Tokyo Ohka Kogyo : Integrated Report 2022 / All pages (single-page, for printing) （21.82 MB）

Integrated Report 2022

Year Ended December 31, 2022

Technology Deepens at

0.000000001 m

-PURPOSE/PHILOSOPHY-

Purpose:

Contribute to a sustainable

Management

Principles

Create a frank, open-minded business culture, continue efforts to enhance technology, raise the level of quality of products, and contribute to society

CSR Policy

Management

Vision

The e-Material Global CompanyTM contributes to a sustainable future through chemistry

• Increases the sustainable corporate value as a whole group by improving employee engagement.
• Continues to provide high-value- added products that contribute to technological innovations in order to resolve social issues.
• Strives to grow together with society and remain as an attractive company that earns the trust of all stakeholders.

Value Creation Story

Initiatives to Address Material Issues for Enhancing Corporate Value

Data Section

future through chemistry

Integrated Report 2022 001

August 2023

Noriaki Taneichi

Representative Director,

President & Chief Executive Officer

002 TOKYO OHKA KOGYO CO., LTD.

Value Creation Story

Initiatives to Address Material Issues for Enhancing Corporate Value

Data Section

-A Society We Aim For-

TOK pursues a sustainable future society filled with happiness and this starts from the pursuit of happiness for individuals in the workplace.

Semiconductors substantially contribute to the resolution of a variety of different social and environmental issues that face humans and to convenient, comfortable, safe and secure lives. TOK is a manufacturer with the largest global market share of photoresists-materials essential for the manufacture and upgrading of semiconductors.

In Japan and internationally, TOK achieved sustainable growth by practicing customer-oriented strategies and by providing value created through the use of world-leading microprocessing

and high purity processing technologies that the company has continuously sophisticated over more than 80 years since its foundation. Under the management vision, The e-Material Global CompanyTM contributing to a sustainable future through chemistry, TOK is striving to create value from the long-term viewpoint, aiming to contribute to 5G and IoT innovation by 2030, to become a 100-year company in 2040, and achieving carbon neutrality by 2050.

In these everyday activities, TOK places the largest focus on "happiness" as the keyword. The TOK Group practices its purpose-contributeto a sustainable future through chemistry-extracted from the management vision and invests in human capital under the concept of pursuit of happiness for individuals in the workplace. The Group hopes that these measures will have a ripple effect to improve happiness for external stakeholders and broadly throughout society.

Human resources who feel a high level of happiness usually provide high performance. Customers who use our products with high added value produced by such human resources will also achieve high performance, leading to an increased sense of happiness. When consumers can improve the quality of life by using excellent end products produced by TOK customers, happiness will be enhanced broadly throughout society. TOK will continue to pursue a society where people feel a high level of happiness that starts from the pursuit of happiness for individuals in the workplace.

The Integrated Report 2022 provides a multi-faceted view of value creation by TOK from the perspectives of social impact and linkage and interaction among capital sources. The report also states how TOK enhances its corporate value in a sustainable manner while adding the viewpoints of self-reformation and stakeholder engagement as both risks and opportunities continue to be maximized.

In authoring this report, TOK referred to the International Integrated Reporting Framework promoted by the IFRS Foundation and Guidance for Integrated Corporate Disclosure and Company- Investor Dialog for Collaborative Value Creation 2.0 issued by the Ministry of Economy, Trade and Industry. The company considered the feedback received in dialogs with shareholders, investors, and other stakeholders, as well as the opinions received regarding the Integrated Report 2021.

I would like to assure the readers that this report represents our best efforts to bring together a variety of information related to long-term value creation at TOK through the commitment of management executives and company-wide due processes in each division.

Integrated Report 2022 003

CORE COMPETENCE 1

-World-leading microprocessing technology

Enhancing intellectual capital and continuously contributing to a sustainable future

Value creation area = 1 nanometer*1

0.000000001 m

*1 Approx. 1/100,000 of hair thickness

TOK was established as an R&D-driven company in 1940. The company developed semiconductor photoresists for the first time in 1968, and the company has continuously promoted R&D and upgraded microprocessing technology while accumulating intellectual capital, thereby contributing to the advancement of semiconductor technology.

At present, TOK continuously upgrades its world-leading microprocessing technology under the purpose-Contributeto a sustainable future through chemistry. In this way, the company contributes to higher performance, lower power consumption, cost reduction, and miniaturization of semiconductors so that TOK can satisfy social expectations with end products and contribute to the generation of a positive social impact.

Trends of line width of semiconductors*2		1990s
				1980s		Line width of
	1970s			semiconductors
	semiconductors		600 nm-
				Line width of
	Line width of			1,500 nm-			130 nm
	semiconductors
	10,000 nm-			600 nm
	1,500 nm

Always satisfying social expectations with microprocessing technology

1970s	Social	1980s	Social	1990s	Social
expectations	expectations	expectations
	More efficient		More advanced		More advanced
	economic		information		communication
	activities		processing

Examples of	Examples of	Examples of
final products	final products	final products
Calculators*3	PC	Feature phones

	Outputs	Outputs	Outputs
	First semiconductor positive	i-Line photoresists	KrF excimer laser photoresists
	photoresist developed in Japan
*2	Includes estimates by TOK for the decades shown
*3	The photos of examples of final products on this page are conceptual images.
*4	Calculated based on the closing stock price at FY 2022/12 end and the number of shares issued (including treasury stock)

