal
expansion of importantquality-related
information within the
TEL group
5
FCN (Field Change
Notice): Refers togeneral recall notice

Continuously improving quality based on strong partnerships with suppliers is essential for providing high-quality
products quickly to the market. Since fiscal year 2001, TEL has conducted its unique Supplier Total Quality Assessments(STQA) in an effort to ensure its suppliers properly understand the level of quality it expects from them. Before starting
business with new suppliers, an STQA is conducted via self-assessment to evaluate their product quality, costs, andinformation security. The assessment also includes their CSR initiatives, including human rights, ethics, safety, and theenvironment. If a risk is identified, we visit the supplier and confirm the area of non-conformance on site. Once ourapproach to quality has been confirmed, we request that they plan and implement improvement measures, and we
provide continuous support until all of them have been completed. In addition, we also conduct on-site audits once
every three years for suppliers who handle important components and for suppliers where quality issues have beenfound. Since STQA is a system shared by our whole group, STQA-L meetings are held regularly, gathering together leaders
selected from among manufacturing companies to share supplier information and to resolve any issues.
We are also focused on process improvement activities using SPC1. Invariably, our customers’ production sites require
limited variations in quality between equipment, accurate process repeatability, and high productivity. To meet theserequirements, we get our suppliers who handle specific important parts to understand the importance of SPC, and wework on implementing SPC together with our suppliers to reduce variations in the quality of parts and to maintain andimprove processes manufacturing good-quality products.
■Example initiative
Number of non-conforming parts (full year)
In the event a flaw, defect, or other non-conformance is foundin a delivered part, time and money is spent in the production
565
600
process, working to replace the part, investigate the cause, change
47 1
500
425
production schedules due to process delays, and to implement other400
changes as needed.
300
The Quality Assurance Division at Tokyo Electron Miyagi had
200
previously limited its quality improvement activities to those
100
suppliers with a large number of non-conforming parts. During the0
FY2020FY2018FY2019process of confirming the overall percentage of non-conformanceand the associated causes, it came to the realization that these
activities needed to be conducted for all suppliers. For this reason,
since fiscal year 2019, it has issued its own Quality Report to all suppliers from which parts were found to be nonconforming, and by including statements on the supplier’s level of quality and the monthly number of non-conforming
parts, it has worked to reduce non-conforming parts and foster awareness for quality.
In fiscal year 2020, the division issued reports to 108 suppliers, and as a result, non-conforming parts decreased by
17%2. One supplier acknowledged, “Using the Quality Report as a guideline to clarify issues related to quality helped us
strengthen our overall capacity to supply parts.” In addition to achieving a concrete outcome, that is, a decrease in thenumber of non-conforming parts, by sharing quality improvement activities based on qualitative data with suppliers, weare also working to raise our level of active communication.
Going forward, we will enrich the content of the reports by incorporating the feedback of suppliers and we will further
accelerate our efforts to improve the quality of parts.

1
SPC (statistical processcontrol): Refers
to monitoring forabnormal values for themean of a characteristic
subject to control, andimplementing process
improvements

2This figure is the actual
result for FY2020
compared to FY2018

6
SEMI S2: Refer to Note 3
on p. 25.

Quality Reports
7
EMC Directive: Refer toNote 5 on p. 25.

Provision of
better-quality products

PDCA at TEL

PDCA at suppliers

High-quality parts

TEL has systems in place to check and comply with the latest trends in laws, regulations, and guidelines for equipment
safety. Equipment is checked by a third-party inspection organization before shipment, to ensure that it complies withsafety requirements, such as international safety standards and SEMI S26. Also, in response to the Machinery Directiveand EMC Directive7, we obtain certificates of conformity from the Notified Bodies in Europe.

31

TOKYO ELECTRON SUSTAINABILITY REPORT 2020

TOKYO ELECTRON SUSTAINABILITY REPORT 202032

Human resource management

People andworkplaces

Approach to human resource management
For Tokyo Electron (TEL), corporate growth is about people. Employees are a foundation for creating value. Our aim
is for both the company and employees to grow together by engaging each employee at work, and linking this toincreased productivity for the company as a whole. Specifically, we focused on: (1) improving employee development
and engagement, such as through promoting support for career development, encouraging them to stretch themselves,and providing opportunities for skill and leadership development, (2) improving productivity through developing
the workplace environment, such as by using IT for better operational efficiency and promoting smart work, and (3)attracting outstanding talent such as through employer branding, strengthening partnerships with universities and labs,
and promoting internships, including international ones. To expand these initiatives effectively, human resources function
has deployed a team supporting business on a global level.

Diversity and inclusion (D&I)
Systems and initiatives

Medium-term goals

Maximize dreams and drive
While conducting sustainable operations, it is also important for companies to meet new demands of society from people andworkplaces' perspectives, such as responding to workstyle reforms and employing people with diverse values. Based on therecognition that people are the source of a company’s growth, Tokyo Electron deeply appreciates the new value created byindividual employees exercising their capabilities, while respecting their individuality and values and encouraging work styles
in sync with their respective lifestyles. In addition to developing a common global human resource system, placing the right
personnel for the right job across countries and regions, and implementing employee performance evaluations that are fair andhighly transparent, by working to strengthen human resource development programs and to promote health and safety, we
strive to nurture employees full of vitality and develop inspiring workplaces.

Main activities

SDGs initiatives■ By globally promoting a highly transparent human resource
system, together with fair hiring and compensation, strive tofacilitate rewarding, human-focused employment (decent work)

Human resource
management

Diversity andinclusion

Work-life balance

Employee
growth■ Proactively develop work-life balance, diversity, and inclusion, andpursue equality among people and in the workplace

Employee growth

Health and safety■Human resource management
Approach to human resource management■Diversity and inclusion (D&I)
Systems and initiatives

Global human resources system
Good health andwell-being

Decent work andeconomic growth

Reducedinequalities

Partnerships for thegoals■Employee growth
Global human resources system, Human resource development
concept at TEL UNIVERSITY, Human resource development system■Work-life balance
New work styles, Encouraging use of leave, Childcare and nursing
systems, Employee life support■Health and safety
Health and productivity management promotion, Activities forsafety, Incident reporting system, etc.
33

TOKYO ELECTRON SUSTAINABILITY REPORT 2020

It is important for Tokyo Electron (TEL) to expand its business globally andaddress social changes and diversifying needs by creating new value andcontinuing to grow. To achieve this in situations where there is diversity, notjust in gender, disability, nationality, or other personal circumstances, but also
different work styles and stages of life, it is essential we have an environment
where personnel can exercise their capabilities and tackle challenges whilestaying highly motivated. To provide all employees with a “pleasant workplace
where anyone can work with strong motivation,” we respect and promote D&I.
D&I Talk
In July 2019, we launched the Global D&I Council, and at a meeting heldthat December attended by members from Japan and overseas, we formulated a D&I vision and slogan for the entire TELgroup. At the meeting, the topic of D&I for the TEL group was again taken up for discussion, and we reaffirmed that it is
not just about gender, but is a more inclusive endeavor.
To realize a workplace where diverse employees have a better understanding of each other and can play an active role,
we have been implementing harassment prevention education and awareness activities globally. In January 2020, we
held a D&I Talk event at our headquarters in Akasaka. The event included guest speakers and a panel discussion, and waswell attended by employees. The event was streamed live to business sites in Japan and overseas in an effort to raiseawareness for D&I among all employees in the TEL group. The Employee Resource Group (ERG) has also been launched,and is promoting initiatives whereby the company supports employees with interest in D&I, voluntarily planning andadministering activities designed to contribute to the community and reform the corporate culture. Looking ahead, we
will work to further promote D&I throughout the entire TEL group, by formulating a three-year plan ending in 2022, androlling out initiatives tailored to the actual circumstances at each of our business sites in Japan and overseas, such as
expanding our training programs and organizing events.

The globally integrated human resources programs introduced in fiscal year 2018 clarify the roles and responsibilities ofeach employee in order to effectively support talent management. In coordination with development programs, Tokyo
Electron (TEL) supports the career development and growth of our employees by presenting the skills required for a job in
the TEL group, the knowledge they should/can acquire, and a description of expected duties at higher levels. We are also
working to build workplaces where diverse individuals can flourish, by conducting talent assessments across countries
and regions, realizing fair total rewards for employees, and utilizing a performance management system and a global
common human resource system.

TOKYO ELECTRON SUSTAINABILITY REPORT 202034

People and workplaces
Work-life balance
New work styles

Human resource development concept at TEL UNIVERSITY
TEL has established TEL UNIVERSITY as an in-house educational establishment, helping employees to independently
build their careers and realize their personal goals for their growth and development. Our aim is to stand shoulder toshoulder with each employee, supporting their self-growth and fruitful career development throughout their working
life, and create a foundation that enables the organization and individuals to trust each other and grow. TEL UNIVERSITY
plays an important part in employees realizing TEL’s vision of being “a truly global company generating high added value
and profits in the semiconductor and flat panel display industries through innovative technologies and groundbreaking
proactive solutions that integrate diverse technologies.” Through the following four initiatives, we are focusing on
employee growth that leads to corporate growth.
First is the provision of personalized learning opportunities. Since each employee’s growth is different, we are putting
effort into the practice of on-demand education1 as a mechanism that allows individuals to learn as they want, when theywant and according to their own needs. In addition to group training, by proactively utilizing e-learning programs, we areproviding opportunities for employees to learn from any location.
Second is support for career development. We are expanding programs designed for employees to quickly acquire basic
skills according to their different levels and goals through our global human resources system. Effort is being put into
providing information and tools so that employees can gain a more concrete image of their own learning, experience, andcareer development.
Third is leader programs. In nurturing the next generation of leaders to support TEL’s future, we are globally expanding
our succession programs to identify and systematically nurture staff to take on the role of realizing medium- tolong-term improvement of corporate value. Selected next generation management candidates are provided growth
opportunities with an eye to the future, through participating in external training, building networks outside thecompany, and cultivating a broader perspective.
Fourth is the provision of global learning opportunities. For employees to acquire skills related to their duties and to
gain a broader insight, we encourage them to actively participate in both internal and external seminars. Besides training,
we are also considering a study abroad program for fiscal year 2021. Furthermore, we are moving to standardize ourcore programs on a global basis so that employees are able to learn using consistent TEL group content and guidelines
regardless of whether they are in Japan or overseas.

1
On-demand education:
Education programs
that allow employees
to learn at the own
convenience, anywhere,anytimeEncouraging use of leave
Based on the belief that taking appropriate leave and properly managing work
hours also contributes to better employee productivity, TEL strives to correct longwork hours, and aims to enhance the leave system and promote taking leave.
Since fiscal year 2019, we have set an annual target of 70% annual paid leave
use, and have promoted employee awareness for planned use of leave. We are
Take-up rate of annual paid leavealso promoting regular monitoring of leave use status and urging management to(overseas)
improve leave use rates, ensuring that five days of compulsory annual leave aretaken as required by law since April 2019. As a result, leave use rates were 72.6% inJapan and 81.2% overseas during fiscal year 2020.
Our goal is to provide refreshment for employees and thereby to boost theirmotivation to work. The system grants special (paid) leave from two weeks to one month per five years of service toemployees who have worked for more than 10 years. In fiscal year 2020, 901 employees in Japan and 514 employees
overseas took refreshment leave.

81.2%

Childcare and nursing systems

TEL provides programs adapted to different levels and goals for employees to gain world-class knowledge and skills.
We are also providing opportunities for employees to improve their understanding and to acquire knowledge on thelatest trends in TEL’s core technologies by running ongoing skill enhancement training and holding technical workshops
for skills acquisition.
Corporate education system (TEL UNIVERSITY)

Executives

Leaders

Mid-level
employees

Junior employees
New employees

Introductory programs (new graduates, mid-career recruits)OJT2 programs (new graduates, mid-career recruits)
Level-based programs

Manager programs

Mid-level employees

Leader programs
Compulsory WBT3

Junior employee programs

Percentage of those who
returned to work afterTEL respects the various lifestyles of its employees and is investing effort
childcare leave (Japan)
into providing an environment where each employee can thrive. In addition,
to the system made available by existing laws, we are independently
building a substantial framework that allows employees to adopt a flexible
approach to work that accords with diverse life events such as raisingchildren or caring for family members.
With regard to the situation in Japan, we have acknowledged the maximum extension of the childcare leave period tothe day a child reaches three years of age, as well as expanding our provision of a reduced working hours program forchildcare to include employees rearing children as far as graduation from elementary school. In addition to leave to care
for a sick or injured child, we are enriching the provision of support through establishment of our own childcare leave,
etc. As a result, currently in Japan, 42% of female TEL employees are working mothers. To further our support for thecompatibility of work, and nursing care, nursing care leave on full pay is available for up to five days. We are advancing
improvement of the system, for instance, by allowing nursing care leave to be taken up to three times per person
requiring nursing care for a one year in total.

