Toray IR Day Medium-term Management Program “AP-G 2022”
Electronic & Information Materials Business
June 4, 2020 Hiroshi ENOMOTO Vice President, General Manager, Electronic & Information Materials Division Toray Industries, Inc. 0 Contents
I. Overview of Electronic & Information Materials Business
II. “AP-G 2022” Business Strategy 1. Review of “AP-G 2019” 2. Strategy for Continuous Business Expansion 3. Semiconductor & Electronic Components Market 4. Display Market 5. Printing Market 6. Business Development in New Growth Markets (Life Innovation Field)
III. Target for FY 2022
Copyright © 2020 Toray Industries, Inc. 1 I. Overview of Electronic & Information Materials Business
2 Diverse Product Lineup Semiconductor & Electronic Components Display PhotoneeceTM PhotoneeceTM Photosensitive Photosensitive Polyimide Coating Material Main Applications Polyimide Coating Material
TM Semicofine Light-Emitting Material Non-Photosensitive Polyimide Coating Material for OLED
Coating Materials RAYBRIDTM for Image Sensors Photosensitive Functional Paste
FALDATM TOPTICALTM Photosensitive/Non-Photosensitive Color Filters for Adhesive Film Liquid Crystal Displays
Heat-Resistant PhotoblackTM Processing Materials Temporary Bonding Material, Sacrificial Layer, Protective Film High-performance Light-shielding Ink
Flexible Circuit Board PhotoclearTM (Single-sided, Double-sided) High-performance Coating Material
TORAYCERAMTM Printing Fine Ceramics TORELIEFTM Medical Photosensitive Relief Printing Plate TORAY WATERLESS PLATETM X-ray Scintillator Panel Offset Printing Plate Requiring No Dampening Water
RAYTELATM Low Environmental Impact Plastic Optical Fiber Printing System
Copyright © 2020 Toray Industries, Inc. 3 Technology System and Product Group
Polyimide Film Copper Laminated Circuit Material Flexible Circuit Board Semiconductor Film & Electronic
y Components
g Adhesion Tech. Adhesive Film o l y o g Resist Material Buffer Coating Material n o l h o c Coating Materials n e Refractive Index T h
for Image Sensors c
n Control Tech. e g T i
s n Functional Materials for Display Display e g i D s r e
e Insulation Material for OLED D
m r e y e l l n Organic Semiconductor Design Tech. Light-emitting Material for OLED c o o i m i . t P s y
r h l r LCD Color Filter e c a High-performance Light-shielding Ink o e v e P i P p
T t s e i i e PDP Back Plate l s Photosensitive Functional Paste n D i b n F a e t s S o Printing t Photosensitive Relief Printing Plate y l o l h a
P Waterless Plate for Offset Printing m r e Low Environmental Impact h
T Printing System
X-ray Scintillator Panel Medical Fiber Tech. Plastic Optical Fiber
Copyright © 2020 Toray Industries, Inc. 4 Trends in Sales
Net Sales k iPhone Introduction c Launch of
(Billion yen) o
h OLED Smartphone S
n
90 n o a i s m s h 80 e c e s L e i s R i Mobile Phone Adoption r
70 T OLED Display I C
l a i c
60 t
n PDP Display s r a u n i B
50 F e l b
40 b u LCD B 30
20
10 Printing, etc. Semiconductor & Electronic Components 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9
[FY] 8 8 9 9 9 9 9 9 9 9 9 9 0 0 0 0 0 0 0 0 0 0 1 1 1 1 1 1 1 1 1 1 9 9 9 9 9 9 9 9 9 9 9 9 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 1 1 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2
Copyright © 2020 Toray Industries, Inc. 5 II. “AP-G 2022” Business Strategy
6 1. Review of “AP-G 2019”
7 Review of “AP-G 2019”
“AP-G 2019” Issues Expand business in growth areas of the display market Identify next high-value “post-display” markets and accelerate development of technology and commercialization of products
Achievements and Issues in the Display Market Business growth due to rapid expansion of the OLED smartphone and OLED-TV markets
Achievements and Issues in “Post-Display” Markets Semiconductor & Electronic Components Market: • Business expansion in semiconductor memory and electronic components for communication • Revenue growth in flexible circuit board business driven by increased demand for high- definition and large-screen TVs Printing Market: Business focus shifted to the growing market for industrial printing (labels, packaging) due to the contraction of the commercial printing (newspaper, magazine) market
Copyright © 2020 Toray Industries, Inc. 8 2. Strategy for Continuous Business Expansion
9 “The One” Strategy for Continuous Business Expansion
Basic Policy Use advanced core technologies to create high value-added electronic materials that meet customer needs in a timely manner Earn customers’ trust and continuously expand business by providing prompt solutions through advanced materials and processes “The One” Strategy Early acquisition of future needs De facto standardization through strong, trusting relationships by global expansion of proven materials with customers and technical know-how
