Identifying Material Issues

Tokyo Electron (TEL) identifies material issues that are important for further improving its corporate value over the medium- to long-term, taking into account social issues, the business environment, stakeholder expectations, and the company’s circumstances. For each material issue, we set medium-term and annual goals, and implement various projects aimed at achieving those goals.

Issues Awareness

Social Environment

While steady growth is forecast for the global economy, humans are also faced with various social issues, including abnormal climate conditions and natural disasters, conflicts between states and terrorism, water and food crises, population problems and cyberattacks.TEL is deepening its awareness of social issues throughout the value chain, giving consideration to SDGs, the United Nations Global Compact, RBA and recommendations from third party organizations.

SDGs: Sustainable Development Goals

The SDGs were adopted by the United Nations in 2015 as a universal set of goals for humanity to achieve by 2030. We have clarified the SDGs related to materiality and endeavor to achieve the SDGs through the development of our business.

*TEL supports the SDGs



Business Environment

With the arrival of the IoT era, applications for semiconductors are expanding further with the emergence of applications based on new technologies including artificial intelligence, AR and VR. Furthermore, opportunities for value creation are increasing in the field of FPD, with changes in technologies such as large screen and high resolution, and the spread of organic EL, which is accompanied by expansion in associated design and application areas. Consequently, semiconductors and FPDs are at a turning point, experiencing a new growth phase and playing a key role in social infrastructure. As technology becomes more sophisticated and diverse, semiconductor and FPD manufacturing equipment makers must have the foresight to develop innovative technologies and deliver them in a timely manner. Furthermore, maintenance and service to improve the productivity and lifespan of equipment is increasingly important.

Risks and Opportunities

Given the social and business environment in which TEL finds itself, we examined the risks and opportunities closely related to sustainable business development.

Social trendsRisks for TELOpportunities
Environmental issues including climate change

● Legal violations and non-
 compliance with industry
 codes of conduct

● Increases in business
 costs

● Reduction of operational costs

● Improvement of product environmental
 performance and creation of business
 opportunities 

Evolution of technology

● Reduction in product
 dominance

● Reduction in customer
 satisfaction

● Generating innovative products and
 services

● Maintaining competitive advantage

Changes in population trends

● Securing human resources

● Decline in development
 and support capability

● Enhancing corporate competitiveness
Sustainable business management

● Ethics and compliance
 violations

● Weakening of monitoring
 and checking functions

● Highly effective governance

● Sound and highly transparent business

 management that builds solid
 relationships of trust with stakeholders

Supply chain management

● Weakening of supply system

● Worsened relations with
 suppliers

● Creation of new value through collaboration

● Establishment of sustainable procurement

Examination and Identification of Validity

TEL considers the importance of the issues it faces based upon opinions and expectations gained through communication with its stakeholders.

Analysis and Selection

TEL has grasped the social and business environment, as well as the opinions of stakeholders, has analyzed risks and opportunities, and compared this with our Corporate Philosophy and Management Policies to identify material issues.

Taking advantage of our strengths as a manufacturing equipment maker with multiple products, we offer a variety of values to customers, including production of advanced devices, productivity maximization and environmental impact reduction. We believe that in this way, we can contribute to the realization of a more convenient and prosperous society. We have established three pillars of product competitiveness, responsiveness to customers and higher productivity in our medium-term management plan, and identified two additional supporting factors to make five material issues: people and workplaces, and management foundation.

Examination and Identification of Validity

TEL verified the validity of material issues at the Review Council, incorporating the opinions of external experts. As a result, we determined that product competitiveness, responsiveness to customers, higher productivity, people and workplaces and management foundation are appropriate as material issues for fiscal 2019. From a medium- to long-term perspective, TEL will promote efforts in these material issues and aim for further growth.

Material Issues

Material issuesMedium-term goalPriority themes
Product CompetitivenessCreate strong next-generation products Tackling technological innovation
● Environmental contribution of products 
Responsiveness to CustomersBecome the best and sole strategic partner● Solutions that create value for
 customers
● Improvement of customer satisfaction
Higher ProductivityConstantly pursue higher management efficiency● Quality management
● Improvement of quality in the value
 chain
People and WorkplacesMaximize dreams and drive● Diversity
● Career development
● Work-life balance
● Health and safety
Management FoundationBuild a management foundation for increasing value● Governance and compliance
● Human rights
● Environmental management
● Supply chain management

CSR Goals and Results

TEL establishes annual goals and medium-term goals, based on material issues and their priority themes. Initiatives aimed at the achievement of goals are promoted throughout the Group, and the results are linked to evaluation and improvement with the aim of increasing corporate value further.