94.1%

Human resource development system

Management

Tokyo Electron (TEL) recommends work styles that incorporate work-life balance, and is continuously developing work
environments to enable this. We are promoting efficient ways of working suited to our employees' lifestyles, such as
reducing commuting time and making the most of work hours, by introducing a teleworking system in addition to aflextime system.

2
OJT: On the Job Training
3
WBT: Web Based Training

Employee life support
TEL is enacting a diverse range of support toward achieving a workplace environment where employees can work
energetically while each making full use of their abilities. We present regular opportunities for employees aged 50 or over
to attend seminars providing necessary information and review of financial planning, encouraging them to consider their
way of working after retirement. Furthermore, we support employees’ everyday lives by offering assistance to all age
groups on familiar topics such as nursing care for family members and inheritance.

Business skills
Goal-based programs

Global communication
Employee life support
Technical programs (seminars & workshops)

35

TOKYO ELECTRON SUSTAINABILITY REPORT 2020

TOKYO ELECTRON SUSTAINABILITY REPORT 202036

People and workplaces
Health and safety
Health and productivity management promotion
Having every employee lead a fulfilling life’s work and achieve their maximum performanceis also important for the future advancement of Tokyo Electron (TEL). To create healthy andcomfortable workplaces for employees, we are working to further develop our systems.
Besides conducting various medical checkups in accordance with the law, we also offer
face-to-face consultations by designated occupational health physicians for employees
who work long hours. Health help desks supported by occupational health physicians canalso be accessed by workers’ families, and we also offer counseling opportunities supported
by external industrial counselors for those who ask. Furthermore, we are working onstrengthening health-related support, organizing regular “line-care1” seminars aimed at management, and, where necessary,
holding liaison meetings with the health officers and health professionals at each TEL group company.
Based on the “collaborative health2” concept, in cooperation with the Tokyo Electron Health Insurance Society, we are
actively expanding data health3 initiatives, providing employees health guidance and effective prevention and healthpromotion according to their individual circumstances by utilizing data from medical checkup tests. As a result, we helped
raise the health literacy of employees in fiscal year 2020, demonstrated, for instance, by an increase in the percentage of
employees receiving specific health guidance4.
Furthermore, during fiscal year 2020, following a widening of the scope from the previous year, all TEL groupcompanies operating in Japan received recognition as a White 500 company under the 2020 Certified Health &Productivity Management Outstanding Organization Recognition Program5. We will continue to promote various
initiatives at the global level to maintain and improve our employees' health.

Wellness declaration
Based on the wellness declaration announced in 2012, TEL has promoted a variety of initiatives addressing health issues
from the perspectives of Eat-Rest-Walk-Talk. Specifically, these include body composition measurement sessions6, healthcounseling workshops, and walking events, healthy food choices offered at company cafeterias, and smoking cessation
advice. In addition to raising employee awareness for health promotion in their daily lives, we provide support leading to
implementation of the wellness declaration.

Stress checks
Stress check take-up rate
In terms of mental health management, employees in Japan complete a stress(Japan)check once a year using a questionnaire recommended by the Ministry of
Health, Labour and Welfare. Occupational health physicians or public healthnurses meet and talk with employees who, as a result of the questionnaire,
are determined to be under high stress, as well as any other employees who
ask. We also strive to ensure thorough mental support for our employees, such as by utilizing organizational analysis andpromoting improvements in organizations which have a comparatively heavy burden. During fiscal year 2020, the stresscheck was taken by 92.9% of employees.

92.9%

Self-care platform
TEL has introduced the Pep Up personal healthcare platform as a means of health management. The platform helps
employees care for their own health by enabling them to easily check their blood pressure, weight, body fat ratio, andhealth age7 using the results of their medical checkups. Through Pep Up, in addition to providing information related
to their own health condition, and holding walking events, we also distribute activity trackers so that employees canmanage their exercise and calorie consumption.

1Line-care: A workplacemeasure for mental
health, in which managers
and supervisors take alead role in responding
to requests by workers
for advice, with an aim of
improving the workplaceenvironment
2Collaborative health:Situation where acompany actively
cooperates with aninsurer, such as a healthinsurance society, toeffectively and efficiently
promote the health of
its employees and theirfamilies
3
Data health: Refers
to a more effective
and efficient healthcare program which
is implemented in linewith the health status
of insured persons, byutilizing and analyzing
the health and medical
information heldelectronically by the
medical insurer
4
Specific health guidance:
Health guidance provided
for reducing the numberof people with metabolic
syndrome (visceral fat
syndrome) or at risk ofmetabolic syndrome, andfor the early detectionand early treatment oflifestyle diseases andcancer, etc.
5
Certified Health& Productivity
Management
Outstanding
Organization Recognition
Program: The program
publicly recognizes
particularly outstandingorganizations thatare practicing healthoriented business
management, based on
initiatives attuned to local
health-related challenges
and on health-promotion
initiatives led by the
Nippon Kenko Kaigi
6
Body composition
measurement session: An
opportunity to measureskeletal muscle massand body fat mass using
a body composition
monitor, for the
purpose of preventing
lifestyle diseases andunderstanding one’s own
physical condition

Safety management framework
Based on a culture of “Safety First,” TEL carries out ongoing activities for safety promotion. In its effort to raise theoverall level of safety and occupational health, TEL uses a management system based on OHSMS1 to manage safety andoccupational health and follows the PDCA cycle, to reduce the potential risk of work-related incidents. Moreover, by
sharing information of any issues at internal meetings, such as those of the EHS Council and the Manufacturing Company
Presidents’ Council, the company promotes safety management as a company-wide initiative.

1
OHSMS (Occupational
Health and Safety
Management System): A
management system toimprove the overall levelof safety and occupational
healthActivities for safety
On-site safety inspections
At each factory and office, monthly safety and health committee meetings are held to discuss measures for any
workplace safety or employee health issues and to conduct safety inspections. TEL has also set up a system forautonomous problem-solving at manufacturing sites, with safety inspections by representatives from appropriate
departments at least once per month.
Risk assessment and stop work authority (SWA)
Before starting work at TEL manufacturing sites, the details of the job and the risks are shared with all workers involved,
and they each increase their awareness in an effort to prevent incidents. In addition, effort is also being directed to safety
managers giving advice on how to manage hazards, as well as to make workers stop work and take corrective action in
the event of an unforeseen incident while on the job.
Safety education
In addition, TEL is implementing two education programs globally for theestablishment of safe work environments. First is TEL’s program on basic safety
TCIRtargeting all employees. This is provided as introductory training for new hires
as well as refresher training every third year of employment. More than 6,000
employees completed this program in fiscal year 2020. Our second program,advanced safety, targets employees working in cleanrooms and on productionlines. Participants are required to complete the course every year. Some portionsof rules pertaining to safety are based on Japanese law, therefore when employees are transferred overseas, they
undertake additional necessary training in a language that they understand, with the aim of standardizing education.
To eliminate incidents, TEL also provides online training and risk assessment training for employees in Japan andoverseas. Also, to expand the concept of safe equipment design2 to our design, manufacture, and service operations, inaddition to online training on equipment safety, we also hold a semiannual seminar at each factory and office, inviting
an external guest to speak. Finally, we also promote our initiatives to prevent accidents, by providing our suppliers andcustomers with safety information as circumstances demand.
As a result of having maintained a high priority on creating safe work environments, TCIR3 has been maintained at lessthan the company’s target of 0.5, with 0.23 in fiscal year 2020.

0.23

2
Safe equipment design:
Refer to p. 25.
3TCIR (Total Case
Incidence Rate): The
number of workplace
incidents per 200,000
work hours

Incident reporting system
If a safety-related incident occurs, the information is shared with related parties and persons in charge through theincident reporting system, creating a system which resolves issues and leads to the proposal of measures to prevent
reoccurrence.
Since fiscal year 2019, we have been operating the TEL Incident Report System (TIRS), a newly developed incident
reporting system, to improve the accuracy of report content further.

7
Health age: An indicatorshowing risk of lifestylediseases, calculated
based on the resultsof an employee’s
medical checkup. The
difference in years withthe employee’s actual
age is displayed, helping
them understandtheir equivalent age interms of their healthconditions.

37

TOKYO ELECTRON SUSTAINABILITY REPORT 2020

TOKYO ELECTRON SUSTAINABILITY REPORT 202038

Corporate governanceManagementfoundation

Corporate governance framework
Tokyo Electron (TEL) upholds the vision of being “a truly global company generating high added value and profits in thesemiconductor and flat panel display industries through innovative technologies and groundbreaking proactive solutions
that integrate diverse technologies.” In an environment where over 80% of our sales come from overseas, we regard
building governance structure as essential in order to become a real global company that achieves success in global
competition and achieves sustainable growth. To that end, TEL has built a framework to maximize use of worldwide
resources, and has worked to incorporate a wide range of opinions to strengthen our management platform andtechnology base, establishing a governance structure capable of ensuring that TEL attains global-level earnings power.
TEL uses the Audit & Supervisory Board System, which consists of a Board of Directors and an Audit & Supervisory
Board, and has achieved effective governance based on the supervision of management by the Audit & Supervisory
Board. Furthermore, in addition to the Board of Directors, whose role is to make major operational decisions and playa supervisory role in the execution of those, and support appropriate risk-taking by executive management, we haveestablished systems that will facilitate growth-oriented governance directed at sustainable growth for TEL, including
the following: (1) The Nomination Committee and Compensation Committee to ensure fair, effective, and transparent
management; (2) The Corporate Senior Staff (CSS) to formulate and advance company strategy; and (3) The Business
Execution Meeting, to play a role in deliberations of the executive management.

Medium-term goals

Build a management foundation for increasing value

Diagram of the corporate governance framework, internal control system, and risk management framework
Shareholders' Meeting
Appointment or Dismissal of
Audit & Supervisory Board members

Appointment or Dismissalof Corporate Directors

In its pursuit of more highly effective governance, Tokyo Electron (TEL) is working to further improve its corporate governanceframework, strengthen its risk management, and ensure thorough compliance. Our aim is to enhance the supervisory and oversightroles of management and improve corporate value in the short term, but also in the medium to long term. In terms of practical
initiatives for respecting human rights, based on our Human Rights Policy, which summarizes our group-wide guiding principles
on human rights, as well as implementing extensive education and awareness-raising efforts, we are expanding human rights
due diligence (impact assessment and remediation) and grievance processes. As for supply chains, we are promoting activities incompliance with global standards to achieve sustainable operations together with customers and suppliers. Regarding problemsof climate change and abnormal weather, which have increased in severity in recent years, endeavoring to preserve the global
environment, we have been working hard to achieve the medium- and long-term environmental goals for our products, factories,
and offices in order to reduce environmental impact along our entire value chain. As we aim to further enhance corporate value, weare endeavoring to build a strong and sound management foundation that supports our whole group's business activities.
Main activities

SDGs initiatives■ Steadily developing highly effective governance and establishing asolid management base in order to contribute to the developmentof sustainable society in order to improve corporate value

Governance,
Risk management,
Compliance

Respect forhuman rights

Supply chain Environmental
management management■Corporate governance■ Promoting compliance as an important business strategy, anddeveloping operations in consideration of the environment andhuman rights, in order to contribute to the creation of a fair andequal society

Supervision and evaluation of strategic decision-making, Process
for evaluating the effectiveness of the Board of Directors andmanagement issues, Investor relations activities, etc.
Risk management system and initiatives, Auditing by the internal audit
department, etc.
Compliance system, Compliance initiatives

Decent work andeconomic growth

Climate action

Peace, justice andstrong institutions

Partnerships for thegoals■Respect for human rights

Approach to human rights, Human rights initiatives■Supply chain management

Initiatives in the supply chain, etc.

■Environmental management

Initiatives to prevent global warming and save energy, Initiatives toreduce water consumption, Initiatives to reduce waste, Management ofchemical substances, etc.

