TDK Corporation
Nihonbashi Takashimaya Mitsui Building,
2-5-1, Nihonbashi, Chuo-ku, Tokyo 103-6128
https://www.tdk.com/en/index.html
Integrated Report 2023
Integrated
Report
2023
Positioning of the Integrated Report
Narrative
Integrated Reports
Non-
financial
Sustainability/ESG
Investor Relations (IR)
Financial
• Corporate Governance
Reports*
• Sustainability Website
• Securities Reports*
• Financial Results*
• Medium-Term Plan
• Performance Briefings
• Shareholder Newsletters
• Investors’ Guide
*Statutory and Timely Disclosure
Documents
Comprehensiveness
Editorial Policy
TDK is focused on working to maximize long-term corporate value, and it
focuses on the P/B ratio as an indicator that expresses that corporate value.
With that perspective in mind, we study what sort of impact the activities
connected to the various themes of materiality have on corporate value,
create a tree diagram, and administer them internally.
In our Integrated Report 2023, our goal is for the officers and managers from
our various divisions related to those respective TDK Group’s materiality—including
financial strategy, human resource strategy, technology and intellectual
property, quality control and Monozukuri (manufacturing excellence), and
marketing—to convey in an easily comprehended way in their own words,
their individual thoughts, examples of various initiatives, and progress reports.
Starting with a message from our president and based on a perspective
framed by the questions of “How will TDK grow?” “What underlies its
competitiveness?” and “How is governance evolving?” the Integrated Report
is positioned as a document focused presenting the value creation stories of
the diverse team members (employees) who comprise our “TDK United” so
awash in character. Meanwhile, information too comprehensive to include
with the Integrated Report such as information for shareholders and investors,
along with information regarding sustainability/ESG, has been posted to our
website as indicated by the diagram shown above.
Cautionary statements with respect to forward-looking statements
TDK’s plans, strategies, and future business prospects set forth in this Integrated Report are judged to
be reasonable by TDK at the present point in time based on information available at present. They are
subject to risks and uncertainties. Please be aware of the possibility that depending on various factors,
actual business results may differ from the contents of this Integrated Report.
Contents
Contents
TDK’s Founding Spirit
Chapter 1
How Will TDK Grow?
Message from the President and CEO
Value Creation Process
TDK’s Solutions for Social Challenges
Changes in TDK’s Portfolio
TDK’s Current Businesses
Strategy by Segment
Chapter 2
What Underlies TDK’s Competitiveness?
The TDK Group’s Materiality
Message from the Corporate Officer of Finance & Accounting
Message from the CPSO and General Manager, Human Resources HQ
Talent Development and Human Growth Measures
Message from the Corporate Officer of Technology and Intellectual Property
Monozukuri Realizing a High Level of Quality as a Global Supplier
Strengthening Marketing, Innovation, and
Incubation Capabilities Across the Group
Delegation of Authority
Supply Chain Management
EX Initiatives
Response to TCFD
Other Environmental Initiatives
Chapter 3
How Is TDK’s Governance Evolving?
Corporate Governance Structure
Message from the Chairman
Strengthening of the Board of Directors’ Monitoring Function
Risk Management
Group Governance
A Talk with Outside Directors
Skills Matrix/Succession Plan/Nomination Advisory Committee
Effectiveness Evaluation of the Board of Directors
Remuneration System
Directors, Audit & Supervisory Board Members, and Corporate Officers
Consolidated Business Results Highlights
Corporate Information
IR Activities
01
02
06
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14
16
18
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26
30
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39
40
44
46
48
50
52
54
57
59
60
62
64
65
66
69
70
72
74
76
80
81
01
TDK’s Founding Spirit
Corporate Motto
Contribute to culture and
industry through creativity
Corporate Principles
“Vision” “Courage” “Trust”
TDK Value Structure
The origins of TDK’s founding story go back to 1930,
when founder Kenzo Saito encountered ferrite, the world’s
first oxide magnetic material, invented by Dr. Yogoro Kato
and Dr. Takeshi Takei of the Tokyo Institute of Technology.
Saito was born in an isolated village where people
survived mainly by farming rice and fishing during the
winters, and he had an ambition to create a new industry
in his impoverished hometown and enrich people’s lives.
However, he faced a series of challenges and failures, and
later when looking back on his life, he said he had “two
successes and 98 failures.”
In the midst of these repeated failures, Saito had a
fortuitous encounter with Dr. Kato and Dr. Takei through a
connection. Dr. Kato showed him ferrite, a previously
unknown magnetic material. Ferrite is a metallic oxide and
has strong magnetism, but it was very much a technological
invention whose specific uses were not clear. Nonetheless,
Saito was deeply impressed by the Dr. Kato’s statement,
“Ferrite is an original invention created in Japan and will
become an industry from Japan,” and he was determined
to commercialize ferrite. Moved by Saito’s passion, Dr. Kato
granted a license to him at no cost. Saito asked Shingo
Tsuda, president of Kanegafuchi Boseki, Japan’s largest
company at the time, whom he had met through the
Angora rabbit wool business, one of his 98 failures, to
provide the startup capital. Tsuda was unable to use
company capital for a purpose outside Kanegafuchi
Boseki’s business, so he provided his personal funds to
Saito. This was venture capital, and instead of seeking a
return on his investment, he entrusted Saito to achieve
true industrialization in Japan using an invention created in
Japan. Tokyo Denki Kagaku Kogyo (later TDK) was
founded in 1935 with the invention of ferrite by two great
scientists, the desire of an investor who dreamed on an
industrialized Japan, and Saito’s passion. Saito, who
witnessed the founding of TDK, was succeeded as
president by Teiichi Yamazaki, and later worked to
establish the Science and Technology Agency and
became its first vice minister in pursuit of his ambition to
make Japan a science and technology nation. The two
major wins that Saito staked his career on were the
founding of TDK and the creation of the Science and
Technology Agency.
Yamazaki, the second president of TDK after Saito,
was a student of Dr. Kato. Yamazaki used specialized
knowledge regarding ferrite and built the foundations of
TDK’s manufacturing base in Akita, and in 1961, TDK’s
shares were listed on the Tokyo Stock Exchange. With the
listing, Yamazaki obtained massive gains, but he used all
of the proceeds to make a donation to the Tokyo Institute
of Technology and established a number of science and
technology foundations with the hope of supporting the
advancement of science in Japan, contributing to the
development of future generations.
Fukujiro Sono, TDK’s third president, was an
exceptional salesperson from Kanegafuchi Boseki, but he
joined TDK with the aspiration of contributing to venture
business. Sono created new applications using ferrite,
such as radios, household appliances, and television sets,
and developed new customers, contributing to the
advancement of Japanese electronics after the Second
World War.
TDK’s corporate motto, “Contribute to culture and
industry through creativity,” is the vision of founder Kenzo
Saito, and the corporate principles—“Vision” “Courage”
“Trust”—are an expression of the venture spirit of the six
members who built up TDK in its founding days.
Kenzo Saito
Teiichi Yamazaki
Fukujiro Sono
Yogoro Kato
Takeshi Takei
Shingo Tsuda
02
03
Chapter 1
How Will
TDK Grow?
04
05
Message from the President and CEO
Not being content with
record-high net sales and
operating profit, we will
strive to dynamically and
sustainably create value
Noboru Saito
Representative Director, President and CEO
Summary of fiscal 2023 performance
Three key businesses grew as
expected, whereas improvements to
problematic businesses were delayed
In the electronics market in fiscal 2023, EX-related
demand for mainly xEVs and industry equipment
was strong, though demand remained sluggish in
some products for the ICT market. The Group’s
ability to reliably capture this demand enabled us to
achieve a 14.7% year-on-year increase in
consolidated net sales and a 1.2% year-on-year
increase in operating profit, both record highs. In my
first year as president of TDK, I believe we have
achieved a certain level of success in terms of our
performance figures.
Last year, when I assumed the post of president,
I stated that growth strategies for three of our
businesses were particularly important for TDK to
work toward a new stage of growth. Those
strategies were to strengthen our business in
medium capacity rechargeable batteries; growth of
the sensor business; and regrowth of the passive
components business. Our assessment is that all
three of these businesses have made good progress
over the past year.
In the medium capacity rechargeable battery
business, there has been strong growth in demand
for residential energy storage systems (RESSs),
contributing to earnings. Business through our joint
ventures (JVs) with CATL, the world’s largest maker
of automotive batteries with which we formed an
alliance in 2021, is also progressing steadily. The
new production site built in Xiamen, Fujian Province
began operating in April 2023.
The sensor business finally moved to profitability
in fiscal 2022 and is now positioned to embark on its
second chapter. Magnetic sensors performed well in
fiscal 2023, with sales of Hall sensors growing for
automotive and smartphone applications. In
addition, sales of TMR sensors for automotive
applications remained strong, and sales of new
products for smartphones did well. As a result, the
sensor business overall saw a significant increase in
both sales and profit. In response, we have decided
to invest approximately ¥35.0 billion to increase
production of TMR sensors, which are the driving
force behind this growth.
In the passive components business, both sales
and profit increased significantly thanks to strong
performance in products for the automotive market,
especially for xEVs. In May 2022, we announced an
investment of approximately ¥50.0 billion to increase
production of multilayer ceramic chip capacitors
(MLCCs) in order to meet strong market demand.
Originally, we had planned to start mass production
in September 2024, but we are now moving ahead
with plans to push the start of mass production
forward by about five months, to around April 2024.
While our growth strategies thus progressed as
expected, or even better than expected, there were
some areas in which we did not progress as
planned, including improvement of low profit
so-called problematic businesses.
In particular, in the magnet business, which
continues to struggle, sales to the xEV market
increased, resulting in higher revenues, but delays in
boosting productivity prevented an improvement in
profitability, resulting in recording of a ¥2.2 billion
impairment loss. The magnet business is viewed in
large part as an investment in the future in terms of
capturing forthcoming demand for use in
automobiles, wind power generation, and other
products. Going forward, we will work to improve
profitability while maintaining a more rigorous
balance between investment and production.
Meanwhile, HDD heads saw a large decrease in
profit due to significant inventory adjustments as
data center investment was more restrained than
expected because of the impact of the economic
slowdown and other factors. With demand for HDDs
expected to take some time to recover, and after
reviewing the market needs and the competitiveness
of our business in products for the ICT market that
apply the HDD suspension, the decision was made
to downsize that business. As a result, we recorded
a one-time expense of ¥25.7 billion for impairment
losses in and restructuring of the HDD-related
business as a whole.
While it’s unfortunate that the Magnetic
Application Products business as a whole suffered
significant losses, I appreciate the flexibility and
speed with which the business divisions responded
to the unexpected deterioration in business
conditions. We will continue to implement measures
to improve profitability as quickly as possible.
06
07
later, these meetings continue, allowing us to
deepen our mutual understanding by discussing
personal thoughts that may be difficult to talk about
in full group meetings.
Corporate leaders are frequently compared to the
I have also made a point of visiting our business
conductors of an orchestra, but in TDK’s case, I think
sites through Japan and overseas to talk with our
a big jazz band, with its greater emphasis on diverse
many team members working at those locations.
personalities, is a more appropriate metaphor. I thus
Since becoming president, I have completed visits to
see my role as equivalent to the leader and manager
all of our sites in Japan, and overseas, I have made
of this big band.
the rounds of our main locations in Europe, the
Today, TDK is a global corporate group with over
United States, and China. In the current fiscal year, I
250 locations across more than 30 countries and
intend to deepen this communication not only by
regions. Non-Japanese now comprise about 90% of
visiting those sites I have yet to travel to, but by
our more than 100,000 employees. Through my
actively conducting visits to the major customers in
30-plus-year career with TDK, I’ve learned that this
each of our businesses.
global company has many team members
In addition, in April 2023 we held an online town
speak of encompasses a much broader meaning. I
believe it includes enhancing quality in a more inclusive
sense, from streamlining production and improving
yield rates, to strengthening marketing and, further,
improving the working environment and increasing
team members’ motivation. These factors are things
that we can improve and enhance through our own
efforts, regardless of macro market conditions. While it
is of course important to address a changing market
environment, aside from that I think we can find
many things we can and should do to improve
quality simply by reexamining what is right in front of
us. That is what we might call growth potential.
Last year when I visited one of our sites in the
Tohoku region, the person in charge on site told me
that after reevaluating their quality standards, their
TDK’s strength in terms of technology is that in
The TDK spirit is never satisfied with the status
continue working to reduce emissions by streamlining
and R&D. We would like each of them to build a
addition to materials technology, including in
quo, but rather drives us to boldly transform
our electricity use as much as possible.
dynamic value creation chain that leverages the
magnetic and ceramic materials, we also have
ourselves and constantly take on new challenges.
In the area of human capital, I think that people
characteristics of their respective regions and
process technology, which can bring out the
TDK’s current broad business portfolio was built as a
are the fundamental element supporting a company’s
constituent team members, leading to strengthening
properties of those materials to the utmost. These,
result of that spirit. Our business structure may yet
sustainable growth. To make the most of the
TDK United as a whole. With this delegation of
along with evaluation and simulation technology
change going forward, to continue adapting to a
individuality and abilities of our highly diverse human
authority to the front lines, I would also like to see
(which provides accurate analysis of ultra-fine areas);
changing environment or to address new customer
resources, we have established and are currently
the Board of Directors focus on broader or more
product design technology (to create modules and
expectations. Still, as long as we maintain this
running the Global Management Development
medium- to long-term themes and engage in
solutions from a variety of materials and
venture spirit, the company will continue to evolve
Programs, which integrates everything from hiring
vigorous discussion.
components); and production engineering (which
and grow. I am convinced of that.
supports mass production with consistent quality),
form TDK’s five core technologies.
Diversity is also one of TDK’s major strengths. In
terms of human capital, we employ people from a
variety of countries and cultural backgrounds,
and training, to compensation, skills development,
and goal management. In April 2023, we appointed
Andreas Keller, General Manager of our Human
Resources HQ, to become our Chief People and
Sustainability Officer (CPSO). The goal is to deepen
collaboration between the Human Resources HQ
(employees) working all over the world who have
hall meeting on a global basis. Everyone in the
yield rate rose, leading to an improvement of several
and applications. Its mission is to utilize information
perspectives. This diversity is what makes it possible
pursue financial value, but also to focus on
Strategy HQ, and others in an effort to further evolve
become such powerful trends worldwide, we
outstanding abilities and unique talents. These
Group can attend these meetings, which offer time
tens of millions of yen annually. In other words,
on cutting-edge technology trends obtained from
for us advisers to our customers on a wide range of
non-financial activities such as ESG, which might
sustainability initiatives.
foresee growth potential in the seven areas we are
diverse, highly individual players have gathered under
during which anyone is free to ask questions. I
taking another look at excessive quality generated
TDK Ventures Inc. (TDK Ventures), which functions as
issues and requests. It allows customers the
also be considered future financial value, and to
In February 2023, we conducted our first global
currently focused on (the Seven Seas). And in fact, I
the TDK flag, each performing in a style that brings
would like to continue holding these meetings, too,
new value. I am certain that these kinds of small
a corporate venture capital (CVC) organization, while
expectation that, when they face difficulties, they can
contribute to the realization of a sustainable society
Team Member Engagement Survey. Based on those
sense a significant increase in the expectations of
out their unique personalities. Together, they form a
while listening to the opinions of our team members.
enhancements to quality, if put into practice across
at the same time tying that information to the
always turn to TDK for some kind of response.
while enhancing corporate value through a balance
results, going forward we will consider measures
our customers, shareholders, investors, business
forming teams with a variety of backgrounds and
In corporate management, it is important not only to
and the Sustainability Promotion HQ, the Corporate
As I mentioned earlier, given that EX and DX have
band called TDK, one that improvises at times while
swinging powerful melodies and beautiful harmonies.
This is why I call this band “TDK United” rather
than “One TDK.” As the band leader and manager, it
is my role to ensure that the creativity, motivation,
all of our global sites, can result in considerable
development of products that respond quickly to
improvement and growth. Under the “Quality First”
market trends, combining a variety of technological
slogan, we will continue to send out a strong
seeds in a manner that makes them available across
message company-wide encouraging everyone to
our technology divisions and business companies.
proactively review the quality of their work.
We will further strengthen these functions and
Another thing that I think is a strength for TDK is
of these two. This, too, I see as both a management
that will contribute to team member engagement
partners, and the varied other stakeholders in TDK’s
our venture spirit. Even as the company has grown
issue and, at the same time, an opportunity for
and improving motivation. In addition, we also intend
orbit. Everything else depends on our ability to
in scale to net sales in excess of two trillion yen,
growth, and I would like to describe our efforts in the
to put even more effort than before in maintaining
execute. “The stage is prepared. Now it is up to
with more than 100,000 team members, we still
areas of decarbonization and energy, human capital,
and improving members’ health, one of the areas of
how well each of you can perform!” That is the call I
retain and continue to pass down our founding spirit
and governance.
quality I mentioned earlier. In conjunction with this
am putting out to the diverse players in the TDK
and desire of each of our diverse team members is
Fiscal 2024 is the final year of our current
Another thing I believe is an issue in achieving
maximize TDK United’s value creation by offering the
of challenge. You can sense, in whichever country
As part of our efforts toward helping to achieve a
effort, we established the TDK Health Declaration to
United band.
brought to bear in the best way possible. As a result,
Medium-Term Plan. Of the numerical targets set out
sustainable growth is to further strengthen our
products and solutions the market and our
or division you go to, the positive attitude behind the
decarbonized society, in November 2022 TDK joined
actively support managing and improving the health
I believe that by maximizing the strengths of TDK
while each player may seem to be taking their solos
in that plan, we expect to meet our target for net
market-in concept. This too is not only a
customers need when they need them.
Group’s willingness to courageously take on things
the RE100 international initiative, as we work toward
of our members. We also joined the Health &
United—the venture spirit we have inherited as part
as each of them sees fit, a sense of harmony and
sales, having already achieved it in fiscal 2023.
tension is created as the notes they each play collide
Unfortunately, it may prove difficult to reach our profit
with one another, producing a high-spirited jazz
targets of an operating profit margin of 12% and
number. I believe that my greatest role as president
ROE of 14%. Naturally, we will continue doing our
is to manage this band so that we achieve this kind
best to reach those numbers up until the last minute.
of value creation. I do this by preparing the stage
We intend to further expand the three growth
management issue, but an opportunity for growth.
Since its founding, TDK was strongly focused on a
product-out or technology-out approach, hoping
customers would use the amazing technologies and
wonderful products we created. I believe this
technology-out attitude is in itself important to a
and the performance environment, coordinating
businesses mentioned earlier, while at the same time
creative manufacturer like TDK. That said, however,
Our corporate motto is to “Contribute to culture and
the relationships among our band members, and
we work to increase earnings by further addressing
it is also important for us as a manufacturer to keep
industry through creativity.” Our Sustainability Vision,
always striving to keep the band in the best
issues in our problematic businesses.
a close eye on market trends and customers’
which we established in 2020, is driven by the
possible condition.
To achieve the goals of the current Medium-Term
potential needs, quickly feeding that information to
slogan “Technology for the well-being of all people.”
For me to fulfill this role, nothing is more
Plan, I am now calling for a rigorous company-wide
development and offering new products and
As these words suggest, my hope is that we will be
important than close communication with each of
implementation of our “Quality First” policy. Of the
solutions in a timely manner. This is why my ideal is a
a company that can bring people happiness through
our team members. I do this not through e-mail or
material issues we have raised in striving toward
hybrid structure that appropriately bridges the
technology. Energy transformation (EX) and digital
phone calls, but emphasize, as much as possible,
sustainable growth, I am placing particular emphasis
technology-out and market-in approaches.
transformation (DX), which today are major global
conveying my thoughts directly by discussing them
on quality. It is the top reason TDK is chosen as a
To bolster our market-in stance, two years ago
trends, are nothing less than a movement toward a
face-to-face and by listening to what our people
brand, and I believe it is a fundamental element of
TDK established the Corporate Marketing &
happier state for humanity. While we at TDK are
have to say. This is why, shortly after becoming
trust in us as a manufacturer.
