INVESTORS GUIDE 2019 Osaka Office to Our Shareholders and Investors Fukuoka Sales Office Shinjuku Office Shinjuku Support Center Tachikawa Sales Office

TOKYO ELECTRON DEVICE LIMITED Securities code: 2760

Business Locations (As of July 1, 2019)

Business Location Domestic Subsidiary

Omiya Sales Office

Matsumoto Sales Office Sendai Sales Office Tsukuba Sales Office Iwaki Sales Office Nagoya Sales Office Mito Sales Office Kyoto Sales Office INVESTORS GUIDE 2019 Osaka Office To Our Shareholders and Investors Fukuoka Sales Office Shinjuku Office Shinjuku Support Center Tachikawa Sales Office

Engineering Center Headquarters (Yokohama)

FAST CORPORATION (Yamato-city, Kanagawa prefecture) TOKYO ELECTRON DEVICE Mishima Sales Office NAGASAKI LTD. Hamamatsu Sales Office (Isahaya-city, Nagasaki prefecture)

Business/Marketing location Overseas Design and development location

Dalian

Yokohama Ottawa

Seoul Silicon Valley Shanghai Taipei Shenzhen Bangkok Wuxi Hong Kong Singapore Philippines

Note on forward-looking statements This Investors Guide was prepared on July 1, 2019. Forward looking statements, including business strategies and business forecasts, were made by the Company’s management, based on information available at that time, and may be revised due to changes in the business environment. Therefore, please be advised that the Company cannot guarantee the accuracy or the reliability of the statements. For the latest information, please refer to our information releases or our website. Note also that product and service names remain the trademarks of their respective owners.

Corporate Communications Dept. https://www.teldevice.co.jp World Headquarters Yokohama East Square, 1-4 Kinko-cho, Kanagawa-ku,Yokohama City, Kanagawa 221-0056, JAPAN Tel.+81-45-443-4005 E-Mail: [email protected] Our History—From Founding to Today Tokyo Electron Device—A Technology Trading Pioneering a New Era with Semiconductors

Company with Manufacturing160000 Capabilities, and IT Infrastructure

Electronic Components Business Computer Networks Business

FY2019 Net sales 120000 Electronic Components Business

The Electronic Components Business ¥141,000 comprises a trading company business that million provides semiconductor products, circuit boards, software and other products, as well as the Private Brand Business, which FY2014 develops private brand products and carries Net sales out contracted design and mass production FY2009 services on behalf of customers. We leverage Net sales , our proposal, technical and support ¥101801 80000 million capabilities to resolve the issues our ¥94,701 customers face. million

Computer Networks Business

The Computer Networks Business handles storage, network and security products and uses them to propose cloud age business solutions. Finding optimal combinations of 40000 equipment based on technology verification, we provide comprehensive, optimized solutions for customers, from installation to maintenance support.

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

1965 1998 2003 2004 2005 2006 2010 2014 2017 2018 2019 Tokyo Electron Ltd. begins selling Tokyo Electron’s entire Listed on the Second Private brand products and Overseas business opera- Sales of Computer Networks solutions Listed on the First Section of Sale of shares electronic components made by Electronic Components Section of the Tokyo design outsourcing services tions begin with subsidiary start by taking over Tokyo Electron’s the Tokyo Stock Exchange by Tokyo Electron FAST CORPORATION such companies as Fairchild Business transferred to TED Stock Exchange branded as “inrevium” established in Hong Kong Computer Network Business becomes consolidated subsidiary

Tokyo Electron Limited TED TED TED AVAL NAGASAKI CORPORATION (now TOKYO ELECTRON DEVICE Electronic Components Business Electronic Components Business Electronic Components Business Electronic Components Business NAGASAKI LTD.) becomes

Computer Network Business Private Brand Business Private Brand Business consolidated subsidiary

Semiconductor Production Equipment Computer Networks Business Business

FPD Production Equipment Business

1 TOKYO ELECTRON DEVICE INVESTORS GUIDE 2019 TOKYO ELECTRON DEVICE INVESTORS GUIDE 2019 2 Medium-Term Management Plan VISION 2020 To Our Shareholders and Investors

VISION Net sales ¥200 billion Medium-Term Management Plan Ordinary income ratio 3.5 % or higher Advancing initiatives ROE to increase our enterprise 15 % value and realize Timeframe for achievement 2020 By March 31, 2021 future growth