39

TOKYO ELECTRON SUSTAINABILITY REPORT 2020

Nomination Report
Committee
Compensation
Committee

Board of Directors

Audit

Audit & Supervisory Cooperate
Board

Independent
Auditors

Audit

ReportProposal & ReportSupervision/Appointment or Dismissal

President & CEO(Representative Director)

Business execution

Appointment or Dismissal

Audit

Cooperate

Global Audit Center

Cooperate

Audit

Business Execution Meeting

Corporate Senior Staff(CSS)

Internal Control Executive Officer
Risk Management Executive Officer
Compliance Executive Officer

Ethics Committee
Risk Management Committee
Information Security Committee
Export Trade Control Committee

Business Execution Organization (All Division/All TEL Group companies)

Sustainability of a Board of Directors appropriate for resolution of management issues■Risk management■ComplianceManagement &Supervision

Based on an effective governance structure that supports increasing corporate value over the medium- to long-term,
the Board of Directors is capable of properly supervising and evaluating (monitoring) the strategic decision making of
the management responsible for business execution. The CEO and Representative Directors will play the primary role incontinually anticipating candidates for succession, primarily from among executive officers, and working to develop suchcandidates in order to develop human resources who will assume management of operations in the next generation to
support the sustainable growth of TEL. The CEO and Representative Directors continually evaluate the skills, character,dignity, and insight of successor candidates from multiple perspectives in the course of performing day-to-day duties,
and continually support education of the candidates through assignment, training, and other opportunities.
Meanwhile, to supervise the soundness of management by the Board of Directors, the Audit & Supervisory Board has
developed a structure that enables its board members to obtain sufficient information necessary for audits throughon-site surveys conducted by the full-time Audit & Supervisory Board members as well as appropriate coordination with
the internal audit department and independent auditors. In addition, as advisory bodies, the Nomination Committee
and the Compensation Committee make proposals to the Board of Directors regarding the election of candidates for the
management team and compensation, thereby ensuring fair, effective, and transparent management.
We operate the Board of Directors under the system described above to maintain the sustainability of the Board of
Directors appropriate for resolving management issues.
TOKYO ELECTRON SUSTAINABILITY REPORT 202040

Management foundation

Skills and diversity of the president and the management

Planning and outcomes of the director compensation system

In electing executive directors, the Nomination Committee places importance on, among others, superior execution
abilities underpinned by experience, insight, and a track record in management, high sensitivity to all possible risks, andbeing able to properly analyze and judge matters and frankly state the opinion that they believe to be correct during
debates. At the same time, in order to ensure constructive debate in Board of Directors meetings born out of a broad
range of backgrounds and knowledge, the Committee proposes personnel with an in-depth knowledge of various
divisions as corporate director candidates to the Board of Directors, taking into consideration the balance between Sales
and Service, Manufacturing, R&D, and Corporate Administration.
The role of Executive Directors does not end with referring and explaining proposals as the representative of eachdivision. They also contribute to active debate, proper decision-making, and supervision of execution through objective,
constructive opinions coming from different perspectives of each Corporate Director.

As its basic policies on executive compensation, the TEL group emphasizes (1) Levels and plans for compensation
to secure highly competent management personnel with global competitiveness; (2) High linkage with businessperformance in the short term and medium- and long-term increase of corporate value aimed at sustainable growth;and (3) Securement of transparency and fairness in the decision process of compensation and appropriateness ofcompensation. Compensation for internal corporate directors consists of fixed basic compensation, annual performancelinked compensation, and medium-term performance-linked compensation.
For outside directors, TEL introduced non-performance-linked stock-based compensation, starting for fiscal year 2020,
while abolishing the annual performance-linked compensation (cash bonuses). As a result, compensation for outside
directors now consists of fixed basic compensation and non-performance-linked compensation. Compensation for Audit& Supervisory Board members consists solely of fixed basic compensation in consideration of their role being primarily
the audit and supervision of management.
In order to secure transparency and fairness in management and appropriateness of compensation, the Compensation
Committee, which is chaired by an independent outside director, utilizes advice from an external expert, performs ananalysis of wage levels and other compensation compared to industry peers in Japan and overseas. The Committee thenproposes to the Board of Directors a compensation system that is globally competitive and most appropriate for the TELgroup, and individual compensation amounts for the Representative Directors.

Skills and diversity of outside directors
Independent outside directors and outside Audit & Supervisory Board members state their unreserved opinions from an
independent perspective so that the debates do not follow the same line of discussion proposed by internal corporate
directors. By doing so, they play the role of guiding Board of Directors debates in the proper direction to win global
competition. In electing independent outside directors and outside Audit & Supervisory Board members, we place
importance on maintaining a good balance among human resources who have qualities such as knowledge of global
business; broad insight into related industries; an extensive network of personal contacts; social viewpoints; objectivity fromthe perspective of the capital market and others; knowledge of finance and accounting; and broad legal knowledge.

Supervision and evaluation of strategic decision-making
Setting the strategic direction of the TEL group is recognized as the main role of the Board of Directors. It engages inconstructive debate of management strategy, management plans, and other matters that have been debated by the
Corporate (CSS). It serves as the venue for supervising progress on the Medium-term Management Plan and other matters.
The Board of Directors also seeks reports and explanations on the status of deliberations at the Business Execution Meeting
to monitor whether decision making by executive management functions properly in relation to matters for which approvalauthority has been delegated to executive management.
At Board of Directors meetings, independent outside directors and Audit & Supervisory Board members actively provide
advice and ask questions to the explanations and statements made by executive directors well versed in business. The
combined perspectives of both parties have enabled the Board of Directors meetings to achieve an appropriate sense of
productive tension and constructive discussions that are essential for business execution decisions and supervision.
To obtain appropriate advice and questions from independent outside directors and Audit & Supervisory Board members,
the administrative office provides them with explanations on proposals in advance of the Board of Directors meeting as
needed. For matters of particular importance, we establish a venue for dialog between independent outside directors andAudit & Supervisory Board members and TEL executive management, striving to provide sufficient information to, andengage dialog with, independent outside directors and Audit & Supervisory Board members.

Policies for allocation of earnings
TEL’s basic approach is for appropriate allocation of company earnings to all stakeholders.
Our basic policy of allocation to shareholders is to link dividend payments to business performance on an ongoingbasis and maintain a payout ratio of around 50% based on net income attributable to owners of the parent company.
Furthermore, in light of stable distribution of dividends, we also set the minimum full-year dividend at 150 yen per share.
TEL effectively uses internal capital reserves to raise corporate value through earnings growth by concentrating
investment in high-growth areas and provide returns directly to shareholders by linking dividend payments to businessperformance and earnings. Furthermore, TEL flexibly considers implementing share buybacks as part of shareholder
returns.

％

Dividend payout ratio

50.0%* Annual DPS of not less than 150 yen* Review dividend policy if the company does not generate net income for two consecutive fiscal years.

41

TOKYO ELECTRON SUSTAINABILITY REPORT 2020

Fixed basic compensation
Fixed basic compensation has been established in reference to the compensation standards of industry peers in Japanand overseas, with the scale of job responsibilities based on the job grade framework provided by the external specialist
organization.
Annual performance-linked compensation
Annual performance-linked compensation consists of cash bonuses and stock compensation-based stock options. It
is profit-sharing compensation that is linked to the business performance in the relevant fiscal year. Actual net income
attributable to owners of parent and actual consolidated ROE performance are incorporated in the formula.
Medium-term performance-linked compensation
Medium-term performance-linked compensation is performance share (stock-based) compensation designed toencourage corporate directors to share a shareholder perspective by holding TEL shares and raise their awareness towardenhancing corporate value. The number of TEL shares awarded to each corporate director varies according to the payout
rate based on their respective responsibilities and performance goal achievement levels for the three-year coverage
period. Consolidated operating margin and consolidated ROE have been adopted as the indicators for measuring theperformance goal achievement levels that are linked to the Medium-term Management Plan.
Non-performance-linked (share-based) compensation
Non-performance-linked compensation is share-based compensation applicable to outside directors. It has been
introduced for the purpose of making the compensation system for outside directors more consistent with their
expected role of giving advice to the management from the perspective of increasing corporate value over the medium
to long term and in addition to their duties of supervising management. Under this share-based compensation system,
TEL shares are granted after the expiration of the period covering three fiscal years.

Process for evaluating the effectiveness of the Board of Directors and management issues
TEL discusses and evaluates the effectiveness of the Board of Directors every year in accordance with the TEL Corporate
Governance Guidelines. In fiscal year 2020, we again conducted a questionnaire of all corporate directors and Audit& Supervisory Board members regarding major items for evaluating the effectiveness of the Board of Directors, theNomination Committee, and the Compensation Committee. In addition to the results of this questionnaire, opinions
exchanged and deliberations held mainly by outside directors and outside Audit & Supervisory Board members
were shared with the whole Board of Directors. In this way, we deliberated on and comprehensively evaluated theeffectiveness of the Board of Directors. Regarding this questionnaire, in an effort to obtain highly objective supervisory
insight and evaluation, we seek perspective and input from external consultants, and analyze the results. Issues identified
through such analysis and evaluations are discussed in depth by the Board of Directors, and efforts are taken to make
improvements as appropriate.
In fiscal year 2020, gender diversity increased in the composition of the Board of Directors, and the appropriate ratio ofoutside directors was also discussed by the Board of Directors. Moreover, we held off-site meetings, aside from Board of
Directors meetings, where matters that are important in the medium to long term were predominantly discussed, such

TOKYO ELECTRON SUSTAINABILITY REPORT 202042

Management foundation

Risk management initiatives

as management strategy, risk management, group governance, and CSR. With regard to the Compensation Committee,
an outside director was appointed as chairman to improve its independence. Discussions at the Compensation
Committee regarding the topic of what executive compensation should be going forward, as well as discussions at theNomination Committee about succession plans, were both shared with the Board of Directors.
We believe that, under the systems described above, our Board of Directors ensure, with a high level of effectivenessin general, that they appropriately fulfill the major roles of the Board of Directors prescribed in the TEL Corporate
Governance Guidelines, such as “indicating the management strategy and vision” and “making major operational
decisions based on strategic direction.” We also recognize that other bodies, establishing the Nomination Committee andthe Compensation Committee, function effectively.
Based on the results of the evaluation of effectiveness conducted this time, TEL’s Board of Directors strives to securesufficient opportunities and time to discuss our medium-to-long-term management strategies fully. It will also work on
further strengthening TEL’s risk management system and group governance. With regard to the Nomination Committee,
we will consider the relationship of the Committee and the Board of Directors, while conducting a review toward an
appropriate member composition in order to increase the objectivity of the Committee. Moreover, we will strengthen
dialog with our stakeholders, with ESG and SDGs in mind.

Each year, TEL identifies key risks for the group and steadily works to reduce those risks. In fiscal year 2020, we reinforced
measures in the following areas1.
■Environment
With climate change and abnormal weather becoming an urgent issue on a global scale, it is becoming increasingly
important for companies to comply with environmental laws and regulations, and industry codes of conduct, and to
reduce environmental impacts throughout the value chain. In addition to initiatives to reduce the environmental impacts
of its products, factories, and offices, to help achieve its medium- to long-term environmental goals, TEL is working to
reduce operating costs and create business opportunities related to the environment, including the provision of production
technologies for developing more energy-efficient devices. We are also promoting environmental management acrossthe entire company. We have also declared our support of the TCFD2 recommendations and analyzing and disclosing theimpacts and opportunities of climate change on our businesses in line with the international framework.

At TEL, we understand that appropriate information disclosure and dialog with capital markets
improve management transparency and contribute to improved corporate value, so oursenior management is actively involved in IR activities. The Chairman of the Board of Directors
and president act as spokespeople when necessary at Japanese and overseas IR conferences
and individual interviews to ensure two-way communication with capital markets. The IR
Department, which was established under the direct control of the president, also regularly
reports capital market feedback to senior management to help inform management decisions.

Risk management
Approach to risk management
Reflecting changes in society and the business environment, the risks facing businesses are growing increasingly complex
and diverse. Tokyo Electron (TEL) considers understanding and appropriately addressing the risks that it may face in its
businesses, as well as their impacts, to be essential to its sustainable growth.

Risk management system and initiatives

The Global Audit Center serves as the internal audit department for the entire group and implements audits based on theaudit plan. Based on the results of these audits, it provides instructions for making improvements as needed, confirms the
progress of these improvements, and provides any necessary support. The group’s internal control over financial reportingin fiscal year 2020 was also evaluated as effective by the independent auditors.

