Identifying material issues

Every year, we look at social issues and business environments, consider risks and opportunities, and examine the opinions and requests of all stakeholders to identify our material issues following discussions and approval at the Corporate Officers Meeting, participated in by the CEO, and a report to the Board of Directors.
We strengthen our “Product Competitiveness” that continuously creates next-generation products with high added value for the future by pursuing innovative technologies and leveraging our expertise and our “Customer Responsiveness” as their sole strategic partner based on the strong trust of our customers, and engage in "productivity improvement" to continuously pursue management efficiency by improving operational efficiency using digital technology and prioritizing quality in our operations, and enhance our “Management Foundation” including governance, compliance, risk management and human capital in order to support these from a strong financial foundation based on profits.

Process of Identifying Material Issues

Identified Material Issues

Process of Identifying Material Issues

Issues Awareness	Stakeholder Engagement	Identifying Material Issues
Social Issues Climate change, human rights issues, geo-economic conflicts, supply chain management, cybersecurity, price rises, etc. Business Environment Further expansion of semiconductors and wafer fab equipment (WFE¹) market as we move rapidly to a data society Initiatives for the preservation of the global environment Human rights initiatives Further strengthening of corporate governance Risks for our company and main initiatives* Identify the following cross-division and comprehensive key risks across the entire Group to build a solid financial foundation based on the Medium-term Management Plan Market fluctuations, geopolitics, R&D, procurement/production/supply, safety, quality, laws/regulations, intellectual property, information security, human resources, environmental responses, etc Key initiatives for these risks are reviewed and deployed*²	Shareholders/ Investors Realization of medium- to long-term growth and enhancement in corporate value Return earnings to shareholders (shareholder returns) generated through business activities Customers Propose products, services, and optimal solutions that contribute to value creation for customers Deployment of environmentally-friendly products and services with focus on safety and quality Suppliers Working collaboratively to Further improve the added value of products and services and construct a sustainable supply chain Employees Creating a workplace environment replete with dreams and vitality that enables a diverse range of people to realize their full potential, based on mutual trust between the organization and the individual Local Communities Promotion of regional revitalization and environmental preservation Financial contributions through tax payments and investments Governments/Associations Business activities that comply with laws and regulations, industry codes of conduct, etc. Providing solutions that contribute to development and solving the issues of industry and society	Identify material issues based on their importance to society and their importance to business Determine annual goals³ for each material issue and clarify SDGs⁴ to be addressed Organize material issues related to the value chain Discussion and approval at the Corporate Officers Meeting and reporting to the Board of Directors

Issues Awareness

Stakeholder Engagement

Identifying Material Issues

Social Issues

Climate change, human rights issues, geo-economic conflicts, supply chain management, cybersecurity, price rises, etc.

Business Environment

Further expansion of semiconductors and wafer fab equipment (WFE*¹) market as we move rapidly to a data society
Initiatives for the preservation of the global environment
Human rights initiatives
Further strengthening of corporate governance

Risks for our company and main initiatives

Identify the following cross-division and comprehensive key risks across the entire Group to build a solid financial foundation based on the Medium-term Management Plan
Market fluctuations, geopolitics, R&D, procurement/production/supply, safety, quality, laws/regulations, intellectual property, information security, human resources, environmental responses, etc
Key initiatives for these risks are reviewed and deployed*²

Shareholders/ Investors

Realization of medium- to long-term growth and enhancement in corporate value
Return earnings to shareholders (shareholder returns) generated through business activities

Customers

Propose products, services, and optimal solutions that contribute to value creation for customers
Deployment of environmentally-friendly products and services with focus on safety and quality

Suppliers

Working collaboratively to Further improve the added value of products and services and construct a sustainable supply chain

Employees

Creating a workplace environment replete with dreams and vitality that enables a diverse range of people to realize their full potential, based on mutual trust between the organization and the individual

Local Communities

Promotion of regional revitalization and environmental preservation
Financial contributions through tax payments and investments

Governments/Associations

Business activities that comply with laws and regulations, industry codes of conduct, etc.
Providing solutions that contribute to development and solving the issues of industry and society

Identify material issues based on their importance to society and their importance to business
Determine annual goals*³ for each material issue and clarify SDGs*⁴ to be addressed
Organize material issues related to the value chain
Discussion and approval at the Corporate Officers Meeting and reporting to the Board of Directors

Wafer Fab Equipment. The semiconductor production process is divided into front-end production, in which circuits are formed on wafers and inspected, and backend production, in which wafers are cut into chips, assembled and inspected again. WFE refers to the production equipment used in front-end production and in wafer-level packaging production. The semiconductor wafer fab equipment includes equipment for wafer level packaging.

Refer toRisk Management

Refer toAnnual Sustainability Goals and Results

Refer to169 Targets of the SDGs

Identified Material Issues

Material Issues	Awareness as materiality issues	Initiatives to the SDGs
Product Competitiveness	Continually creating and providing high value-added next-generation products to achieve technological innovation in semiconductors is vital for our medium- to long-term growth Solid business and finance foundations are required to continue to develop next-generation products with leading-edge technology	Create innovative technologies by promoting innovation Help develop a sustainable society by providing environmentally friendly products and services
Customer Responsiveness	Building relationships of strong trust with our customers and pursuing technological innovation in semiconductors with our customers as their sole strategic partner are vital for our growth. It is important to work to further improve customer satisfaction, one of our Management Policies, through proposing optimal solutions that contribute to customer value creation, and providing the Best Technical Service with high added value in a prompt and appropriate manner	Contribute to customer innovation and value creation through the proposal of optimal solutions and the provision of high added value services Ensure sustainable forms of production and consumption throughout product life cycles by considering safety and the environment
Higher Productivity	In all business activities, it is important to pursue management efficiency by streamlining operations and implementing quality-first operations to increase medium- and long-term profits and enhance corporate value. It is important to establish a competitive edge through prompt and appropriate business decisions as well as to engage in improving productivity in all aspects, from the product planning and development stages to maintenance, by promoting Shift Left and drawing on our digital technologies	Pursue productivity, continuously increase management efficiency, and contribute to sustainable economic growth Promote streamlined business operations and quality management throughout the value chain, ensuring sustainable forms of production and consumption
Management Foundation	It is vital to work to enhance a strong management foundation that underpins our business activities, focused around the three material issues above It is important to promote initiatives such as corporate governance and risk management, safety and quality, compliance, human rights, and human capital, and to expand sustainable operation	Build a solid management foundation that achieves sustainable growth based around highly effective corporate governance Promote value creation in the supply chain, including ourselves, through respect for human rights and environmental awareness

Our Material Issues

Product competitiveness

Customer responsiveness

Higher productivity

Management foundation