Early adoption of our products through rapid development using advanced and extensive fundamental technologies, process technologies, and evaluation capabilities
High barrier-to-entry (IP network, high quality, stable supply, competitive cost, customer support)
Copyright © 2020 Toray Industries, Inc. 10 3. Semiconductor & Electronic Components Market
11 3. Semiconductor & Electronic Components Market Polyimide Products for the Semiconductor & Electronic Component Markets Develop products to enable a wide variety of high-end applications using our accumulated knowledge and experience in polyimide technology 1975 - 2000 - 2015 - High breakdown Low dielectric voltage High resolution constant Thermal shock resistance High sensitivity Low temp. cure High Tg Thick-film capability High elongation
High strength Low out-gassing High adhesion High chemical resistance Slit-coating capability Low stress Product Line up Non-Photosensitive Photosensitive Coating
Film
Timely rollout of new products to meet changing demands in high-growth markets
Copyright © 2020 Toray Industries, Inc. 12 3. Semiconductor & Electronic Components Market Strengthen the Competitiveness of Polyimide Products
Expansion of Development and Quality Management Systems Provide solutions through customer collaboration in our Open Lab Advanced quality control system – equipment equivalent to our customers’ allows very accurate evaluation of their processes 12-inch Wafer Exposure, Developing Equipment
Achieved rapid development & certification, and advanced quality control
Copyright © 2020 Toray Industries, Inc. 13 3. Semiconductor & Electronic Components Market Expansion into Growth Markets for Polyimide Products (5G, IoT Fields) Development of Products for High Frequency Devices
Transition to high frequency band with evolution of wireless Conventional 5G communication system Frequency Frequency Increasing need for low-Df/low-Dk materials band band Df: dielectric loss tangent, Dk: dielectric constant s s Conventional Frequency (GHz) o l Materials c
3 6 30 50 80 i r t c
High e Low l e i 5G 5G D 4G New Low-Df/Dk Super high frequency Polyimide Sub-6 (Millimeter wave) Frequency Polyimide Molecular Structure Design Strategy Polarization (Dk) Suppression of molecular movement vibration Low Df Polarization movement (Df) Reduction of polar groups rotation Low Dk
Achieved world's lowest Df=0.001 (@ 20 GHz)
Copyright © 2020 Toray Industries, Inc. 14 3. Semiconductor & Electronic Components Market Global Customer Development Network
Japan Toray-G Control Center (R&D, Manufacturing, Marketing, Sales) United States (Marketing, Sales) Korea (R&D, Marketing, Sales)
China United States (R&D, Marketing, Sales) Center for Semiconductor Taiwan Design and Sales (Marketing, Sales)
Asia and ASEAN Singapore (Marketing, Sales) Semiconductor Production and Assembly Base
Japan, US, Asia and ASEAN: Three regions form an effective business development system
Copyright © 2020 Toray Industries, Inc. 15 3. Semiconductor & Electronic Components Market Flexible Circuit Board and COF
Established in 1995 as a joint venture between Toray and Samsung Group
Single-sided COF IC Chip 2007 2019 Since 2007 Pattern Pitch 30μm <20μm
IC Chip Double-sided COF 2013 2019 Since 2013 Pattern Pitch 12μm <9μm
About COF A flexible circuit board connects the driver IC to the display Display (COF: Chip on Film) Driver IC COF
Provide innovative materials for TV and mobile device displays, including advanced fine-pattern technology and the world's first commercialization of double-sided COF
Copyright © 2020 Toray Industries, Inc. 16 3. Semiconductor & Electronic Components Market Strengthen the Competitiveness of Toray Group Flexible Circuit Board Production Fine patterning technology Technology Reel-to-Reel processing Automated inspection using machine learning (AI)
Supply Polyimide FCCL COF Mount Final Panel Chain Film Driver IC Product
Toray Advanced Panel DuPont-Toray Materials OEM Korea IC Manufacturer Manufacturer
Expand market share of COF business based on Toray Group’s advanced technology and supply chain
Copyright © 2020 Toray Industries, Inc. 17 3. Semiconductor & Electronic Components Market Toray COF Technology Driving Innovative Applications
Development of New Products such as High-functionality COF and Coil
Multilayer Flexible Substrate Multilayer Micro Coil Thin film, ultra-fine wiring, micro connection via Double-sided COF Single-sided COF Copper Polyimide Plating Copper wiring Insulation layer Polyimide Thickness 100μm 72㎛ Mounting Technology Cross section Insulation layer
ICs and passive components mounted on COF in one process Display Panel
COF FPC Achieved miniaturization and cost reduction with fine-pattern technology!