43

TOKYO ELECTRON SUSTAINABILITY REPORT 2020

reinforced measures forcompliance risk.
2
TCFD: Refer to p. 8 for
TCFD.

■Research and development
To maintain a competitive advantage and continue growing in markets where technological innovation is rapid, it isimportant for businesses to continuously create innovation and to provide high value-added products and services.
While actively investing in research and development of leading-edge technologies to enhance its own research anddevelopment capabilities, TEL is also focusing on collaboration with Japanese and international consortiums. In addition,
we are sharing technology roadmap with our customers and collaborating with them in the early stages of development
to ensure our research and development activities properly reflect future needs. Going forward, we will continue to drive
technological development for the next generation through a group-wide development structure for collaboration
between the Development & Production Divisions and Business Divisions.

Annual Report

Auditing by the internal audit department

Refer to p. 45 for
information on■Human rights
In our global society, human rights issues such as inequalities, discrimination, and forced labor are becoming increasingly
serious. At the same time, it is becoming more important for companies to conduct sustainable operations by eliminating
human rights-related business risks and respecting the rights of the people behind their business activities. Whileclarifying its approach to human rights, identifying human rights risks, and implementing corrective actions in accordancewith the United Nations Guiding Principles on Business and Human Rights, TEL is making further improvements to its
reporting systems and other grievance mechanisms. We are working to ensure such human rights as freedom, equality,
non-discrimination, freely chosen employment, health and safety, and working hours. We are incorporating respectfor human rights in every aspect of our business activities. In this way, we are striving to further improve employee
engagement and create new value.

Investor relations (IR) activities

In order to promote more effective risk management, TEL carries out enterprise risk management* through a bodyestablished within the General Affairs Department at its headquarters. This body works with the respective departments
responsible for each operation to identify a wide range of risks arising in corporate activities (such as compliance risk,
human resource and labor risk, and business continuity risk). It then classifies risks with high impact and probability as
key risks within the TEL group. The body also formulates and executes measures to minimize these key risks, monitors
the effect of said measures, works to understand the status of risk control, and implements the PDCA cycle for risk
management. In fiscal year 2020, in addition to these activities, the body conducted interviews with the responsible
departments at the corporate headquarters, and Japanese and overseas subsidiaries to understand the status ofrisk management. From fiscal year 2021 onward, it also plans to enhance the various functions and systems of risk
management and internal audits to further promote highly effective risk management activities. The status of these
activities is regularly reported to the Board of Directors and the Audit & Supervisory Board.

1*
Enterprise risk
management:Group-wide systems andprocesses related to risk
management activities■Supply chain management
For manufacturers of semiconductor and flat panel display production equipment, implementation of sustainable supply
chain management is an essential part of such activities as development, production, and providing services. To prepare
for disruptions to the procurement of important parts or production due to earthquakes or other natural disasters, TEL
works, on an ongoing basis, to establish alternative production structures within its network and to develop a multisource system for important parts. Furthermore, in addition to formulating business continuity plans (BCPs) and holding
regular drills, we are building seismically isolated production buildings, adopting appropriate inventory controls, andtaking other steps to establish stable product supply systems.
■Information security
With information security becoming increasingly important as more and more of society is data-driven, it is equallyimportant that companies work to improve their information literacy and build robust information infrastructure.
TEL is focusing on information security risk from the two perspectives of cybersecurity and confidential information
management. To improve cybersecurity, we use a combination of industry-leading security systems, providing security
training for employees, and work to protect our information from the sabotage of our servers or computers as well
as data theft, data manipulation and other forms of cyberattacks. The information security environment, including
cyberattack methods, is continually changing. TEL is always working to stay ahead of these changes and formulating andimplementing the necessary countermeasures on a global basis. To improve confidential information management, our
Human Resources Department and Intellectual Property Department work in close collaboration to strengthen measures
to prevent leaks of confidential information, particularly targeting employees who retire or resign to ensure proper
management of confidential information, including the return and destruction of data.

TOKYO ELECTRON SUSTAINABILITY REPORT 202044

Management foundation
ComplianceApproach to compliance
Stakeholder trust is essential to business activities. In order to maintain this trust, it is essential to continuously ensurecompliance and enhance corporate ethics. The Code of Ethics of the Tokyo Electron group establishes the “appropriate
actions to be taken” in conducting business operations in an honest and fair manner in accordance with the laws andregulations of the countries and regions in which the Tokyo Electron (TEL) group operates as well as with internal
regulations and rules, and stipulates that all executives and employees must understand and apply the Code of Ethics.

Compliance system
In order to strengthen our compliance system and to ensure efficacy, people responsible for compliance (Regional
Compliance Controllers) have been appointed at key overseas sites, creating a system for direct reporting to the newly
established Chief Compliance Officer and Compliance Department. The primary role of the Compliance Department is toformulate and review practical compliance programs for the TEL group, establish and implement corporate ethics, planand implement education and training, and establish and operate internal reporting systems.

Compliance training
We conduct online and face-to-face training adapted to different levels for all employees1. In fiscal year 2021, we will
deploy a more comprehensive and systematic training program and advance multilingual support to reinforce efforts tofoster compliance awareness and behavior-oriented awareness-building activities in the TEL group.

1
Training and seminar
topics include basics
of corporate ethics
and compliance, anti-Internal reporting system
As a means for employees to provide information and seek redress outside the chain of command about behavior that is,or may be, in violation of laws, regulations, or corporate ethics, we have established internal reporting mechanisms that
ensure confidentiality, anonymity, and the prohibition of retribution. Apart from an internal point of contact that can also beaccessed by suppliers, our reporting mechanisms include an external point of contact at a law firm that can be contacted
directly. In March 2020, we enhanced the internal reporting system, andInternal reporting
renamed TEL group Ethics & Compliance Hotline—a global common point
system utilizationof contact that uses a third-party system—thereby ensuring a greater levelof confidentiality and anonymity. This hotline can be accessed via phone ora dedicated website 24 hours a day, 365 days a year, and accommodates all
languages used by employees.

corruption, export
compliance, insider
trading prevention, theAct for Subcontracting,and the preventionof harassment. Sometraining is limited tocertain employees.

64

Representative Director, President & CEO
General Manager of Legal, Compliance
Division

Third-party system

Chief Compliance Officer

Report/consult

Compliance Department(Headquarters)

EuropeKorea

TaiwanChina

Compliance initiatives
Corporate ethics
In addition to establishing the Code of Ethics as common and minimum standards of conduct
by which all executives and employees should abide, we have also established a Business Ethics
Committee for the purpose of promoting and raising awareness of compliance and corporate
ethics more effectively within the TEL group. We have also set up the Disciplinary Committee asa subordinate organization of the Business Ethics Committee for the purpose of ensuring thatreasonable and appropriate punishments are imposed, and proper procedures followed when taking
disciplinary action.
To ensure awareness of the Code of Ethics, we arrange to translate it into five languages for local
use, including Japanese, and distribute it in the form of a booklet to all executives and employees.
Code of Ethics
In May 2020, the Code of Ethics was revised. In addition to reflecting standards required as a
global company, we added a number of new provisions on such important issues as personal
data protection, information security, and money laundering. The revisions, including changes to the booklet design
and adoption of a bullet point format, were made in pursuit of clarity and usability. We strive to further strengthen
compliance and corporate ethics by annually obtaining confirmation from all executives and employees that they
understand and comply with the Code of Ethics.
Global policies on anti-bribery and competition laws
In fiscal year 2021, we will establish common global policies on anti-bribery and competition laws. Under our anti-bribery
policy, we reviewed our standards concerning gifts, entertainment, and donations, and we thoroughly enforce a process
requiring preapproval if undertaking conduct outside these standards. As for our policy on competition laws, we havecompiled different types of violations in an easy-to-understand format, based on applicable laws and regulations in the
countries and regions in which we operate.

45

TOKYO ELECTRON SUSTAINABILITY REPORT 2020

NoticeProgress/results reportCompliancedepartment/
Legal, Compliancedivision of eachoverseas subsidiary

Report/consult

ReportBoard ofDirectors
Audit & Supervisory
Board Member

Request forinvestigation/corrective andpreventative action

Follow-up/redress

Singapore/
Malaysia

Regional Compliance Controllers

ReportInternal
point ofcontact

Progress/results report

Information
providers
U.S.

Representative Director, President & CEO
Chief Compliance Officer

Report/consult

Progress/results report

Relevant
divisions,etc.

Report/consult

Progress/results report/follow-up

External point of contact(Outside Law Firm)

In the event of a report or request for advice, the TEL group undertakes an investigation in accordance with internal
regulations. If, as a result, a compliance violation is found, a disciplinary action is imposed in accordance with the Rules of
Employment2. Preventive measures and corrective measures, such as improvements to the workplace environment, arealso implemented as necessary.
In fiscal year 2020, a total of 64 cases were received via internal reporting mechanisms (excluding overseas
subsidiaries), primarily concerning harassment, attendance management, and work environment. Among these, there
were no reports or cases of non-compliance with laws, regulations, or the Code of Ethics that could have had a material
impact on the TEL group’s business or local communities.

2
A leniency system
has been introduced
whereby any disciplinary
action may be reduced
or exempted in the eventthe employee involvedin a compliance violation
has made a report orsought advice on his/her
own volition.

Respect for human rights
Approach to human rights

URL

www.tel.com/csr/employee/diversity/

Conscious of its corporate social responsibility, Tokyo Electron (TEL) recognizes that it is important to conduct itself witha strong sense of integrity. Based on this recognition, TEL has firmly upheld human rights since its founding, as reflectedin the spirit of its Corporate Philosophy and Management Policies. For TEL, respecting human rights means a significant
undertaking, not only to fulfill its responsibility for eliminating adverse impacts on people caused through businessactivities, but to respect those people who support the company’s business activities, and contribute to the realization ofa sustainable, dream-inspiring society. TEL incorporates the concept of respect into every aspect of its business activities,
and strives to nurture a dynamic corporate culture where each person can realize his or her full potential.

TOKYO ELECTRON SUSTAINABILITY REPORT 202046

Management foundation
Supply chain management
Supply chain principles and system

Human rights initiatives
In fiscal year 2018, TEL formulated its Human Rights Policy, summarizing its approach to human rights. TEL has specified thehuman rights it believes are particularly important in business activities as Freedom; Equality & Non-Discrimination; Freely
Chosen Employment; Product Safety & Workplace Health and Safety; Freedom of Association; and Appropriate Working Hours& Breaks/Holidays/Vacations. In preparing the Human Rights Policy, we referred to the United Nations’ Guiding Principles on
Business and Human Rights and the International Bill of Human Rights and the ILO Declaration on Fundamental Principles andRights at Work referred to therein, the Ten Principles of the United Nations Global Compact, and the RBA Code of Conduct1.

1
RBA Code of Conduct:
The RBA establishes a setof standards for supply
chains in the electronics
industry for a safe labor
environment, to ensurethat workers are treatedwith respect and dignity,
and that companies
take responsibility forenvironmental impact
in the manufacturing
process.

Procurement principles and system
The high-value manufacturing that Tokyo Electron (TEL) strives for is based on the functions of all materials andcomponents that make up the products and the pursuit of high quality. TEL values communications with suppliers andseeks to grow manufacturing on a global scale with its suppliers based on ongoing trusting relationships.
We engage in procurement activities in line with our own procurement policy, which we formulated based on thelaws, regulations, and social norms of each country, as well as the RBA Code of Conduct. We then disseminated it within
the TEL group to suppliers. Under the leadership of the TEL Representative Director, President & CEO, as the top of
the procurement system, issues identified during procurement activities are shared with the manufacturing company
presidents’ council and the purchasing department manager council for consideration of specific improvements.

