Integrated Report:TAIYO YUDEN Report 2020(8174KB)

Integrated Report

TAIYO YUDEN Report 2020

Editorial Policy

The TAIYO YUDEN Group has issued an integrated report titled TAIYO YUDEN Report as a communication tool for its various stakeholders including investors. The report contains information on the Group's financial position and results, management strategies and efforts to address envi- ronmental, social and governance (ESG) concerns with the aim of conveying in an easy-to-understand manner how the TAIYO YUDEN Group works diligently to realize sustainable growth and contribution to society. This includes efforts to resolve both customers' and society's issues by delivering various module, software and other comprehensive solutions such as the provision of highly reliable electronic components.

Moving forward, the TAIYO YUDEN Group will continue to sincerely respond to the requests of stakeholders while endeavoring to make its activities better understood.

For details on the TAIYO YUDEN Group's financial and non-financial information, please visit our website at:

Investor Relations https://www.yuden.co.jp/or/ir/

Sustainability https://www.yuden.co.jp/or/company/sustainability/

External Evaluation

Based on favorable evaluations for its efforts to address sustainability issues, the TAIYO YUDEN Group has been

selected for inclusion in the following ESG indexes.

FTSE4Good Index Series

The FTSE4Good Index Series is an index compiled by FTSE Russell (UK). The index includes companies that have demonstrated strong Environment, Social, and Governance (ESG) practices that are based on global standards.

FTSE Blossom Japan Index

The FTSE Blossom Japan Index is an index compiled by FTSE Russell and includes Japanese companies that have demonstrated strong ESG practices. The Government Pension Investment Fund (GPIF) of Japan has selected this index as a core ESG index.

MSCI Japan Empowering Women Index (WIN)

The MSCI Japan Empowering Women Index is an index compiled by MSCI (US). The index includes Japanese companies with high gender diversity scores thanks to their promotion of women in the workplace. The Government Pension Investment Fund (GPIF) of Japan has selected this index as a core ESG index.

S&P/JPX Carbon Efficient Index

The S&P/JPX Carbon Efficient Index is an index compiled by the Tokyo Stock Exchange and S&P Dow Jones Indices (US). Companies included are selected based on their disclosure of environment-related information and their carbon efficiency standards. The Government Pension Investment Fund (GPIF) of Japan has selected this index as a core ESG index.

SOMPO Sustainability Index

The SOMPO Sustainability Index is an index compiled by SOMPO Asset Management. The index is composed of Japanese companies with strong ESG performance evaluations and stock valuations.

2 TAIYO YUDEN Report 2020

Contents

Section 1

VALUE CREATION STORY

4 Value Creation Story

6 The History of Value Creation

8 Business Domains

10 Our Goals

12 Financial and Non-financial Highlights

14 Message from the President

22 Feature: TAIYO YUDEN Value Creation

Product Development Centered on

Material & Multilayer Technologies

Section 2

STRATEGIES FOR THE

CREATION OF VALUE

26 Strategies for the Creation of Value

28 Market Environment and Business Development

30 Business Model

32 Medium-term Management Plan

34 At a Glance

36Research and Development Activities

38Human Resources Strategy

Scope of Report

This report covers (as of March 31, 2020) 26 companies, comprising TAIYO YUDEN, 10 domestic subsidiaries and 16 overseas subsidiaries.

Reference Guidelines

For editing purposes, reference was made to the International Integrated Reporting Framework recommended by the International Integrated Reporting Council (IIRC) and the Guidance for Collaborative Value Creation provided by the Ministry of Economy, Trade and Industry. For ESG-related information, we referred to the Ministry of the Environment's Environmental Reporting Guidelines (2012 version). We also refer to GRI guidelines and publish environment-related indicators.

Notes

• Period covered by this report: From April 1, 2019 to March 31, 2020. The figures in this report omit amounts less than hundred million yen and 1 million yen and displays it.
• The following convention has been applied as regards the labeling of fiscal years in graphs: "The fiscal year ended March 2019," for example, has been shortened to "2019."

Section 3

FOUNDATION UNDERPINNING VALUE CREATION

40Roundtable Discussion with the Outside Directors

44Executives

46ESG

46Management system

48Environment (E) and Social (S) activities

50Corporate Governance (G)

DATA SECTION

5411-year Summary

56Financial Review

58Consolidated Financial Statements

66Notes - Significant accounting policies for preparation of consolidated financial statements

100Independent Auditor's Report

104Corporate Data

105Stock Information

• The English-language version of this report is based on the Japanese-language ver- sion. With the exception of the financial statements, all figures presented have been rounded down to the nearest appropriate unit. As a result, there are cases when a presented figure differs slightly from the equivalent figure in the financial statements.
• Owned by Bluetooth SIG, Inc., the Bluetooth® word mark and logos are being used by TAIYO YUDEN under a licensing agreement.
• The contents of this report are correct as of June 26, 2020.

Disclaimer

This report is intended to provide information about the business performance and strategies of the TAIYO YUDEN Group. It is not intended as an inducement to purchase or sell stock in TAIYO YUDEN. Statements in this report that are not historical fact are forward-looking statements based on the current beliefs, estimates and expectations of TAIYO YUDEN Group management. As these beliefs, estimates and expectations are subject to a number of risks, uncertainties and assumptions, actual results may differ materially. TAIYO YUDEN undertakes no obligation to update any forward-looking statements, and shall in no event be liable for any damages arising out of the use or interpretation of this material. Please refrain from copying or disseminating this material without the prior consent of TAIYO YUDEN.

TAIYO YUDEN Report 2020

3

Section

1

VALUE CREATION

STORY

Management Philosophy

Employee Well-being

Betterment of Local Communities

Responsibility to Provide Returns to

Shareholders

TAIYO YUDEN Vision

To be an excellent company

that enjoys the trust and highest regard

from our customers

4 TAIYO YUDEN Report 2020