Incubation (CM&I) HQ, an organization with
firmly on top of these major trends, we would like to
president, I decided to hold monthly one-on-one
When talking about quality, the general tendency
cross-sectional functions. This HQ functions as an
become an even more indispensable presence in
meetings with all of our 18 corporate officers. A year
is to think only of product quality, but the quality I
antenna for TDK’s wide range of markets, customers,
society than we are today.
of value and new challenges without fear of failure.
ensuring that by 2050, 100% of the electricity used
Productivity Management Alliance, the goal of which
of our DNA since our founding; our core technologies
In that sense, I think of TDK as a magnificent
at our business facilities around the world will come
is the co-creation of a model and solutions for health
from material science; our wide range of business
venture company.
renewable energy sources for 100% of the electricity
the most of our members’ individuality.
other stakeholders to gain a deeper understanding
from renewable energy. Initially, we have set a goal
of achieving a Group-wide renewable energy
introduction rate of 50% or more by fiscal 2026, and
we expect to achieve this goal by the end of fiscal
2025, one year ahead of schedule. One of the
specific initiatives backing this progress is that,
effective from July 2023, we have transitioned to
used at all of our domestic manufacturing sites. In
parallel with these renewable energy initiatives, we
continue to focus on lower energy consumption,
and are working to reduce the amount of energy
used at each of our sites, primarily manufacturing
sites. Although overall production is currently on an
upward trend, we are seeing a downward trend not
only in CO2 emission intensity but in the volume of
emissions as well. Going forward, we intend to
and productivity management in Japan.
domains and diverse human resources running
In the area of governance, based on our basic
across the company; and our organizational ability to
policy of Empowerment and Transparency we have
smoothly integrate these into a single jazz big
established rules that every team member of the
band—we will continue to create new value that
Group must follow as the Global Common
meets your expectations as we pursue our goal of
Regulations, while structuring an autonomous and
becoming an indispensable presence in society.
decentralized organization that allows us to make
I would like our shareholders, investors, and
As part of delegating authority to the front lines,
of this value creation story. To that end, we will make
we are also advancing efforts to expand the authority
even greater efforts to disseminate a variety of
of our regional headquarters. Since October 2022,
information as a company and to engage in dialogue
we have appointed both the heads of our regional
with all of you. I hope you will continue to look
headquarters in China and the Americas as corporate
forward to the future of TDK United.
officers. This is intended to allow our regional
headquarters, which have traditionally focused on
business management functions, to further evolve by
integrating a variety of functions such as marketing
In the passive components business, both sales
and profit increased significantly thanks to strong
performance in products for the automotive market,
especially for xEVs. In May 2022, we announced an
investment of approximately ¥50.0 billion to increase
In the electronics market in fiscal 2023, EX-related
production of multilayer ceramic chip capacitors
demand for mainly xEVs and industry equipment
(MLCCs) in order to meet strong market demand.
was strong, though demand remained sluggish in
Originally, we had planned to start mass production
some products for the ICT market. The Group’s
in September 2024, but we are now moving ahead
ability to reliably capture this demand enabled us to
with plans to push the start of mass production
achieve a 14.7% year-on-year increase in
forward by about five months, to around April 2024.
consolidated net sales and a 1.2% year-on-year
While our growth strategies thus progressed as
increase in operating profit, both record highs. In my
expected, or even better than expected, there were
first year as president of TDK, I believe we have
some areas in which we did not progress as
achieved a certain level of success in terms of our
planned, including improvement of low profit
performance figures.
so-called problematic businesses.
Last year, when I assumed the post of president,
In particular, in the magnet business, which
I stated that growth strategies for three of our
continues to struggle, sales to the xEV market
businesses were particularly important for TDK to
increased, resulting in higher revenues, but delays in
work toward a new stage of growth. Those
boosting productivity prevented an improvement in
strategies were to strengthen our business in
profitability, resulting in recording of a ¥2.2 billion
medium capacity rechargeable batteries; growth of
impairment loss. The magnet business is viewed in
the sensor business; and regrowth of the passive
large part as an investment in the future in terms of
components business. Our assessment is that all
capturing forthcoming demand for use in
three of these businesses have made good progress
automobiles, wind power generation, and other
over the past year.
products. Going forward, we will work to improve
In the medium capacity rechargeable battery
profitability while maintaining a more rigorous
business, there has been strong growth in demand
balance between investment and production.
for residential energy storage systems (RESSs),
Meanwhile, HDD heads saw a large decrease in
contributing to earnings. Business through our joint
profit due to significant inventory adjustments as
ventures (JVs) with CATL, the world’s largest maker
data center investment was more restrained than
of automotive batteries with which we formed an
expected because of the impact of the economic
alliance in 2021, is also progressing steadily. The
slowdown and other factors. With demand for HDDs
new production site built in Xiamen, Fujian Province
expected to take some time to recover, and after
began operating in April 2023.
reviewing the market needs and the competitiveness
The sensor business finally moved to profitability
of our business in products for the ICT market that
in fiscal 2022 and is now positioned to embark on its
apply the HDD suspension, the decision was made
second chapter. Magnetic sensors performed well in
to downsize that business. As a result, we recorded
fiscal 2023, with sales of Hall sensors growing for
a one-time expense of ¥25.7 billion for impairment
automotive and smartphone applications. In
losses in and restructuring of the HDD-related
addition, sales of TMR sensors for automotive
business as a whole.
applications remained strong, and sales of new
While it’s unfortunate that the Magnetic
products for smartphones did well. As a result, the
Application Products business as a whole suffered
sensor business overall saw a significant increase in
significant losses, I appreciate the flexibility and
both sales and profit. In response, we have decided
speed with which the business divisions responded
to invest approximately ¥35.0 billion to increase
to the unexpected deterioration in business
production of TMR sensors, which are the driving
conditions. We will continue to implement measures
force behind this growth.
to improve profitability as quickly as possible.
Message from the President and CEO
Management philosophy
Strengthening bonds within TDK United
as the manager of a jazz band
Corporate leaders are frequently compared to the
conductors of an orchestra, but in TDK’s case, I think
a big jazz band, with its greater emphasis on diverse
personalities, is a more appropriate metaphor. I thus
see my role as equivalent to the leader and manager
of this big band.
Today, TDK is a global corporate group with over
250 locations across more than 30 countries and
regions. Non-Japanese now comprise about 90% of
our more than 100,000 employees. Through my
30-plus-year career with TDK, I’ve learned that this
global company has many team members
(employees) working all over the world who have
outstanding abilities and unique talents. These
diverse, highly individual players have gathered under
the TDK flag, each performing in a style that brings
out their unique personalities. Together, they form a
band called TDK, one that improvises at times while
swinging powerful melodies and beautiful harmonies.
This is why I call this band “TDK United” rather
than “One TDK.” As the band leader and manager, it
is my role to ensure that the creativity, motivation,
and desire of each of our diverse team members is
brought to bear in the best way possible. As a result,
while each player may seem to be taking their solos
as each of them sees fit, a sense of harmony and
tension is created as the notes they each play collide
with one another, producing a high-spirited jazz
number. I believe that my greatest role as president
is to manage this band so that we achieve this kind
of value creation. I do this by preparing the stage
and the performance environment, coordinating
the relationships among our band members, and
always striving to keep the band in the best
possible condition.
For me to fulfill this role, nothing is more
important than close communication with each of
our team members. I do this not through e-mail or
phone calls, but emphasize, as much as possible,
conveying my thoughts directly by discussing them
face-to-face and by listening to what our people
have to say. This is why, shortly after becoming
president, I decided to hold monthly one-on-one
meetings with all of our 18 corporate officers. A year
later, these meetings continue, allowing us to
deepen our mutual understanding by discussing
personal thoughts that may be difficult to talk about
in full group meetings.
I have also made a point of visiting our business
sites through Japan and overseas to talk with our
many team members working at those locations.
Since becoming president, I have completed visits to
all of our sites in Japan, and overseas, I have made
the rounds of our main locations in Europe, the
United States, and China. In the current fiscal year, I
intend to deepen this communication not only by
visiting those sites I have yet to travel to, but by
actively conducting visits to the major customers in
each of our businesses.
In addition, in April 2023 we held an online town
hall meeting on a global basis. Everyone in the
Group can attend these meetings, which offer time
during which anyone is free to ask questions. I
would like to continue holding these meetings, too,
while listening to the opinions of our team members.
Key issues in fiscal 2024
Enhancing our strengths under
the “Quality First” slogan
Fiscal 2024 is the final year of our current
Medium-Term Plan. Of the numerical targets set out
in that plan, we expect to meet our target for net
sales, having already achieved it in fiscal 2023.
Unfortunately, it may prove difficult to reach our profit
targets of an operating profit margin of 12% and
ROE of 14%. Naturally, we will continue doing our
best to reach those numbers up until the last minute.
We intend to further expand the three growth
businesses mentioned earlier, while at the same time
we work to increase earnings by further addressing
issues in our problematic businesses.
To achieve the goals of the current Medium-Term
Plan, I am now calling for a rigorous company-wide
implementation of our “Quality First” policy. Of the
material issues we have raised in striving toward
sustainable growth, I am placing particular emphasis
on quality. It is the top reason TDK is chosen as a
brand, and I believe it is a fundamental element of
trust in us as a manufacturer.
When talking about quality, the general tendency
is to think only of product quality, but the quality I
speak of encompasses a much broader meaning. I
believe it includes enhancing quality in a more inclusive
sense, from streamlining production and improving
yield rates, to strengthening marketing and, further,
improving the working environment and increasing
team members’ motivation. These factors are things
that we can improve and enhance through our own
efforts, regardless of macro market conditions. While it
is of course important to address a changing market
environment, aside from that I think we can find
many things we can and should do to improve
quality simply by reexamining what is right in front of
us. That is what we might call growth potential.
Last year when I visited one of our sites in the
Tohoku region, the person in charge on site told me
that after reevaluating their quality standards, their
yield rate rose, leading to an improvement of several
tens of millions of yen annually. In other words,
taking another look at excessive quality generated
new value. I am certain that these kinds of small
enhancements to quality, if put into practice across
all of our global sites, can result in considerable
improvement and growth. Under the “Quality First”
slogan, we will continue to send out a strong
message company-wide encouraging everyone to
proactively review the quality of their work.
Another thing I believe is an issue in achieving
sustainable growth is to further strengthen our
market-in concept. This too is not only a
management issue, but an opportunity for growth.
Since its founding, TDK was strongly focused on a
product-out or technology-out approach, hoping
customers would use the amazing technologies and
wonderful products we created. I believe this
technology-out attitude is in itself important to a
creative manufacturer like TDK. That said, however,
it is also important for us as a manufacturer to keep
a close eye on market trends and customers’
potential needs, quickly feeding that information to
development and offering new products and
solutions in a timely manner. This is why my ideal is a
hybrid structure that appropriately bridges the
technology-out and market-in approaches.
To bolster our market-in stance, two years ago
TDK established the Corporate Marketing &
Incubation (CM&I) HQ, an organization with
cross-sectional functions. This HQ functions as an
antenna for TDK’s wide range of markets, customers,
and applications. Its mission is to utilize information
on cutting-edge technology trends obtained from
TDK Ventures Inc. (TDK Ventures), which functions as
a corporate venture capital (CVC) organization, while
at the same time tying that information to the
development of products that respond quickly to
market trends, combining a variety of technological
seeds in a manner that makes them available across
our technology divisions and business companies.
We will further strengthen these functions and
maximize TDK United’s value creation by offering the
products and solutions the market and our
customers need when they need them.
Vision for the medium and long term
Passing down our founding spirit to
become an indispensable presence
in society
Our corporate motto is to “Contribute to culture and
industry through creativity.” Our Sustainability Vision,
which we established in 2020, is driven by the
slogan “Technology for the well-being of all people.”
As these words suggest, my hope is that we will be
a company that can bring people happiness through
technology. Energy transformation (EX) and digital
transformation (DX), which today are major global
trends, are nothing less than a movement toward a
happier state for humanity. While we at TDK are
firmly on top of these major trends, we would like to
become an even more indispensable presence in
society than we are today.
08
09
TDK’s strength in terms of technology is that in
The TDK spirit is never satisfied with the status
continue working to reduce emissions by streamlining
and R&D. We would like each of them to build a
addition to materials technology, including in
quo, but rather drives us to boldly transform
our electricity use as much as possible.
dynamic value creation chain that leverages the
magnetic and ceramic materials, we also have
ourselves and constantly take on new challenges.
In the area of human capital, I think that people
characteristics of their respective regions and
process technology, which can bring out the
TDK’s current broad business portfolio was built as a
are the fundamental element supporting a company’s
constituent team members, leading to strengthening
properties of those materials to the utmost. These,
result of that spirit. Our business structure may yet
sustainable growth. To make the most of the
TDK United as a whole. With this delegation of
along with evaluation and simulation technology
change going forward, to continue adapting to a
individuality and abilities of our highly diverse human
authority to the front lines, I would also like to see
(which provides accurate analysis of ultra-fine areas);
changing environment or to address new customer
resources, we have established and are currently
the Board of Directors focus on broader or more
product design technology (to create modules and
expectations. Still, as long as we maintain this
running the Global Management Development
medium- to long-term themes and engage in
solutions from a variety of materials and
venture spirit, the company will continue to evolve
Programs, which integrates everything from hiring
vigorous discussion.
components); and production engineering (which
and grow. I am convinced of that.
supports mass production with consistent quality),
form TDK’s five core technologies.
Diversity is also one of TDK’s major strengths. In
terms of human capital, we employ people from a
variety of countries and cultural backgrounds,
and training, to compensation, skills development,
and goal management. In April 2023, we appointed
Andreas Keller, General Manager of our Human
Resources HQ, to become our Chief People and
Sustainability Officer (CPSO). The goal is to deepen
collaboration between the Human Resources HQ
forming teams with a variety of backgrounds and
In corporate management, it is important not only to
and the Sustainability Promotion HQ, the Corporate
As I mentioned earlier, given that EX and DX have
perspectives. This diversity is what makes it possible
pursue financial value, but also to focus on
Strategy HQ, and others in an effort to further evolve
become such powerful trends worldwide, we
for us advisers to our customers on a wide range of
non-financial activities such as ESG, which might
sustainability initiatives.
foresee growth potential in the seven areas we are
issues and requests. It allows customers the
also be considered future financial value, and to
In February 2023, we conducted our first global
currently focused on (the Seven Seas). And in fact, I
expectation that, when they face difficulties, they can
contribute to the realization of a sustainable society
Team Member Engagement Survey. Based on those
sense a significant increase in the expectations of
always turn to TDK for some kind of response.
while enhancing corporate value through a balance
results, going forward we will consider measures
our customers, shareholders, investors, business
Another thing that I think is a strength for TDK is
of these two. This, too, I see as both a management
that will contribute to team member engagement
partners, and the varied other stakeholders in TDK’s
our venture spirit. Even as the company has grown
issue and, at the same time, an opportunity for
and improving motivation. In addition, we also intend
orbit. Everything else depends on our ability to
in scale to net sales in excess of two trillion yen,
growth, and I would like to describe our efforts in the
to put even more effort than before in maintaining
execute. “The stage is prepared. Now it is up to
with more than 100,000 team members, we still
areas of decarbonization and energy, human capital,
and improving members’ health, one of the areas of
how well each of you can perform!” That is the call I
retain and continue to pass down our founding spirit
and governance.
quality I mentioned earlier. In conjunction with this
am putting out to the diverse players in the TDK
of challenge. You can sense, in whichever country
As part of our efforts toward helping to achieve a
effort, we established the TDK Health Declaration to
United band.
or division you go to, the positive attitude behind the
decarbonized society, in November 2022 TDK joined
actively support managing and improving the health
I believe that by maximizing the strengths of TDK
Group’s willingness to courageously take on things
the RE100 international initiative, as we work toward
of our members. We also joined the Health &
United—the venture spirit we have inherited as part
of value and new challenges without fear of failure.
ensuring that by 2050, 100% of the electricity used
Productivity Management Alliance, the goal of which
of our DNA since our founding; our core technologies
In that sense, I think of TDK as a magnificent
at our business facilities around the world will come
is the co-creation of a model and solutions for health
from material science; our wide range of business
venture company.
renewable energy sources for 100% of the electricity
the most of our members’ individuality.
other stakeholders to gain a deeper understanding
from renewable energy. Initially, we have set a goal
of achieving a Group-wide renewable energy
introduction rate of 50% or more by fiscal 2026, and
we expect to achieve this goal by the end of fiscal
2025, one year ahead of schedule. One of the
specific initiatives backing this progress is that,
effective from July 2023, we have transitioned to
used at all of our domestic manufacturing sites. In
parallel with these renewable energy initiatives, we
continue to focus on lower energy consumption,
and are working to reduce the amount of energy
used at each of our sites, primarily manufacturing
sites. Although overall production is currently on an
upward trend, we are seeing a downward trend not
only in CO2 emission intensity but in the volume of
emissions as well. Going forward, we intend to
and productivity management in Japan.
domains and diverse human resources running
In the area of governance, based on our basic
across the company; and our organizational ability to
policy of Empowerment and Transparency we have
smoothly integrate these into a single jazz big
established rules that every team member of the
band—we will continue to create new value that
Group must follow as the Global Common
meets your expectations as we pursue our goal of
Regulations, while structuring an autonomous and
becoming an indispensable presence in society.
decentralized organization that allows us to make
I would like our shareholders, investors, and
As part of delegating authority to the front lines,
of this value creation story. To that end, we will make
we are also advancing efforts to expand the authority
even greater efforts to disseminate a variety of
of our regional headquarters. Since October 2022,
information as a company and to engage in dialogue
we have appointed both the heads of our regional
with all of you. I hope you will continue to look
headquarters in China and the Americas as corporate
forward to the future of TDK United.
officers. This is intended to allow our regional
headquarters, which have traditionally focused on
business management functions, to further evolve by
integrating a variety of functions such as marketing
In the passive components business, both sales
and profit increased significantly thanks to strong
performance in products for the automotive market,
especially for xEVs. In May 2022, we announced an
investment of approximately ¥50.0 billion to increase
In the electronics market in fiscal 2023, EX-related
production of multilayer ceramic chip capacitors
demand for mainly xEVs and industry equipment
(MLCCs) in order to meet strong market demand.
was strong, though demand remained sluggish in
Originally, we had planned to start mass production
some products for the ICT market. The Group’s
in September 2024, but we are now moving ahead
ability to reliably capture this demand enabled us to
with plans to push the start of mass production
achieve a 14.7% year-on-year increase in
forward by about five months, to around April 2024.
consolidated net sales and a 1.2% year-on-year
While our growth strategies thus progressed as
increase in operating profit, both record highs. In my
expected, or even better than expected, there were
first year as president of TDK, I believe we have
some areas in which we did not progress as
achieved a certain level of success in terms of our
planned, including improvement of low profit
performance figures.
so-called problematic businesses.