Initiatives in the supply chain
Commitment

Assessment

Remediation

ReportCommitment to respecting
human rights

Assessment of human rights risks
in business and supply chains

Actions to reduce risks based on
assessment results

Regular disclosure of information• Human Rights Policy publication• Awareness and implementation• Web-based education• Education• CSR assessment• Human rights risk assessment• Human rights impact assessment• Feedback sheet publication• Program development and review
according to issues• Sustainability Report publication• Disclosures on website

TEL is focusing on ensuring awareness and implementation of the Human Rights Policy internally and by suppliers.
In fiscal year 2019, we published the policy on our website and made it available for everyone inside and outside thecompany, and implemented an online human rights education program targeting all TEL executives and employees.
In fiscal year 2020, we also conducted due diligence on human rights, conducted human rights risk surveys, andidentified and assessed impacts. As part of the surveys, we utilized a self-assessment questionnaire (SAQ) for internal use
based on the RBA Code of Conduct, and a CSR survey2 for suppliers of materials, staffing, and logistics, to understand thecurrent situation throughout the value chain. We are using the results of these surveys to identify and assess impacts, andto clarify and implement corrective action.

2
CSR survey: Refer
to Supply Chain
Management on p. 48.

CSR operations
To keep track of its suppliers’ engagement in CSR activities, TEL has conducted a CSR Survey since fiscal year 2014.
The survey is in accordance with the RBA Code of Conduct. We analyze the responses from suppliers and use them as
feedback to assist with further improvement activities. In accordance with auditing standards stipulated by the RBA,
the survey targets materials suppliers1 from which we procure parts and raw materials. In the fiscal year 2020 survey,
improvements in overall rating level were observed at 36% of suppliers and improvements in the overall raw score
were seen at 56%. Also, no suppliers were engaged in any of the practices given particular emphasis in the RBA Code of
Conduct, namely, child labor, forced labor, bonded labor, inhumane treatment, false reports, falsification of records, or
bribery. Neither were any suppliers of a sufficient size2 to be considered high risk in terms of compliance.
From fiscal year 2019, we also began surveying staffing suppliers who provide temporary employees, contractors, andother workers, and logistics suppliers3 with a focus on major logistics/customs clearance operators.

Plan

Do

Check

Act

Formulation of Procurement Policy
and Procurement Policy Supplement: Requests to Our
Suppliers

Notification of Requests to
Our Suppliers and appeal for
CSR activities

Implementation of supply chain
CSR assessment and analysis of
response

Provision of feedback based on
the results and request for
improvements to suppliers

From the internal assessment results, we identified potential human rights risks inthe areas of labor, and health and safety. In the area of labor, we will continue efforts
to ensure working hours are in compliance with laws and regulations while further
streamlining operations. In the area of health and safety, we will work to reduce
human rights risks by improving relevant equipment. From the supplier assessment
results, we identified potential human rights risks in labor, health and safety.
Therefore, we have requested they reconfirm working hour requirements according
to laws and regulations, industry codes of conduct, and take other actions, including
preparing for emergencies.

Health andsafety

0

20

40

60

80

100 (%)TEL recognizes the importance of having highly effective grievance mechanisms and it is working to establish and operate
those mechanisms. In fiscal year 2020, we further strengthened our internal and external reporting systems in Japan andoverseas for employees and suppliers, and started operation.
By continuing to conduct due diligence on human rights going forward, we will assess and correct any human rights
issues we identify in our business activities, and further improve the grievance mechanisms we provide.

47

TOKYO ELECTRON SUSTAINABILITY REPORT 2020year 2014 for suppliers
accounting for morethan 80% of TEL’s
procurement spend.
2
500 employees or more
3
Staffing suppliers:
100% of employment
agencies and contractingof customs-related
operators

43TG: Tantalum, tin,tungsten, and gold

Considered to have no risks

Labor

Surveys have been
conducted since fiscal

companies (internal
contractors)
Logistics suppliers: 100%

Supply chain
chainCSR
CSRprocessprocess

Supplier CSR survey results * 500 employees or more
Considered to have potential/actual risks

1

Responsible procurement of minerals (conflict minerals)
TEL regards taking action against conflict minerals (3TG4) obtained through illegal exploitation, including sources withhuman rights violations or poor working conditions, an important part of corporate social responsibility. The company’s
resolute goal is to eliminate the use of raw materials made from these conflict minerals, as well as any parts orcomponents containing them.
In fiscal year 2020, TEL conducted its sixth annual survey on potential conflict minerals, using the reporting template(CMRT5) developed by the RMI6. As a result, TEL identified 261 RMAP7 conformant smelters, providing the company
confidence that 3TG sourced from these smelters were conflict-free. None of the materials procured were found tocontain conflict-affected 3TG.
Procurement BCP
Percentage of supplier sites by country (FY2020)
As part of its Business continuity plans (BCP), TEL collaborates with the
Taiwan 1.0%
suppliers for disaster preparation. The company maintains a database of
Other 4.7%
suppliers’ production sites so that if a crisis arises, it can promptly identify
U.S. 2.2%
impacted suppliers and quickly collaborate in recovery efforts. During fiscal
China 3.2%
year 2020, about 18,000 supplier sites were registered, and post-disasterJapan 88.9%
impact surveys were conducted eight times.
In addition, for key suppliers accounting for more than 80% of the
TEL’s procurement spend, it conducts a BCP survey8, analyzes their
responses, and gives the results to suppliers as feedback to promote further improvement. In the fiscal year 2020 survey,
improvements in overall rating level were observed at 16% of suppliers, and improvements in the overall raw score wereseen at 40%.

5
CMRT: Conflict Minerals
Reporting Template
6
RMI (Remote Method
Invocation): An
organization that
inspects 3TG smelters tocertify they do not haveconflict minerals
7
RMAP (Responsible
Minerals Assurance
Process): A program
promoted and led by
the RMI for auditing
smelters/refiners that do
not use conflict minerals
8
BCP survey: A surveythat has continuously
been conducted to key
suppliers accounting for
more than 80% of the
TEL’s procurement spend
since FY2013

TOKYO ELECTRON SUSTAINABILITY REPORT 2020

48

Management foundation
Environmental management
Environmental management system

CO2 emissions across the value chain

Tokyo Electron (TEL) has established two new bodies, the Council of Environmental General Managers and the TEL
Corporate Environmental Council, to promote activities in the medium to long term, responding to the rising importanceof environmental issues, such as climate change, and meeting the environmental/ESG needs of its customers and otherstakeholders. The councils are composed of TEL representatives in charge of the environment as well as members from
related division. They are responsible for reviewing our overall environmental direction and our progress in achieving our
medium- and long-term environmental goals. Furthermore, to continuously improve our environmental activities, wehave operated an environmental management system based on ISO 14001 since 1997, primarily at our manufacturingsubsidiaries. In March 2017, we acquired multi-site ISO 14001 certification for our factories and offices in Japan that
had previously acquired certification separately. Coinciding with this multi-site certification, we have developed
a standardized group format for environmental impact assessments, the identification of useful environmental
aspects, environmental management programs, and internal audit checklists. During fiscal year 2020, we establishedapproximately 100 environmental goals for different levels across the entire group and carried out these improvement
activities. Progress of activities and compliance with laws and regulations are confirmed through internal audits andthird-party audits. Any issues identified through these activities are reviewed by the EHS Council, reported to the
Manufacturing Company Presidents’ Council, and reflected in environmental activities across our entire group.
Under such an environment management system, fiscal year 2020 was again free from environmental incidents,
accidents, violations, and associated legal proceedings.

By recognizing environmental impact throughout the value chain, TEL develops business activities that are consciousof reducing this impact. Based on its environmental slogan “Technology for Eco Life,” it aims to resolve environmental
problems through leading technology and reliable services.

171
kilotons
Scope 1 & 2

kilotons
Scope 3 downstream

Not from the TEL GroupOwn emissions

Not from the TEL Group

Fuel- and energy-related
activities

13 kilotons

12 kilotons

Capital goods

Business travel

164 kilotons

9 kilotons

Purchased goods andservices

Waste generated inoperations

256 kilotons

Company nameFactory/Office nameTokyo Electron

EHS Promotion Center (Fuchu Technology Center)

Tokyo Electron Technology Solutions

Fujii Office/Hosaka Office/Tohoku Office

Tokyo Electron Kyushu

Koshi Office/Ozu Office

Tokyo Electron Miyagi

Taiwa Office

TEL Manufacturing and Engineering of America
Tokyo Electron Korea

1 kilotons

Upstream transportationand distribution

Certification date*
The Billerica Office was
relocated in May 2020.

May 1998—

March 2013

Chaska Office

March 2013

Billerica Office*May 2018

Balan Factory

July 2014

5,410

Direct emissions
from fuel & gas use
Scope 1

27 kilotons
Indirect emissions
from electricity use &heat purchase
Scope 2144 kilotons

Upstreamowned or controlled

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

End-of-life treatment ofsold products

2 kilotons

Scope 3:Emissions from
corporate value chains(excluding scope 1 andUse of sold product5,229 kilotons
Downstream
transportationand distribution

179 kilotons

9 kilotons

ISO 14001 certified factories and offices

Tokyo Electron (Kunshan)

EmployeecommutingDirect GHG emissions
from use of fuel and gas
by TELkilotons
Scope 3 upstream

464

Scope 1:

2 emissions), such as
product transportation,
employee businesstravel, and major
outsourced production
processes* Scope 3 is divided into
upstream activities,
which include emissions
associated withpurchased or procured
products and services,

Downstream

and downstream
activities, which include
emissions associatedwith sold products andservices.

The total of Scope 1 and Scope 2 of the TEL group is 171 kilotons, while Scope 3 accounts for a total of 5,874 kilotons,
which is approximately 97% of the total. TEL believes that it is particularly important to develop products with low
CO2 emissions during operation, as CO2 emissions from the use of products sold amount to 5,229 kilotons, which isapproximately 87% of the overall total.

Initiatives to prevent global warming and save energy
Environmental risks and opportunities
The various issues related to the environment impact on our daily lives and the business activities of companies. Physicalrisks, such as rising average global temperatures, strong winds, disasters, and water shortages caused by climatechange and abnormal weather, heighten the risks in business, such as damage to assets, increased operating costs, andimpacts on the supply chain. In terms of legal risks, we recognize that stronger environmental laws and regulations,more stringent regulations on greenhouse gas emissions, the introduction of carbon taxes, and so on will lead to higher
costs for associated measures. At the same time, promoting environmental initiatives leads to more opportunities
to sell outstanding, environmentally friendly products, reduce operating costs, and further improve corporate value.
As a participant in the semiconductor and flat panel display (FPD) industry, by leveraging our advanced technologicalprowess to create added value, we can contribute to the creation of semiconductor and FPD products with low power
consumption and the building of an energy-saving society that makes the most of information technology.
Based on the requirements of ISO 14001, we identified and analyzed internal and external issues in relation to theenvironment, namely, our relationship with the climate, air quality, and water quality. We also clarified the environmental
needs and expectations of customers, suppliers, governments, and employees, and identified the compliance obligationsof our group. From this information, TEL has set the following as its risks and opportunities to address: (1) environmental
management by reducing the environmental impact of its business activities, (2) compliance with applicable laws, and (3)enhancing product competitiveness with the environmental contribution of products.

Each TEL plant and office has an established goal of reducing energy consumption by at least 1% year-over-year.
Initiatives to achieve this goal include energy-saving cleanroom operation, appropriate temperature settings for officecooling and heating, the introduction of highly energy-efficient equipment, and the adoption of renewable energies.
As a result of these initiatives, in fiscal year 2020, we increased energy consumption per unit sales at our factories andoffices by 20% year-over-year. However, an increase in its volume of production and an increase in energy consumption
associated with product development and evaluation resulted in power consumption of 318 GWh in fiscal year 2020,
up 4% year-over-year; and energy-derived CO2 emissions* ofPercentage of factories and offices achieving energy intensity target
144 kilotons, down 2% year-over-year. Based on the correlation(%)
between business operations and energy use, we changed to a
55
55
60
more appropriate metric in fiscal year 2019, and have since applied45
50
it as standard at factories and offices across Japan. Specifically, we
40
adopted a metric calculated using a complex weighting of data from 30
20each area on the number of evaluation units used in development,10
the number of units produced, total floor area, and staff-hours. As
0a result, goals were achieved at 6 out of 11 factories and offices in
(FY)
2020
2018
2019
Japan and overseas.

*
In fiscal year 2020,
the adjusted emission
factors of the respective
electrical power
providers are used forthe emission factor forelectricity consumption
in Japan, and theemission factor in
Emissions Factors (2019edition) published by
the International Energy
Agency (IEA) is used
for the emission factor
for overseas electricity
consumption.