Growth The end of the VISION 2020 medium-term strategy management plan in fiscal 2021, the year for fiscal 2016 ending March 31, 2021, is drawing closer. to fiscal 2021 Private Brand Business During fiscal 2020, we are accelerating efforts to achieve the plan’s targets while also advancing initiatives that look ahead, New Business TED REAL IoT beyond the plan’s conclusion. Establish high value-added businesses utilizing In line with our management priorities of existing business foundation increasing our technological capabilities, focusing on high value-added business and stable earnings growth, we are working together with shareholders and all Electronic stakeholders to create new value and Core Business Components Business Respond quickly to further enhance enterprise value. environmental changes, Computer Networks Thank you for your continued support. realize stable earnings growth Business Atsushi Tokushige President & Representative Director

Based on the fundamental principles of Growth, Stability, and Value Creation, Career Summary VISION 2020 is Tokyo Electron Device’s growth strategy, with the targets for fiscal 2021 of April 1986 Joined Tokyo Electron Limited ¥200 billion in net sales, an ordinary income ratio of 3.5% or higher, and ROE of 15%. April 2005 Vice President of TED June 2007 Corporate Director of the Company

Managing Director, Tokyo Electron Device’s business environment has been ROE (%) 15.0% June 2011 TOKYO ELECTRON DEVICE HONG KONG LTD. Net sales (Billions of yen ) (now TOKYO ELECTRON DEVICE ASIA PACIFIC LTD.) changing at a dizzying pace, driven by such factors as the Ordinary income ratio (%) 9.5 8.4 September CEO, inrevium AMERICA, INC. consolidation of manufacturers and advance of cloud 6.8 2013 (now TOKYO ELECTRON DEVICE AMERICA, INC.) 4.2 4.3 ¥200 billion technologies. In the Electronic Components Business and 3.2 President & Representative Director January 2015 Computer Networks Business, our core businesses, we 159.8 of the Company (present) 141.0 150.0 are aiming to respond quickly to environmental changes to 131.8 111.6 117.8 3.5% realize stable, ongoing earnings growth. In the Private 2.2 2.3 Brand Business, part of the Electronic Components 1.7 1.4 Business, we are building on our core businesses, lever- 1.2 1.0 aging our wealth of proprietary technologies to establish new, high value-added business models. FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 (forecast) (forecast)

3 TOKYO ELECTRON DEVICE INVESTORS GUIDE 2019 TOKYO ELECTRON DEVICE INVESTORS GUIDE 2019 4 President’s Message

Vision Initiatives for A Unique Business Model Comprehensive Future Growth System Development Electronic The origins of Tokyo Electron Device Limited (TED) go back to the In order to provide customers with optimal products, in 1985 we Components Contracting launch of electronic component sales at Tokyo Electron established a Design & Development Center, launching semicon- TED is working to evolve its business portfolio Business Laboratories, Inc. (now Tokyo Electron Limited, or TEL) in 1965. ductor and electronic device development. Over time, our product and shift from its current form, a technology By securing sales agency agreements with Fairchild lineup evolved in step with customer needs, shifting closer to Semiconductor in the United States and other leading manufac- finished products, such as the design of substrates and system trading company with design and manufacturing TED Nagasaki boasts the capability to accept comprehensive turers, the business became Japan’s first distributor to maintain products on which semiconductor and electronic devices are functions, to become a manufacturer with contracts spanning from the development to production of system-level products. Making maximum use of this, in addition to and actively manage inventory, growing in step with the domestic mounted. Today, we also provide design and contracted produc- technology trading company functions. semiconductor industry. tion services, as well. our existing business selling individual semiconductor compo- In 1990, TED began electronic component sales, and in 1998, In 2006, TED took over TEL’s Computer Network Business, To this end, TED is advancing four initiatives nents, we will promote a business based on comprehensive con- all of TEL’s Electronic Component Business was transferred to beginning computer system-related product sales and mainte- aimed at achieving the targets of tracting, from development to production, of such products as modules, circuit boards and embedded systems. By leveraging TED. Amid ongoing economic globalization, TED built its brand by nance services. VISION 2020 and future growth. supplying cutting-edge semiconductors and electronic devices Having created and honed the business model as a technology the TED Group’s unique technologies to secure contracts for the made by overseas manufacturers along with sophisticated techni- trading company with manufacturer functions, TED will continue development and production of systems that other companies cal support from specialized engineers in order to help enhance its evolution going forward. are less equipped to handle, we will further improve profitability. the competitiveness of its industry-leading customers in Japan. TED’s greatest feature was its in-house development functions. See “Our History—From Founding to Today,” p.1–2 Wide-Ranging Modes of Provision, See “At a Glance—The Businesses Powering TED’s Growth,” p.9–10 They have enabled its current business model—a technology from Individual Product Sales to Systems trading company with design and manufacturing services. Made to Customer Specifications Final product System-level product Strategy & Performance supply to meet specific customer needs Embedded systems* Profitability Substrates Aims and Progress of VISION 2020 (circuit boards)