Copyright © 2020 Toray Industries, Inc. 18 4. Display Market
19 4. Display Market Advanced Materials for Improved OLED Displays Insulation Layer and Planarization Layer Materials Photosensitive polyimide Organic Light-Emitting Material High reliability High electron mobility Pattern shape control High efficiency High sensitivity De facto standard
Touch sensor panel
TFT board Flexible Board Material Conductive Paste “ TM” Non-photosensitive Polyimide RAYBRID Trace (circuit wiring) Fine-pattern wiring Ultra-high heat resistance Low resistance Transparency Metal-mesh
Expand a wide range of advanced materials in the OLED display market
Copyright © 2020 Toray Industries, Inc. 20 4. Display Market Materials for Touch Sensor Panels
Trace Formed in Enlarged View (circuit wiring) Same Process
Enlarged View Metal-mesh L/S=8/8
3.5~4um
Fine patterning enables wiring closer to edge of touch panel Large display size enabled by low sheet resistance Significant cost reduction due to simultaneous patterning of trace and metal-mesh
Mass production for larger displays driven by demand in automotive and tablet PC markets
Copyright © 2020 Toray Industries, Inc. 21 4. Display Market Global Customer Development Network
Korea AMRC: Advanced Materials Research Center R&D:AMRC TIK: Toray International (Korea), Inc. Sales:TIK Japan Smartphone Manufacturers Toray-G Control Center Display Manufacturers (R&D, Manufacturing, Sales)
China R&D:TARC Sales:TICH, TIGT TARC: Toray Advanced Materials Research Laboratories (China) Co., Ltd. TICH: Toray International (China) Co., Ltd. TIGT: Toray International Guangzhou Trading Co. Ltd. Build strong relationships with customers in important markets (China, Korea, etc.)
Copyright © 2020 Toray Industries, Inc. 22 5. Printing Market
23 5. Printing Market A Serious Environmental Issue in the Printing Industry! Many chemicals in the printing process (i.e. inks, cleaning liquids) contain VOCs (VOC: Volatile Organic Compounds) Waterless Plate New Waterless Plate Printing Method Gravure printing Printing Printing Ink Solvent Ink UV Ink Water-soluble Ink Curing Method Hot Air Drying UV UV/EB Organic Solvent in Ink 50 – 80 % 0 % 0 % Cleaning Liquid Organic solvent Organic solvent Aqueous solvent VOCs from Printing and Cleaning Lots Few None Process
New Development New Development Waterless Plate Water-soluble Ink VOC-free Cleaning Liquid
Conversion to a low environmental impact printing system
Copyright © 2020 Toray Industries, Inc. 24 5. Printing Market Development of Printing System Aimed at “Zero Environmental Impact”
Promote the “Zero Environmental Impact Printing System" as a Global Standard
Copyright © 2020 Toray Industries, Inc. 25 5. Printing Market Global Customer Development Network
Czech Republic Toray Textiles Central Europe (TTCE) (R&D, Manufacturing, Marketing, Sales) Japan Toray-G Control Center (R&D, Manufacturing, Marketing, Sales) United States China (Marketing, Sales) (R&D, Marketing, Sales) Germany, France, Italy (Marketing, Sales)
Brazil (Marketing, Sales)
Expand business in Europe and China with support from Japan and TTCE
Copyright © 2020 Toray Industries, Inc. 26 6. Business Expansion into New Growth Markets (Life Innovation Field)
27 6. Business Expansion into New Growth Markets High-Resolution X-ray Scintillator Panel
Converts X-ray image to digital image
Increase in breast cancer patients ⇒ Importance of early detection
Limitation of Conventional Scintillators Pixelated Scintillator X-rays are converted into light while diffusing Fine-pitch barrier ribs enable sharp images in the scintillator panel Blurred images 10μm Sensor: Detect light Scintillator: Barrier 100μm Converts X-rays into light Rib
X-ray X-ray
Copyright © 2020 Toray Industries, Inc. 28 6. Business Expansion into New Growth Markets Superior X-ray Image with Pixelated Scintillator
Hand Phantom
Copyright © 2020 Toray Industries, Inc. 29 6. Business Expansion into New Growth Markets Other Life Innovation Businesses
Optical Fiber for Endoscopy Wearable Device Application Mainly used as a light guide Expand various materials in disposable endoscopes into displays, sensors and electronic circuits
Optical Fiber (Light Guide) Endoscope
Copyright © 2020 Toray Industries, Inc. 30 III. Target for FY 2022
31 FY 2022 Target (IFRS)
Sales Revenue (Billion yen) 120
100 + 48% 80
そOのth他ers 60 印P刷rinting 40 デDィisスplaプy レイ 半Se導m体ico・n電du子cto部r &品 20 Electronic Components
0 [FY] 2017 2018 2019 2019 2022 Est. Target J-GAAP IFRS
Copyright © 2020 Toray Industries, Inc. 32 Descriptions of predicted business results, projections, and business plans contained in this material are based on predictive forecasts of the future business environment made at the present time. The material in this presentation is not a guarantee of the Company’s future business performance.
Copyright © 2020 Toray Industries, Inc. 33 34