■Example initiative 1
Tokyo Electron Technology Solutions (Tohoku Office) is using energy more efficiently, having put heat-insulating
materials around steam pipes in boiler rooms to prevent heat from discharging. As a result, we expect to reduce our useof heavy oil by 31,000 liters a year, which will also reduce emissions of 84 t-CO2.
■Example initiative 2Tokyo Electron Miyagi is reusing waste oil from the staff cafeteria to produce biofuel. In fiscal year 2020, it began using
this biofuel in generators and forklifts at the same site.

49

TOKYO ELECTRON SUSTAINABILITY REPORT 2020

TOKYO ELECTRON SUSTAINABILITY REPORT 202050

Management foundation

Renewable energy initiatives

Management of chemical substances

TEL promotes the use of renewable energies. At the Tokyo Electron Miyagi (Taiwa Office) and Tokyo Electron Technology
Solutions (Fujii Office, Hosaka Office), renewable energy generated from solar panels is used to power the factories, andmonitors displaying their energy profile have been set up at the entrances to the factories. At its Tokyo Electron Kyushu(Koshi Office), generated energy is sold, helping to prevent global warming. In fiscal year 2020, TEL generated a total of
3,804 MWh of renewable energy in Japan.
In addition, Tokyo Electron U.S. Holdings has continued to purchase green power, 3,334 MWh, in fiscal year 2020.

TEL constantly monitors and manages its use and release of any chemical substances used in product development andmanufacturing subject to the Japanese PRTR1 law. Whenever TEL introduces a new chemical substance or changes theway an existing substance is used, we check for environmental, health, and safety risks beforehand. In response to the
Act on Rational Use and Proper Management of Fluorocarbons, we conduct simple checks, regular inspections, and so on
based on law in an effort to monitor the amounts of fluorocarbons filled and recovered. In fiscal year 2020, none of ourfactories or offices had fluorocarbon leakages requiring notification.

Initiatives to reduce water consumption

Biodiversity

With the growing importance of water resource preservation in global environmental initiatives, the TEL group has
established a goal of keeping water consumption at the same level or below that of the baseline year (fiscal year 2012
for factories and offices in Japan and a fiscal year of their choosing for each overseas operation). TEL’s ongoing efforts
to achieve these goals include reusing pure water from its manufacturing operations, installing water-saving devices,
watering lawns with rainwater, and implementing the intermittent operation of cafeteria faucets.
During fiscal year 2020, as a consequence of new buildings coming online and an increase in water consumption
associated with product development and evaluation, water consumption amounted to 1,305,000 m3, up 5% year-overyear. Moreover, we achieved 9 of the 13 goals in our factories and offices worldwide. It also discharged an estimated1,078,000 m3 of wastewater.

In carrying out its business activities, the TEL group has a not insignificant impact on biodiversity, and yet without thebenefits yielded from biodiversity, we could not sustain its activities. In recognition of this, the group will develop aframework for promoting initiatives to conserve biodiversity. In fiscal year 2020, we set a goal of conducting at least two
ecosystem tours or conservation activities at our factories and offices in Japan. A total of 18 events were held, attracting a
total of 368 participants.

■Example initiative
At Tokyo Electron Miyagi, we have promoted a reduction in blow-off water1 by installing a system in the cooling tower
to prevent scale2 from building up. In addition to achieving a reduction in water consumption, it is expected that
introducing this system will also eliminate the need for liquid chemicals that were previously used for preventing scalebuild-up, and will result in less power being consumed because of an improvement in heat exchange efficiency. Other
added benefits of the system are that it lengthens the life of pipes by preventing corrosion, and it reduces cleaning
time by controlling algae.

Green procurement

1
Blow-off water:
Water that is drained
from equipment andpipes to prevent an
overconcentration of
impurities in the water2
Scale: An inorganic salt

Initiatives to reduce waste
To curb the amount of waste generated and to recycle it wherever possible, the TELgroup promotes initiatives to reduce waste. In addition to participating in the electronic
manifest system3 to ensure proper waste management, we are engaged in maintaining
an appropriate amount of parts inventory and in reusing cushioning material. We arealso achieving lower waste processing costs by promoting waste sorting activities, andRecycling rateby modifying space used for storing waste to increase storage capacity and reduce thefrequency of collection. In fiscal year 2020, we surveyed waste disposal operators in Japan
using a unified on-site checklist, and we shared the results. In fiscal year 2020, we generated
142 tons of incinerated and landfill waste in Japan. As a result of our waste-reduction
initiatives, the recycling rate4 at sites in Japan in fiscal year 2020 was 98.9%, achieving our single-year goal of maintaining
a recycling rate of 97% or higher for the 14th consecutive year since fiscal year 2007. We have also maintained a high levelof recycling at its overseas factories and offices of 90.3%.

98.9%

compound (calcium,magnesium, etc.)
contained in water,which hardens on thesurface of equipment
and pipes
3
Electronic manifest
system: A system forelectronically tracking
the flow of industrial
waste instead of using
paper-based manifests(i.e. paper forms for
tracking industrial
waste). The system
uses a communications
network of dataprocessing centers,
businesses thatgenerate waste, andwaste collection/
disposal companies

URL

URL

www.tel.com/csr/environment/office/1
PRTR (Pollutant Release
and Transfer Register): A
framework for tracking,tabulating, and disclosing
quantitative data on
chemical substancesthat may be hazardous
to human health andthe ecosystem, including
the amounts used anddischarged into theenvironment and theamounts transferred (aspart of waste) off theoriginal business’s premises

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

TEL began implementing its Green Procurement Guidelines in January 2001, and has since promoted green procurement,
prioritizing the purchase of environmentally friendly parts, products, and materials. Through these guidelines, we strive togain the understanding and cooperation of our suppliers with respect to building environmental management systems,
monitoring, reducing, and disclosing information on the environmental impacts of business activities; and developing
environmentally friendly products.

Logistics initiatives

URL

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

TEL has been promoting activities designed to reduce the environmental impact of its logistics. We have been
implementing a modal shift2 from air to ocean transportation for the overseas shipping of our semiconductor and FPD
production equipment, and at the same time, we have been working hard to reduce production lead times. We have also
been endeavoring to reduce CO2 emissions and costs by adopting the shelved trolleys used in shipping FPD production
equipment to semiconductor production equipment, thereby improving the load factor of trucks. We are also pushing for
fewer resources to be used in packaging when shipping products.

Environmental communication

URL

2
Modal shift: Efforts totransform the means oftransportation

www.tel.com/csr/environment/office/In promoting initiatives for the environment, TEL maintains close communication with all its stakeholders. Our
environmental policy requires that we promote cooperative partnerships with our stakeholders, and respond
appropriately as a company to their expectations and wishes.
In fiscal year 2020, we revamped our online environmental education programs to better promote environmental
communication within us. Our online programs consist of an environmental program for new employees and mid-career
recruits, plus a refresher program for existing employees. In fiscal year 2020, more than 11,000 employees attended these
programs in Japan. In fiscal year 2021 and beyond, we plan to expand these education programs overseas.

4
Recycling rate:(Recycled amount/
Amount of waste
generated) × 100

51

TOKYO ELECTRON SUSTAINABILITY REPORT 2020

TOKYO ELECTRON SUSTAINABILITY REPORT 2020

52

TEL FOR GOOD (social contribution activities)
Initiatives around the world

Expanding TEL FOR GOOD activities
The social contribution activities of Tokyo Electron (TEL) aim to contribute to the development of local communities and the resolution ofsocial issues through various initiatives while deepening relationships of trust with all stakeholders. We are expanding activities globally with
Innovation and Technology, Education, Environment, and Community Involvement as our four focus areas.

Japan

The Tohoku Forum for Creativity (TFC) is aninternational visitor research institute locatedwithin Tohoku University. TEL has been providing
comprehensive support to the TFC ever since theHouse of Creativity was established in fiscal year
2014. The program theme adopted for fiscal year
2021 is “Designing the Human-Centric IoT Society,”
which was jointly proposed with the university.
Through this industry-academia cooperation,
research is being conducted to overcome challenges
expected in an Internet of Things (IoT) society,and realize a future society centered on human well-being. The Kick-off
Symposium for this program was held in October 2019.

TEL FOR GOOD is the new brand name that represents TEL’s social contribution activities.
From fiscal year 2019, we are using it as a collective term for social contribution events andvarious programs, donations and volunteer activities sponsored by our company aroundthe world.

4 focus areas

Japan

Innovation andTechnology

Education

Community
involvement

Environment

Number of TEL FOR GOOD activities (178 in total for FY2020)

Innovation and Technology: 6 (3.4%)

Korea: 6(3.4%)

China: 3(1.7%)

United States: 10(5.6%)

53

TOKYO ELECTRON SUSTAINABILITY REPORT 2020

Keep Portland Beautiful

In April 2019, as part of Earth Month, employees of Tokyo Electron America
held a cleanup of Rock Creek Park, located close to the Portland Branch Office,and picked up rubbish along roads leading to the office. With park visitors also
participating on the day, about 30 people
collected 200 kg of waste and helped
maintain the beauty of the area. The event
offers a great opportunity to consider ourown communities and the environment.

Europe: 12(6.7%)

Education: 28(15.7%)
Environment: 28(15.7%)

Physics Challenge: All-Japan physics contest

Recognizing that physics underpins modern science and technology, TEL started
providing support to the Physics Challenge, for the top junior high school students
and high school students across Japan, from the 15th challenge in fiscal year 2020.
The Physics Challenge is a contest
offering a variety of programs that also
demonstrate the appeal of physics.
About 1,200 students took part in Round
1, with the top 100 going on to Round
2. Finally, five students were selected
to represent Japan in the International
Physics Olympiad 2020 in Lithuania.

U.S.

By region

By focus area

Tohoku Forum for Creativity: 2020 program activities

Taiwan: 21(11.8%)
Community
involvement: 116(65.2%)

China

Japan: 126(70.8%)

Fun runTokyo Electron (Shanghai) participates in a public fun run hosted by the
Shanghai Zhangjiang Hi-Tech Park. The event is held to promote health among
employees of companies in the area to build a mutually supportive community
through human connections. On
the day of the event, donations arecollected for the Giving Tree Community
Center Shanghai as well. In fiscal year
2020, 41 employees helped run theevent and also collected 8,000 yuan in
donations.

TaiwanTEL Robot Combat

TEL Robot Combat is a robot contest that has been held every year since
fiscal year 2017 for university students and graduate students specializing inscience and technology. One of the event sessions assesses each robot on
characteristics such as maneuverability,
stability, precision, and creativity, withthe design being assessed along withperformance. Through industry-academia
cooperation, TEL creates opportunities forstudents to develop their skills and abilities
and provides opportunities for companies
and associations to exchange ideas.

Japan

Work experience support

TEL’s domestic manufacturing facilities offer work experience programs every
year to help foster human resources and contribute to local communities.
These activities offer opportunities for participants to get a deeper
understanding of the roles of industry
and companies, and the significance ofwork done there. The program focuses
specifically on actual business, including
factory tours and training on exchanging
business cards and other Japanese customs,
3D CAD design and wafer inspections, andonsite lessons about logistics processes.

Japan

Companies Creating Forests—Afforestation activity

As part of an agreement with Oshu City in Iwate Prefecture to participate in its
Companies Creating Forests program, Tokyo Electron Technology Solutions plants
trees around its office in Iwate Prefecture. Participating in this activity for the ninth
time in fiscal year 2020, employees and family members cooperate each year
to plant about 700 seedlings. Conducted as part of environment conservationand greening efforts in the surrounding area, pictures of these activities are also
published as an example
of CSR activities in thesocial studies textbooksof some junior highschools.

EuropeChildren in Need

Tokyo Electron Europe participates in Children in Need, a charity event held in
November every year to help improve the lives of sick children and children
with disabilities. Employees bake andsell cakes within the company, and thecompany adds a matching amount to themoney they raise, which is then donated
together. During fiscal year 2020, a Funny
Hats Competition was also held to build
excitement for the event.