Under the VISION 2020 medium-term management plan, we aim While advancing such measures, in fiscal 2019, TED recorded Individual Modules product sales to achieve sustainable growth by diversifying our businesses. a year on year decrease in net sales, but an increase in profit. Net Semiconductors Specifically, we seek to realize stable earnings growth in our core sales came to ¥141,000 million (down 11.8% year on year), * Embedded systems: businesses (the Electronic Components Business and Computer ordinary income to ¥3,077 million (up 16.7%), and net income Computer systems that are Networks Business) while establishing high value-added business attributable to owners of parent to ¥2,341 million (up 46.5%). embedded in final products models in new businesses (the Private Brand Business). At the The decrease in net sales reflected the considerable impact of the Scope of contracted functions same time, the plan aims to ensure satisfaction among sharehold- cancellation of a distributor agreement with a key partner. ers, employees and other stakeholders through such means as However, the year-on-year increase in net profit was thanks to the dividends and compensation. contributions of TED Nagasaki and Fast as well as favorable Gartner Semiconductor Market Forecast In our core businesses, we are working toward qualitative performance in the Computer Networks Business. This increase Average annual growth rate (CAGR 2017–2023)

improvement of profit by expanding the customer base, improving in profit was also a product of our efforts to diversify our business Compute 2.2% the profit ratio, and streamlining operations. To this end, the fields and realize qualitative improvement in profit. Dividends for Wireless 3.0% Electronic Components Business is focusing on the industrial the year comprised an interim dividend of ¥40 per share and a Industrial Electronics 10.3% equipment and automotive equipment markets, in which our year-end dividend of ¥53 per share, for a total of ¥93 per share, Automotive Electronics 9.9% Japanese customers operate globally, while the Computer up ¥27 from the previous fiscal year. Consumer Electronics Networks Business is targeting the data center and other cloud- For the year ending March 31, 2020, reflecting expansion in 3.9% related markets and the security market. customer trade rights in the Electronic Components Business and Storage 11.5% The Private Brand business offers potential for high profitability. expected growth in both the Computer Networks and Private Wired 2.9% Military/Civil Aerospace In this business, we are advancing the provision of our labor- Brand businesses, we forecast net sales of ¥150,000 million (up Electronics 3.7% saving and energy-saving products to expand into the production 6.4% year on year), ordinary income of ¥3,500 million (up 13.7%) Total 5.0% operations of manufacturing industries. To this end, we have and net income attributable to owners of parent of ¥2,200 million * Graph prepared by Tokyo Electron Device based on research by Gartner established a firm business infrastructure, making AVAL (down 6.0%). Based on our policy on shareholder returns, we * Under Gartner’s classification, Military/Civil Aerospace Electronics is included in NAGASAKI CORPORATION (now TOKYO ELECTRON DEVICE plan to pay an interim dividend of ¥40 per share and a year-end Industrial Electronics NAGASAKI LTD.; “TED Nagasaki”), which manufactures electronic dividend of ¥50 per share, for an annual total of ¥90 per share. Source: Gartner “Semiconductor Forecast Database, Worldwide, 2Q19 Update”, devices for substrate production and semiconductor production Nolan Reilly, Ben Lee et al., 28 June 2019 (G00434140) equipment, a consolidated subsidiary in 2017, followed by FAST See “Medium-Term Management Plan VISION 2020,” p.3 CORPORATION (“Fast”), which possesses image processing and See “At a Glance—The Businesses Powering TED’s Growth,” p.9–10 machine vision technologies, in 2018.

Strong growth expected in the industrial, automotive and storage fields

5 TOKYO ELECTRON DEVICE INVESTORS GUIDE 2019 TOKYO ELECTRON DEVICE INVESTORS GUIDE 2019 6 President’s Message

Reinforcing Private Brand Introducing New Products Accelerating Product Development and Establishing IoT Businesses in the Private Brand Leveraging Our Computer a Technical Service TED Business Networks REAL IoT Industrial Sector Technological Assets Business Framework

