Performance by Segment

Performance by Segment

TED operates two business segments, comprising the Electronic Components Business and the Computer Networks Business. The Private Brand Business belongs to the Electronic Components Business.

Electronic Components Business

The Electronic Components Business handles a lineup of semiconductor products from more than 50 companies, mainly leading overseas manufacturers. Based on strengths such as technical support provided by product-specific engineers, our products are used in a wide range of final products, mainly from major appliance and electronics manufacturers. We focus efforts on the industrial equipment and automotive equipment sectors. Due to the termination of distributor agreements with one of our major business partners, Analog Devices, Inc., nearly all transactions with this company were ended in the fiscal year ended March 31, 2018. Transactions with this company by product item include general purpose IC, and by application include mainly industrial equipment, automotive equipment and communications equipment. Sales Component Ratio by Product Category (Millions of yen) 142,076 Category Main products Function Main suppliers

Texas Instruments General Analog ICs ICs commonly used for a variety of Analog Devices purpose ICs Logic ICs applications NXP Semiconductors 115,018 26% ICs for image Texas Instruments / Broadcom Specialized processing Specialized ICs made for specific Pixelworks ICs ICs for communication applications Cypress Semiconductor net work inrevium (private brand) 28% NXP Semiconductors Micro CPU Electronic equipment brain Intel / Texas Instruments processors DSP Arithmetic and control functions 23% Cypress Semiconductor

Optical LED Electronic components used to Broadcom components Photo couplers convert electricity into light 27%

16% Socionext ASIC Custom ICs made according to Custom ICs Lattice Semiconductor PLC customer specifications inrevium (private brand) 16% % SRAM / FRAM 12 Memory ICs Memory ICs MRAM Cypress Semiconductor 3% (read / write and read only) Flash Memories 3% 8% Software embedded in industrial Software Microsoft Software / equipment for enterprises and products 2% Circuit boards Intel 3% (circuit boards) equipped with ICs, power 18% Circuit Power supplies Cosel supplies, connectors and other 15% boards Conectors inrevium (private brand) components on printed-wiring assemblies FY2017 FY2018 Sales Component Ratio by Application (Millions of yen)

142,076 Category Main applications Main customers

Medical equipment / Broadcasting equipment Surveillance camera / FA equipment Industrial TOSHIBA / Panasonic 115,018 Measuring equipment / Industrial robots equipment Machine tools / Semiconductor production Hitachi / Mitsubishi Electric 38% equipment / Inverter

32% Multifunctional printer / Projector / Office Computer and TOSHIBA / Panasonic equipmen / Storage / PCs and peripheral peripherals Hitachi / Fuji Xerox devices / POS terminal

Car navigation system Automotive ALPS ELECTRIC / Panasonic 25% Car audio equipment equipment Hitachi / Mitsubishi Electric 30% Auto body-related

Feature phone / Smartphone Communications Sharp / Panasonic Router / Transmission equipment Hitachi / FUJITSU 17% equipment Base stations 17%

Digital cameras / Digital video cameras 14% Consumer TVs / DVD / AV equipment ALPS ELECTRIC / TOSHIBA 15% appliances Home gaming consoles / Remote Panasonic / Yamaha controls / Major home appliance 6% 6% FY2017 FY2018

INVESTORS GUIDE 2018 8 Performance by Segment

Computer Networks Business Private Brand Business * The Private Brand Business belongs to the Electronic Components Business.

The Computer Networks Business handles products from more than 20 companies, mostly North American IT The Private Brand Business is comprised of design and contracted production services, private brand products and manufacturers with unique technologies. consolidated subsidiary AVAL NAGASAKI CORPORATION. We will attempt to improve our earnings structure by With a lineup of innovative and highly specialized network, storage, and server devices and security strengthening the highly profitable Private Brand Business. products, we propose solutions leveraging our technical capabilities combined with optimal devices based on Furthermore, FAST CORPORATION which became a consolidated subsidiary in July 2018 is expected to technology verification. contribute to performance in the second half of the fiscal year ending March 31, 2019. TED is expanding its lineup in this business to include security services, converged systems and other Design and manufacturing services products where growth is expected. This integrated service works with customers on specification development, prototype design and evaluation, production trials and mass production. With the Design & Development Center (Yokohama), which has a long track record of design and development, as the core of these activities, we also operate affiliated companies in China Sales Component Ratio by Product Category (Shanghai and Wuxi) and Canada (Ottawa). Furthermore, we will attempt to further expand these services through (Millions of yen) tie-ups with consolidated subsidiary AVAL NAGASAKI CORPORATION, which is engaged in design and manufacturing. 17,764 Category Main products Function Main suppliers 16,836 Design and manufacturing services flow Network products

Network load balancing Internet connection load Arista Networks Specification Design Design Production trial Mass production devices balancing Extreme Networks development prototype evaluation Network switches Switches for data centers F5 Networks

57% 56% Storage products Private Brand Products We are focusing efforts on the development of private brand inrevium products targeting the labor-saving and High-speed connection Broadcom SAN switches and storage of bulk DELL EMC energy-saving sectors. Flash storages data Pure Storage Private brand product examples SDS host controller LSI Software, etc. ThisT host controller LSI is for use with SD card system equipment. Its ease of use has led to 36% Database management 37% Embedded databases SDS cards being adopted for consumer equipment as well as industrial equipment, medical Cloud environment Integrated Oracle Japan management equipmente and a wide range of other sectors. Virtualization products Nutanix Enhanced network Security products security ORIGAMI 7% 7% This video codec module product from Image Matters (Belgium) is equipped with functions FY2017 FY2018 necessary for the development of broadcasting equipment, medical equipment and other image processing equipment.

Sales Component Ratio by Application DynaFlashDy (Millions of yen) JointlyJoin developed with the Ishikawa Watanabe Laboratory at the University of Tokyo, tthishis high-speed projector is able to project 1,000 images per second. Targeted applications 17,764 Category Main suppliers incinclude measurement sensors that project onto objects moving on production lines and for 16,836 Data centers, savingsav labor in industrial sectors where inspections are conducted visually. telecommunications operators and other general companies TOF Camera 32% Sales to end-users Government agencies, research 31% Sensing camera able to measure distances based on the time required for near infrared light facilities and educational institutions to be reflected as it travels between the light source and target object. Intended applications include factory automation, robots and other industrial equipment as well as entrance/exit management and other security applications. AVAL NAGASAKI CORPORATION Device sales to IT service 35% Sales to system integrators companies (system integrators) in 36% AVAL NAGASAKI is engaged in the contracted development and production of semiconductor manufacturing Japan devices and other industrial equipment.

Maintenance and technical support for 33% 33% Services customers

FY2017 FY2018

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