Fiscal 2018

Material issuesPriority themesAnnual goalsResults

Enhancing product competitiveness

Technological innovation aimed at creating value

・Ensure that 5% or more (three-year
 moving average) of all equipment
 models are new products for next-
 generation technologies

・Achieved 9.2%

・Maintain the previous year’s global
 patent application rate

・Achieved 76.0%
 (maintained programs at
 the level of the previous
 fiscal year)
Environmental contribution of products

・Reduce per-wafer consumption of
 energy and pure water by 10% by
 fiscal 2019
 (as compared with fiscal 2014)

・Achieved for the four
 models

Reinforcing responsiveness to customers

Accurate grasp of customer needs

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

・Achieved 64.9%

Solutions that create value for customers

・Increase TEL’s value to customers

・Achieved increased
 adoption of TEL
 equipment by major
 customers against
 the background of
 vigorous demand
 for memory

・Increase field solutions business sales
 from the fiscal 2017 level
・Increase of 31.4% from
 the fiscal 2017 level
Strengthening earnings powerHigh quality products・Reduce quality improvement costs
 from the fiscal 2017 level
・Reduction of 9.8% from
 the fiscal 2017 level

Increase added value of processes

・Revise business processes to reduce
 man-hours used for sales operations
 from the fiscal 2017 level

・Partially introduced
 systems to support
 sales operations

Invigorating people and workplaces

Human rights and diversity



・Retain 100% of new employees for the
 first three years

 
Reach 70% of take-up rate of annual
 paid leave

・ Increase the use of the Group’s “Pep
 Up” healthcare platform from the
 fiscal 2017 level

・Increased from 92.9% to
 93.4%
 Implemented initiatives
 such as Step-up Activity
 Training for employees
 in their second year

・Increased from 64.1% to
 64.3% (increase of 0.2
 points from the fiscal
 2017 level)
 Communicate the policy
 for overtime reduction at
 the start of the period

・20% increase (from 47.1%
 to 67.2%)
 Distribute activity
 monitors to promote
 health awareness

Work-life balance

Human resource development
Health
Establishing a sustainable management foundation

Corporate governance

・Improve on issues identified in
 evaluations of the effectiveness
 of the Board of Directors


・Revise the internal reporting system
 (set up new external hotlines, revise
 range of persons covered, etc.)

・In response to the issue of
 increasing discussion
 time, hold a two-day
 one-night off-site
 conference to provide
 more discussion
 time to consider
 management
 policies and strategies
 such as medium- to
 long-term growth
 strategies.

・Established external
 reporting system for
 Group companies in
 Japan and set up
 hotlines for supplies

Safety management

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

・Achieved 0.38
Environmental management

・Reduce energy consumption by 1%
 from the fiscal 2017 level (on a per-
 unit basis) 
・ Maintain water consumption at the
 fiscal 2012 level (on a per-unit basis)

・Achieved at 6 out of 11
 factories or offices* 
・Achieved 11 out of 14
 goals

Supply chain management

・Implement supply chain CSR
 assessments for 80% or more of
 suppliers (procurement volume basis)

・Assessed key suppliers
 accounting for more than
 80% of our procurement
 spend

* According to new per-unit basis after revision

FY2019

Material issuesPriority themesAnnual goalsMedium-term goalRelevant SDGs 
Product competitivenessTackling technological innovation

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

Create strong next-generation products

17.jpg

・Maintain the previous year’s global
 patent application rate

Environmental contribution of products

・Reduce per-wafer consumption of
 energy and pure water by 10% by
 fiscal 2019
 (as compared with fiscal 2014)

Responsiveness to customersSolutions that create value for customers・Increase TEL’s value to customersBecome the best and sole strategic partner

・Increase field solutions business
 sales from the fiscal 2018 level
Improvement of customer satisfaction

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

Higher productivityQuality management・Reduce quality improvement costs
 from the fiscal 2018 level
Constantly pursue higher management efficiency

Improvement of quality in the value chain

・Revise business processes to reduce
 man-hours used for sales operations
 from the fiscal 2018 level

People and workplacesDiversity・Double percentage of female
 managers by fiscal 2021
 (as compared with fiscal 2018)
Maximize dreams and drive

Career development

・Increase number of training sessions
 attended per person by 10% from
 the fiscal 2018 level

Work-life balance・ Reach 70% of take-up rate of
 annual paid leave
Health and safety

・Reduce gap between health age*1
 and actual age by 1.5 points by
 fiscal 2021 (as compared with
 fiscal 2018)

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

Management foundation

Governance and compliance

・Improve on issues identified in
 evaluations of the effectiveness
  of the Board of Directors
・Establishment of external hotline
 overseas and reorganize internal
 hotline

Build a management foundation for increasing value



Human rights・100% participation in human rights
 training
Environmental management

・Reduce energy consumption by 1%
 from the fiscal 2017 level (per-unit
 basis*2) at each factory or office

Maintain water consumption at the
 fiscal 2012 level according to per-
 unit basis*3 set at each factory or
 office

Supply chain management

Implement supply chain CSR
 assessments for 80% or more of
 suppliers (procurement volume
 basis)

*1 health age: An indication of the risk of lifestyle diseases by age based on the results of health checkups
*2 Per-unit basis: Calculated using complex weighting of the number of developed evaluation machines, units produced, floor area, and labor-hours for each district
*3 Per-unit basis: Calculated based on floor area and labor-hours, etc. for each district