To support manufacturing industries, TED is promoting the provi- Spurred by the announcement of the 2020 Tokyo Olympic and TED REAL IoT is a joint project between the Electronic sion of products and services to their production operations. Paralympic games, initiatives in the security field have been ramp- Components, Private Brand, and Computer Networks businesses. Expanding our product lineup to better meet the needs of a wide ing up. For several years, TED has stationed a marketing repre- The project aims to accelerate IoT businesses in the industrial range of production floors, we continue to invest in R&D related sentative in the United States to form distributor agreements with sector by expanding the IoT business customer base through to the predictive maintenance AI generator machine we released manufacturers that offer new security technologies. Furthermore, sales expansion of Microsoft Azure cloud services. In the indus- in 2017, and Fast machine vision products. We will promote to help our customers use these products with confidence, in trial sector, we currently count over 300 companies as clients. automation and labor saving in production lines by providing October 2018, we launched a security operation center (SOC) Building an IoT system requires a wide array of technological products and services for predictive facility maintenance, auto- within the Company to provide operational services. We continue elements so we are simultaneously working with our business mated inspection, three-dimensional measurement, visual to advance initiatives to expand the scale of our business in the partners in their IoT businesses to create ecosystems through inspection and other production functions. By doing so, we are security market, where growth is expected going forward. which they can provide multiple technologies and services. We contributing to increased productivity in the manufacturing sector. currently have more than 100 such ecosystem partners. In addition, we are reinforcing efforts—including human As next-generation 5G telecommunications standards are resources—related to hardware for AI and the creation of servic- Security Product Lineup adopted and the speed of communications between devices es for the AI era. increases, industrial-sector IoT businesses are expected to AI vulnerability Network Cloud Endpoint emerge in earnest. By expanding our customer base and analysis security security security steadily advancing collaboration with our ecosystem partners, Labor-Saving Product Development we will continue working to position TED to reap the benefits of the full-scale start of IoT businesses. Virtual Security Exit safeguards Predictive environment operation against targeted IoT security maintenance security automation attacks Machine vision* Customer Base Expansion AI generator machine Centered on Microsoft Azure (Cloud Services)

Technical Support Service 305 “Connect Beyond.” This is Tokyo Electron Device’s corporate for Security Products Microsoft Azure slogan. As businesses around the world dramatically change, October 2018 Customers TED SOC opened Microsoft we connect diverse strengths, such as those of our divisions, Azure CX-M * Machine vision: An approach that (24-hour, 365-day service) suppliers and business partners, as well as various technolo- 112 uses automated recognition by gies. We go beyond the organizational, technological and Monitoring and analysis ecosystem robots and software to conduct partners* visual tasks conventionally per- national frameworks of the Company to create new value. By formed by humans Incident response doing so, we meet the trust and expectations of our stakehold- Contributing to productivity Operational support ers—this is the meaning behind our corporate message. * Ecosystem partner: Companies to which TED provides Microsoft Azure to jointly Aiming for innovative value creation that goes beyond exist- Risk assessment provide their IoT-related technologies and services gains ing paradigms, in fiscal 2020, Tokyo Electron Device has Japanese IoT Market Forecast begun formulating a new medium-term management plan for Japanese Information Security Market sustainable growth. by Use and Industry • The security product market is expected to see average annual Sales to Production Lines growth (CAGR) of 2.8% from 2018 to 2023 • User spending in the Japanese IoT market in 2018 is estimated at • The market is expected to grow from ¥307.0 billion in 2018 ¥6,316.7 billion. in Manufacturing Industries to ¥351.8 billion in 2023 • The market is expected to see average annual growth (CAGR) of 13.3% from 2018 to 2023 Policy on Shareholder Returns (Millions of yen) • The market is forecast to reach ¥11,791.5 billion in 2023 Since its listing, Tokyo Electron Device has positioned the return of prof- 400,000 its to shareholders as one of its foremost management priorities and 350,000 (Trillions of yen) (%) paid dividends from a perspective of providing appropriate shareholder 14 25 300,000 returns. Using the consolidated dividend payout ratio as a base indicator 12 Predictive facility 20 and giving due consideration to future capital expenditures, capital 250,000 11.8 maintenance 10 10.7 required for R&D and working capital, the Company aims for a consoli- 9.6 15 200,000 8 dated dividend payout ratio of 40%. We make decisions regarding Automated inspection 8.4 acquisitions of treasury shares as part of shareholder returns, along with 6 7.3 10 150,000 6.3 dividends, based on the comprehensive consideration of cash flows, Three-dimensional 4 5 share liquidity, future capital expenditure requirements and other factors. measurement 100,000 2 50,000 0 0 The Corporate Governance Code Visual inspection 2018 2019 2020 2021 2022 2023 0 TED’s Board of Directors confirms the implementation of the Corporate Source: Adapted from “Kokunai IoT Shijō Yūsukēsu (Yōto) Betsu/Sangyō Bunya 2016 2017 2018 2019 2020 2021 2022 2023 Governance Code and, when improvements are deemed necessary, Betsu Yosoku wo Happyō” (“Publication of Japan Internet of Things Forecast by takes steps to create rules or systems in line with the Code. While there Security appliance market Vertical Industry and Use Case”) IDC Japan press release issued only in Japanese SaaS security software market on March 11, 2019 remain some items that TED explains (under the Code’s “comply or On-premises security software market explain” framework), going forward, TED will continue working to Source: Adapted from “Kokunai Jōhō Sekyuriti Shijō Yosoku wo Happyō” (“Publication enhance corporate governance in line with the Code and increase its of Japan Information Security Forecast”), IDC Japan press release issued only in enterprise value. Japanese on June 5, 2019