004 TOKYO OHKA KOGYO CO., LTD.

Value Creation Story

Initiatives to Address Material Issues	Data Section
for Enhancing Corporate Value

Highlights 2022

Aggregate market value

¥255.1 billion*4

Semiconductors

TOK photoresists

		2010s-	2020s-
2000s		Semiconductor
Semiconductor	process nodes
	process nodes			5 nm
Semiconductor		32 nm-
process nodes
130 nm-		7 nm
32 nm

Accumulated intellectual capital

2000s

Social

2010s

Social

2020s

Social

expectations

expectations

expectations

Social

Promotion of

Advancement

networking

of AI

decarbonization

Examples of

Examples of

Examples of

final products

final products

final products

Smartphones

Interactive AI

General electronic

products

Outputs

Outputs

Outputs

ArF excimer laser photoresists

Full portfolio

EUV photoresists

Integrated Report 2022 005

CORE COMPETENCE 2

World-leading high purity processing technology

Level of impurities in cutting-edge products

Continuously satisfying customer expectations by strengthening manufactured capital

Less than

1/1,000,000,000,000

In addition to microprocessing technology, the second core competence of TOK is high-purity processing technology, which has been continuously upgraded since the foundation of the company.

TOK released many "Japan's first" fine chemical products leveraging high-purity processing technology and they satisfied many social expectations in the early post-war era in Japan. Through subsequent global expansion, TOK provides customers across the world with materials stably produced from its robust manufactured capital to substantially contribute to higher productivity (yield) and resource saving by world-leading semiconductor manufacturers.

Source

1940 Original management principles presented by Founder Shigemasa Mukai

-"Create a frank and open-minded business culture, continue efforts to enhance our technology, raise the quality levels of our products, and contribute to society"

Consistently satisfy social expectations with high-purity processing technology

	Source		Social		Social
Foundation	Create a frank	1930-40s	expectations	1950s	expectations
Safety of	Development of
and open-minded
	business		workers		culture

culture

Shigemasa Mukai,	Examples of
TOK founder	final products
	Batteries used in hard
	hat lights for coal miners

Outputs

The first high-purity potassium hydroxide produced in Japan

*1 1 ppm = 1/1,000,000; 1 ppb = 1/1,000,000,000; 1 ppt = 1/1,000,000,000,000 *2 Includes estimates by TOK for the decades shown

Examples of final products

Black-and-white TVs

Outputs The first high-purity

potassium silicate produced in Japan, Ohka Seal

006 TOKYO OHKA KOGYO CO., LTD.

Value Creation Story

Initiatives to Address Material Issues	Data Section
for Enhancing Corporate Value

Highlights 2022

Consolidated net sales

¥175.4 billion

Semiconductors

High-purity chemicals and photoresists from TOK

Trends in level of high-purity processing (impurities)*1*2

		2020s	Strengthening of
	2000s	impurities	manufactured
		Level of	capital
1970s	impurities	≤ 1 ppt
	Level of
Level of	≤ 100 ppt
impurities

≤ 1 ppm

Social

Social

Customer

1970s*2

expectations

2000s*2

expectations

2020s

expectations

Higher

Resource saving

Higher

productivity

purification

and environmental

contribution

Value provided	Value provided	Value provided
Higher yield in	Reduced material loss	Pursuing ultimate defect
semiconductor	in semiconductor/LCD	reduction with state-of-
production	production	the-art equipment

Outputs	Outputs	Outputs
High-purity chemicals and	High-purity chemicals and	High-purity chemicals and
semiconductor photoresists	semiconductor photoresists	semiconductor photoresists

Integrated Report 2022 007

CORE COMPETENCE 3

Customer-oriented strategies

	Overseas sales growth rate
Increasing social and	over the past 10 years*1
	2.9 times
relational capital through
human capital-oriented management

Customer-oriented strategies are TOK's strengths that continuously advance the benefits of microprocessing and high-purity processing technology, and TOK delivers them to all parts of the world.

TOK opened its first overseas site in 1987 and accelerated overseas expansion as the offshoring of the semiconductor industry proceeded. In 2012, the company established a customer-oriented site in South Korea, where human resources from the development, manufacturing, and marketing functions work in collaboration.

The company also promoted the same strategies in Taiwan and the United States to upgrade human capital. TOK is now engaged in long-run research and development activities based on the frank and open-minded business culture and a close relationship of trust with customers.

Continuously expanding social and relational capital to all parts of the world

	Overseas		Overseas		Overseas
1987	expansion	1998	expansion	2004	expansion
USA	Taiwan	China

First overseas site	First overseas site in Asia	First manufacturing site in China
Ohka America, Inc.	TOK Taiwan Co., Ltd.	Chang Chun TOK (Changshu) Co., Ltd.
(present Tokyo Ohka Kogyo America, Inc.)	(Miaoli Plant)	(Changshu Plant)

Continuously contributing to a sustainable future through chemistry through long-run research and development with human capital-oriented management

Photoresists for image sensors

Long-run research and development

Release and

(approx. 10 years)

gro

w

t

h

i

n

2003

*1 FY 2013/3 vs. FY 2022/12

EUV photoresists

008 TOKYO OHKA KOGYO CO., LTD.