Identifying material issues

Tokyo Electron identifies important and priority material issues to be addressed for medium- to long-term profit expansion and continuous corporate value enhancement by examining both social and business environments, evaluating risks and opportunities and through active engagement and such with stakeholders.

Issues Awareness

Social Issues

With the state of society being affected by things such as the spread of COVID-19, the invasion of the conflict in Ukraine and also due to climate change causing abnormal climate conditions and natural disasters, along with human rights issues, conflicts between nations, supply chains disruptions, cyberattacks and so forth, we are currently facing many issues. Mitigating climate change and eliminating inequality in human rights in particular are pressing issues for the 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 participating in global initiatives such as the United Nations Global Compact and RBA and keeping an eye on societal trends, and considering recommendations from third party organizations, we also examine social issues that may impact our business activities.

Business Environment

The spread of IoT, AI and 5G, smarter industries, autonomous driving, use of the highly anticipated metaverse, and other technologies, are moving us toward a data-driven society at an unprecedented speed. Semiconductors are a core part of this shift, and their market size is expected to more than double in the next ten years with technological innovations in larger capacity, higher speed, higher reliability, lower power consumption, etc. Alongside this, the semiconductor production equipment market in which we operate is expected to expand even further.

New evolutions are also required in Flat Panel Display, which act as the interface between people and ICT, and further technical innovations are occurring. In the future, as organic EL displays become widespread, panel size increases, and design improvements that take advantage of enhanced characteristics such as high-definition, lower power consumption, thinner profile and flexibility, are expected to further expand the application fields.

Taking actions to preserve the global environment has become an urgent issue, and under international frameworks such as SDGs and the Paris Agreement in which initiatives toward decarbonization are essential, the role which technological innovations in semiconductors and displays will play in society will be more prominent in the future.

At the same time, in step with the increasing importance of corporate governance, which fundamentally supports the medium- to long-term growth of corporations, further strengthening of measures is essential to ensure safety and quality, as well as compliance and risk management.

Social Themes of Risks and Opportunities

We examined the risks and opportunities closely related to sustainable business development in consideration of the SDGs and other initiatives, social issues and social/business environments.

Social Trends Main Potential Risks Opportunities
  • If we fail to comply with laws and regulations, industry codes of conduct, in-house policies and so forth, product competitiveness and social credibility will decline, and the cost of correcting the problem will increase business costs.
Create business opportunities by providing technologies, products and services that contribute to the reduction of environmental impact
Human rights
  • If we fail to comply with laws and regulations, industry codes of conduct and so forth, social credibility and employee engagement will decline.
Create a workplace environment that respects employee diversity and enables all employees to demonstrate their full capabilities, improve employee turnover rate and promote health management
Supply chain
  • If a natural disaster occurs, or it becomes impossible to continue business transactions with suppliers, events such as delivery delays and contractual nonperformance will harm business continuity.
  • If sustainability-related issues such as the environment and human rights become more serious, operations will stagnate.
Establish a sustainable production system, further increase business operations efficiency, improve business continuity through enhanced business continuity plans (BCPs), strengthen competitiveness in the supply chain and build trusted relationships with customers and suppliers
  • If management’s monitoring or supervising function declines, management risk will increase, and business activities will stagnate.
Enhance corporate value on a medium- to long-term basis, gain stakeholders’ trust and increase social credibility
  • If an ethical or compliance violation occurs, we will lose social credibility and suffer economic loss.
Operate healthy corporate activities by complying with laws and regulations, industry codes of conduct, corporate ethics and other rules
Evolution of technology
  • If the development of leading-edge technologies is delayed, we will lose business opportunities.
Create ground-breaking innovations, strengthen competitive superiority and contribute to industry and social issue resolution and growth
Information security
  • If confidential information is leaked, social credibility will decline, and compensation for damages will be required.
  • If a cyberattack or natural disaster occurs, our business will stagnate.
Build a rock-solid information infrastructure by strengthening information security, and improve information literacy

Stakeholder Engagement

We examined the opinions and requests obtained through engagement opportunities with stakeholders.

Stakeholders Main Engagement Opportunities Key Opinions and Requests
  • Earnings release conference, Medium-term Management Plan briefing, IR Day
  • IR conference, IR road show*1, individual IR interview
  • Shareholders' Meeting
  • Medium- to long-term enhancement of corporate value and measures for such enhancement
  • Initiatives for highly effective governance
  • Capital policy, including shareholder return
  • Technology conference
  • Joint development
  • Customer satisfaction survey
  • Provision of innovative technologies for the future
  • Maximization of productivity using high-value-added service
  • Proposal of comprehensive and optimal solutions
  • Production update briefing
  • TEL Partners Day
  • Sustainability assessment (including E-COMPASS)
  • STQA*2 audit
  • Sharing aspects such as market and technology trends and information on production plans in a timely manner
  • Encouraging understanding regarding expected quality standards, compliance with industry code of conduct, etc.
  • Further improving added value of products and service through collaboration with us
  • Employee meeting
  • Global engagement survey
  • Individual workshops
  • Sharing of initiatives for corporate policy and Medium-term Management Plan
  • Opportunities for career development and skill improvement
  • Creation of work environments in which diverse human resources can thrive
Local communities
  • TEL FOR GOOD (social contribution activities)
  • Tours of plants and offices
  • Environmental debriefing
  • Cooperation with companies regarding regional revitalization and development
  • Promotion of environmental conservation
  • Human resource development and generation of innovation
  • Cooperation with the government and administrative agencies
  • Collaboration with global initiatives
  • Industry group activities
  • Collaboration toward solving common issues
  • Create new value through innovation
  • Building of sustainable supply chains

IR roadshows: IR activities presented directly to shareholders and investors

STQA: Supplier Total Quality Assessment

Identifying Material Issues

We have come to understand social issues and business environments, considered risks and opportunities, examined the opinions and requests of all stakeholders and identified our material issues. The CEO and those related to sustainability, such as the corporate directors and the executive officers, approved “Product Competitiveness,” “Customer Responsiveness,” “Higher Productivity,” and “Management Foundation” as material issues.

Based on a strong “Management Foundation” of safety, quality, compliance, governance, and risk management that underpin our business activities, we will be the first to grasp leading-edge technological trends and changing needs, and continuously create next-generation products with overwhelming added value and performance to increase “Product Competitiveness.” With our extensive track record in “Customer Responsiveness,” we will build absolute trust with our customers and be the sole strategic partner. Furthermore, through “Higher Productivity,” which arises from continually pursuing operational efficiency, we will work toward medium- to long-term profit expansion and continuous corporate value enhancement.

Identified Material Issues

Identified Material Issues

Our Material Issues