7 TOKYO ELECTRON DEVICE INVESTORS GUIDE 2019 TOKYO ELECTRON DEVICE INVESTORS GUIDE 2019 8 At a Glance—The Businesses Powering TED’s Growth At a Glance —The Businesses Powering TED’s Growth

Business Overview Business Model

Electronic The Electronic Components Sales Component Ratio Sales Component Ratio Category Main suppliers Function Category Main applications Main customers Business handles a lineup of semi- by Product Category by Application Components conductor products from more General Texas Instruments ICs commonly used for a variety of Medical equipment purpose ICs NXP Semiconductors applications Broadcasting equipment Panasonic Business than 40 companies, mainly leading Surveillance cameras Hitachi Industrial overseas manufacturers. Based on FA equipment / Measuring equipment FANUC Texas Instruments equipment strengths such as the ability to pro- General purpose ICs 26% 24% The brains of electronic equipment Industrial robots / Machine tools Mitsubishi Micro processors NXP Semiconductors pose solutions to customer prob- Arithmetic and control Semiconductor production equipment Electric Intel / Cypress Semiconductor Inverters Share of lems and offer finely tuned sales Industrial equipment 38% net sales 43% support, along with sophisticated Texas Instruments / Pixelworks Excelitas technical support provided by Specialized Specialized ICs made for specific Multifunctional printers / Projectors TOSHIBA NXP Semiconductors Computers and Office equipment / Storage Panasonic field application engineers, our ICs applications 84.9% Micro processors 16% 19% Broadcom peripherals PCs and peripheral devices Fuji Xerox products are used in a wide range inrevium (private brand) POS terminals FUJITSU of final products, predominantly Optical Electronic components used to convert those of major appliance and elec- Broadcom components electricity into light ALPS ELECTRIC tronics manufacturers. We particu- Computers and Automotive Car navigation systems 16% 25% Panasonic peripherals equipment Car audio equipment larly focus efforts on the industrial Specialized ICs 23% Nissan 26% Lattice Semiconductor Auto body-related products equipment and automotive equip- Custom ICs made according to customer Hitachi Custom ICs Socionext specifications ment sectors. inrevium (private brand) 10% Smartphones Sharp Optical components Memory ICs 12% 4% Automotive equipment 17% Memory ICs Cypress Semiconductor Communications Routers Panasonic 3% (read/write and read only) equipment Transmission equipment Hitachi Custom ICs 3% 20% Base stations FUJITSU 2% Memory ICs Software embedded in industrial equip- Communications Microsoft ment for enterprises and products 24% 14% Digital cameras / Digital video cameras Sharp Software equipment Software Intel (circuit boards) equipped with ICs, 18% Consumer TVs / DVD / AV equipment Panasonic Circuit boards 5% Circuit boards Cosel power supplies, connectors and other Consumer appliances and Home gaming consoles Yamaha inrevium (private brand) components on printed-wiring appliances and 6% 6% electronics Remote controls Mitsubishi electronics assemblies Major home appliance Electric FY2018 FY2019 FY2018 FY2019

