Taiyo Yuden : INTEGRATED REPORT 2022(7992KB)

TAIYO YUDEN CO., LTD.

INTEGRATED

R E P O R T

2022

Stronger and more socially

aware through

the wonders of science

2 TAIYO YUDEN INTEGRATED REPORT 2022

CONTENTS

4 TAIYO YUDEN's Mission

6 Our Profile

Section 1	9	Mission, Management Philosophy, Vision
VALUE CREATION	10	History of Value Creation
12	TAIYO YUDEN's Value Provision
STORY
14	Business Activities that Provide Value
	16	Materiality
	18	Medium-term Management Plan 2025 (FY2021-FY2025)
	20	Financial and Non-financial Highlights
	22	Message from the President
	28	Message from the Officer in charge of Finance

Section 2	32	Smart Product Development System
STRATEGIES FOR THE	34	Market Environment and Business Development
36	Value Creation Model
CREATION OF VALUE
38	At a Glance
	40	Feature 1: Product-driven Advances in Digital Transformation (DX)
	44	Feature 2: Solutions to Solve Social Issues

TAIYO YUDEN INTEGRATED REPORT 2022

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On the Publication of the Integrated Report 2022

TAIYO YUDEN began its five-yearmedium-term management plan 2025 in FY2021. This report focuses on our efforts under the plan which aim to enhance our corporate value by increasing both our economic and social value. We have sought to provide easy-to-understand explanations on these so that even first-time readers may understand TAIYO YUD- EN's value creation. On top of this, we have worked to expand the content of the report, working to enhance the quantitative and qualitative information listed on ESG in particular based on feedback we have received through dialogue with our stakeholders.

In preparing the report, the President, the officer in charge of corporate planning, other members of management and each division collaborated to ensure that a proper process was followed. We hope that reading this report will help provide you with a better understanding of the TAIYO YUDEN Group.

We will continue to place value on the dialogue we have with our stakeholders and strive to enhance both our information disclosure and transparency. We appreciate any candid feedback you may have.

October 2022

Katsuya Sase

Director and Senior Executive Operating Officer,

Chief of Management Planning Headquarters

Departments involved in the publication of the Integrated Report 2022 (in alphabetical order)

TAIYO YUDEN CO., LTD.

Accounting Department, General Affairs Department, Human Resources Department, Intellectual Property Department, Legal Department, Management Information System Department, President's Office, Procurement Management Department, Public Relations Department, Research and Development Laboratory, and Sustainability Development Department

46 R&D

Section 3	52	Roundtable Discussion with the Outside Directors
FOUNDATION		-Striving to Further TAIYO YUDEN's Governance in Step with Its Growth
56	(G)Corporate Governance
UNDERPINNING
	62	Compliance and Risk Management
VALUE CREATION		64	Executives
	66	Sustainability / (E)Environment Activities
		68	Efforts to Address Climate Change
		73	Efficiently Using Resources and Helping to Build a Recycling-Based Society
	74	(S)Social Activities
		76	Human Resources Strategy
	81	External Evaluation

Data Section	82	11-year Financial and Non-financial Summary
	84	Financial Review

Scope of Report

This report covers (as of March 31, 2022) 32 companies, comprising TAIYO YUDEN, 11 domestic subsidiaries and 21 overseas subsidiaries.

Reference Guidelines

For editing purposes, reference was made to the International Integrated Reporting Framework recommended by the IFRS Foundation 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 (2018 version). We also used the GRI Standards as a reference guideline.

Our GRI Standard Table

can be viewed on our website:

https://www.yuden.co.jp/or/company/sustainability/misc/GRI/

Notes

• In this report, the fiscal year will be displayed as follows. Example: April 1, 2021 to March 31, 2022
  FY 2021 or fiscal year ended March 2022
• The figures in this report omit amounts less than hundred million yen and 1 million yen and displays it.
• The English-language version of this report is based on the Japanese-language version. 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.
• The contents of this report are correct as of June 29, 2022.

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 assump- tions, 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.

86	Consolidated Financial Statements
94	ESG Data
96	Corporate Data
97	Stock Information

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

Investor Relations

Sustainability

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

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

4 TAIYO YUDEN INTEGRATED REPORT 2022

TAIYO YUDEN's Mission

Stronger and more socially aware through

the wonders of science

TAIYO YUDEN's electronic components are critical in the manufacturing of various pieces of electronic equipment. Our products support the evolution of electronics technology that is indispensable for people's safe, secure, comfortable, and convenient lives.