Last year, when I assumed the post of president,
In particular, in the magnet business, which
I stated that growth strategies for three of our
continues to struggle, sales to the xEV market
businesses were particularly important for TDK to
increased, resulting in higher revenues, but delays in
work toward a new stage of growth. Those
boosting productivity prevented an improvement in
strategies were to strengthen our business in
profitability, resulting in recording of a ¥2.2 billion
medium capacity rechargeable batteries; growth of
impairment loss. The magnet business is viewed in
the sensor business; and regrowth of the passive
large part as an investment in the future in terms of
components business. Our assessment is that all
capturing forthcoming demand for use in
three of these businesses have made good progress
automobiles, wind power generation, and other
over the past year.
products. Going forward, we will work to improve
In the medium capacity rechargeable battery
profitability while maintaining a more rigorous
business, there has been strong growth in demand
balance between investment and production.
for residential energy storage systems (RESSs),
Meanwhile, HDD heads saw a large decrease in
contributing to earnings. Business through our joint
profit due to significant inventory adjustments as
ventures (JVs) with CATL, the world’s largest maker
data center investment was more restrained than
of automotive batteries with which we formed an
expected because of the impact of the economic
alliance in 2021, is also progressing steadily. The
slowdown and other factors. With demand for HDDs
new production site built in Xiamen, Fujian Province
expected to take some time to recover, and after
began operating in April 2023.
reviewing the market needs and the competitiveness
The sensor business finally moved to profitability
of our business in products for the ICT market that
in fiscal 2022 and is now positioned to embark on its
apply the HDD suspension, the decision was made
second chapter. Magnetic sensors performed well in
to downsize that business. As a result, we recorded
fiscal 2023, with sales of Hall sensors growing for
a one-time expense of ¥25.7 billion for impairment
automotive and smartphone applications. In
losses in and restructuring of the HDD-related
addition, sales of TMR sensors for automotive
business as a whole.
applications remained strong, and sales of new
While it’s unfortunate that the Magnetic
products for smartphones did well. As a result, the
Application Products business as a whole suffered
sensor business overall saw a significant increase in
significant losses, I appreciate the flexibility and
both sales and profit. In response, we have decided
speed with which the business divisions responded
to invest approximately ¥35.0 billion to increase
to the unexpected deterioration in business
production of TMR sensors, which are the driving
conditions. We will continue to implement measures
force behind this growth.
to improve profitability as quickly as possible.
later, these meetings continue, allowing us to
deepen our mutual understanding by discussing
personal thoughts that may be difficult to talk about
in full group meetings.
Corporate leaders are frequently compared to the
I have also made a point of visiting our business
conductors of an orchestra, but in TDK’s case, I think
sites through Japan and overseas to talk with our
a big jazz band, with its greater emphasis on diverse
many team members working at those locations.
personalities, is a more appropriate metaphor. I thus
Since becoming president, I have completed visits to
see my role as equivalent to the leader and manager
all of our sites in Japan, and overseas, I have made
of this big band.
the rounds of our main locations in Europe, the
Today, TDK is a global corporate group with over
United States, and China. In the current fiscal year, I
250 locations across more than 30 countries and
intend to deepen this communication not only by
regions. Non-Japanese now comprise about 90% of
visiting those sites I have yet to travel to, but by
our more than 100,000 employees. Through my
actively conducting visits to the major customers in
30-plus-year career with TDK, I’ve learned that this
each of our businesses.
global company has many team members
In addition, in April 2023 we held an online town
speak of encompasses a much broader meaning. I
believe it includes enhancing quality in a more inclusive
sense, from streamlining production and improving
yield rates, to strengthening marketing and, further,
improving the working environment and increasing
team members’ motivation. These factors are things
that we can improve and enhance through our own
efforts, regardless of macro market conditions. While it
is of course important to address a changing market
environment, aside from that I think we can find
many things we can and should do to improve
quality simply by reexamining what is right in front of
us. That is what we might call growth potential.
Last year when I visited one of our sites in the
Tohoku region, the person in charge on site told me
that after reevaluating their quality standards, their
(employees) working all over the world who have
hall meeting on a global basis. Everyone in the
yield rate rose, leading to an improvement of several
and applications. Its mission is to utilize information
outstanding abilities and unique talents. These
Group can attend these meetings, which offer time
tens of millions of yen annually. In other words,
on cutting-edge technology trends obtained from
diverse, highly individual players have gathered under
during which anyone is free to ask questions. I
taking another look at excessive quality generated
TDK Ventures Inc. (TDK Ventures), which functions as
the TDK flag, each performing in a style that brings
would like to continue holding these meetings, too,
new value. I am certain that these kinds of small
a corporate venture capital (CVC) organization, while
out their unique personalities. Together, they form a
while listening to the opinions of our team members.
enhancements to quality, if put into practice across
at the same time tying that information to the
band called TDK, one that improvises at times while
swinging powerful melodies and beautiful harmonies.
This is why I call this band “TDK United” rather
than “One TDK.” As the band leader and manager, it
is my role to ensure that the creativity, motivation,
all of our global sites, can result in considerable
development of products that respond quickly to
improvement and growth. Under the “Quality First”
market trends, combining a variety of technological
slogan, we will continue to send out a strong
seeds in a manner that makes them available across
message company-wide encouraging everyone to
our technology divisions and business companies.
proactively review the quality of their work.
We will further strengthen these functions and
and desire of each of our diverse team members is
Fiscal 2024 is the final year of our current
Another thing I believe is an issue in achieving
maximize TDK United’s value creation by offering the
brought to bear in the best way possible. As a result,
Medium-Term Plan. Of the numerical targets set out
sustainable growth is to further strengthen our
products and solutions the market and our
while each player may seem to be taking their solos
in that plan, we expect to meet our target for net
market-in concept. This too is not only a
customers need when they need them.
as each of them sees fit, a sense of harmony and
sales, having already achieved it in fiscal 2023.
tension is created as the notes they each play collide
Unfortunately, it may prove difficult to reach our profit
with one another, producing a high-spirited jazz
targets of an operating profit margin of 12% and
number. I believe that my greatest role as president
ROE of 14%. Naturally, we will continue doing our
is to manage this band so that we achieve this kind
best to reach those numbers up until the last minute.
of value creation. I do this by preparing the stage
We intend to further expand the three growth
management issue, but an opportunity for growth.
Since its founding, TDK was strongly focused on a
product-out or technology-out approach, hoping
customers would use the amazing technologies and
wonderful products we created. I believe this
technology-out attitude is in itself important to a
and the performance environment, coordinating
businesses mentioned earlier, while at the same time
creative manufacturer like TDK. That said, however,
Our corporate motto is to “Contribute to culture and
the relationships among our band members, and
we work to increase earnings by further addressing
it is also important for us as a manufacturer to keep
industry through creativity.” Our Sustainability Vision,
always striving to keep the band in the best
issues in our problematic businesses.
a close eye on market trends and customers’
which we established in 2020, is driven by the
possible condition.
To achieve the goals of the current Medium-Term
potential needs, quickly feeding that information to
slogan “Technology for the well-being of all people.”
For me to fulfill this role, nothing is more
Plan, I am now calling for a rigorous company-wide
development and offering new products and
As these words suggest, my hope is that we will be
important than close communication with each of
implementation of our “Quality First” policy. Of the
solutions in a timely manner. This is why my ideal is a
a company that can bring people happiness through
our team members. I do this not through e-mail or
material issues we have raised in striving toward
hybrid structure that appropriately bridges the
technology. Energy transformation (EX) and digital
phone calls, but emphasize, as much as possible,
sustainable growth, I am placing particular emphasis
technology-out and market-in approaches.
transformation (DX), which today are major global
conveying my thoughts directly by discussing them
on quality. It is the top reason TDK is chosen as a
To bolster our market-in stance, two years ago
trends, are nothing less than a movement toward a
face-to-face and by listening to what our people
brand, and I believe it is a fundamental element of
TDK established the Corporate Marketing &
happier state for humanity. While we at TDK are
have to say. This is why, shortly after becoming
trust in us as a manufacturer.
Incubation (CM&I) HQ, an organization with
firmly on top of these major trends, we would like to
president, I decided to hold monthly one-on-one
When talking about quality, the general tendency
cross-sectional functions. This HQ functions as an
become an even more indispensable presence in
meetings with all of our 18 corporate officers. A year
is to think only of product quality, but the quality I
antenna for TDK’s wide range of markets, customers,
society than we are today.
Message from the President and CEO
TDK’s strength in terms of technology is that in
The TDK spirit is never satisfied with the status
addition to materials technology, including in
magnetic and ceramic materials, we also have
process technology, which can bring out the
properties of those materials to the utmost. These,
along with evaluation and simulation technology
(which provides accurate analysis of ultra-fine areas);
product design technology (to create modules and
solutions from a variety of materials and
components); and production engineering (which
supports mass production with consistent quality),
form TDK’s five core technologies.
Diversity is also one of TDK’s major strengths. In
terms of human capital, we employ people from a
variety of countries and cultural backgrounds,
forming teams with a variety of backgrounds and
perspectives. This diversity is what makes it possible
for us advisers to our customers on a wide range of
issues and requests. It allows customers the
expectation that, when they face difficulties, they can
always turn to TDK for some kind of response.
Another thing that I think is a strength for TDK is
our venture spirit. Even as the company has grown
in scale to net sales in excess of two trillion yen,
with more than 100,000 team members, we still
retain and continue to pass down our founding spirit
of challenge. You can sense, in whichever country
or division you go to, the positive attitude behind the
Group’s willingness to courageously take on things
of value and new challenges without fear of failure.
In that sense, I think of TDK as a magnificent
venture company.
quo, but rather drives us to boldly transform
ourselves and constantly take on new challenges.
TDK’s current broad business portfolio was built as a
result of that spirit. Our business structure may yet
change going forward, to continue adapting to a
changing environment or to address new customer
expectations. Still, as long as we maintain this
venture spirit, the company will continue to evolve
and grow. I am convinced of that.
Sustainability initiatives
Creating corporate value in both
financial and non-financial terms
In corporate management, it is important not only to
pursue financial value, but also to focus on
non-financial activities such as ESG, which might
also be considered future financial value, and to
contribute to the realization of a sustainable society
while enhancing corporate value through a balance
of these two. This, too, I see as both a management
issue and, at the same time, an opportunity for
growth, and I would like to describe our efforts in the
areas of decarbonization and energy, human capital,
and governance.
As part of our efforts toward helping to achieve a
decarbonized society, in November 2022 TDK joined
the RE100 international initiative, as we work toward
ensuring that by 2050, 100% of the electricity used
at our business facilities around the world will come
from renewable energy. Initially, we have set a goal
of achieving a Group-wide renewable energy
introduction rate of 50% or more by fiscal 2026, and
we expect to achieve this goal by the end of fiscal
2025, one year ahead of schedule. One of the
specific initiatives backing this progress is that,
effective from July 2023, we have transitioned to
renewable energy sources for 100% of the electricity
used at all of our domestic manufacturing sites. In
parallel with these renewable energy initiatives, we
continue to focus on lower energy consumption,
and are working to reduce the amount of energy
used at each of our sites, primarily manufacturing
sites. Although overall production is currently on an
upward trend, we are seeing a downward trend not
only in CO2 emission intensity but in the volume of
emissions as well. Going forward, we intend to
continue working to reduce emissions by streamlining
our electricity use as much as possible.
In the area of human capital, I think that people
are the fundamental element supporting a company’s
sustainable growth. To make the most of the
individuality and abilities of our highly diverse human
resources, we have established and are currently
running the Global Management Development
Programs, which integrates everything from hiring
and training, to compensation, skills development,
and goal management. In April 2023, we appointed
Andreas Keller, General Manager of our Human
Resources HQ, to become our Chief People and
Sustainability Officer (CPSO). The goal is to deepen
collaboration between the Human Resources HQ
and the Sustainability Promotion HQ, the Corporate
Strategy HQ, and others in an effort to further evolve
sustainability initiatives.
In February 2023, we conducted our first global
Team Member Engagement Survey. Based on those
results, going forward we will consider measures
that will contribute to team member engagement
and improving motivation. In addition, we also intend
to put even more effort than before in maintaining
and improving members’ health, one of the areas of
quality I mentioned earlier. In conjunction with this
effort, we established the TDK Health Declaration to
actively support managing and improving the health
of our members. We also joined the Health &
Productivity Management Alliance, the goal of which
is the co-creation of a model and solutions for health
and productivity management in Japan.
In the area of governance, based on our basic
policy of Empowerment and Transparency we have
established rules that every team member of the
Group must follow as the Global Common
Regulations, while structuring an autonomous and
decentralized organization that allows us to make
the most of our members’ individuality.
As part of delegating authority to the front lines,
we are also advancing efforts to expand the authority
of our regional headquarters. Since October 2022,
we have appointed both the heads of our regional
headquarters in China and the Americas as corporate
officers. This is intended to allow our regional
headquarters, which have traditionally focused on
business management functions, to further evolve by
integrating a variety of functions such as marketing
and R&D. We would like each of them to build a
dynamic value creation chain that leverages the
characteristics of their respective regions and
constituent team members, leading to strengthening
TDK United as a whole. With this delegation of
authority to the front lines, I would also like to see
the Board of Directors focus on broader or more
medium- to long-term themes and engage in
vigorous discussion.
To our stakeholders
Putting even greater effort into our
dialogue with you, as we work to
execute our value creation story
As I mentioned earlier, given that EX and DX have
become such powerful trends worldwide, we
foresee growth potential in the seven areas we are
currently focused on (the Seven Seas). And in fact, I
sense a significant increase in the expectations of
our customers, shareholders, investors, business
partners, and the varied other stakeholders in TDK’s
orbit. Everything else depends on our ability to
execute. “The stage is prepared. Now it is up to
how well each of you can perform!” That is the call I
am putting out to the diverse players in the TDK
United band.
I believe that by maximizing the strengths of TDK
United—the venture spirit we have inherited as part
of our DNA since our founding; our core technologies
from material science; our wide range of business
domains and diverse human resources running
across the company; and our organizational ability to
smoothly integrate these into a single jazz big
band—we will continue to create new value that
meets your expectations as we pursue our goal of
becoming an indispensable presence in society.
I would like our shareholders, investors, and
other stakeholders to gain a deeper understanding
of this value creation story. To that end, we will make
even greater efforts to disseminate a variety of
information as a company and to engage in dialogue
with all of you. I hope you will continue to look
forward to the future of TDK United.
10
11
Value Creation Process
Our Business Model
INPUTS
Financial capital
Financial position and investments
that support value creation
• Total assets (fiscal 2021)
¥2,359.7 billion
• Capex (fiscal 2022 to fiscal 2024) ¥750.0 billion
Manufactured capital
Competitive global network
• Manufacturing sites
Approx. 100 locations
Social and relationship capital
Strong customer base and
co-creation of innovation
• Long-term, good relations with
major global corporation customers
• TDK Ventures investments in 26 companies
Intellectual capital
Unique core technologies that
continue to grow
• Global development system for
creating technologies of value
• Ferrite Tree and five core technologies
• Research and development (fiscal 2021)
¥127.4 billion
Human capital
Diverse human resources
• Consolidated number of employees (fiscal 2021)
129,284
• Non-Japanese corporate officers:
9 of 18 in total (as of the end of June 2023)
92.0%
• Overseas employee ratio (fiscal 2021)
• Diverse and abundant engineering staff
Natural capital
Effective use of resources
• Total energy consumption (fiscal 2021)
• Total water withdrawal (fiscal 2021)
17,783 thousand m3
16,068,546GJ
Our Driver
Corporate Motto
Contribute to culture and industry
through creativity
Corporate Principles
Sustainability Vision
“Vision” “Courage” “Trust”
Technology for the well-being of
all people
TDK has voluntary adopted the IFRS on its consolidated financial statements in the annual Securities Reports from
the fiscal 2022 in place of the US-GAAP. The figures for the fiscal 2021 are also presented in accordance with IFRS.
BUSINESS ACTIVITIES
Realization of 2CX
Customer Experience, Consumer Experience
Robotics
Medical/
Health Care
Seven Seas
(see page 14)
EX DX
Kotozukuri
Systems
Mobility EV
Modules
Parts
AR/VR
Beyond
5G
Mobility
ADAS
Renewable
Energy
Monozukuri
IoT
TDK Group’s Materiality (see page 26)
Core Competencies
New designs from
material science
Manufacturing capabilities
that will continue to evolve
Sales and
marketing to
strike at the
center of the
world
Unique employee culture for value creation
Empowerment and Transparency
(see page 65)
Return on capital
Changes in the external environment
Necessity of EX and DX in industry
OUTPUTS
High-value-added products and services
Passive
Components
Sensor Application
Products
Magnetic Application
Products
Energy Application
Products
(see page 20)
By-products and waste
CO2
Emissions
Chemical
substances
Achieve net zero
CO2 emissions
by 2050
Improving
the emission
intensity
Reducing the use
and emission of
chemical substances
OUTCOMES
Financial capital
• OP margin (fiscal 2024):
• ROE (fiscal 2024):
over 12%
over 14%
(see page 30)
Manufactured capital
• Achieving zero-defect product quality
• Management of ISO certification maintenance
Certification maintenance ratio: 100%
• Furthering activities of all types to reduce
quality-related costs
(see page 44)
Social and relationship capital
• CSR compliant supplier rate (fiscal 2024): 100%
• “A rank” in degree of customer satisfaction:
(see page 50)
At least 95%
Intellectual capital
• Total number of patents claimed globally:
Approx. 18,000
• Deepening of core technologies and accumulation
of production technology know-how
(see page 40)
Human capital
• Female managers ratio (by 2035): 15% (Japan)
(see page 36)
Natural capital
• CO2 emission intensity from energy use
Reduce by 12% compared with fiscal 2015
(fiscal 2024)
(see page 52)
12
13
Climate change
Resource depletion
Geopolitical risks
Changes to social
structure and
industrial structure
Expansion of
the pandemic
Heightened
awareness of
human rights
TDK’s Solutions for Social Challenges
TDK’s seven focal areas
Seven Seas
TDK has stipulated seven focal areas as the “Seven Seas.”
As energy transformation (EX) and digital transformation (DX) further advance as the main currents of
society, we have cited Beyond 5G, IoT, Robotics, AR/VR, Medical/Health Care, Mobility ADAS/EV, and
Renewable Energy as fields to be tackled in a priority manner going forward.
TDK’s four business companies (BCs), the HQ R&D function, and the corporate marketing department
will work together to promote product development and contribute to the solution of social challenges.
Beyond 5G
IoT
Anytime, Anywhere, Anything:
Delivering a More Connected Future
Turning Connectivity into
an Emotional Experience
Beyond 5G refers to the next-generation communications system, which
will further advance the functions of 5G network communications. It will
enable the real-time processing of vast amounts of data from around the
world. Transcending the conventional communications infrastructure, it is
expected soon to become the core of social infrastructure. TDK’s
technologies will contribute to such innovations as augmented reality
(AR) powered by ultra-high-speed and high-bandwidth communications,
as well as vehicle-to-everything (V2X) communications.
The Internet of Things (IoT) connects everything around us to a
network and exchanges data between cars, household appliances,
industrial equipment, and medical devices. The technologies are
creating new value and culture in our society and lives. TDK supplies
devices and promotes innovations to further evolve IoT equipment,
such as haptic technology, which transmits information through not
only sight and hearing but also touch.
Chip antennas for
smartphones and
automobile applications
Applications: Smartphones,
tablets, mobile routers, etc.
Click here to learn more
The ultra-thin actuators
PiezoHapt™
Applications: IoT, etc.
Click here to learn more
AR/VR
Medical/Health Care
A Whole New World, Right Before Your Eyes
Living Healthier with Technology
Technologies like VR enable a realistic experience of the virtual
world, while AR overlays the virtual world onto the real world. These
technologies are being used to create simulated experiences not
only in entertainment, but in education, as well as in medical and
travel and so on. Through the development, for example, of a
compact and light laser module that projects high-quality images,
TDK will help realize easy access to digital space.
