Notice of Correction Pursuant to Transfer Pricing Taxation

Tokyo Electron Limited (TEL) today received a notice of correction pursuant to transfer pricing taxation from the Tokyo Regional Taxation Bureau based on the determination that income arising from transactions with TEL's subsidiaries in the United States and South Korea during the six fiscal years from the fiscal year ended March 31, 2006 to the fiscal year ended March 31, 2011 was insufficiently allocated to TEL in Japan. TEL's corrected income according to this notice is 14.3 billion yen, and the penalty taxes including local taxes are estimated to be approximately 6.7 billion yen.

TEL properly paid its taxes in accordance with the tax systems of each country. During the recent tax audit, TEL explained repeatedly that the pricing of transactions with its subsidiaries was proper, but a difference of opinions developed between TEL and the tax authorities that could not be resolved. It is truly regrettable that the situation has developed to the point that TEL is subject to a retrospective tax adjustment, and that TEL cannot acquiesce to the adjustment. TEL will promptly file its objections with the tax authorities and perform procedures requesting inter-governmental consultations pursuant to the tax treaties ratified by Japan, the United States, and South Korea.

TEL believes that it will be able to eliminate the double taxation by agreement achieved through consultations, and accordingly, plans to report in the first quarter of the fiscal year ending March 31, 2013 total tax expenses of approximately 2.4 billion yen as the difference in amounts resulting from the different corporate tax rates between Japan, the United States and South Korea (the difference of the amount of the additional taxes in Japan and the tax refunds in the United States and South Korea) and the additional amount in conjunction with the imposition of additional taxes. We are currently investigating the impact that the correction will have on financial results for the fiscal year ending March 31, 2013.