Realizing a dream-inspiring society through technological innovation.
President and CEO Toshiki Kawai
“We strive to contribute to the development of a dream-inspiring society through our leading-edge technologies and reliable service and support.” This is the Corporate Philosophy of Tokyo Electron. But what exactly is a dream-inspiring society? The abundance of data we can access via the Internet is a treasure trove. We accumulate this at our data centers for analysis, whereby we can use it for the enhancement of social services. Examples include:
Smart fabs, where productivity improvements help to boost corporate competitiveness. Autonomous driving to achieve accident-free transport. Remote medical diagnosis technology, enabling people to benefit from high quality medical services irrespective of the location. Smart city concept, where information and communications technology (ICT) are linked to town planning and public transport.
Prerequisite to this are the technological advancements that support the big data era. These include the Internet of Things (IoT), producing data by linking everyday physical objects to the Internet; 5G, which enables rapid data transmission; cloud technology, for data accumulation and processing; artificial intelligence (AI), that can analyze data and provide appropriate directions; and VR/AR/MR, that allow for data visualization.
Semiconductors, the lifeblood of industry, form the foundation for these information technologies. Semiconductor performance supports the emergence and evolution of diverse applications and also contributes to the development of society.
High-speed, highly reliable devices that operate without malfunctioning or freezing, are required to facilitate autonomous driving, and to link medical services with the IoT. Furthermore, the development of low-energy consumption semiconductors is essential to manage the increase of data centers, which consume vast amounts of power. With growing demands on semiconductors for more sophisticated and diverse functionality, Tokyo Electron (TEL) is creating new technology related to semiconductor production that will contribute to the development of a dream-inspiring society.
As CEO, I aim to ensure that people connected with the company are happy. By producing technology, products and services with high added value, I hope we can make our customers happy. I want to give something back to employees and their families. I also want to give back to shareholders who invested in our company. This is the reason why I pursue profit. Without profit, we cannot raise the R&D funding required to respond to the needs of customers, nor can we create opportunities for our employees to tackle new challenges.
TEL’s Management Policies provide 8 important management standards, and I carry this booklet with me, re-reading it whenever possible. Some of these points include:
Employees: The TEL Group's employees both create and fulfill company values, performing their work with creativity, a sense of responsibility, and a commitment to teamwork.
Organizations: The TEL Group builds optimal organizations that maximize corporate value in which all employees can realize their full potential.
Safety, Health, and the Environment: The TEL Group gives the highest consideration to the safety and health of every person connected with our business activities as well as to the global environment.
Social Responsibility: Feeling a strong sense of corporate social responsibility, we strive to gain the esteem of society and to be a company where our employees are proud to work.
For TEL, employees are the source of corporate value creation and growth. Since 2017, we have begun operation of a new unified global human resources system at all our bases worldwide. It supports employees who tackle new challenges through just employment, appointment, evaluation and treatment. Work-style reform, promotion of diversity, increased engagement (motivation-focused management) create a company where diverse talent plays an active role.
Furthermore, I hope we can be a company that employees can be proud of, by enhancing corporate value not simply in terms of economic value but also the aspect of social value. We focus on governance and compliance, implementing management which strives to remain aware of the social environment and social issues, including the Sustainable Development Goals (SDGs) adopted at the UN Sustainable Development Summit.
TEL’s Medium-Term Management Plan commits to high targets including net sales of 2 trillion yen, operating income margin of 30% or above and return on equity (ROE) or 30% or above. At its foundation lies the fact that the volume of data communication is forecast to grow at the explosive rate of 26% annually. The semiconductor market, valued at 468.8 billion dollars in 2018, is expected to be worth over 1 trillion dollars in 2030.
However, we have not set our targets solely relying on market expansion.We aim to increase profit by pursuing the “Best Products, Best Service,” required in the future by our customers. “Best” refers to being the world number one, as the word implies. We will not be second best, nor will we make products that follow in the footsteps of rival companies.
In an environment of market expansion, we will also reap the benefit and naturally grow our net sales. But TEL is determined to achieve growth that surpasses this. In fact, TEL’s net sales have been growing at above the rate of market expansion. We are intent on growth, rather than expansion, working in pursuit of high added-value products and services in our aim to be world number one.
The background to achieving our management goals is TEL’s predominance in a number of aspects in the industry.
Firstly, there is our comprehensive strength. Semiconductor production equipment is an assembly of advanced technology fields. In response to the big data era, technological innovation in the production process is essential to manufacture highly reliable semiconductors with high added-value. Without the accumulation of abundant management resources and technology, we could not compete.
In the semiconductor production equipment business, TEL possesses a world-leading line-up of important processing equipment for lithography, etching, film deposition, cleaning as well as wafer probers, enabling it to lead the market for all products. TEL’s equipment also boasts a top-level share in the flat panel display (FPD) production equipment business. In the field solution (FS) business, the cumulative total shipment of TEL products has exceeded 69,000 units, the highest level in the industry. In the future, by promoting more intelligent, advanced equipment, this business is expected to grow.
In addition, the professional attitude of each employee in their approach to work, and our culture of valuing teamwork are also important management resources that contribute to our comprehensive strength.
Furthermore, the fact that there are semiconductor material manufacturers and suppliers in Japan, and that other semiconductor manufacturers are shifting their manufacturing sites to other Asian countries gives TEL a locational advantage.
Aiming for world number one through Best Products, Best Service.
Next, I will look at specific strategies we are adopting to achieve our management plan.
Our key action is to create products ahead of rivals, with cutting-edge technology not being attempted by others, and world-leading functionality.
In order to achieve this, TEL is expanding its business in fields that take advantage of its expertise, with its accumulated technology, in areas where it can leverage its management know-how. We jointly develop a roadmap with our customers who possess high technological capabilities to conduct development that is certain to lead to business. We anticipate potential issues at the development stage in order to reduce costs that might arise later and the burden on employees.
If, in this way, we can produce Best Products, Best Service that are totally unique, TEL will be able to lead the market price. Consequently, sales staff will not be exhausted by price negotiations. We will also be able to secure significant profit. I hope that, as a result, all employees will have a vision and be able to tackle challenging work.
In order to create such a virtuous cycle, my responsibility in management as CEO is to continuously produce high profits and to create structures that enable us as a company to channel resources towards growth. As miniaturization of semiconductors progresses, the degree of miniaturization with state-of-the-art semiconductors is 5 nanometers or less, the equivalent of 1/20,000th the thickness of a human hair. Furthermore, research and commercialization of the technology to produce what is considered the future of semiconductors, a single package combining and connecting chips possessing different functions, such as communication and memory.
For this reason, we cannot be frugal with R&D investment. We have already made plans for R&D investment worth hundreds of billions of yen.
Customers around the world are anticipating technological innovation and Best Products, Best Service from TEL. We are the ones who will realize a dream-inspiring society in the big data era.