Innovations in medical and health care technology are advancing at a
faster pace. They include daily health management through wearable
devices, online consultations via the Internet, image diagnosis using
AI and the development of new drugs, are advancing. TDK’s inertial
measurement units (IMUs) in wearable devices sense and track
human movement with high degrees of accuracy to support
biometric measurements. Thus, we promote the health and
well-being of people of all ages.
Ultrasmall full color
laser modules
Applications: AR/VR (augmented
reality/virtual reality), etc.
Click here to learn more
Inertial measurement units (IMUs)
Applications: Medical and
health care, etc.
Click here to learn more
Robotics
A Partner Who Is Always
by Your Side
The new society in which robots and human beings coexist is just
around the corner. Sensors, such as temperature sensors, angle
sensors, and inertial sensors, are essential for the high-level control
of robot movement. In addition, a robot equipped with optical image
stabilization (OIS) technology will be able to communicate with you
smoothly by constantly acquiring steady visual information even
during intense movement.
Mobility ADAS/EV
Renewable Energy
Mobility Experiences That Are
Safe, Secure, and Sustainable
Renewable Energy as
the New Normal
The emergence of advanced driver assistance systems (ADASs) and
electric vehicles (EVs) enables mobility experiences that are safe,
secure, and sustainable. Notably, sensors that detect the status of
the vehicle and its surrounding conditions are playing increasingly
important roles. By detecting road and vehicle conditions and
coordinating with next-generation communications systems, TDK’s
sensor solutions will enable safer driving.
What can technology do to help achieve a sustainable global
environment? For one, it can help ensure a stable supply of electric
power through the use of energy storage systems (ESSs). Through the
supply of medium capacity rechargeable batteries and power-supply
products for residential energy storage systems (RESSs), TDK will
contribute to the diffusion of renewable energy and the solution of
issues relating to climate change, such as the energy problem.
TMR angle sensors
Applications: Service robots, etc.
Click here to learn more
Smart sensing
InWheelSense™
Applications: Automotive, etc.
Click here to learn more
Residential energy storage
systems (RESSs)
Applications: Smart energy, etc.
Click here to learn more
14
15
Changes in TDK’s Portfolio
Together with the changing times,
TDK has continued to create new businesses
Throughout this history of more than 85 years, TDK has responded to the constantly changing market and continued to
supply valuable products. To supply products that meet the needs of the society, TDK has promoted technological
innovations applying and developing our core technologies, such as material technology rooted in ferrite and process
technology. With our eyes on future social requirements, we have also actively addressed such things as our main
business portfolio transformation.
Diffusion of electric products
Diffusion of cassette tapes
Magnetic tapes
Capacitors
HDD heads
Ferrites
Inductors
Magnets
Promoted electrification of automobiles
Diffusion of cloud computing
Diffusion of smartphones and continued
upgrading of functions
(Net sales)
Diffusion of personal computers and continued
expansion of memory capacity
Sensors & actuators
Batteries
RF
components
Power
modules
1935
1970
1980
1990
2000
2003
2010
2020
2023
Changes in the portfolio since 2000
Changes in the portfolio since 2000
2005
•Acquired ATL, a Hong Kong-based manufacturer
2008
•Acquired EPCOS (now TDK
and seller of lithium-ion batteries.
•Acquired Lambda Power Group, a company specializing
in power supply business, from Invensys plc.
Electronics), a Germany-based
electronic components manufacturer.
Deep cultivation of the markets
for energy application products
and passive components
2000
•Acquired Headway Technologies,
an U.S.-based magnetic head manufacturer.
2007
•Acquired Magnecomp, a Thailand-based
manufacturer of suspension applications
for HDDs.
Fiscal 2003
Recording Media
& Systems
such as tapes,
CDs, and MDs
Expansion of the magnetic application
products business
2007
•Marketing and sales operations for
TDK brand recording media sold to
Imation Corp. in the United States.
2012
•Withdraw from OLED display business
2013
•Discontinuation of magnetic tape production
2014
•Withdraw from recording media business
Electronic Materials
& Components
Including HDD heads and
passive components
Other
Film Application Products
including rechargeable
batteries
Magnetic Application
Products
Fiscal 2013
Fiscal 2023
Passive
Components
Other
Energy Application
Products
Magnetic
Application Products
Passive
Components
Sensor Application
Products
(Percentage of net sales)
Expansion of
the sensor
application
products
business
2016
•Acquired Micronas, a Switzerland-based developer
and manufacturer of magnetic sensors.
(Subsequently, absorbed and merged into TDK
Magnetic Field Sensor Switzerland)
2017
•Acquired InvenSense, a U.S.-based sensor
business company.
2017
•Part of the high-frequency components
business sold to Qualcomm
16
17
TDK’s Current Businesses
(Fiscal 2023, IFRS)
*In accordance with the reorganization for the first quarter of the fiscal 2023, certain products of Other are reclassified into Other passive components and certain products of Other
passive components are reclassified into Capacitors and Inductive devices. Thus, the prior year’s figures are also reclassified to conform to the new segmentation.
Passive
Components
Share of net sales
26.4%
¥575.9 billion
Sensor
Application
Products
Share of net sales
7.8%
¥169.5 billion
Magnetic
Application
Products
Share of net sales
9.2%
¥200.6 billion
Energy
Application
Products
Share of net sales
53.8%
¥1,173.4 billion
Other
Net sales (¥ billion)
575.9
507.8
Net sales
407.1
¥2,180.8 billion
Operating profit (¥ billion)/
OP margin (%)
95.5
Net sales (¥ billion)
Operating profit (¥ billion)/
OP margin (%)
10.7
Net sales (¥ billion)
248.4
Operating profit (¥ billion)/
OP margin (%)
Net sales (¥ billion)
1,173.4
Operating profit (¥ billion)/
OP margin (%)
Net sales (¥ billion)
169.5
16.6
130.8
81.3
76.8
15.1
40.1
9.8
-0.2
-0.3
-30.6
6.3
199.3
200.6
-1.1
-2.3
4.5
1.8
-56.4
965.3
740.2
Share of net sales
2.8%
¥61.4 billion
Operating profit (¥ billion)/
OP margin (%)
-2.9
-0.7
-31.4
-16.1
2021
2022
2023
(FY)
61.4
51.1
49.7
-0.4
-1.4
147.4
19.9
123.2
147.4
12.6
12.8
Operating profit
¥168.8 billion
Capex (¥ billion)
79.7
Number of employees
32,805 34,218 34,522
2021
2022
2023
(FY)
2021
2022
2023
(FY)
2021
2022
2023
(FY)
-24.9
2021
2022
2023
(FY)
2021
2022
2023
(FY)
2021
2022
-28.1
2023
(FY)
2021
2022
2023
(FY)
2021
2022
2023
(FY)
2021
2022
2023
(FY)
41.6
35.1
10.9
6.7
29.7
Capex (¥ billion)
Number of employees
Capex (¥ billion)
Number of employees
Capex (¥ billion)
Number of employees
Capex (¥ billion)
Number of employees
17.1
8,523
7,783
7,274
52.5
53.8
13,726 13,580
11,683
175.7
67,694
128.0
114.0
54,288
41,945
4.2
3.6
5.1
4,104
4,804
4,469
2021
2022
2023
(FY)
2021
2022
2023
(FY)
2021
2022
2023
(FY)
2021
2022
2023
(FY)
2021
2022
2023
(FY)
2021
2022
2023
(FY)
2021
2022
2023
(FY)
2021
2022
2023
(FY)
2021
2022
2023
(FY)
2021
2022
2023
(FY)
Capacitors
Soft-termination multilayer ceramic chip capacitors,
aluminum electrolytic capacitors, etc.
Sensors
Sensors (temperature, pressure, angle, current,
acceleration, gyroscope, etc.)
Magnets
Magnets for motors (cooling fan, door lock, etc.),
magnets for xEV drive motors, etc.
Energy devices
Lithium-ion batteries (for electric motorcycles)
Power supplies
DC-DC converters, onboard chargers,
programmable power supplies (for inspecting) etc.
Automotive
ICT
Industrial & Energy
Inductive devices
SMD inductors with guaranteed high-temperature
ratings, common mode filters for automotive-use
LAN, etc.
Other passive components
Piezo actuators, etc.
Capacitors
3-terminal feed-through capacitors, etc.
Inductive devices
SMD inductors, thin-film common-mode filters, etc.
Other passive components
Ceramic high-frequency components, multilayer
chip varistors, etc.
Capacitors
Film capacitors, aluminum electrolytic capacitors, etc.
Inductive devices
Transformers, EMC filters, etc.
Other passive components
Varistors, arresters, etc.
Sensors
Sensors (acceleration, gyroscope, MEMS
microphones, magnetic, barometric pressure, etc.)
Recording devices
HDD magnetic heads, HDD suspension applications, etc.
Magnets
HDD magnets, etc.
Energy devices
Lithium-ion batteries (for smartphones, tablet devices,
notebook computers, wearable devices, game
consoles, etc.)
Power supplies
POL converters, etc.
Camera module micro actuators (VCM/OIS) for
smartphones, etc.
Sensors
Sensors (temperature, pressure, acceleration,
gyroscope, current, etc.)
Magnets
Magnets for industrial equipment motors, etc.
Energy devices
Lithium-ion batteries (for drones, residential
energy storage systems, etc.)
Power supplies
Switching power supplies (AC-DC, DC-DC),
bidirectional DC-DC converters, etc.
Load ports, flip chip bonding systems, flash memory
application devices, anechoic chambers, etc.
Competitors
Capacitors
Murata Manufacturing, TAIYO YUDEN,
SEMCO (Korea), Yageo (Taiwan), etc.
Inductive devices
Murata Manufacturing, TAIYO YUDEN,
SEMCO (Korea), Cyntec (Taiwan), etc.
Other passive components
Murata Manufacturing, ALPS ALPINE,
Panasonic, AMOTECH (Korea), etc.
Sensors
Bosch Sensortec (Germany),
STMicroelectronics (Switzerland),
Infineon (Germany), Allegro (USA),
Melexis (Belgium), Asahi Kasei Microdevices,
Shibaura Electronics,
Amphenol Corporation (USA),
Sensata Technologies (USA),
Murata Manufacturing, etc.
HDD magnetic heads*1
Seagate Technology (USA), Western Digital
Technologies (USA)
HDD suspension applications
NHK SPRING, etc.
Magnets
Shin-Etsu Chemical, Proterial, ZHONG KE SAN
HUAN (China), etc.
Energy devices
Samsung SDI (Korea), LG Energy Solution (Korea),
Murata Manufacturing, Panasonic, BYD (China), etc.
Power supplies
Delta Electronics (Taiwan), Advanced Energy (USA), XP
Power (Singapore), MEAN WELL (Taiwan), Cosel, etc.
*1 TDK is the world’s only specialized manufacturer of HDD magnetic heads. HDD magnetic head production is currently concentrated at three companies: TDK, Seagate, and Western Digital.
18
19
Strategy by Segment
Passive Components
Business Strategy
Achieve growth by firmly grasping EX and DX
trends with diverse elemental technologies
Net sales (billions of yen) / OP margin (%)
CAGR*: 7%
575.9
507.8
433.4
395.5
407.1
Value Creation 2020
Value Creation 2023
13.5
9.9
9.8
15.1
16.6
3/2019
3/2020
3/2021
3/2022
3/2023
3/2024
*As of the time of the Medium-Term Plans formulated
Sensor Application
Products Business Strategy
Expand customer base and applications and
move into the growth phase
Net sales (billions of yen) / OP margin (%)
CAGR*: 25%
169.5
130.8
76.5
77.9
81.3
Value Creation 2020
Value Creation 2023
3/2019
3/2020
3/2021
3/2022
-0.2
3/2023
6.3
3/2024
-28.9
*As of the time of the Medium-Term Plans formulated
-32.1
-30.6
As a result of the robust market for electronic components that continued from 2021 into the first
half of 2022 and the weak yen, the Passive Components business segment was able to register
record-high net sales and operating profit in the first and second fiscal years of the current
Medium-Term Plan. Since the summer of 2022, however, demand from mainly the ICT market,
such as smartphones, has shrunk. At the same time, the increase in energy and commodity prices
has put pressure on profits. But from a long-term perspective, the electrification of automobiles,
as well as ICT technology, are going to push up demand for electronic components worldwide.
Therefore, we will continue to actively undertake capital investment and to supply outstanding
and high-quality products without being flustered by any temporary business downturns.
In the current Medium-Term Plan we are focusing on the ICT and IoT markets, and thanks to an
expansion of the TMR and motion sensors businesses, it looks like we will be able to achieve our
numerical goals. Sensors have become able to gather and output even more advanced
information, and, following the electrification of automobiles, as “Episode 2” we will undertake
further value creation for xEVs and ADASs. The Sensor Systems Business Company is a team
gathering members from not only TDK but also various other companies, and our new slogan is
“Creating and connecting differences.” In accordance with the “market-in, concept-out” strategy,
we connect various differences in a single line so that people come into contact with different
values and thereby create new ideas and innovations.
Taro Ikushima CEO, Electronic Components Business Company
Takao Tsutsui CEO, Sensor Systems Business Company
Market needs
Growth strategies
Market needs
Growth strategies
•The passive components market has
expanded to the automotive and the
industrial equipment fields. There are
also signs of expansion to the IoT, use
of AR/VR and AI fields.
•As a result of the diffusion of electric
vehicles and other types of xEVs, and
the accelerated electrification of
automobiles, such as advanced driving
assistance systems (ADASs), the
number of electronic components
installed per vehicle is increasing.
•It is necessary that power electronic
components become even more
efficient so that a decarbonized society
can be achieved.
•The fields of ICT, automotive, and industrial equipment are fusing together, a variety of
new applications are being created. We have seen these as a growth market and are
bringing together our unique elemental technologies to put products into the market
that have a high degree of originality.
•Regarding multilayer ceramic chip capacitors (MLCCs), we are focusing on products for
automobiles, industrial equipment, mobile phone base stations, etc. that are required to
have high quality and large capacity. These fields demand elaborate and complex
manufacturing technology, so the barrier against the entry of rival companies is high.
•We provide a diverse range of inductors that use magnetic material as well as wire
winding, layering, and thin-film technologies. We are now focusing on supplying
products for automotive applications such as ADASs and autonomous driving, markets
that are expected to grow and demand high quality products.
• We possess a high level of elemental technologies, including a wide range of
processing techniques, materials, simulation, and analysis, enabling product
development tailored to markets and uses.
•With the diffusion of AI in the wake of
digital transformation, and to link the
real world and the virtual world, the
need for sensors able to digitalize all
kinds of information is growing.
•It is becoming increasingly important to
supply solutions embracing a
complexity of sensors, AI technology,
network technology, etc.
•The widespread adoption of xEVs and
ADASs will result in the diverse use of
temperature, pressure, magnetic,
motion, ultrasonic sensors and others.
•Sensors and sensor solutions are areas where we anticipate growth in the future. TDK
is striving to expand a product lineup that combines AI and machine learning (ML) with
a broad range of elemental technologies, all aimed at satisfying customer demands and
solving social issues.
•TMR sensors, which were developed by using the thin-film and magnetic technologies,
are a strategic product that TDK is focusing on. We are pushing forward on the
development of products suited to a wide range of applications from ICT to industrial
equipment and automotive uses.
•Our temperature sensors, pressure sensors, magnetic sensors, and motion sensors are
being used in products for automotive uses, and we are seeking to grow our business in
particular in conjunction with the expansion of uses with xEVs. As examples of magnetic
sensors, we are working to further development efforts that should deliver sensor
solutions that are both highly reliable and accurate by combining Hall and TMR sensors.
•We offer motion sensors, ToF sensors, MEMS microphones, and barometric pressure
sensors all based on our MEMS technology and will further create a lineup of sensors of
various types.
Opportunities
Value of demand for automotive MLCCs
Upward trend in the number of
MLCCs carried per product
Opportunities
Percentage of automobiles that comprise xEV is on the rise
•Expansion of sensor demand in the wake
Number of automobiles Percentage of xEVs
•Electrification and multifunctionalities of
automobiles
•Creation of new applications
Risks
•Catching up technologically by passive
components companies in China and
other Asian countries
•Unpredictable price fluctuations in energy,
raw materials, and distribution costs
•Geopolitical issues
(billions of yen)
CAGR 13%
400
300
200
100
0
Smartphones
1,000 +
Gasoline
cars
3,000–
5,000
EVs
5,000–
10,000 +
3/2021 3/2022 3/2023 3/2024 3/2025
(TDK forecast)
(TDK estimate)
of DX
•Electrification and multifunctionalities of
automobiles
Risks
•The rise of new competitor companies
•Unpredictable price fluctuations in energy,
raw materials, and distribution costs
•Geopolitical issues
(Millions of units)
100
80
60
40
20
0
(TDK forecast)
(%)
50
40
30
20
10
0
3/2021
3/2022
3/2023
3/2024
3/2025
20
21
Strategy by Segment
Magnetic Application
Products Business Strategy
Supply advanced technologies to meet
the needs of the high-capacity storage age
Net sales (billions of yen) / OP margin (%)
CAGR*: 12%
272.8
219.7
199.3
248.4
200.6
Value Creation 2020
Value Creation 2023
6.2
0.2
-1.1
1.8
3/2019
3/2020
3/2021
3/2022
3/2023
3/2024
*As of the time of the Medium-Term Plans formulated
-28.1
Energy Application Products
Business Strategy
Contribute to the realization of a sustainable
society through the batteries and power
supplies businesses
Net sales (billions of yen) / OP margin (%)
CAGR*: 11%
20.8
597.7
16.9
537.5
19.9
740.2
965.3
1,173.4
12.8
12.6
Value Creation 2020
Value Creation 2023
3/2019
3/2020
3/2021
3/2022
3/2023
2024/3
*As of the time of the Medium-Term Plans formulated
The HDD industry has a long history of successes in developing advance breakthrough
technology to increase areal density. The previous major technology was perpendicular recording,
which replaced traditional longitudinal recording, thereby allowing a major increase in areal
density and hence HDD storage capacity. TDK has been working very closely with our key
customer in advancing heat assisted magnetic recording (HAMR) technology. In the meantime, we
have also, in parallel, developed microwave assisted magnetic recording (MAMR). Although the
current HDD industry is going through a difficult transition due to macro-economic events and
circumstances, we firmly believe that the ever-increasing growth in digital creation will continue to
drive HDD demand especially for data centers and the high-capacity storage industry.
Albert Ong CEO, Magnetic Heads Business Company
Our medium capacity (mid-cap) rechargeable batteries joint ventures, which began full-scale
operations in 2022, already has acquired a globally top-class share of the mid-cap rechargeable
batteries market for RESSs. In fiscal 2024 and beyond, we will further accelerate the mid-cap
rechargeable batteries business, including batteries for electric motorcycles, and, while grasping
customer needs, contribute to the realization of a decarbonized society and to enhancing the
convenience of society through the timely supply of industrial/automotive power supplies using the
highly efficient power conversion and control technologies that are TDK’s forte. When it comes to
small capacity rechargeable batteries intended for the ICT devices that are our main business,
smartphone demand is forecast to be sluggish in the short-term but we are working to boost our
competitiveness through continual technological innovation with the goal of achieving further growth.
Fumio Sashida CEO, Energy Solutions Business Company
Market needs
Growth strategies
Market needs
Growth strategies
•Thanks to the expansion in cloud and
other services, investments in HDD
servers for data centers are forecast to
experience further growth. The
technology requirements for HDD
magnetic heads are likewise becoming
ever more sophisticated.
•By combining magnetic technology and thin-film process technology, we have
commercialized magnetic heads for HDDs such as TMR/PMR heads. TDK, the world’s
only independent manufacturer specializing in HDD magnetic heads, will focus on the
continuous development and mass production of new technology products such as
MAMR heads and HAMR heads by providing advanced technologies that meet the
needs of the era of large-capacity data storage.