Private Brand The Private Brand Business is, Contracted Design and Production Services Flow Featured Private Brand Products Business for the sake of segment grouping, Small parts have conventionally been In manufacturing industries, production included in the Electronic Design Development Mass production counted using electronic scales to mea- line stoppage due to equipment failure Components Business. It com- TV-Counter sure their weight or by hand. TV-Counter is a significant issue, and interest in pre- prises contracted design and pro- Predictive Counting System is an easy, accurate counting system dictive maintenance, aimed at increas- duction services, private brand that uses image processing technology Maintenance AI ing facility utilization, is on the rise. Share of for Small and net sales products and the consolidated to identify and count components. Generator Machine CX-M uses longitudinal data on such Lightweight subsidiaries TED Nagasaki and Jointly developed by applying Fast’s CX-M factors as the vibrations and tempera- Fast. We aim to reinforce TED Components image processing technologies, ture of equipment in use to automatical- 7.2% Nagasaki’s manufacturing frame- Our contracted design and manufacturing services are integrated from it was released in May 2019 and is ly generate abnormality detection work for contracted design and specification development to the design, prototyping, evaluation, pro- being marketed to component factories, programs (AI). When integrated with a production service projects and to duction trials and mass production of customer products. We are logistics warehouses and other busi- company’s systems, these programs advance joint development of new shifting from the sale of individual semiconductor components, the nesses. With a focus on labor- and can be used to manage facilities at pro- products with Fast while expand- conventional mainstay of the Electronic Components Business, to pro- energy-saving, we will continue to duction lines. By leveraging IoT technol- mote contracting services for the comprehensive development and develop private brand products that ogies to promote automation and labor * The Private Brand Business is including orders received for Fast’s manufacturing of such products as modules, substrates, and embed- help automate inspection and other saving in manufacturing, this product ed in the Electronic Components image inspection systems. Business. ded systems. By doing so, we aim to increase profitability. manufacturing processes. contributes to productivity gains.

Computer Networks The Computer Networks Business Sales Component Ratio Sales Component Ratio Category Main suppliers Function Category Main customers handles products from more than by Product Category by Application Business 20 companies, mostly North Internet connection load balancing Arista Networks Sales to system American IT manufacturers with Network products Ethernet switches mainly for IT service companies in Japan F5 Networks integrators unique technologies. With a lead- Sales to system 35% large-scale data centers ing lineup of innovative and highly integrators 40% Share of 51% specialized network, storage, Network products 57% net sales Data centers, telecommunications server devices and cutting-edge Broadcom operators and other general High-speed connection Sales to security products, we propose Storage products DELL EMC companies, government agencies, Sales to and storage of bulk data end-users % solutions leveraging our technical 32% Pure Storage research facilities and educational 15.1 end-users 31% capabilities and provide mainte- institutions nance support as well as opera- 41% Data centers, telecommunications tional and surveillance support Storage products 36% operators and other general services for security products 33% Software, etc. Nutanix Hyperconverged infrastructure Services companies, government agencies, Services 29% through our security operation research facilities and educational institutions center (SOC). Software, etc. 7% 8% FY2018 FY2019 FY2018 FY2019

* Share of net sales figures are for the year ended March 2019

9 TOKYO ELECTRON DEVICE INVESTORS GUIDE 2019 TOKYO ELECTRON DEVICE INVESTORS GUIDE 2019 10 Consolidated Performance Highlights

Financial Highlights (Millions of yen) Efficiency

Fiscal years ended March 31 Total assets (Millions of yen) Inventories (Millions of yen) Receivables turnover (Times) Income 2015 2016 2017 2018 2019 Asset turnover ratio (Times) Inventory turnover ratio (Times) Payables turnover (Times) Net sales ¥111,664 ¥117,831 ¥131,855 ¥159,841 ¥141,000 86,478 26,203 25,018 25,007 Gross profit 16,559 14,979 15,146 17,680 19,705 78,352 73,708 22,554 69,449 21,537 64,284 13.3 Gross profit ratio 14.8% 12.7% 11.5% 11.1% 14.0% 6.6 13.1 6.0 11.8 Selling, general and administrative expenses 13,965 13,488 13,481 14,924 16,179 10.8 11.2 2.0 5.1 5.5 1.8 1.8 1.9 4.8 Operating income 2,594 1,490 1,665 2,755 3,525 1.7 Operating income ratio 2.3% 1.3% 1.3% 1.7% 2.5% 4.3 4.0 3.9 3.9 3.5 Ordinary income 1,358 1,628 1,377 2,637 3,077 Ordinary income ratio 1.2% 1.4% 1.0% 1.7% 2.2% FY2015 FY2016 FY2017 FY2018 FY2019 FY2015 FY2016 FY2017 FY2018 FY2019 FY2015 FY2016 FY2017 FY2018 FY2019 * Asset turnover ratio = Net sales / Average total * Inventory turnover ratio = Net sales / Average inventories * Receivables turnover = Net sales / Average notes and Net income before income taxes 1,354 1,613 1,435 2,485 3,257 assets at the beginning and end of the term at the beginning and end of the term accounts receivable at the beginning and end of the term * Payables turnover = Cost of sales / Average accounts Net income attributable to owners of parent 717 925 972 1,598 2,341 payable at the beginning and end of the term