TOKYO ELECTRON SUSTAINABILITY REPORT 202054

Performance summary: Social
The scope for calculating social data is the Tokyo Electron group (34 consolidated companies), and the calculating period is fiscal year 2020 (April 1, 2019 to March 31, 2020).
Japan: Tokyo Electron Ltd. and six consolidated subsidiaries (including Tokyo Electron Technology Solutions Ltd., Tokyo Electron Kyushu Ltd., Tokyo Electron

FY2016

Miyagi Ltd., and Tokyo Electron FE Ltd.)FY2016

Regular employees(Region/Group)

FY2017FY2019FY202011,696

12,46913,542

Japan

6,737

6,967

7,268

7,526

7,806

Rest of Asia

1,543

1,850

2,218

2,832

3,494

440

448

492

513

528

1,586

1,655

1,718

1,598

1,714

North America

FY2016FY2017FY2018FY2019

23

Men

43

30

30

28

18

Women

6

4

1

2

5

Percentage of regular employees who received regularperformance and career evaluations

100.0

100.0

100.0

100.0

100.0

FY2016

Employee retention

7,060

7,288

7,516

7,797

8,100

Regular employees

6,737

6,967

7,268

7,526

7,806

Men

5,874

6,079

6,292

6,479

6,681

Women

863

888

976

1,047

1,125

323

321

248

271

294

Men

201

209

181

220

263

Women

122

112

67

51

31

Number hired
Under 30 yrs old
Men

New graduates hired

72

167

199

281

24

72

163

198

280

20

70

131

166

233

90.2

85.2

87.1

88.0

88.6

17 yrs. 0 mos.

17 yrs. 1 mos.

17 yrs. 1 mos.

17 yrs. 2 mos.

17 yrs. 2 mos.

Men

17 yrs. 2 mos.

17 yrs. 4 mos.

17 yrs. 4 mos.

17 yrs. 5 mos.

17 yrs. 5 mos.

Women

16 yrs. 0 mos.

15 yrs. 5 mos.

15 yrs. 7 mos.

15 yrs. 8 mos.

15 yrs. 11 mos.

131

102

103

108

82

Men

94

82

82

88

54

Women

37

20

21

20

28

1.8

1.4

1.4

1.4

1.0

Average service years

denotes data with third-party assurance.

FY2016

Paternity leave

FY2017FY2018FY2019FY2020Take-up rate2

62.6

64.1

64.3

67.2

72.6

Number of those who took leave

1,045

586

639

605

901

Men

926

499

556

507

773

Women

119

87

83

98

128

Number of those who took leave

172

179

180

155

184

Number of those who took leave

42

44

41

56

46

2

2

4

8

12

Women (percentage who took leave)

40 (93.3)

42 (95.7)

37 (93.2)

48 (100.0)

34 (97.9)

Number of those who returned towork after leave

48

Men

2

32

32

47

1

0

4

1

1

Men

1

0

4

1

1

46

44

44

43

Women

0

0

0

0

0

Men

1

2

6

6

8

0

0

0

0

0

Women

45

42

38

37

40

Men

0

0

0

0

0

Percentage reinstated

85.2

93.6

93.6

93.5

94.1

Women

0

0

0

0

0

Retention rate

91.3

95.7

90.0

88.9

91.3

16.0

2.8

19.2

16.1

16.7

Number of those who used

188

170

176

153

149

66

279

262

239

150

Men

13

23

24

8

11

17

102

102

85

42

Women

175

147

152

145

138

13

85

85

67

35

453

464

455

517

625

Men

245

263

281

334

428

Women

208

201

174

183

197

103

106

120

129

125

Men

15

16

19

26

26

Women

88

90

101

103

99

Under 30 yrs old
Men
Women

4

17

17

18

7

30–49 yrs old

47

170

156

145

96

Men

31

155

135

119

82

Women

16

15

21

26

14

2

7

4

9

12

Men

2

6

3

5

10

Women

0

1

1

4

2

Percentage of women

30.3

11.8

14.9

20.1

15.3

Percentage hired (TEL)

1.96

2.13

2.22

2.18

2.06

Percentage hired (Group)

1.98

1.98

1.91

2.04

2.01

50 and over yrs old

Reemployment system

25

94.6

Women

1 Average in recent five years

Refreshment leave

FY2020

93.8

93.5

4

Number hired

Female managers (Group)1, 2, 3

FY2019

93.0

94.3

Women

Percentage of women

Employees with disabilities

FY201893.4

94.1

30–49 yrs old

50 and over yrs old

Career-track recruits

FY2017

FY202092.9

Work-life balance (Japan)

denotes data with third-party assurance.

FY2016FY201994.1

Turnover percentage

Annual paid leave

Recruitment/employment (Japan)

FY2018

93.6

Employee turnover
Turnover

FY2017

Men

Retention after three years of joining TEL1

FY2020

Number of employees

Non-regular employees

FY202030

Employee retention (Japan)

10,920Europe and Middle East

Employees(Employment type/Japan)

FY201810,306

Number of regular employees

FY201931

Second career support system

Composition of employees

FY201834

Overseas: 27 consolidated subsidiaries (including Tokyo Electron America, Inc., Tokyo Electron Europe Ltd., Tokyo Electron Korea Ltd., Tokyo Electron Taiwan Ltd.,Tokyo Electron (Shanghai) Ltd., and Tokyo Electron Singapore Pte. Ltd.)FY201749

Number of users

Number of people

39

42

20

22

23

Percentage

1.5

1.6

1.8

2.0

2.0

Number of users

101

125

156

201

242

Men

98

123

155

196

235

Women

3

2

1

5

7

1 Percentage of female managers Calculation method: Number of female managers/Number of managers × 100
2 Grade resetting through global human resources system since FY2018
3 As of March 31

Childcare leave

Shorter working hour system

Number of those who took leave
Leave to care for a sick/injured child

Number of those who took leave
Childcare support leave

0

2

3

5

2

Men

0

1

2

2

2

Women

0

1

1

3

0

31

50

47

63

95

Men

10

31

25

38

56

Women

21

19

22

25

39

0

0

0

2

2

Men

0

0

0

0

1

Women

0

0

0

2

1

Number of those who took leave
Extended nursing care leave

Number of those who took leave
Short nursing care leave

Number of those who used
Shorter working hour system fornursing care

2 Take-up rate of annual paid leave Calculation method: (Days of paid leave taken by employees**)/(Days of paid leave provided to employees**) × 100 ** Incl. non-regular employees

Customers
FY2016Percentage of respondents who selected “Very Satisfied” or “Satisfied” in the customer
satisfaction survey3

46.2

FY201767.6

FY201859.4

FY201984.4

FY202093.3

3 Past figures have been revised due to change in indicator

55

TOKYO ELECTRON SUSTAINABILITY REPORT 2020

TOKYO ELECTRON SUSTAINABILITY REPORT 202056

Performance summary: Social

Performance summary: Environment
The scope for calculating environmental data is the Tokyo Electron group (34 consolidated companies), and the calculating period is fiscal year 2020 (April 1, 2019
to March 31, 2020).

Products/Innovation

Japan: Tokyo Electron Ltd. and six consolidated subsidiaries (including Tokyo Electron Technology Solutions Ltd., Tokyo Electron Kyushu Ltd., Tokyo Electron
FY2016FY2017FY2018FY2019Miyagi Ltd., and Tokyo Electron FE Ltd.)FY2020Overseas: 27 consolidated subsidiaries (including Tokyo Electron America, Inc., Tokyo Electron Europe Ltd., Tokyo Electron Korea Ltd., Tokyo Electron Taiwan Ltd.,

Total number of incidents of non-compliance with regulations and voluntary codes
concerning the health and safety impacts of products and services

0

0

0

0

0

Number of active issued patents

16,30016,023

16,767

17,473

18,137

Japan

5,172

4,984

5,091

5,304

5,348

North America

4,361

4,224

4,321

4,415

4,606

241

199

185

179

191

Active issued patents (Region/Country)

EuropeGreenhouse gas consumption/emissions
FY2016

Korea

2,784

2,672

2,864

3,076

3,223

Taiwan

2,131

2,387

2,675

2,817

2,948

Emissions (kt-CO2)

China

1,611

1,557

1,631

1,682

1,821

Global patent application rate
Japan

CY20151

CY20171

70.0

76.1

81.2

79.8

78.0

66.5

71.5

82.9

83.1

72.3

78.0

CO2 from energy consumption

CY2018168.0
71.2

North America

CY20161

85.1

85.5

1 Calendar year when patents were filed/granted

CO2 by scope

SafetyFY2016FY2017FY2018FY2019FY2020Percentage of employees who received training on basic safety

100

100

100

100

100

Percentage of employees who received training on advanced safety

100

100

100

100

100

Lost time incident rate (LTIR)

0.42

0.46

0.77

0.40

0.51

Number of workplace injuries per 200,000 work hours (TCIR)

0.21

0.28

0.38

0.20

0.23

denotes data with third-party assurance.

Scope
Emissions metric (sales)(t-CO2/billion yen)

CY20141

Patent application success rate

Tokyo Electron (Shanghai) Ltd., and Tokyo Electron Singapore Pte. Ltd.)

Non-energy-derived greenhousegas

Procurement
FY2017FY2018FY2019FY2020Percentage of new important suppliers screened using social criteria

100

100

100

100

100

Rate of improvement after supply chain CSR assessment (including green procurement survey)

33.8

16.9

20.7

—2

35.8

Rate of improvement after supply chain BCP assessment

26.5

32.3

21.2

19.4

16.0

Number of identified RMAP conformant smelters

204

237

249

253

261

2 Unable to compare with previous fiscal year due to comprehensive revisions, including the survey

Governance
FY2016FY2017FY2018FY2019FY2018FY2019FY2020

2.22

1.77

1.34

1.24

1.38

148

141

152

159

155

Japan

115

110

119

127

127

Overseas

33

31

33

32

28

Scope 11 emissions (kt-CO2)

8

8

9

9

11

Japan, energy-derived

6

6

7

7

10

Overseas, energy-derived

2

2

2

2

2

Scope 22 emissions (kt-CO2)

140

133

143

150

144

Japan

109

104

112

120

118

Overseas

30

29

31

30

26

Scope 33 emissions (kt-CO2)

3,491

4,028

5,855

6,467

5,874

Emissions (kt-CO2e) (Japan)

33

28

26

47

59

HFCs

1

3

3

3

6

PFCs

8

8

11

18

24

SF6

17

9

4

11

11

Other

6

8

8

15

18

12

9

8

15

16

Scope 14 emissions (kt-CO2e)

FY2016FY2017

1 Scope 1: Direct GHG emissions from use of fuel and gas owned or controlled by TEL.
Calculation method: Emissions = Σ (fuel consumed × CO2 emission factor)
Emission factor based on Japan’s Act on Promotion of Global Warming Countermeasures
2 Scope 2: Indirect GHG emissions from use of electricity purchased by TEL.
Calculation method: Emissions = Σ (purchased electricity × CO2 emission factor)
Adjusted emission factors for the electrical power providers concerned based on Japan’s Act on Promotion of Global Warming Countermeasures were used as the emission factor for Japan
Emission factors based on values from the Emissions Factors 2019 edition published by the International Energy Agency (IEA) were used as the emission factor for overseas electricity consumption
3 Scope 3: Emissions from corporate value chains (excluding scope 1 and 2 emissions), such as product transportation, employee business travel, and major outsourced production processes.
The entire scope is divided into 15 categories, of which calculations were made for categories 1, 2, 3, 4, 5, 6, 7, 9, 11, and 12. Calculations for categories 8, 10, 13, 14, and 15 were not made as they are either notincluded in TEL’s activities, or have already been included in other categories.
4 Scope 1: Non-energy-derived CO2 and greenhouse gases other than CO2.
Calculation method: Emissions = Σ (consumption × emission per unit consumption – amount recovered and properly treated) × global warming factor
Global warming factor is based on Japan’s Act on Promotion of Global Warming Countermeasures

FY2020Total number of critical incidents notified to Board of Directors

—

1

0

0

0

Total number of incidents subject to legal action on the basis of anti-competitive conduct, antitrust activity, or monopolistic practices where the governance body’s involvement was revealed

0

0

0

0

0

Number of executive officers who received training on anti-corruption3

—

12

13

0

0

Total number (percentage) of directors who provided instructions on the body’s policies andprocedures in relation to anti-corruption3—

11 (100)

12 (100)

12 (100)

11 (100)

Total number (percentage) of directors who received training on anti-corruption3—

9 (81.8)

9 (75.0)0 (0)11 (100)

Payment to industry groups, etc. (thousand yen)——

16,616

17,374

26,042

Payment to politically affiliated organizations (yen)

—

—

0

0

0

Average tenure of directors

—

—

8.04

7.36

4.84

Average rate of attendance for board meetings

—

—

99.46

98.24

99.39

Resource consumption

denotes data with third-party assurance.

