CEO's Message

Business Environment in Which We Operate

As shown by a dramatic increase in the utilization of artificial intelligence (AI) with the recent arrival of generative AI, the relationships between digital technologies and our daily lives and every industry are now closer than ever. As a result, the role of semiconductors and related technological innovation are becoming increasingly important. While the semiconductor device market has grown to approximately US$630 billion*¹ as of 2024, it is forecast to reach approximately US$1 trillion*² by around 2030.
On the other hand, it is expected that the many different AI-based applications arriving going forward will not only require higher data processing capabilities but will also increase power consumption, raising concerns about a growing burden on the environment. For this reason, innovative technologies are needed to not only achieve higher speeds, larger capacity and superior reliability in semiconductors, but lower power consumption as well. New high-value-added equipment and technical services will be essential for technological innovation in semiconductors, so the semiconductor production equipment market in which we operate is also expected to grow considerably going forward.

Source: World Semiconductor Trade Statistics (WSTS)

Estimated by Tokyo Electron

Our Vision and Medium-term Management Plan

We have established a Vision: “A company filled with dreams and vitality that contributes to technological innovation in semiconductors,” which is based on the CSV (Creating Shared Value)*¹ approach. To build a strong and resilient society in which economic activities do not stop under any circumstances, we have defined our own CSV as TSV (TEL’s Shared Value), through which we strive to create social and economic value. Leveraging our expertise as a semiconductor production equipment manufacturer, we will contribute to technological innovation in semiconductors that will support digitalization and decarbonization for preservation of the global environment.
As part of our Medium-term Management Plan for realizing our Vision, we have set fiscal year 2027 financial targets for an operating margin of 35% or more and ROE of 30% or more, with net sales of 3 trillion yen or more. Despite risks that need our attention, including geopolitical trends such as friction and tariffs between the U.S. and China, the Russia-Ukraine war, and conflicts in the Middle East, and global inflation, the importance of semiconductors for the future will remain unchanged. We therefore aim to achieve our Medium-term Management Plan by providing new high-value-added products and technical services in the areas of semiconductor scaling and advanced packaging. These efforts will center on a broad product lineup leveraging our track record as the industry’s largest installed base (cumulative total of more than 96,000 units*²) with the industry’s largest number of patents (approximately 25,000 patents*²).
We have also established, and are currently implementing, a growth investment plan to refine our strengths and maximize future growth opportunities. We plan to spend 1.5 trillion yen or more on R&D investment and 700 billion yen or more on capital expenditures while recruiting 10,000 employees globally, over five years from fiscal year 2025.

The CSV approach aims to create social and economic value, enhance corporate value, and realize sustainable growth by leveraging company expertise to address social challenges.

As of the end of March 2025

Human Resource-related Initiatives

We believe that “our corporate growth is enabled by people, and our employees both create and fulfill company values.” Based on this belief, we practice motivation-oriented management to increase employee motivation and engagement with the company so that they can fully exercise their capabilities, centered on the following five points.

Environment-related Initiatives

With the importance of preserving the global environment grows even more in society, we are working to reduce environmental impact, and above all achieve decarbonization, in all of our business activities to contribute toward realization of a sustainable society. We have therefore set ourselves the goal of net zero greenhouse gas emissions by 2040. As part of this initiative, we are targeting a rate of 100% renewable energy usage at all of our plants and offices. We achieved this target in Japan during fiscal year 2023, while our global usage is currently at 89% (fiscal year 2025).
In addition to our own emissions, we are also working with our customers and partner companies to reduce environmental impacts across the entire product lifecycle*¹. As part of this, we are implementing the E-COMPASS*² initiative, which focuses on the environment, to achieve technological innovation in semiconductors, and reduce their environmental impact throughout the entire supply chain.

Product lifecycle: The value chain from product planning, development, and design, through procurement, manufacturing, logistics, customer use, maintenance and service, to disposal

E-COMPASS: Environmental Co-Creation by Material, Process and Subcomponent Solutions

Governance-related Initiatives

We aim to achieve short-term and medium- to long-term profit expansion and continuous corporate value enhancement, so we apply a basic management policy that we call “double-offensive governance.” The first “offensive” refers to an aggressive style of business activities. We consider profit to be an important measure of value in our products and services, so we always pursue a world-class operating margin and ROE by providing the Best Products with innovative technology, and the Best Technical Service with high added value. We have defined 14 material issues, that we work on with priority, as key items in conducting our aggressive style of business activities.
The second “offensive” refers to an aggressive style of building a management foundation. Fundamental to all corporate activities is the strengthening and enhancement of safety, quality, legal compliance, engagement with employees and other stakeholders, and security, and we aim to make them our own strengths. We have identified 16 risks that we may face when conducting business, including four newly added in fiscal year 2025, and we are conducting appropriate risk management not only to minimize their impacts but also to turn them into business opportunities.
Through this “double-offensive governance,” we aim to contribute to technological innovation in semiconductors while becoming the truly excellent global company that the world needs.

Aiming to Become a Company That Is Cherished and Trusted by All Stakeholders

In terms of a prosperous future made possible by semiconductors and their ongoing evolution, we have now entered a new growth phase in the semiconductor production equipment market that supports them. To achieve our goal of becoming number one globally, we will continue to take on
challenges and evolve, create high-value-added technologies that the world has never seen and only we can, and provide them to society. We will also strive to become a company that is cherished and deeply trusted by all stakeholders, and that continues to be a company filled with dreams and vitality.
We look forward to your continued support and patronage.

Toshiki Kawai
Representative Director, President & CEO
Tokyo Electron Limited

This message is the CEO's message in the Integrated Report 2025.