•In preparation for the increased demand for new-technology products, we will
continuously promote automation and increase the utilization of big data to optimize
production capacity and operational systems.
•We will further enhance our share in the nearline HDD market by launching
next-generation Tri-SA suspension for large-capacity nearline HDDs.
Opportunities
•Expanding demand for data storage
through advances in AI technology and
popularization of cloud services, etc.
•Take the lead in medium- to long-term
technological innovation in cutting-edge
technologies (MAMR, HAMR)
Risks
•Curbs on investments in data centers and
storage
•Cost reductions due to SSD technology
innovations
•Unpredictable price fluctuations in energy,
raw materials, and distribution costs
•Geopolitical issues
Storage capacity of nearline HDDs shipped worldwide
(Exabytes)
4,000
3,000
2,000
1,000
0
2021
2022
2023
2024
2025
2028
Source: Techno Systems Research
*1 Exabyte (EB) = 1,000,000 Terabytes (TB)
•Demand is increasing for power
supplies and rechargeable batteries
due to the proliferation of xEVs, electric
motorcycles, 5G communications, IoT
and wearable devices.
•As the utilization of solar power, wind
power, and other renewable energy
increases toward the realization of a
decarbonized society, demand is increasing
significantly for batteries of ESSs for
residential and industrial use.
•In such fields as smart cities and
advanced medicine, demand is
expanding for power supplies and ESSs
for the effective utilization of electricity.
Opportunities
•Expansion of storage battery market and
related equipment demand as a result of
the accelerated introduction of
renewable energy (rechargeable batteries
and industrial power supplies businesses)
•Increase of demand and advance of higher
added value, such as high voltage driving
and autonomous driving (automotive
power supplies business for xEVs)
Risks
•Uncertain supplies of raw materials and
semiconductors due to sharp expansion
of the EVs and renewable energy markets
•Unpredictable price fluctuations in energy,
raw materials, and distribution costs
•Geopolitical issues
•We will maintain and expand our front-runner status in rechargeable batteries through
the development of cutting-edge technologies and performance improvements in the
ICT market. At the same time, capitalizing on the cell technology that we have nurtured
through small capacity batteries, we will pursue business expansion in the field of highly
safe, long-life, and high-output medium capacity batteries. Furthermore, with future
business expansion in mind, we will strengthen our undertakings throughout our supply
chain, including the upstream of raw materials.
•Regarding power supplies for industrial equipment, we contribute to solve energy
issues of society through the development and supply of, among other things,
bidirectional converters for the highly efficient charging and discharging of storage
batteries, which are essential for the utilization of renewable energy; programmable
power supplies that are widely used in semiconductor manufacturing equipment and so
on; and switching power supplies for various medical equipment requiring a high level
of safety, such as MRI machines and PCR test devices.
•Regarding power supplies for xEVs, in addition to its technology of the compact and
low-profile, and the light power supplies through the original design, we will contribute
to solve issues in automobile society by the provision of added value enabling it to
respond to the increasing demand for electricity due to the multifunctionality of
automobiles and the need for rapid charging.
Annual power capacity expansion
New capacity non-renewables New capacity renewables Renewable share
(GW/yr)
300
200
100
0
2014
2016
2018
2020
2022
Source: International Renewable Energy Agency (2023)
(%)
80
60
40
20
0
22
23
Chapter 2
What Underlies
TDK’s
Competitiveness?
24
25
The TDK Group’s Materiality
Materiality
In order to both achieve the goals of the Medium-Term Plan
and balance a sustainable society with sustainable corporate
growth, we identified materiality by defining key issues as
those which should be addressed by giving them top priority
in investment of the organization’s management resources.
On the premise of long-term value creation for all stakeholders,
including customers, suppliers, and employees, the TDK
Group focuses on long-term investors and shareholders that
are the beneficiaries of residual profit.
EX
DX
Contribution to energy and
environmental solutions by
minimizing waste heat and noise
with electronic devices
Promotion of the digitalization of
society by adding software
technology to material science
and process technology
• Quality Management • HR Management
• Supply Chain Management • Opportunity & Risk Management
• Pursuing Both Delegation of Authority and Internal Controls
• Asset Efficiency Improvement
Please see the website for information about materiality identification process.
https://www.tdk.com/en/sustainability2022/tdk_sustainability/
tdk-materiality/definition
Rigorous selection of materiality
Regarding the 22 themes linked to the identified materiality,
we conducted hearings with related headquarters functions.
After that, we carried out a qualitative assessment of the
relationship of each theme to corporate value, centering on
the two axes of financial results and non-financial results, and
selected rigorous KPIs (diagram on right) linked to the six
materiality targets from the perspectives of the effectiveness
of KPIs and the impacts on corporate value.
•Maximize customer
•Rebuild business
satisfaction with product
and service quality
•Enhance global
procurement capabilities
and mechanisms
portfolio
•Optimize facilities and
manufacturing sites
• Effective use of energy and expanding use of renewable energy
toward the realization of net zero CO2 emissions by 2050
• Implement appropriate post-merger integration (PMI) for acquired
companies
• Foster greater diversity and inclusion
• Ensure societal and environmental consideration in the supply chain
• Pursue zero-defect product quality
• Reduce quality costs
i
F
n
a
n
c
a
i
l
r
e
s
u
l
t
s
To examine activities that really do enhance corporate value,
we quantitatively analyze the relationship between the P/B ratio,
a proxy for corporate value, and ESG and other non-financial indicators.
In promoting more effective non-financial activities, such as
ESG, to further enhance corporate value, we are utilizing
outside opinions and conducting demonstrative studies of
nonfinancial activities. Specifically, using information
released by 85 electric appliance companies listed in the
Prime Market of the Tokyo Stock Exchange (as of March
2023) as a data source, we conduct causal estimates by
the following analytical model and statistically evaluate and
identify significant nonfinancial indicators against the P/B
ratio, ROE, and P/E ratio. In addition, we also carried out
an identification of ESG and other non-financial indicators
that promote the enhancement of corporate value in
qualitatively explicable terms with reference to analyzed
results based on a data source of manufacturing
industries as a whole and manufacturing businesses other
than electric appliance companies, as well as previous
research in business management and so on.
As a result, it can be said that such nonfinancial
indicators as the ratio of recycled waste to total waste do
contribute to the enhancement of corporate value. These
items are not included in the materiality set by the current
Medium-Term Plan, but we are continuing to tackle them
as activities. Going forward, we will increase the data and
improve the analytical model so as to raise its authenticity.
At the time of formulation of the next Medium-Term Plan,
giving due consideration to comparable issues in
non-financial information disclosed by other companies
and the limits of the analytical model caused by the
problem that the evaluation of non-financial indicators is
still at the developmental stage, we will carry out a
review of our materiality based on these analyzed results
and our value-creation story and even more proactively
promote the enhancement of corporate value through
non-financial activities.
Non-financial results
1. Analytical model
Relationship between materiality and corporate value
In endeavoring to maximize long-term corporate value, TDK
emphasizes a P/B ratio as an indicator of corporate value.
Following this approach, we studied and formulated a tree
showing how activities linked to each materiality theme impact
corporate value. The tree also indicates which of the six
capitals defined by the International Integrated Reporting
Council (IIRC) corporate activities linked to each theme
contribute to. (These six types of capital are financial,
manufactured, intellectual, human, social and relationship, and
natural.) In addition, we monitor the degree of achievement of
KPIs set for each materiality theme by contrasting planned
figures and achieved figures with a tool called a management
dashboard that analyzes and visualizes data.
• Implemented causal estimates for each of three objective variables (the P/B ratio, ROE, and P/E ratio) using our original
regression equation.
• In consideration of the nature of the objective variables, besides one non-financial factor to be analyzed, six financial factors of
the previous term’s results are added to the explanatory variables.
i
: Company
t
: FY
Regression equation
applied this time:
yit
0=
ß
x
it−1
+
ß
x
1 1
it−1
+ +...
6ß
it−16x
it+u
Non-financial
factor (one)
Financial factors relating to business
performance selected in consideration of
the characteristics of the industry (six)
TDK’s materiality Relationship to financial results Relationship to non-financial results
2. Analysis results
Maximization
of
long-term
corporate
value
Business
model
Social
value
creation
Financial capital
Corporate value
P/B ratio
Financial results
ROE (%)
Non-financial results
P/E ratio
Financial leverage
ROA (%)
Capital cost (%)
Latent growth rate (%)
Net profit margin (%)
Cash conversion cycle
(month)
Fixed asset turnover
ratio (times)
Social and relationship
capital
Maximize customer satisfaction with
product and service quality
Reduce quality costs
Ensure societal and
environmental
consideration in
the supply chain
Enhance global procurement
capabilities and mechanisms
Natural
capital
Achieve net zero CO2
emissions by 2050
Manufactured
capital
Optimize facilities and
manufacturing sites
Human
capital
Pursue zero-defect
product quality
Intellectual
capital
Rebuild business
portfolio
Foster greater diversity
and inclusion
Materiality
Governance
Classification
Non-financial indicators*1
Unit
P/B ratio
ROE
P/E ratio
Regression
coefficient*2
P value*3
Regression
coefficient*2
P value*3
Regression
coefficient*2
P value*3
Environment
Amount of recycled waste/
total amount of waste
No. of ISO 14001 certified
facilities/no. of employees
Social
Period of paid leave obtainable
under maternity leave system
%
2.623
p<0.01
4.075
p<0.05
No. of facilities/
1,000 persons
0.069
p<0.01
–
–
Week
0.044
p<0.1
0.145
p<0.05
Ratio of outside directors
possessing shares
Average remuneration paid to
directors
%
0.011
p<0.1
0.039
p<0.05
million yen
0.054
p<0.01
–
–
–
–
–
–
–
–
–
–
–
–
*1 This shows partially extracted non-financial indicators recognized as being statistically significant in causal estimation with objective variables and for which qualitative
interpretation was possible.
*2 This shows the rate at which the P/B ratio, ROE, or P/E ratio increases in this model when the non-financial indicators are increased by one unit, assuming that other
explanatory variables remain fixed.
*3 This is an indicator to investigate whether there is any statistical relationship between objective variables and explanatory variables. The p value shows the probability of a calculated
regression coefficient being observed. The smaller the value, the higher is the possibility of a statistical relationship between the objective variables and explanatory variables.
Analysis method and data analysis method: Employed the panel data analysis method (fixed effect model)
Analysis method: Employed the panel data analysis method (fixed effect model)
Data source: Used data released by companies in the electric appliance industry (industrial classification of the Tokyo Stock Exchange)
Data population: Narrowed down to 35 electronic components companies among the electric appliance companies listed in the Prime Market of the Tokyo Stock Exchange
Data period: Last nine years
26
27
The TDK Group’s Materiality
KPIs, medium-term targets, and achievements for rigorously selected materiality themes
Please see the Sustainability Website for related information and other themes.
https://www.tdk.com/en/sustainability/index.html
Fields
Themes
Responsible
department
Goals in three years
Action items
KPIs
Medium-term target
(fiscal 2022-2024)
Progress of fiscal 2023
EX
(see page 52)
Effective use of energy and
expanded use of renewable
energy toward the realization
of net zero CO2 emissions
by 2050
Safety & Environment
Group
CO2 emission intensity from energy use (Scope 1, 2)
is reduced by 12% compared with base year
(fiscal 2015)
Pursue zero-defect product
quality
Quality Assurance HQ
Manufacturing in business divisions is moving toward
upstream management in order to eliminate quality
defects in the four areas of design, material, process,
and management
Aim at halving CO2 emission intensity, as advocated in
the TDK Environmental Vision 2035, through the
following two activities:
• Strengthen energy efficiency by improving productivity
at manufacturing sites
• Expand the use of renewable energy
• Strengthen the quality education in design,
development, and manufacturing departments
• Manage and maintain the certification at all
applicable sites
• Promote activities to eliminate the four quality
defects (design, material, process, and management)
by improving quality awareness and improvement
methods and using AI
CO2 emission intensity from energy use
Reduce by 12% compared with
fiscal 2015
Reduced 30.7%
Implementation of quality education at
all applicable sectors
Promote the globalization of
quality education utilizing DX
Creation and deployment of online quality education
content in collaboration with the global HR function
and overseas sites
Management of certification maintenance
at all applicable sites (ISO 9001)
Certification maintenance ratio: 100%
100%
Consideration of the development
of systems by utilizing AI
• Develop a system for detecting
signs of equipment failure
• Consider the development of
design screening by AI search
• Development of an automatic failure mode
classification system as an elemental technology for
indicative detection
• Investigate introduction and develop prototype of AI
into design review
Quality
Management
(see page 44)
Reduce quality costs
Quality Assurance HQ
Measures have been taken to strengthen design
reviews during design phase and to improve 4M (man,
machine, material, method) at manufacturing sites,
and improvements are promoted autonomously in
business divisions
• Promote 4M improvement in manufacturing aimed at
reducing quality loss (improving yield)
• Promote small-group activities
Quality improvement activities for each
cause
Implement measures for each cause
• Implementation of improvement activities for defects
caused by foreign objects
• Establishment of product security measures mechanism
in IoT products (confirmed in design review)
• Deployment of new quality diagnostics (process,
equipment) to China by Headquarters functions
• Horizontal deployment of best practices for small group
activities
Maximize customer
satisfaction with product
and service quality
Quality Assurance HQ
The speed of response to quality complaints is improved
by enhancing and strengthening the semiconductor
analysis functions and, in the case of especially serious
complaints, a company-wide cross-functional activity is
conducted to respond to the customer
• Accelerate measures to improve customer satisfaction
through cross-functional activities
“A rank” in degree of customer satisfaction
(calculated based on TDK/Japan)
*Among the total of supplier evaluations obtained
from customers, “A rank” means the ratio of
customers expressing satisfaction
At least 95%
95.0%
HR Management
(see page 36)
Foster greater diversity
and inclusion
Human Resources HQ
Employees’ understanding of the significance and
purpose of activities to promote diversity and inclusion
are deepened, and a foundation and talent pool are
created that will continuously produce female
candidates for managerial positions
• Penetrate the significance and purpose of activities to
promote diversity and inclusion
• Foster female candidates for managerial positions
• Share TDK (Japan) activities globally and vice versa
% of female candidates for promotion to
manager position (calculated based
on TDK/Japan)
Female managers ratio
(calculated based on TDK/Japan)
Ensure societal and
environmental consideration
in the supply chain
Procurement &
Logistics Group
The working environment of suppliers is regularly
monitored utilizing CSR check sheets and continuously
improved through feedback or guidance to suppliers
• Appropriately manage the working environment of
suppliers
CSR compliant supplier rate
4%/year
10.3%/year
3%
100%
4.3% (as of April 2023)
100%
Attendance ratio of workshop for
managers (calculated based on TDK/Japan)
70%/year
97%/year
Enhance global procurement
capabilities and mechanisms
Procurement &
Logistics Group
• Continuous cost reduction is achieved by sharing and
utilizing the latest information of common critical
suppliers of the TDK Group
• Procurement risks, including potential risks, are
reduced through supply chain optimization
• Compliance with Global Common Regulations (GCR)
is achieved through regular monitoring and support
for subsidiaries
• Analyze the Approved Supplier List (ASL), formulate
cost reduction plans, negotiate with common suppliers,
study information sharing platforms, and launch a
Global Procurement Collaboration Committee (GPCC)
• Analyze high-risk components and materials and
consider countermeasures; restructure and optimize
the supply chain through negotiations with suppliers
• Consider monitoring mechanisms, collect feedback
from subsidiaries, support formulation of individual
regulations, and conduct regular monitoring
Visualization and utilization of
supplier information and purchasing data
Build a platform to uniformly visualize
the TDK Group’s supplier information
and purchasing data and utilize it in
procurement strategy
Consolidated procurement data of subsidiaries within
the group (in progress)
Reduction of procurement risks for
high-risk parts and materials
Conduct supply chain risk analysis
and implement countermeasures
Promoted risk mitigation of high-risk parts/materials
Conformity with global common rules
100%
Confirmed/corrected individual regulations of subsidiaries
Implement appropriate
post-merger integration (PMI)
for acquired companies
Corporate Planning
Group
Pre- and post- acquisition processes are established
and practiced, enabling acquired companies to display
synergy and to grow and enhance their value under the
TDK Group’s governance
• Implement pre-acquisition due diligence by each function
• Compile pre- and post-acquisition plans and monitor
activities to create synergy based on these plans
–
Rebuild business portfolio
Optimize facilities and
manufacturing sites
Corporate Planning
Group
Through the implementation of various measures to
improve asset efficiency, for example, the following
indicators have been achieved:
• OP margin: 12% or more
• ROE: 14% or more
• Capex (three years): 750 billion yen
• Reduce operating losses by certain execution of
improvement measures in priority challenging businesses
based on business portfolio management
• Effectively use R&D costs with optimization by setting
new, continuation, and withdrawal criteria for R&D themes
OP margin
ROE
–
12% or more
14% or more
• Implement pre-acquisition due diligence by each function
• Conducted PMI activities for the U.S. subsidiary acquired
in February based on a list of items to be complied with
by the newly joined group companies and the grace
period until compliance
7.7%*
8.3%*
• Optimize capital investment budget of each business
by priority allocation based on asset profitability and
business potential along with the rule in business
portfolio management
• Improve operation rate of manufacturing sites
Capex (three years)
750.0 billion yen (three years)
275.7 billion yen (one year)*
*IFRS
29
Supply Chain
Management
(see page 50)
Pursuing Both
Delegation of
Authority and
Internal Controls
(see page 48)
Asset Efficiency
Improvement
(see page 30)
28
Asset Efficiency Improvement
Message from the Corporate Officer of Finance & Accounting
Flexibly reconfiguring allocation to meet
changes in the business environment and
demand, while pursuing improved
profitability and capital efficiency
Tetsuji Yamanishi
Representative Director
Executive Vice President
General Manager of
Finance & Accounting HQ
Measures set out in the Medium-Term Plan
delivered steady results, resulting in new
record-high net sales and operating profit
We have completed the second year of Value Creation
2023, our three-year Medium-Term Plan that began in
fiscal 2022 and which now enters its final fiscal year.
During the term of the current Medium-Term Plan, the
market environment and demand trends that formed
our assumptions behind that plan changed significantly
with the impact of a resurgence in COVID-19 infections
and Russia’s invasion of Ukraine. The impact of
semiconductor supply shortages and other factors on
automobile production continues to this day, and the
COVID-19 epidemic has triggered an ongoing slump in
smartphone demand. Further, we are also beginning to
see a recoil from that special demand for PCs and
tablets that arose during COVID-19. In Europe and the
United States, economic uncertainty is increasing as
inflationary pressures curb consumption, corporate
costs increase, and housing and capital investment is
restrained, leading major IT companies and others to
hold back on data center investments. Meanwhile, the
move toward a decarbonized society is accelerating on
a global scale, and demand for renewable energy,
xEVs, and energy storage system for corporate and
residential use continues to grow.
Amid these changes in the business environment,
our performance in fiscal 2023 continued to reach
record highs in both net sales and operating profit. We
consider the fact that we were able to reach our
ultimate sales target of ¥2,000 billion under the
Medium-Term Plan ahead of schedule to be a
particularly significant achievement. Progress has also
been made in moving away from a business structure
heavily dependent on the batteries business, something
which had been an issue since the previous
Medium-Term Plan. Assets that had largely been
allocated to the growth in small capacity rechargeable
batteries, primarily for smartphones, were reduced in
anticipation of declining demand. In addition, the
burden of capital expenditures (capex) in medium
capacity rechargeable batteries, where future growth is
expected, was reduced through the effect of the joint
ventures (JVs) with CATL, and the assets allocated to
mainly MLCCs and TMR sensors expected to grow
going forward. As a result of this flexible reassessment
of asset allocation, not only is the passive components
business becoming into a major pillar of earnings
second only to the batteries business, but the sensors
business has also grown its net sales as it maintains a
certain level of profitability, resulting in steady progress
being made in the transformation of our profit structure.