Financial Position 2015 2016 2017 2018 2019 Current assets ¥ 63,615 ¥ 59,340 ¥ 68,768 ¥ 80,427 ¥ 70,420 Soundness Property, plant and equipment 902 870 816 1,241 1,740 Current assets (Millions of yen) / Current ratio (%) Total liabilities (Millions of yen) / Debt-equity ratio (%) Net assets (Millions of yen) / Capital ratio (%) Total assets 69,449 64,284 73,708 86,478 78,352 62,077 Current liabilities 33,799 28,189 33,193 44,117 32,000 26,410 80,427 50,780 51,942 24,401 22,777 22,174 22,928 Total liabilities 46,671 42,110 50,780 62,077 51,942 68,768 70,420 46,671 63,615 42,110 59,340 259.8 Net assets 22,777 22,174 22,928 24,401 26,410 32.8 34.5 211.6 222.2 31.1 32.9% 187.7 203.5% 27.6 210.5 202.8 220.1% Cash Flows 2015 2016 2017 2018 2019 188.2 182.3 Cash flows from operating activities ¥ (5,011) ¥ 3,543 ¥ (4,685) ¥ (7,993) ¥ 12,335 Cash flows from investing activities (262) (347) (262) (896) (1,708) Cash flows from financing activities 6,200 (2,841) 4,739 9,869 (10,504) FY2015 FY2016 FY2017 FY2018 FY2019 FY2015 FY2016 FY2017 FY2018 FY2019 FY2015 FY2016 FY2017 FY2018 FY2019 * Current ratio = Current assets / Current liabilities * Debt-equity ratio = Liabilities / Shareholders’ equity * Capital ratio = Net assets / Total assets Cash and cash equivalents at end of period 2,302 2,637 2,433 3,406 3,534

Profitability Per Share Data and Others

Net sales (Millions of yen) / Gross profit ratio (%) Operating income (Millions of yen) Ordinary income (Millions of yen) Earnings per share (EPS)* (Yen) Book-value per share (Yen) Price earnings ratio (Times) Operating income ratio (%) Ordinary income ratio (%) Price book-value ratio (Times) 3,525 3,077 230.65 2,637 2,536 159,841 2,755 2,284 2,276 2,355 22.3 141,000 2,594 2,212 131,855 158.22 111,664 117,831 2.2% 16.3 16.6 2.3 2.5% 1,628 1,665 1,490 1,358 1,377 1.7 12.1 92.55 96.71 14.8 1.7 1.4 12.7 14.0% 71.99 7.7 11.5 11.1 1.3 1.3 1.2 1.0 0.7 0.7 0.7 0.8 0.7

FY2015 FY2016 FY2017 FY2018 FY2019 FY2015 FY2016 FY2017 FY2018 FY2019 FY2015 FY2016 FY2017 FY2018 FY2019 FY2015 FY2016 FY2017 FY2018 FY2019 FY2015 FY2016 FY2017 FY2018 FY2019 FY2015 FY2016 FY2017 FY2018 FY2019

* Gross margin = Gross profit / Net sales * Operating margin = Operating income / Net sales * Ordinary income ratio = Ordinary income / Net sales * Earnings per share (EPS) = Net income attributable to * Book-value per share = Net assets at the end of the term / * Price earnings ratio (PER) = Share price at the end owners of parent / Average number of shares issued Number of shares issued at the end of the term of the term / Net income per share in the term * Price book-value ratio (PBR) = Share price at the end of the term / Net assets per share

Net income attributable to owners of parent (Millions of yen) Return on equity (%) Return on assets (%) Dividends per share (Yen) Payout ratio (%) / Dividend on equity ratio (%) Net income attributable to owners of parent per Net income attributable to owners of parent margin (%) employee (Thousands of yen) Number of employees (Persons) 2,341 93 1,210 1,066 83.3 9.4% 2.8% 979 942 942 1,598 66 1,935 60 60 64.8 60 62.0 6.8 2.0 1,500 1.7% 925 972 41.7 982 1,032 717 1.4 1.4 40.3% 1.0 4.1 4.3 732 1.1 0.8 0.7 3.1 0.6 2.6 2.7 2.8 2.9 3.8%

* Net income attributable to owners of parent margin = * Return on equity (ROE) = Net income attributable to * Return on assets (ROA) = Net income attributable * Dividends per share = Paid interim dividend and * Payout ratio = Paid interim dividend and year-end * Net income attributable to owners of parent per employee = Net income attributable to owners of parent / Net sales owners of parent / Average net worth at the beginning and to owners of parent / Average total assets at the year-end dividend / Number of shares issued dividend / Net income Net income attributable to owners of parent / Number of end of the term beginning and end of the term * Dividend on equity ratio = Total dividend / Average of employees at the end of the term net assets at the beginning

Note: Per-share figures in the above graphs reflect amounts after the stock split (100 shares for one) on October 1, 2014.