In order to create, advance, and deliver these small but important electronic components to every corner of society, we are seeking to broaden and increase the depth of new knowledge while pursuing the sophistication of our technologies and skills.

Meanwhile, the strengths that we have accumulated throughout our history have generated incidental discoveries and inspirational encounters, which opened the door to unexpected future of innovative solutions and expansion into new areas of scientific advancement.

The foundation of this process is "the wonders of science," which is the source of TAIYO YUDEN's corporate value enhancement.

As a company that continues to grow, we will create greater economic value.

As a company that contributes to the realization of a better society, we will continue to enhance social value.

As a member of society, our constant and enduring aspiration is to fulfill this mission.

TAIYO YUDEN INTEGRATED REPORT 2022

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6 TAIYO YUDEN INTEGRATED REPORT 2022

Our Profile

We are a global manufacturer of electronic components that develops and manufactures products indispensable to people's lives

TAIYO YUDEN develops, manufactures, and sells electronic components for use in a range of electronic equipment that are essential to people's lives, including smartphones and other communication equipment, automobiles, and IT infrastructure/industrial equipment. The Company boasts advanced technological capabilities, continuing to produce the world's smallest MLCC, and supplies its products globally.

9%

Overseas Sales	24%	Sales Composition
Ratio	16%	by Market Sector
90.2%		Industrial
Net sales
		IT infrastructure/
	¥ 349.6		equipment
Ratio of Overseas		Automotive
Production	billion		Communication
67.5%	22%		equipment
	Information
29%
	equipment

Consumer products

Sales Composition Ratio by Region

China	Other
countries and
36.2
regions
%	54.0
	%

Japan

9.8%

TAIYO YUDEN INTEGRATED REPORT 2022

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Multilayer ceramic capacitor (MLCC)
	Reference:
	No. of MLCCs used in electronic
	equipment
Global market share	(As of December 2021 (According to in-house research))
No.3	Per smartphone*
(As of December 2021 (According to in-house research))	Approx.1,300
	*High-end model
	Per electric vehicle
Mass production of the	Approx.10,000
world's smallest MLCC
0.25×0.125mm
FY2017	FY2021
20.2 billion	68.2billion

Operating (8.3%)

(19.5%)

income	Operating margin is shown in parentheses.

GHG absolute		Accident frequency		Rate of newly
emissions reduction		rate*		recruited
rate				female graduates
(Compared to FY2020)		0.10		38%
-5.2%
(FY2021)	(FY2021)	(As of April 1, 2022)
			*The accident frequency rate is the number of fatalities
				and injuries caused by work-related accidents per
				one million actual working hours and represents the
				frequency of accidents. The average for the Japanese
				manufacturing industry for FY2021 was 1.31

(FY2021)

8

Section

1

Rutilcon, barium titanate tubular ceramic capacitors

VALUE CREATION STORY

Since its inception in 1950, TAIYO YUDEN has been engaged in the Electronic Components Business, focusing primarily on capacitors. By constantly taking on new challenges and leveraging its long-honed core technologies, the Company has not only made lifestyles more convenient, but has also contributed to the discovery of solutions to various social issues.

Founder

Hikohachi Sato

Hikohachi Sato, the founder of TAIYO YUDEN, worked as a researcher in ceramic materials before the second world war. Following the belief that 'product commercialization should start from the development of materials,' Mr. Sato launched TAIYO YUDEN to develop and commercialize titanium-oxide porcelain capacitors in 1950.

He also believed that affection for others was the most valuable thing a person could have. The Company's management philosophy has three major components, all of which are designed to improve the social nature of the Company and contribute to cultural development by creating an environment in which employees and their families can live their lives in happiness and prosperity.

The beliefs and philosophy of Mr. Sato live on as the underlying spirit of TAIYO YUDEN.

		STRATEGIES FOR THE	FOUNDATION UNDERPINNING
VALUE CREATION STORY		CREATION OF VALUE	VALUE CREATION		Data Section	9

Mission

Stronger and more socially aware through the wonders of science

Management Philosophy

Employee well-being

Betterment of local communities

Responsibility to provide returns to shareholders

Vision

To be an excellent company that enjoys the trust

and highest regard from all stakeholders

Smart products

Smart design

	High quality	Low power	Downsizing	Abolishing
	use of toxic
	consumption
			substances
	Smart production processes
	Following	More		Reuse and	Minimizing
Safety first	efficient use	100% yields
rules	recycle	emissions
	of energy
		Systems
OHSMS	ISO9001	IATF16949	ISO14001