On the other hand, one of the major issues for those
Medium-term management targets (Key financial KPIs)
Fiscal 2024 target
¥2,000.0 billion
Net sales
OP margin
12%
Net sales
Operating profit
OP margin
ROE
(Billions of yen)
2,500
2,000
1,500
1,000
500
0
* As of April 2023
1,902.1
11.6
8.8
166.8
2,180.8
2,020.0
8.3
7.7
168.8
9.8
9.4
190.0
3/2022
3/2023
3/2024 (Projection*)
Please see the website below for the information about fiscal 2023 results.
https://www.tdk.com/en/ir/ir_events/conference/2023/4q_1.html
(as of May 2021)
ROE
14%
Target for net sales
2,000.0
Target for ROE
14%
Target for
OP margin
12%
(%)
25
20
15
10
5
0
(FY)
of us in the corporate management divisions was to
strengthen our risk hedging function against changes in
markets and demand within each of our businesses.
Although each business division takes the initiative in
formulating plans for specific investments and businesses
based on their own demand forecasts, in order to
effectively hedge risk, the corporate management
divisions must verify the feasibility of these plans based
on market trends from a broader, medium- to long-term
perspective. In fiscal 2023, we recorded significant
restructuring costs—including impairment losses—in
several of our businesses, due in part to major changes
in the demand environment. In the process of reaching
that result, the Finance & Accounting HQ worked
closely with the Corporate Planning Group to repeatedly
verify the suitability of profit plans and the possibility of
recovering additional investments, offering proposals for
the future direction of the business in an effort to
prevent additional risks from arising.
Let me next explain about cash flow. First,
regarding capital allocation, the current Medium-Term
Plan initially called for ¥750.0 billion in capex in
response to ¥900.0 billion in operating cash flow. As
we enter the final year of the plan, however, we have
revised the amount of capex to ¥830.0 billion. The
increase is in part due to the weaker yen, but also to a
major review of asset allocation that brings forward
investments in boosting capacity in passive
components—mainly MLCCs—and TMR sensors,
investments originally scheduled for the next
Medium-Term Plan. Under the previous Medium-Term
Plan, this allocation was nearly 90% of EBITDA ratio, and
while we planned to keep it at around 65% in the current
Medium-Term Plan, due to these additional investments
made ahead of schedule, it is now about 75%.
The ultimate goal of achieving positive cumulative
free cash flow after shareholder returns over the
three-year period of the current Medium-Term Plan has
been made difficult by an expenditure of ¥110 billion in
prepaid funds, announced for fiscal 2022, to secure
long-term supplies of cobalt in the batteries business.
However, this is an advance to ensure materials for the
future, and excluding this amount, we expect to secure
a positive result, with a D/E ratio of approximately 0.4
times, nearly in line with plan. While shareholder returns
will vary with each fiscal year, if profit for fiscal 2024 is
as planned, we expect to achieve a cumulative payout
ratio of about 30% over three years.
Rigorous management of business profit
to form an optimal portfolio
While we set new records for net sales and operating
profit in fiscal 2023, numerous problems remain to be
30
31
solved. One of these is the need to improve problematic
share the same sense of purpose and awareness of
In terms of shareholder returns, our current
company as a whole, but the finance department must
businesses. In order to achieve more flexible asset
issues, while implementing everything from
medium-term guideline calls for a payout ratio of 30%,
also work to diversify risk by reviewing the balance of
allocation in line with changes in the business
establishment of KSFs, to the execution of various
but over the long term we will implement returns based
assets and cash position by individual region.
environment, beginning in fiscal 2022 we stratified our
measures and monitoring of progress. I believe my
on an optimal financial balance structure without
Strengthening global finance and accounting
approximately 80 business units into six categories
mission is to lead this series of processes.
necessarily fixating on this figure.
governance is important in ensuring the smooth
along two axes: asset profitability and business
Of course, among these problematic businesses, it
In terms of financial soundness, our goal is to
implementation of such measures. Under its previous
potential, and are allocating investments according to
is important to support management in strengthening
achieve a financial structure that allows us to obtain
Medium-Term Plan, TDK introduced Global Common
the positioning of each. We have set a weighted average
their top lines and improving profitability in businesses
appropriate ratings while improving capital efficiency. To
Regulations, and in finance, we also established rules
cost of capital (WACC) of 10% as a hurdle rate for return
where future growth can be expected, such as MEMS
that end, going forward I believe we must enact
covering pooling, netting, inter-company loans,
on invested capital. We will prioritize investments in
microphones, even if profitability does not currently
financial measures to address global geopolitical risks.
dividends and other areas. For example, ATL, a
business that clear this rate and have strong potential,
meet the hurdle rate. TDK thus strategically invests in
As symbolized by the situation in Ukraine, these risks
mainstay of the batteries business, has in the past
including MLCCs, small capacity rechargeable batteries,
areas like these where future growth is anticipated.
have increased significantly in recent years. Naturally,
given priority to reallocating retained earnings to
motion sensors, and TMR sensors, treating them as
That said, for each of these businesses we have of
these geopolitical risks must be addressed by the
investment for growth. However, due to changes in
“sustained high-profit businesses.” Conversely,
course established clear KPIs for achieving our
“problematic businesses” are those deemed to have
investment plans and are closely monitoring their
profitability issues and no significant growth potential,
progress, and we intend to work together with the
and include magnets, power supplies for EVs, and
finance and accounting departments of each business
suspension application products. Basically, reinvestments
to anticipate and deal with market environment
will not be made in these businesses, and the business
changes and risks.
divisions and the corporate management divisions will
work together to implement measures seeking an early
turnaround (business restructuring).
My role in the corporate management division is to
support management as a business partner to each of
our business divisions. For problematic businesses in
At TDK, our intent is to build a financial position that
particular, we need to clarify the key success factors
supports sustained growth by enacting capital policies
(KSFs) for business restructuring and management
that emphasize an appropriate balance between capital
reform and enact specific measures. To do that, we
efficiency, shareholder returns, and financial soundness.
need to strengthen our global finance and accounting
With regards to capital efficiency, for example, we
network, and through appropriate communication,
will further strengthen our portfolio management,
ensure that finance and accounting in the corporate
working to improve the efficiency of capital invested in
management divisions and the business divisions
individual businesses while monitoring business ROA.
demand for small capacity rechargeable batteries and
the effect of the JVs with CATL for medium capacity
rechargeable batteries, required investment levels
have also decreased. Based on these regulations,
global scale by combining these proprietary
To do so, it is important that in reviewing materiality
technologies, and enhancing our presence in each
for our next Medium-Term Plan, we first solidly identify
market, will be the key to increasing our corporate
any key issues that will lead to future improvements in
value in the medium to long term and enhancing our
corporate value. At the same time, we need to
beginning in fiscal 2023 all retained dividends will be
Our understanding is that our cost of shareholders’
price-to-book-value (P/B) ratio.
establish appropriate non-financial KPIs for achieving
returned to Japan in an effort to optimize our cash
equity is currently about 10%. Because of leverage,
Of course, dialogue with shareholders, investors,
those goals, and build a system to enable the
position as a Group. Further, to strengthen global
WACC is a little more than 7%. However, because the
and other stakeholders is important in forming an
quantitative management of progress with those
financial management, the Group has established
cost of shareholders’ equity and WACC are both
appropriate share price, and to date, the president,
initiatives. We then need to disclose and explain this
finance departments at regional headquarters in
variable, we have set a WACC of 10% as a hurdle rate
along with myself as a corporate officer of finance and
non-financial information with a view to its contribution
Japan, China, the Americas, and Europe, and has
for our business portfolio, as noted earlier. We plan to
accounting, have played a central role in focusing our
to future finances and its relationship to the
built a network connecting the finance and accounting
establish ROIC as a company-wide management target
efforts on this dialogue. That said, in TDK’s case there
enhancement of corporate value, and gain the
functions of each regional headquarters and the
in the next Medium-Term Plan, and if we can realize an
are so many business units within a single business
understanding of our investors and other stakeholders.
subsidiaries under their respective jurisdictions,
earnings portfolio that achieves this WACC of 10%, we
segment that there is a limit to how much time we can
The Finance & Accounting HQ would like to be more
allowing for timely monitoring of financial information
naturally expect to clear the company-wide WACC of
spend explaining the strategies and long-term
deeply involved in these processes in cooperation with
at each company. Going forward, under this
just over 7%, ultimately achieving an ROE that exceeds
thinking, etc. of all of them. This is why, going
a variety of other departments, including the Corporate
governance structure we will continue to strengthen
the cost of capital.
forward, we would like to provide opportunities for
Strategy HQ, the Human Resources HQ, and the
our risk response as a Group, intensifying global
We are aware that, seen from the vantage point of
those in charge of business units that are of great
Sustainability Promotion HQ.
finance and accounting communication while keeping
current performance and stock price levels, we have
interest to our stakeholders, or that are expected to
Opaque, uncertain conditions are expected to
in mind Empowerment and Transparency.
yet to fully meet the expectations of our shareholders.
achieve high growth in the future, to participate in
continue in the business environment surrounding the
As quantitative targets in our long-term financial
Going forward, we must continue our efforts to further
dialogue and provide more detailed explanations so
TDK Group. That said, in response to drastic changes
policy, we will maintain a financial balance of a ratio of
improve profitability and capital efficiency and to
that those stakeholders can gain a deeper
in the market environment and demand trends during
at least 50% of equity attributable to owners of the
continuously enhance corporate value. The Group’s
understanding of the company.
parent and a D/E ratio of 0.2 to 0.3 times. We intend to
strength lies in materials, and we have developed a
return profits to shareholders in a variety of forms,
wide range of products and businesses comprising the
premised on maintaining this balance.
Ferrite Tree by combining our materials technology,
mainly ferrite, with process technology for
commercializing those materials. We believe that
further accelerating the creation of synergies on a
period of the current Medium-Term Plan, we successfully
achieved record highs in both net sales and operating
profit by flexibly shifting asset allocation and
implementing structural reforms. I believe that our
resilience in the face of environmental changes and our
risk management capabilities have steadily grown
In recent years, it has become extremely important to
stronger. At the same time, I have no doubt that, as
disclose not only financial information that can be
medium- to long-term changes in our business
expressed in numbers and quantities, but also to
environment, we will see an acceleration of trends such
provide appropriate disclosure of non-financial
as the shift to xEVs, the expansion of market related
information in areas such as sustainability initiatives,
renewable energy aimed at achieving a decarbonized
human capital, and intellectual property. Those of us in
society, and the growth of EX and DX markets in
the Finance & Accounting HQ have mainly been
conjunction with the digitalization of society.
involved in the management and disclosure of financial
Going forward, the TDK Group will continue striving
information, but as a new challenge for myself, going
to build a strong, flexible corporate foundation that can
forward I would like to be actively engaged in the
respond quickly to changes in the business
management and disclosure of non-financial
environment. At the same time, we will work to achieve
information as well.
sustained growth and enhancement of corporate value
I consider non-financial information not as
by ensuring we take advantage of these growth
unrelated to financial information, but as future
opportunities, thus responding to the expectations of
financial information. In other words, this is information
our stakeholders. I look forward to your continued
related to management resources that underpin
support of the TDK Group.
ongoing business activities and initiatives essential to
future business growth, even if it is not yet directly
reflected in financial indicators. While this information
is thus difficult to quantify, I believe we need to explain
to our stakeholders in as quantitative and rational
manner as possible how it is linked to enhancing our
corporate value.
Amid these changes in the business environment,
our performance in fiscal 2023 continued to reach
record highs in both net sales and operating profit. We
consider the fact that we were able to reach our
of us in the corporate management divisions was to
investments in boosting capacity in passive
strengthen our risk hedging function against changes in
components—mainly MLCCs—and TMR sensors,
markets and demand within each of our businesses.
investments originally scheduled for the next
Although each business division takes the initiative in
Medium-Term Plan. Under the previous Medium-Term
We have completed the second year of Value Creation
ultimate sales target of ¥2,000 billion under the
formulating plans for specific investments and businesses
Plan, this allocation was nearly 90% of EBITDA ratio, and
2023, our three-year Medium-Term Plan that began in
Medium-Term Plan ahead of schedule to be a
based on their own demand forecasts, in order to
while we planned to keep it at around 65% in the current
fiscal 2022 and which now enters its final fiscal year.
particularly significant achievement. Progress has also
effectively hedge risk, the corporate management
Medium-Term Plan, due to these additional investments
During the term of the current Medium-Term Plan, the
been made in moving away from a business structure
divisions must verify the feasibility of these plans based
made ahead of schedule, it is now about 75%.
market environment and demand trends that formed
heavily dependent on the batteries business, something
on market trends from a broader, medium- to long-term
The ultimate goal of achieving positive cumulative
our assumptions behind that plan changed significantly
which had been an issue since the previous
perspective. In fiscal 2023, we recorded significant
free cash flow after shareholder returns over the
with the impact of a resurgence in COVID-19 infections
Medium-Term Plan. Assets that had largely been
restructuring costs—including impairment losses—in
three-year period of the current Medium-Term Plan has
and Russia’s invasion of Ukraine. The impact of
allocated to the growth in small capacity rechargeable
several of our businesses, due in part to major changes
been made difficult by an expenditure of ¥110 billion in
semiconductor supply shortages and other factors on
batteries, primarily for smartphones, were reduced in
in the demand environment. In the process of reaching
prepaid funds, announced for fiscal 2022, to secure
automobile production continues to this day, and the
anticipation of declining demand. In addition, the
that result, the Finance & Accounting HQ worked
long-term supplies of cobalt in the batteries business.
COVID-19 epidemic has triggered an ongoing slump in
burden of capital expenditures (capex) in medium
closely with the Corporate Planning Group to repeatedly
However, this is an advance to ensure materials for the
smartphone demand. Further, we are also beginning to
capacity rechargeable batteries, where future growth is
verify the suitability of profit plans and the possibility of
future, and excluding this amount, we expect to secure
see a recoil from that special demand for PCs and
expected, was reduced through the effect of the joint
recovering additional investments, offering proposals for
a positive result, with a D/E ratio of approximately 0.4
tablets that arose during COVID-19. In Europe and the
ventures (JVs) with CATL, and the assets allocated to
the future direction of the business in an effort to
times, nearly in line with plan. While shareholder returns
United States, economic uncertainty is increasing as
mainly MLCCs and TMR sensors expected to grow
prevent additional risks from arising.
will vary with each fiscal year, if profit for fiscal 2024 is
inflationary pressures curb consumption, corporate
going forward. As a result of this flexible reassessment
Let me next explain about cash flow. First,
as planned, we expect to achieve a cumulative payout
costs increase, and housing and capital investment is
of asset allocation, not only is the passive components
regarding capital allocation, the current Medium-Term
ratio of about 30% over three years.
restrained, leading major IT companies and others to
business becoming into a major pillar of earnings
hold back on data center investments. Meanwhile, the
second only to the batteries business, but the sensors
move toward a decarbonized society is accelerating on
business has also grown its net sales as it maintains a
a global scale, and demand for renewable energy,
certain level of profitability, resulting in steady progress
Plan initially called for ¥750.0 billion in capex in
response to ¥900.0 billion in operating cash flow. As
we enter the final year of the plan, however, we have
revised the amount of capex to ¥830.0 billion. The
xEVs, and energy storage system for corporate and
being made in the transformation of our profit structure.
increase is in part due to the weaker yen, but also to a
While we set new records for net sales and operating
residential use continues to grow.
On the other hand, one of the major issues for those
major review of asset allocation that brings forward
profit in fiscal 2023, numerous problems remain to be
Asset Efficiency Improvement
solved. One of these is the need to improve problematic
businesses. In order to achieve more flexible asset
allocation in line with changes in the business
environment, beginning in fiscal 2022 we stratified our
approximately 80 business units into six categories
along two axes: asset profitability and business
potential, and are allocating investments according to
the positioning of each. We have set a weighted average
cost of capital (WACC) of 10% as a hurdle rate for return
on invested capital. We will prioritize investments in
business that clear this rate and have strong potential,
including MLCCs, small capacity rechargeable batteries,
motion sensors, and TMR sensors, treating them as
“sustained high-profit businesses.” Conversely,
“problematic businesses” are those deemed to have
profitability issues and no significant growth potential,
and include magnets, power supplies for EVs, and
suspension application products. Basically, reinvestments
will not be made in these businesses, and the business
divisions and the corporate management divisions will
work together to implement measures seeking an early
turnaround (business restructuring).
My role in the corporate management division is to
support management as a business partner to each of
our business divisions. For problematic businesses in
particular, we need to clarify the key success factors
(KSFs) for business restructuring and management
reform and enact specific measures. To do that, we
need to strengthen our global finance and accounting
network, and through appropriate communication,
ensure that finance and accounting in the corporate
management divisions and the business divisions
share the same sense of purpose and awareness of
issues, while implementing everything from
establishment of KSFs, to the execution of various
measures and monitoring of progress. I believe my
mission is to lead this series of processes.
Of course, among these problematic businesses, it
is important to support management in strengthening
their top lines and improving profitability in businesses
where future growth can be expected, such as MEMS
microphones, even if profitability does not currently
meet the hurdle rate. TDK thus strategically invests in
areas like these where future growth is anticipated.
That said, for each of these businesses we have of
course established clear KPIs for achieving our
investment plans and are closely monitoring their
progress, and we intend to work together with the
finance and accounting departments of each business
to anticipate and deal with market environment
changes and risks.
Pursuing an appropriate balance between
capital efficiency, shareholder returns,
and financial soundness
At TDK, our intent is to build a financial position that
supports sustained growth by enacting capital policies
that emphasize an appropriate balance between capital
efficiency, shareholder returns, and financial soundness.
With regards to capital efficiency, for example, we
will further strengthen our portfolio management,
working to improve the efficiency of capital invested in
individual businesses while monitoring business ROA.
Decision-making criteria for capital allocation
Hurdle rate
over 10%
Invest in sustained high-profitability businesses
MLCCs
Small capacity rechargeable batteries
Motion sensors
TMR sensors
p
a
s
t
p
e
r
f
o
r
m
a
n
c
e
s
,
Profitability
Low
profitability
Turnaround and reinforcement
Power supplies for EVs
Magnets
Suspension application products
MEMS microphones
Medium capacity
rechargeable batteries
Top-line
reinforcement
Improving profitability
Operating
cash flow
900
Capex
750
Energy
60%
450
Passive
20% 150
Magnetic
16% 120
Low
Business potential Product lifecycle, market size, competitive advantage
High
i
B
u
s
n
e
s
s
R
O
A
,
A
s
s
e
t
P
r
o
f
i
t
a
b
i
l
i
t
y
r
e
t
u
r
n
o
n
i
n
v
e
s
t
m
e
n
t
32
In terms of shareholder returns, our current
medium-term guideline calls for a payout ratio of 30%,
but over the long term we will implement returns based
on an optimal financial balance structure without
necessarily fixating on this figure.
In terms of financial soundness, our goal is to
achieve a financial structure that allows us to obtain
appropriate ratings while improving capital efficiency. To
that end, going forward I believe we must enact
financial measures to address global geopolitical risks.
As symbolized by the situation in Ukraine, these risks
have increased significantly in recent years. Naturally,
these geopolitical risks must be addressed by the
company as a whole, but the finance department must
also work to diversify risk by reviewing the balance of
assets and cash position by individual region.