11 TOKYO ELECTRON DEVICE INVESTORS GUIDE 2019 TOKYO ELECTRON DEVICE INVESTORS GUIDE 2019 12 Corporate Directors, Audit & Supervisory Board Members and Vice Presidents Stock Information (As of June 19, 2019) (As of March 31, 2019)

Shares of the Company Major Shareholders

Securities code 2760 Number of Shareholding Shareholder shares held ratio (%) Number of authorized shares 25,600,000 Tokyo Electron Limited 3,532,700 33.82 Number of issued shares 10,445,500 Tokyo Electron Device Employee Shareholder Association 426,318 4.08 Number of shareholders 7,339 The Master Trust Bank of Japan, Ltd. (Trust Account) 345,400 3.31 Trading unit (Shares) 100 Japan Trustee Services Bank, Ltd. (Trust Account) 243,400 2.33 DFA International Small Cap Value Portfolio 203,700 1.95

Distribution of Shares Stock Price and Trading Volume

(Yen) Financial institutions, Foreign companies, etc. Stock Price securities firms, etc. 3,000 9.5% 15.5% Individuals, etc. 40.2%

2,000 Shareholdings

Other domestic companies 34.8% 1,000

Other domestic companies 0.7% (Shares) Trading Volume Foreign companies, 1,600,000 etc. 1.1% Financial institutions, securities firms, etc.0.7%

Individuals, etc. 97.5%

800,000 Shareholders

0 * “Individuals, etc.” includes 174 treasury shares. ’17/04 05 06 07 08 09 10 11 12 ’18/01 02 03 04 05 06 07 08 09 10 11 12 ’19/01 02 03

Corporate Directors Audit & Supervisory Board Members Vice Presidents Corporate Profile (As of July 1, 2019) Individual Investor IR Activities 1 Chairman of the Board Noriyuki Kuga Audit & Supervisory Atsushi Tokushige Company Name: TOKYO ELECTRON DEVICE LIMITED 10 Nobuo Kawai Board Member We participate in IR fairs for individual President & Masami Hasegawa Established: March 3, 1986 2 Atsushi Tokushige Audit & Supervisory Katsuyuki Matsui investors and conduct Company briefings. Representative Director 11 Board Member (outside) Yukio Saeki Capital: ¥2,495 million We also try to ensure the timely provi- 3 Representative Director Masami Hasegawa sion of information, including business Audit & Supervisory Hisami Fukumori Akihiro Kamikogawa Employees: 1,210 (consolidated, as of March 31, 2019) 4 Corporate Director Yukio Saeki 12 overviews and performance information, Board Member (part-time, outside) Kazuki Shinoda Yokohama East Square, 1-4 Kinko-cho, Kanagawa-ku, World Headquarters: on the individual investors section of our 5 Corporate Director Akihiro Kamikogawa Audit & Supervisory Yoshinori Nishimura Yokohama City, Kanagawa 221-0056, Japan 13 Toshikazu Mishina corporate website. 6 Corporate Director Kazuki Shinoda Board Member (part-time, outside) FAST CORPORATION Yasuo Hatsumi (https://www.teldevice.co.jp/eng/) Tetsuo Tsuneishi TOKYO ELECTRON DEVICE NAGASAKI LTD. 7 Corporate Director (part-time) Yoshinao Jozen TOKYO ELECTRON DEVICE ASIA PACIFIC LIMITED 9 10 8 7 13 Group Company: TOKYO ELECTRON DEVICE (SHANGHAI) LIMITED Kunio Ishikawa 11 12 Tatsushi Yasumura 8 Corporate Director TOKYO ELECTRON DEVICE SINGAPORE PTE. LTD. (part-time, outside) Kunio Iwata TOKYO ELECTRON DEVICE (THAILAND) LTD. Koichi Kawana TOKYO ELECTRON DEVICE AMERICA, INC. 9 Corporate Director Kenji Dohi (part-time, outside) Tadashi Koyama Fidus Systems Inc. 6 4 2 1 3 5 Affiliated Company: Newtouch Electronics (Shanghai) Co.,Ltd. Newtouch Electronics (Wuxi) Co.,Ltd.

13 TOKYO ELECTRON DEVICE INVESTORS GUIDE 2019 TOKYO ELECTRON DEVICE INVESTORS GUIDE 2019 14