Scope

FY2016

Copier paper

FY2018FY2019FY2020

1,055

1,143

1,240

1,305

896

861

966

1,054

1,098

Groundwater

314

251

359

363

390

Tap water

368

385

387

422

411

Industrial water

214

225

220

269

297

Overseas

180

194

177

186

207

Use (t) (Japan)

128

157

194

165

132

Japan
Water

FY2017
1,076

Consumption (thousand m3)

3 Scope: Japan

Compliance
FY2016FY2017FY2018FY2019FY2020Percentage of employees who have received online training on business ethics and compliance4

98.4

98.0

99.4

99.2

63.75

CO2 emissions from energy consumption

Water consumption

Percentage of employees who have consented to the information security agreement

99.9

99.9

99.9

100.0

100.0

(kt-CO2)(thousand m3)

0

0

0

0

0

Significant fines and non-monetary sanctions for noncompliance with laws and regulations inthe social and economic area

4 Scope: Japan 5 Value from March 16 (start date for training) to March 31. Training will continue to be provided in fiscal year 2021.

115

127

127

119

110

896

Social contribution
FY201657

FY2018FY201933

FY2020

277

242

238

281

250

Charity donations (providing donations/relief supplies to charity organizations)

14

17

13

11

4

Community investment (charitable expenses for long-term cause forcommunity)

52

43

49

55

68

Spending on social contribution (million yen)Cashdonationsbreakdown

FY2017

Commercial initiatives (charitable expenses with anticipated effects on
business growth)TOKYO ELECTRON SUSTAINABILITY REPORT 2020

34

40

38

34

28

31

33

32

28

314

251

359

368

385

387

214
2016
Japan

2017
Overseas

2018

2019

2020

(FY)

180
2016

194

225

220
2017

Industrial water (Japan)

1,054

966

861

177

1,098

363

390

422

411

269

2018
Tap water (Japan)

186
2019

297

207
2020

(FY)

Groundwater (Japan)

Overseas use

TOKYO ELECTRON SUSTAINABILITY REPORT 202058

Performance summary: Environment
Energy consumption/generation

Amount of waste generated

Scope

FY2016

Emissions metric (sales)(kL/billion yen)Consumption(crude oil equivalent) (kL)

EnergyConsumption (MWh)Overseas

0.63

0.75

67,49967,45775,03380,91884,931

59,61365,75770,52014,781

15,42015,161

14,411

254,201

253,300

282,274

305,795

317,614200,547

226,747

250,911265,293

55,79752,75355,52754,88452,321

2,748

2,877

3,083

2,991

3,565

Japan

1,602

1,666

1,947

1,948

2,611

Overseas

1,146

1,211

1,136

1,043

954

706

797

875

915

1,482

706

796

874

915

1,481

0

1

1

0

1

3,833

3,334

3,458

3,834

3,334

0

0

0

0

0

3,833

3,334

3,458

3,834

3,334

4,486

4,436

4,414

4,392

3,804

4,486

4,436

4,414

4,392

3,804

Overseas
Purchase (MWh)Japan
Overseas
Power generation (MWh)
Japan

0

0

0

0

0

1,331

1,346

1,386

1,382

1,225

Overseas
Power sales (MWh)*

1,331

Japan

1,346

0

Overseas

Waste

Specially controlled industrial
waste

Recycling

1,386

0

1,382

0

Scope

FY2016FY2017FY2018FY201913,9897,721

11,393

13,694

14,208

12,973

663

925

741

752

1,016

Emissions (t) (Japan)

2,125

3,683

4,904

6,619

5,911

Recycled amount (t)8,18212,128

14,211

14,77013,748

7,599

11,281

13,561

14,092

12,831

583

847

650

678

917

65

97

122

146

186

6

7

12

9

9

Overseas

59

90

110

137

177

36.1

31.9

36.4

35.9

31.9

Proportion of marinetransportation (international)

202

190

224

190

241

Japan

122

112

133

116

142

Overseas

80

78

91

74

99

Water discharge volume(thousand m3)

904

874

905

1,006

1,078

Japan

750

709

759

850

900

Overseas

154

165

146

156

178

Chemical substances consumption/emissions (Japan)
Scope

PRTR Class I designated chemical
substances

FY2016FY2017FY2018FY201964

100

FY2020Volume handled (t)

35

101

121

Ferric chloride

21

33

82

84

98

Hydrogen fluoride and its
water-soluble salts

9

25

12

11

12

Methylnaphthalene

4

5

5

5

10

Other

1

1

1

1

1

Amount transported(waste amount) (t)

31

59

95

96

111

Consumption (t)

4

5

5

5

10

NOx

Emissions (t)

7.5

7.9

11.5

9.6

11.9

SOx

Emissions (t)

2.2

2.5

2.7

2.8

4.0

FY2020Japan

Emissions (kt-CO2)

FY202014,960

Amount of waste (t)0Environmental impact of logistics

FY201914,435

Overseas

1,225

0FY201812,318Japan

Water discharges

FY2017
8,384

Japan

* Heating, cooling and steam not sold

CO2

FY2016

Amount generated (t)Incinerated and landfill waste

Japan

Power sales

52,676

15,497

Consumption(crude oil equivalent) (kL)PV power generation system

Scope

0.66

Consumption (crude oil
equivalent) (kL)Green power

FY20200.84

198,404

Japan

Fuel

FY20191.02

52,002

Overseas

Gas

FY2018Overseas

Japan

Electricity

FY2017

Other
Scope

FY2016FY2017
8

9

9

9

4

5

5

5

5

Overseas

3

3

4

4

4

15

18

22

17

18

281

396

718

595

368

0

0

0

0

0

0

0

0

0

0

17,342

20,445

34,11032,715

Number of ecosystem tour
participants*
Number of breaches ofenvironmental laws andregulations
Amount of fines for breaches oflaws and regulations

Environmental laws andregulations

FY20207

Number of ecosystem tours*
Biodiversity

FY2019Japan

Number of certified offices
ISO 14001

FY2018

Total product shipment (t)*31,184* Scope: Japan

Recycling rate/generation of incinerated and landfill waste in Japan
CO2 emissions from logistics and the proportion of marine transportation(kt-CO2)
35.9
186

Electricity consumption(Million kWh)

198.4

200.5

226.7

250.9

265.3

36.1

31.9

65
55.8
2016
Japan

59

52.8
2017

55.5
2018

54.9
2019

Overseas

TOKYO ELECTRON SUSTAINABILITY REPORT 2020

52.3
2020

6

146

9

2016
Logistics in Japan

99.2

121 1

98.9

2018

122

137

Overseas logistics

2019

101 1

10
12

82

84

98

5
12

5
11

64 1
177

110

100 1
Target: Maintain recycling rate of 97% or more

2016
2017

99.0

31.9

59
(FY)

99.0

12

7
90

(t)

98.4

9

36.4
122

97

Volume of PRTR Class I designated chemical substances handled in Japan

2020

(FY)

Proportion of marine transportation
in international logistics (%)

112
2017

133

2018

116
2019

2020

Incinerated and landfill waste (t)Recycling rate (%): (Recycled amount/Amount of waste generated) × 100

5
25

35 1

142

4
9
21

(FY)

2016

33
2017

2018

2019

2020

Ferric chloride

Hydrogen fluoride and its water-soluble salts

Methylnaphthalene

Other

(FY)

TOKYO ELECTRON SUSTAINABILITY REPORT 202060

Independent practitioner's assurance

Corporate profile

Corporate profile（TRANSLATION）

Independent Practitioner’s Assurance Report

Mr. Toshiki Kawai,
Representative Director, President & CEO,Tokyo Electron Ltd.

Company name:Tokyo Electron Limited

Main business:

Address:

Akasaka Biz Tower
3-1 Akasaka 5-chome, Minato-ku, Tokyo
107-6325, Japan

Semiconductor production equipment business,flat panel display (FPD) production equipment business

Capital:54,961 million yen

July 3, 2020

Masahiko Sugiyama
Representative Director
Deloitte Tohmatsu Sustainability Co., Ltd.
3-2-3, Marunouchi, Chiyoda-ku, Tokyo

We have undertaken a limited assurance engagement of the CO2 Emissions from energy consumption in Japan, theWater consumption in Japan, Female managers percentage in Japan and Annual paid leave take-up rate in Japan
indicated withfor the year ended March 31, 2020 (the “Sustainability Information”) included in the “TOKYOELECTRON SUSTAINABILITY REPORT 2020” (the “Report”) of Tokyo Electron Ltd. (the “Company”).
The Company’s Responsibility
The Company is responsible for the preparation of the Sustainability Information in accordance with the calculation
and reporting standard adopted by the Company (indicated with the Sustainability Information included in theReport). CO2 quantification is subject to inherent uncertainty for reasons such as incomplete scientific knowledge
used to determine emissions factors and numerical data.
Our Independence and Quality Control
We have complied with the independence and other ethical requirements of the Code of Ethics for Professional
Accountants issued by the International Ethics Standards Board for Accountants, which is founded on fundamental
principles of integrity, objectivity, professional competence and due care, confidentiality and professional behavior.
We apply International Standard on Quality Control 1, Quality Control for Firms that Perform Audits and Reviews ofFinancial Statements, and Other Assurance and Related Services Engagements, and accordingly maintain acomprehensive system of quality control including documented policies and procedures regarding compliance withethical requirements, professional standards and applicable legal and regulatory requirements.
Our Responsibility
Our responsibility is to express a limited assurance conclusion on the Sustainability Information based on theprocedures we have performed and the evidence we have obtained. We conducted our limited assurance engagementin accordance with the International Standard on Assurance Engagements (“ISAE”) 3000, Assurance Engagements
Other than Audits or Reviews of Historical Financial Information, issued by the International Auditing and AssuranceStandards Board (“IAASB”), ISAE 3410, Assurance Engagements on Greenhouse Gas Statements, issued by the
IAASB and the Practical Guideline for the Assurance of Sustainability Information, issued by the Japanese
Association of Assurance Organizations for Sustainability Information.
The procedures we performed were based on our professional judgment and included inquiries, observation ofprocesses performed, inspection of documents, analytical procedures, evaluating the appropriateness of quantification
methods and reporting policies, and agreeing or reconciling with underlying records. These procedures also included
the following:
・ Evaluating whether the Company’s methods for estimates are appropriate and had been consistently applied.
However, our procedures did not include testing the data on which the estimates are based or reperforming theestimates.
・ Performing interviews of responsible persons and inspecting documentary evidence to assess the completenessof the data, data collection methods, source data and relevant assumptions applicable to the sites.
The procedures performed in a limited assurance engagement vary in nature and timing from, and are less in extent
than for, a reasonable assurance engagement. Consequently, the level of assurance obtained in a limited assurance
engagement is substantially lower than the assurance that would have been obtained had we performed a reasonableassurance engagement.

Established:

November 11, 1963

Representative:

Toshiki Kawai
Representative Director,
President & CEO

Number of employees:

14,079 (consolidated)
1,645 (non-consolidated)

Number of locations:Japan: 7 companies at 26 locations
Outside Japan: 23 companies at 52 locationsin 17 countries and regions
Worldwide total: 30 companies at 78 locationsin 18 countries and regions (consolidated)(as of April 1, 2020)

Financial data
Earnings Release:
URL

www.tel.com/ir/library/report/

Securities Report:
URL

www.tel.co.jp/ir/library/fs/

Annual Report:
URL

www.tel.com/ir/library/ar/

Tokyo Electron’s logo
Our logo was created as a symbol for Tokyo Electron (TEL)'s next stage of
growth, based on our corporate philosophy and vision.
This simple design represents our reliability and the engaging presence webring to a competitive industry. The green square at the center of the logo
signifies the core of innovation supporting development in industry; thetranslucent blue expresses TEL's leading-edge advanced technology.
We contribute to the development of a dream-inspiring society through ourleading-edge advanced technology and reliable service and support.

Limited Assurance Conclusion
Based on the procedures we have performed and the evidence we have obtained, nothing has come to our attention
that causes us to believe that the Sustainability Information is not prepared, in all material respects, in accordance withthe calculation and reporting standard adopted by the Company.
The above represents a translation, for convenience only, of the original Independent Practitioner’s Assurance report issued in
the Japanese language.
Member of
Deloitte Touche Tohmatsu Limited

61

TOKYO ELECTRON SUSTAINABILITY REPORT 2020

TOKYO ELECTRON SUSTAINABILITY REPORT 202062