Strengthening global finance and accounting
governance is important in ensuring the smooth
implementation of such measures. Under its previous
Medium-Term Plan, TDK introduced Global Common
Regulations, and in finance, we also established rules
covering pooling, netting, inter-company loans,
dividends and other areas. For example, ATL, a
mainstay of the batteries business, has in the past
given priority to reallocating retained earnings to
investment for growth. However, due to changes in
Cash flows
Shareholder returns
Operating cash flow
Investment cash flow
Free cash flow
Dividends*2
Dividend payout ratio
(Billions of yen)
400
300
200
100
0
179.0
360.0
262.8
28.4
80.0
-100
-200
-300
-400
-102.6
-281.5
-234.4
3/2022
3/2023
-280.0
3/2024
(Projection*1)
(FY)
(Yen)
120
90
60
30
0
106.0
116.0
35.2
29.9
78.3
22.6
3/2022
3/2023
3/2024
(Projection*1)
(%)
40
30
20
10
0
(FY)
*1 As of April 2023
*1 As of April 2023
*2 Dividends are calculated on the basis of the 3-for-1 share split as of October 1, 2021.
Review of capital allocation plan
Medium-Term Plan (as of May 2021)
Medium-Term Plan (as of April 2023)
(Billions of yen)
Strengthened
financial position
Shareholder
returns
D/E ratio 40% range
Target dividend
payout ratio of 30%
(Billions of yen)
Procurement
Disposal of
equipment
Advance payment
for battery materials
Strengthened
financial position
Shareholder returns
Strategic investments
D/E ratio 40% range
Target dividend
payout ratio of 30%
Investment in
CJV and others
Operating
cash flow
910
Capex
830
Energy
47%
390
Passive
25% 210
Magnetic
17% 160
Other
4% 30
Sensor 8% 70
Other
2% 20
Cash-IN
Cash-OUT
Cash-IN
Cash-OUT
33
demand for small capacity rechargeable batteries and
the effect of the JVs with CATL for medium capacity
rechargeable batteries, required investment levels
have also decreased. Based on these regulations,
global scale by combining these proprietary
To do so, it is important that in reviewing materiality
technologies, and enhancing our presence in each
for our next Medium-Term Plan, we first solidly identify
market, will be the key to increasing our corporate
any key issues that will lead to future improvements in
value in the medium to long term and enhancing our
corporate value. At the same time, we need to
beginning in fiscal 2023 all retained dividends will be
Our understanding is that our cost of shareholders’
price-to-book-value (P/B) ratio.
establish appropriate non-financial KPIs for achieving
returned to Japan in an effort to optimize our cash
equity is currently about 10%. Because of leverage,
Of course, dialogue with shareholders, investors,
those goals, and build a system to enable the
position as a Group. Further, to strengthen global
WACC is a little more than 7%. However, because the
and other stakeholders is important in forming an
quantitative management of progress with those
financial management, the Group has established
cost of shareholders’ equity and WACC are both
appropriate share price, and to date, the president,
initiatives. We then need to disclose and explain this
finance departments at regional headquarters in
variable, we have set a WACC of 10% as a hurdle rate
along with myself as a corporate officer of finance and
non-financial information with a view to its contribution
Japan, China, the Americas, and Europe, and has
for our business portfolio, as noted earlier. We plan to
accounting, have played a central role in focusing our
to future finances and its relationship to the
built a network connecting the finance and accounting
establish ROIC as a company-wide management target
efforts on this dialogue. That said, in TDK’s case there
enhancement of corporate value, and gain the
functions of each regional headquarters and the
in the next Medium-Term Plan, and if we can realize an
are so many business units within a single business
understanding of our investors and other stakeholders.
subsidiaries under their respective jurisdictions,
earnings portfolio that achieves this WACC of 10%, we
segment that there is a limit to how much time we can
The Finance & Accounting HQ would like to be more
allowing for timely monitoring of financial information
naturally expect to clear the company-wide WACC of
spend explaining the strategies and long-term
deeply involved in these processes in cooperation with
at each company. Going forward, under this
just over 7%, ultimately achieving an ROE that exceeds
thinking, etc. of all of them. This is why, going
a variety of other departments, including the Corporate
governance structure we will continue to strengthen
the cost of capital.
forward, we would like to provide opportunities for
Strategy HQ, the Human Resources HQ, and the
our risk response as a Group, intensifying global
We are aware that, seen from the vantage point of
those in charge of business units that are of great
Sustainability Promotion HQ.
finance and accounting communication while keeping
current performance and stock price levels, we have
interest to our stakeholders, or that are expected to
Opaque, uncertain conditions are expected to
in mind Empowerment and Transparency.
yet to fully meet the expectations of our shareholders.
achieve high growth in the future, to participate in
continue in the business environment surrounding the
As quantitative targets in our long-term financial
Going forward, we must continue our efforts to further
dialogue and provide more detailed explanations so
TDK Group. That said, in response to drastic changes
policy, we will maintain a financial balance of a ratio of
improve profitability and capital efficiency and to
that those stakeholders can gain a deeper
in the market environment and demand trends during
at least 50% of equity attributable to owners of the
continuously enhance corporate value. The Group’s
understanding of the company.
parent and a D/E ratio of 0.2 to 0.3 times. We intend to
strength lies in materials, and we have developed a
return profits to shareholders in a variety of forms,
wide range of products and businesses comprising the
premised on maintaining this balance.
Ferrite Tree by combining our materials technology,
mainly ferrite, with process technology for
commercializing those materials. We believe that
further accelerating the creation of synergies on a
period of the current Medium-Term Plan, we successfully
achieved record highs in both net sales and operating
profit by flexibly shifting asset allocation and
implementing structural reforms. I believe that our
resilience in the face of environmental changes and our
risk management capabilities have steadily grown
In recent years, it has become extremely important to
stronger. At the same time, I have no doubt that, as
disclose not only financial information that can be
medium- to long-term changes in our business
expressed in numbers and quantities, but also to
environment, we will see an acceleration of trends such
provide appropriate disclosure of non-financial
as the shift to xEVs, the expansion of market related
information in areas such as sustainability initiatives,
renewable energy aimed at achieving a decarbonized
human capital, and intellectual property. Those of us in
society, and the growth of EX and DX markets in
the Finance & Accounting HQ have mainly been
conjunction with the digitalization of society.
involved in the management and disclosure of financial
Going forward, the TDK Group will continue striving
information, but as a new challenge for myself, going
to build a strong, flexible corporate foundation that can
forward I would like to be actively engaged in the
respond quickly to changes in the business
management and disclosure of non-financial
environment. At the same time, we will work to achieve
information as well.
sustained growth and enhancement of corporate value
I consider non-financial information not as
by ensuring we take advantage of these growth
unrelated to financial information, but as future
opportunities, thus responding to the expectations of
financial information. In other words, this is information
our stakeholders. I look forward to your continued
related to management resources that underpin
support of the TDK Group.
ongoing business activities and initiatives essential to
future business growth, even if it is not yet directly
reflected in financial indicators. While this information
is thus difficult to quantify, I believe we need to explain
to our stakeholders in as quantitative and rational
manner as possible how it is linked to enhancing our
corporate value.
Amid these changes in the business environment,
our performance in fiscal 2023 continued to reach
record highs in both net sales and operating profit. We
consider the fact that we were able to reach our
of us in the corporate management divisions was to
investments in boosting capacity in passive
strengthen our risk hedging function against changes in
components—mainly MLCCs—and TMR sensors,
markets and demand within each of our businesses.
investments originally scheduled for the next
Although each business division takes the initiative in
Medium-Term Plan. Under the previous Medium-Term
We have completed the second year of Value Creation
ultimate sales target of ¥2,000 billion under the
formulating plans for specific investments and businesses
Plan, this allocation was nearly 90% of EBITDA ratio, and
2023, our three-year Medium-Term Plan that began in
Medium-Term Plan ahead of schedule to be a
based on their own demand forecasts, in order to
while we planned to keep it at around 65% in the current
fiscal 2022 and which now enters its final fiscal year.
particularly significant achievement. Progress has also
effectively hedge risk, the corporate management
Medium-Term Plan, due to these additional investments
During the term of the current Medium-Term Plan, the
been made in moving away from a business structure
divisions must verify the feasibility of these plans based
made ahead of schedule, it is now about 75%.
market environment and demand trends that formed
heavily dependent on the batteries business, something
on market trends from a broader, medium- to long-term
The ultimate goal of achieving positive cumulative
our assumptions behind that plan changed significantly
which had been an issue since the previous
perspective. In fiscal 2023, we recorded significant
free cash flow after shareholder returns over the
with the impact of a resurgence in COVID-19 infections
Medium-Term Plan. Assets that had largely been
restructuring costs—including impairment losses—in
three-year period of the current Medium-Term Plan has
and Russia’s invasion of Ukraine. The impact of
allocated to the growth in small capacity rechargeable
several of our businesses, due in part to major changes
been made difficult by an expenditure of ¥110 billion in
semiconductor supply shortages and other factors on
batteries, primarily for smartphones, were reduced in
in the demand environment. In the process of reaching
prepaid funds, announced for fiscal 2022, to secure
automobile production continues to this day, and the
anticipation of declining demand. In addition, the
that result, the Finance & Accounting HQ worked
long-term supplies of cobalt in the batteries business.
COVID-19 epidemic has triggered an ongoing slump in
burden of capital expenditures (capex) in medium
closely with the Corporate Planning Group to repeatedly
However, this is an advance to ensure materials for the
smartphone demand. Further, we are also beginning to
capacity rechargeable batteries, where future growth is
verify the suitability of profit plans and the possibility of
future, and excluding this amount, we expect to secure
see a recoil from that special demand for PCs and
expected, was reduced through the effect of the joint
recovering additional investments, offering proposals for
a positive result, with a D/E ratio of approximately 0.4
tablets that arose during COVID-19. In Europe and the
ventures (JVs) with CATL, and the assets allocated to
the future direction of the business in an effort to
times, nearly in line with plan. While shareholder returns
United States, economic uncertainty is increasing as
mainly MLCCs and TMR sensors expected to grow
prevent additional risks from arising.
will vary with each fiscal year, if profit for fiscal 2024 is
inflationary pressures curb consumption, corporate
going forward. As a result of this flexible reassessment
Let me next explain about cash flow. First,
as planned, we expect to achieve a cumulative payout
costs increase, and housing and capital investment is
of asset allocation, not only is the passive components
regarding capital allocation, the current Medium-Term
ratio of about 30% over three years.
restrained, leading major IT companies and others to
business becoming into a major pillar of earnings
hold back on data center investments. Meanwhile, the
second only to the batteries business, but the sensors
move toward a decarbonized society is accelerating on
business has also grown its net sales as it maintains a
a global scale, and demand for renewable energy,
certain level of profitability, resulting in steady progress
Plan initially called for ¥750.0 billion in capex in
response to ¥900.0 billion in operating cash flow. As
we enter the final year of the plan, however, we have
revised the amount of capex to ¥830.0 billion. The
xEVs, and energy storage system for corporate and
being made in the transformation of our profit structure.
increase is in part due to the weaker yen, but also to a
While we set new records for net sales and operating
residential use continues to grow.
On the other hand, one of the major issues for those
major review of asset allocation that brings forward
profit in fiscal 2023, numerous problems remain to be
solved. One of these is the need to improve problematic
share the same sense of purpose and awareness of
In terms of shareholder returns, our current
company as a whole, but the finance department must
businesses. In order to achieve more flexible asset
issues, while implementing everything from
medium-term guideline calls for a payout ratio of 30%,
also work to diversify risk by reviewing the balance of
allocation in line with changes in the business
establishment of KSFs, to the execution of various
but over the long term we will implement returns based
assets and cash position by individual region.
environment, beginning in fiscal 2022 we stratified our
measures and monitoring of progress. I believe my
on an optimal financial balance structure without
Strengthening global finance and accounting
approximately 80 business units into six categories
mission is to lead this series of processes.
necessarily fixating on this figure.
governance is important in ensuring the smooth
along two axes: asset profitability and business
Of course, among these problematic businesses, it
In terms of financial soundness, our goal is to
implementation of such measures. Under its previous
potential, and are allocating investments according to
is important to support management in strengthening
achieve a financial structure that allows us to obtain
Medium-Term Plan, TDK introduced Global Common
the positioning of each. We have set a weighted average
their top lines and improving profitability in businesses
appropriate ratings while improving capital efficiency. To
Regulations, and in finance, we also established rules
cost of capital (WACC) of 10% as a hurdle rate for return
where future growth can be expected, such as MEMS
that end, going forward I believe we must enact
covering pooling, netting, inter-company loans,
on invested capital. We will prioritize investments in
microphones, even if profitability does not currently
financial measures to address global geopolitical risks.
dividends and other areas. For example, ATL, a
business that clear this rate and have strong potential,
meet the hurdle rate. TDK thus strategically invests in
As symbolized by the situation in Ukraine, these risks
mainstay of the batteries business, has in the past
including MLCCs, small capacity rechargeable batteries,
areas like these where future growth is anticipated.
have increased significantly in recent years. Naturally,
given priority to reallocating retained earnings to
motion sensors, and TMR sensors, treating them as
That said, for each of these businesses we have of
these geopolitical risks must be addressed by the
investment for growth. However, due to changes in
“sustained high-profit businesses.” Conversely,
course established clear KPIs for achieving our
“problematic businesses” are those deemed to have
investment plans and are closely monitoring their
profitability issues and no significant growth potential,
progress, and we intend to work together with the
and include magnets, power supplies for EVs, and
finance and accounting departments of each business
suspension application products. Basically, reinvestments
to anticipate and deal with market environment
will not be made in these businesses, and the business
changes and risks.
divisions and the corporate management divisions will
work together to implement measures seeking an early
turnaround (business restructuring).
My role in the corporate management division is to
support management as a business partner to each of
our business divisions. For problematic businesses in
At TDK, our intent is to build a financial position that
particular, we need to clarify the key success factors
supports sustained growth by enacting capital policies
(KSFs) for business restructuring and management
that emphasize an appropriate balance between capital
reform and enact specific measures. To do that, we
efficiency, shareholder returns, and financial soundness.
need to strengthen our global finance and accounting
With regards to capital efficiency, for example, we
network, and through appropriate communication,
will further strengthen our portfolio management,
ensure that finance and accounting in the corporate
working to improve the efficiency of capital invested in
management divisions and the business divisions
individual businesses while monitoring business ROA.
Asset Efficiency Improvement
demand for small capacity rechargeable batteries and
the effect of the JVs with CATL for medium capacity
rechargeable batteries, required investment levels
have also decreased. Based on these regulations,
beginning in fiscal 2023 all retained dividends will be
returned to Japan in an effort to optimize our cash
position as a Group. Further, to strengthen global
financial management, the Group has established
finance departments at regional headquarters in
Japan, China, the Americas, and Europe, and has
built a network connecting the finance and accounting
functions of each regional headquarters and the
subsidiaries under their respective jurisdictions,
allowing for timely monitoring of financial information
at each company. Going forward, under this
governance structure we will continue to strengthen
our risk response as a Group, intensifying global
finance and accounting communication while keeping
in mind Empowerment and Transparency.
As quantitative targets in our long-term financial
policy, we will maintain a financial balance of a ratio of
at least 50% of equity attributable to owners of the
parent and a D/E ratio of 0.2 to 0.3 times. We intend to
return profits to shareholders in a variety of forms,
premised on maintaining this balance.
Achieving an ROE in excess of cost of
shareholders’ equity, with the goal of
sustained enhancement of corporate value
Our understanding is that our cost of shareholders’
equity is currently about 10%. Because of leverage,
WACC is a little more than 7%. However, because the
cost of shareholders’ equity and WACC are both
variable, we have set a WACC of 10% as a hurdle rate
for our business portfolio, as noted earlier. We plan to
establish ROIC as a company-wide management target
in the next Medium-Term Plan, and if we can realize an
earnings portfolio that achieves this WACC of 10%, we
naturally expect to clear the company-wide WACC of
just over 7%, ultimately achieving an ROE that exceeds
the cost of capital.
We are aware that, seen from the vantage point of
current performance and stock price levels, we have
yet to fully meet the expectations of our shareholders.
Going forward, we must continue our efforts to further
improve profitability and capital efficiency and to
continuously enhance corporate value. The Group’s
strength lies in materials, and we have developed a
wide range of products and businesses comprising the
Ferrite Tree by combining our materials technology,
mainly ferrite, with process technology for
commercializing those materials. We believe that
further accelerating the creation of synergies on a
Financial and operation logic tree
Build a framework by which frontline policies lead to improvements in capital efficiency
Corporate
management
target
ROE
over 14%
Individual
business
targets
TVA
Financial
leverage
Business ROA
Cost of
invested capital
Net profit
Business assets
Capital cost ratio
Business assets
P&L aspect
Profitability
assessment
OP margin
over 12%
B/S aspect
Assessment of business
asset efficiency
Capital expenditures
(three years)
¥750.0 billion
C/F aspect
Assessment of cash
generating capability
Related accounts
Policies
Cost of sales
Cost reductions
Sales and
marketing
expenses
Marketing
Selling, general
and administrative
expenses
Operational efficiency
improvements
Accounts
receivable
Promotion of
debt collection
Inventories
Inventory
reduction
Accounts
payable
Lengthened
payment terms
To do so, it is important that in reviewing materiality
for our next Medium-Term Plan, we first solidly identify
any key issues that will lead to future improvements in
corporate value. At the same time, we need to
establish appropriate non-financial KPIs for achieving
those goals, and build a system to enable the
quantitative management of progress with those
initiatives. We then need to disclose and explain this
non-financial information with a view to its contribution
to future finances and its relationship to the
enhancement of corporate value, and gain the
understanding of our investors and other stakeholders.
The Finance & Accounting HQ would like to be more
deeply involved in these processes in cooperation with
a variety of other departments, including the Corporate
Strategy HQ, the Human Resources HQ, and the
Sustainability Promotion HQ.
Opaque, uncertain conditions are expected to
continue in the business environment surrounding the
TDK Group. That said, in response to drastic changes
in the market environment and demand trends during
period of the current Medium-Term Plan, we successfully
achieved record highs in both net sales and operating
profit by flexibly shifting asset allocation and
implementing structural reforms. I believe that our
resilience in the face of environmental changes and our
risk management capabilities have steadily grown
stronger. At the same time, I have no doubt that, as
medium- to long-term changes in our business
environment, we will see an acceleration of trends such
as the shift to xEVs, the expansion of market related
renewable energy aimed at achieving a decarbonized
society, and the growth of EX and DX markets in
conjunction with the digitalization of society.
Going forward, the TDK Group will continue striving
to build a strong, flexible corporate foundation that can
respond quickly to changes in the business
environment. At the same time, we will work to achieve
sustained growth and enhancement of corporate value
by ensuring we take advantage of these growth
opportunities, thus responding to the expectations of
our stakeholders. I look forward to your continued
support of the TDK Group.
global scale by combining these proprietary
technologies, and enhancing our presence in each
market, will be the key to increasing our corporate
value in the medium to long term and enhancing our
price-to-book-value (P/B) ratio.
Of course, dialogue with shareholders, investors,
and other stakeholders is important in forming an
appropriate share price, and to date, the president,
along with myself as a corporate officer of finance and
accounting, have played a central role in focusing our
efforts on this dialogue. That said, in TDK’s case there
are so many business units within a single business
segment that there is a limit to how much time we can
spend explaining the strategies and long-term
thinking, etc. of all of them. This is why, going
forward, we would like to provide opportunities for
those in charge of business units that are of great
interest to our stakeholders, or that are expected to
achieve high growth in the future, to participate in
dialogue and provide more detailed explanations so
that those stakeholders can gain a deeper
understanding of the company.
Treating non-financial information as
“future financial information” to
communicate it quantitatively and rationally
In recent years, it has become extremely important to
disclose not only financial information that can be
expressed in numbers and quantities, but also to
provide appropriate disclosure of non-financial
information in areas such as sustainability initiatives,
human capital, and intellectual property. Those of us in
the Finance & Accounting HQ have mainly been
involved in the management and disclosure of financial
information, but as a new challenge for myself, going
forward I would like to be actively engaged in the
management and disclosure of non-financial
information as well.
I consider non-financial information not as
unrelated to financial information, but as future
financial information. In other words, this is information
related to management resources that underpin
ongoing business activities and initiatives essential to
future business growth, even if it is not yet directly
reflected in financial indicators. While this information
is thus difficult to quantify, I believe we need to explain
to our stakeholders in as quantitative and rational
manner as possible how it is linked to enhancing our
corporate value.
34
35
Message from the CPSO and General Manager, Human Resources HQ
Prioritizing global talent
to ensure a sustainable
future for the company
Andreas Keller
Senior Vice President
Chief People and Sustainability Officer and
General Manager, Human Resources HQ
The TDK Group’s success is closely tied to its strategy of creating value through human resources, with
over 90% of overseas sales. Mr. Keller, the newly appointed Chief People and Sustainability Officer
(CPSO), intends to show how the TDK Group can utilize its global human resources to strive the
company’s sustainability goals.
Revamping global HR and elevating
talent management
We take pride in our team of over 100,000 employees
across more than 100 Group companies worldwide. To
help them reach their full potential and shine on the
global stage, we have developed a range of programs to
help team members (employees) expand their skills and
knowledge worldwide, including global management
development programs, support for English language
learning, and TDK’s internal global Incubator Program
which is called “TDK Kindergarten.”
We maintain that enhancing the capabilities of each
individual will not only contribute to the development of their
team and division but also the entire company and Group as
a whole. Our efforts to nurture our team members’ talents
are what set the TDK Group apart from other companies.
assessment outcome, internal/external working history,
and geographical / functional individual preferences. We
leverage these tools to optimize the assignment of
members, ensuring that the right people are assigned to
the right position regardless of company or region.
Additionally, we are committed to attracting
talented individuals from outside by promoting
large-scale sustainability projects involving several of
our Group companies and showcasing our
commitment to sustainability.
Enhancing our business performance through team
members’ engagement
We can strengthen trust relationships internally and
externally by enhancing team members’ engagement and
communicating this openly to all.
To effectively manage team members information on a
In February 2023, we conducted the first-ever global
global scale, we rely on centralized talent management
and HR evaluation systems that offer greater flexibility and
expanded capabilities. This enables us to identify and
promote our members for higher positions based on
factors such as skills, performance, competency,
team members’ engagement survey, achieving an
impressive 80% response rate thanks to our efforts to
ensure everyone had access to the survey not only via
their PCs but also through their smartphones. The survey
asked two key questions: “How happy are you working at
this company?” and “Would you recommend this
company as a great place to work?” It is important to
analyze the real answers and comments from employees
to understand the situation on the ground, rather than just
looking at engagement ratings or percentages. To achieve
this, we have been analyzing over 40,000 comments using
AI to identify issues and discussed how to deal with them.
Understanding what our people are thinking and feeling is
vital for the TDK Group’s growth and for unlocking their
human potential. The results also help drive discussions
on how to enhance our working environment and business
activities. This will position us as a more sustainable,
stronger, and resilient company that can prepare for the
future with confidence.
Diversity, Equity, and Inclusion (DE&I) are also important
for running a successful organization, especially since we
have a diverse workforce from around the world as a result
of many mergers and acquisitions. We will work to ensure
that our workforce is representative of the communities in
which we work (diversity) and that all team members have
equal opportunity to develop (equity). Moreover, we will
foster a culture where all members feel they are part of the
TDK family, respect each other, and are comfortable
sharing/exchanging ideas regardless of their uniqueness
(combination of many characteristics, including gender,
generation, nationality, ethnicity, sexual orientation,
personality style, thinking style, disability, education,
experience, etc.) (inclusion). We have created a global DE&I
team comprised of members from the US, Germany,
China, and Japan to focus on and achieve this vision.
By fostering a diverse and inclusive work environment,
we can motivate our existing team members and inspire
them to be more engaged, while also attracting talented
individuals from outside the company. Our policies are
already reaping the benefits, as 50% of our leaders are
female within our global HR organization.
As an employer, we are also making efforts to improve
our communication and become more visible to the
outside world. For instance, we have established a
worldwide agreement with a global, large-scale direct
recruiting platform that is gaining in popularity also in Asian
countries. We recognize that our primary business is now
B2B, and as a result, the younger generation may not be
familiar with the TDK Group. Therefore, we are working on
various channels to improve our presence and attract
talented individuals. We believe that once people learn
about the TDK Group and what we do, they will become
interested in working with us.
The CPSO spearheads the TDK Group’s
Sustainability Vision
In my new role as the CPSO for the TDK Group, I
recognize the crucial role that our human resources and
environmental initiatives play in driving our sustainability
strategy. As the global challenge of attracting and retaining
talented individuals continues to grow, the importance of
human resources and development strategy becomes
increasingly critical for sustained success in our business.
At the same time, as we encounter the mounting
expectations of stakeholders regarding societal
sustainability, and the need to fulfill our Sustainability
Vision, it is imperative that our human resources and
sustainability strategies will be more closely aligned in
order to enhance our corporate value. I firmly believe that
Team Member Engagement Survey 2023
2023
Response Rate
Engagement Index
Comments
80%
72
43%
Benchmark* 75%
Benchmark* 76
Benchmark* 33%
Purpose
Top Strengths
Belonging
Company
Top Opportunities
Customer Focus
Barriers to
Execution
Communication
Recognition
* Glint’s 2022 global industry benchmark
•We believe that people are everything and the value each team
member creates is the sum of TDK’s value.
•Engaged team members will enhance TDK’s value and help us
achieve success as an organization. Therefore, we gave team
members’ engagement a strategic priority in our Medium-Term Plan.
•With the systemic approach of implementing the TME system, we
will not only measure engagement, but create a work
environment where engagement can flourish.
•The 1st company-wide Team Member Engagement Survey
(“MyVoice”) was conducted in February 2023. A participation rate
of 80%, an engagement index of 72%, and more than 42,000
comments and suggestions show that team members embrace
the chance to make their voice be heard and to co-create their
work environment.
•Team leaders across the globe have team conversations with
their teams to discuss the survey results and agree on one step
forward they want to take, to enhance each team members’
work experience.
36
37
there is a strong correlation between people and
chain to address global issues such as climate change
sustainability, and I am committed to promoting team
and human rights, in line with the TDK Group’s materiality.
members’ development and finding ways for our entire
Secondly, we establish a trusted relationship with society
Group to address sustainability issues. My previous
through engagement with stakeholders. Finally, we
experience in supply chain management at the TDK Group
promote Empowerment and Transparency throughout all
has deepened my interest and connection to sustainability.
our Group companies.
As a father of two children, I am further motivated to take
We use a top-down approach and employee-centered
immediate action in order to help shape a more
management in a balanced manner to establish and
sustainable future for the generations to come.
maintain a sustainable management and stable human
During Global Advanced Management Program in
resource infrastructure. By doing so, we will continue to
2022—one of our management development programs—a
drive success even in times of uncertainty and create a
group presented an impressive sustainability project. They
sustainable company and society for the next generation.
found ways to significantly accelerate the reduction of CO2
The TDK Group is committed to being a positive force
emissions and successfully implemented it in a factory.
in the world by addressing major social issues like digital
What struck me most was the energy and motivation the
transformation (DX) and energy transformation (EX). This is
group generated toward a common cause that addresses
reflected in our 2023 Medium-Term Plan, where we strive
all forms of sustainability. This inspiring project, which
to enhance customer and consumer experience (2CX). As
originated from an HR program, further reinforced my belief
CPSO, I am convinced that it is critical to focus on two key
in the importance of developing our people. As such, I am
areas to achieve this goal. Firstly, we must continue to
determined to unlock the potential of our members to
attract and develop specialized team members to create
accelerate our sustainability initiatives even further.
high-quality products and solutions in the fast-evolving
The TDK Group is actively pursuing three key initiatives
digital world. Secondly, we need to strengthen collaboration
in line with our corporate philosophy, as we strive to
across our global group of companies to generate optimal
achieve our Sustainability Vision of “Technology for the
solutions and ideas. By consistently creating value, I believe
well-being of all people” and address societal challenges
that the TDK Group can offer sustainable products and
through our business endeavors. Firstly, we leverage our
solutions that drive the growth of those who rely on us.
products, solutions, and activities throughout our supply
this company?” and “Would you recommend this
them to be more engaged, while also attracting talented
company as a great place to work?” It is important to
individuals from outside the company. Our policies are
analyze the real answers and comments from employees
already reaping the benefits, as 50% of our leaders are
to understand the situation on the ground, rather than just
female within our global HR organization.
looking at engagement ratings or percentages. To achieve
As an employer, we are also making efforts to improve
this, we have been analyzing over 40,000 comments using
our communication and become more visible to the
AI to identify issues and discussed how to deal with them.
outside world. For instance, we have established a
Understanding what our people are thinking and feeling is
worldwide agreement with a global, large-scale direct
vital for the TDK Group’s growth and for unlocking their
recruiting platform that is gaining in popularity also in Asian
human potential. The results also help drive discussions
countries. We recognize that our primary business is now
on how to enhance our working environment and business
B2B, and as a result, the younger generation may not be
activities. This will position us as a more sustainable,
familiar with the TDK Group. Therefore, we are working on
stronger, and resilient company that can prepare for the
various channels to improve our presence and attract
future with confidence.
talented individuals. We believe that once people learn
Diversity, Equity, and Inclusion (DE&I) are also important
about the TDK Group and what we do, they will become
for running a successful organization, especially since we
interested in working with us.
have a diverse workforce from around the world as a result
of many mergers and acquisitions. We will work to ensure
that our workforce is representative of the communities in
The CPSO spearheads the TDK Group’s
Sustainability Vision
which we work (diversity) and that all team members have
In my new role as the CPSO for the TDK Group, I
equal opportunity to develop (equity). Moreover, we will
recognize the crucial role that our human resources and
foster a culture where all members feel they are part of the
environmental initiatives play in driving our sustainability
TDK family, respect each other, and are comfortable
strategy. As the global challenge of attracting and retaining
sharing/exchanging ideas regardless of their uniqueness
talented individuals continues to grow, the importance of
(combination of many characteristics, including gender,
human resources and development strategy becomes
generation, nationality, ethnicity, sexual orientation,
increasingly critical for sustained success in our business.
personality style, thinking style, disability, education,
At the same time, as we encounter the mounting
experience, etc.) (inclusion). We have created a global DE&I
expectations of stakeholders regarding societal
team comprised of members from the US, Germany,
sustainability, and the need to fulfill our Sustainability
China, and Japan to focus on and achieve this vision.
Vision, it is imperative that our human resources and
By fostering a diverse and inclusive work environment,
sustainability strategies will be more closely aligned in
we can motivate our existing team members and inspire
order to enhance our corporate value. I firmly believe that
Message from the CPSO and General Manager, Human Resources HQ
there is a strong correlation between people and
sustainability, and I am committed to promoting team
members’ development and finding ways for our entire
Group to address sustainability issues. My previous
experience in supply chain management at the TDK Group
has deepened my interest and connection to sustainability.
As a father of two children, I am further motivated to take
immediate action in order to help shape a more
sustainable future for the generations to come.
During Global Advanced Management Program in
2022—one of our management development programs—a
group presented an impressive sustainability project. They
found ways to significantly accelerate the reduction of CO2
emissions and successfully implemented it in a factory.
What struck me most was the energy and motivation the
group generated toward a common cause that addresses
all forms of sustainability. This inspiring project, which
originated from an HR program, further reinforced my belief
in the importance of developing our people. As such, I am
determined to unlock the potential of our members to
accelerate our sustainability initiatives even further.
The TDK Group is actively pursuing three key initiatives
in line with our corporate philosophy, as we strive to
achieve our Sustainability Vision of “Technology for the
well-being of all people” and address societal challenges
through our business endeavors. Firstly, we leverage our
products, solutions, and activities throughout our supply
chain to address global issues such as climate change
and human rights, in line with the TDK Group’s materiality.
Secondly, we establish a trusted relationship with society
through engagement with stakeholders. Finally, we
promote Empowerment and Transparency throughout all
our Group companies.
We use a top-down approach and employee-centered
management in a balanced manner to establish and
maintain a sustainable management and stable human
resource infrastructure. By doing so, we will continue to
drive success even in times of uncertainty and create a
sustainable company and society for the next generation.
The TDK Group is committed to being a positive force
in the world by addressing major social issues like digital
transformation (DX) and energy transformation (EX). This is
reflected in our 2023 Medium-Term Plan, where we strive
to enhance customer and consumer experience (2CX). As
CPSO, I am convinced that it is critical to focus on two key
areas to achieve this goal. Firstly, we must continue to
attract and develop specialized team members to create
high-quality products and solutions in the fast-evolving
digital world. Secondly, we need to strengthen collaboration
across our global group of companies to generate optimal
solutions and ideas. By consistently creating value, I believe
that the TDK Group can offer sustainable products and
solutions that drive the growth of those who rely on us.
Global management development programs
The nurturing of successors capable of leading the TDK Group in the next generation is essential for ensuring TDK’s sustained
growth. Therefore, TDK has launched four Global Management Development Programs aimed at developing future candidates for
top management and director positions and building ties among them. Through the drafting of management strategy and
workshops, we build an environment in which candidates can display their skills.
Development of next-generation
human resources
•Global selective education
•Gathering HR information
•Expanded scope of understanding
HR information
•Successor training plans
GEMP/
Global Executive Management Program
GAMP/
Global Advanced Management Program
Global level
GMP/
Global Management Program
Regional level
(China, Europe, Americas, Asia)
TCDP/
Territorial Career Development Program
Talent Development and Human Growth Measures
The TDK Group consists of more than 100 companies out 90% operating work in over 250 countries sites in
other more than 30 countries around the world. Of the Group’s team members (employees), about 90% work
in countries other than Japan. About 80% of these members joined the TDK Group through M&A.
In addition to its human resources, the company has a diverse range of businesses. All our four main
businesses span multiple regions around the world.
Realizing that the nurturing of next-generation leaders capable of steering this diverse business portfolio
would be impossible with only the traditional Japan-led, uniform type of education and training, TDK was quick
to shift the pivot of training from Japan to the global level.
Visualization of the HR skills of Group members
We are pressing ahead with the introduction of a system
to unify and visualize HR management and training,
centering on managers in the TDK head office and Group
companies. In this system, which is called the Talent
Management System (TMS), we have prepared such
modules as “Performance evaluation,” “Competency
assessment,” “Succession planning,” and “HR training
plan” so that we can comprehend the abilities of each
individual. This system is an important initiative to fully
display the individual qualities of our human resources on
a global scale. Going forward, our aim is to introduce it
for key talents in our global group.
Global unification of HR training and
development methods
We are implementing the Global Communication & English
(GCE) educational program for all members with the aim
of polishing communication skills in English, which are
essential for global engagement within the Group. In
addition, we have introduced the Weconnect platform,
which enables the online study of digital teaching
materials covering about 25,000 courses, including IT
skills and management. We have built this environment
enabling members to study what they want and when
they want so as to support their skill improvement.
Formulation of global mobility regulations
To promote the ideal placement of members within the
Group transcending country and company, we are
formulating common regulations for Group companies on
transfer not only from HQ functions to subsidiaries but also
in the opposite direction and between Group companies.
Implementation of exchange and development
programs for next-generation leader candidates
TDK has launched four Global Management Development
Programs aimed at developing future candidates for top
management and director positions and building ties
among them. Through the drafting of management
strategy and workshops, we build an environment in
which candidates can display their skills.
Active invitation of outstanding global members
to Japan
TDK actively invites outstanding members in our overseas
affiliates to Japan to enable them to display their abilities
to the full. This scheme not only helps the person
concerned to grow but also serves as a stimulus for
Japanese members.
Diversity, Equity & Inclusion
TDK believes that we can continue generating innovative
creativity be establishing an environment in which all
members respect one another, feel included, and are
motivated to contribute to the best of their ability
regardless of any way which makes them unique,
including race, religion, gender, sexual orientation, age,
thinking style, and nationality, just to name a few. In order
to accelerate DE&I activity we have established a global
DE&I Department comprised of members from China,
Japan, Germany, and the US.
We will continue to build upon our current efforts to
empower the women of Japan and work towards our
goal of having women comprise 15% of our managerial
ranks in Japan by 2035, TDK’s 100th anniversary. In
another effort to support the advancement of women in
TDK, we have actively encouraged male members to
take childcare leave. This program aids the transition of
new working mothers back into the workplace and allows
new fathers more time to support mom and enjoy taking
care of their new baby.
Number of female employees (non-consolidated) /
Ratio of women in managerial roles
Number of female employees (left)
Ratio of women in managerial roles (right)
(Persons)
1,200
1,000
800
600
400
200
0
833
895
942
982
1,050
3.8
3.2
2.3
1.8
1.4
(%)
5
4
3
2
1
0
2019
2020
2021
2022
2023
(FY)
Percentage of male employees taking
childcare leave
(%)
25
23.1
16.9
11.1
9.3
20
15
10
5
0
3.4
2019
2020
2021
2022
2023
(FY)
38
39
Revamping global HR and elevating
talent management
assessment outcome, internal/external working history,
and geographical / functional individual preferences. We
We take pride in our team of over 100,000 employees
leverage these tools to optimize the assignment of
across more than 100 Group companies worldwide. To
members, ensuring that the right people are assigned to
help them reach their full potential and shine on the
the right position regardless of company or region.
global stage, we have developed a range of programs to
Additionally, we are committed to attracting
help team members (employees) expand their skills and
talented individuals from outside by promoting
knowledge worldwide, including global management
large-scale sustainability projects involving several of
development programs, support for English language
our Group companies and showcasing our
learning, and TDK’s internal global Incubator Program
commitment to sustainability.
which is called “TDK Kindergarten.”
We maintain that enhancing the capabilities of each
individual will not only contribute to the development of their
Enhancing our business performance through team
members’ engagement
team and division but also the entire company and Group as
We can strengthen trust relationships internally and
a whole. Our efforts to nurture our team members’ talents
externally by enhancing team members’ engagement and
are what set the TDK Group apart from other companies.
communicating this openly to all.
To effectively manage team members information on a
In February 2023, we conducted the first-ever global
global scale, we rely on centralized talent management
team members’ engagement survey, achieving an
and HR evaluation systems that offer greater flexibility and
impressive 80% response rate thanks to our efforts to
expanded capabilities. This enables us to identify and
ensure everyone had access to the survey not only via
promote our members for higher positions based on
their PCs but also through their smartphones. The survey
factors such as skills, performance, competency,
asked two key questions: “How happy are you working at
EX
Quality Management
Asset Efficiency Improvement
Message from the Corporate Officer of
Technology and Intellectual Property
Advancing to the next stage of
utilizing technology and IP while
continuing TDK’s culture of
creating original technology
Shigeki Sato
Director, Senior Vice President,
General Manager, Technology and
Intellectual Property HQ
Promoting R&D from three angles to
accelerate TDK’s original Monozukuri
TDK’s business started with the invention and
commercialization of ferrite, a magnetic material, and
subsequently spread to derivatives, piezoelectric materials,
and semiconductors, developing into today’s wide range
of technologies and products that we call the Ferrite Tree.
The main features of TDK’s technological development is
that we can develop and propose devices and
applications meeting the needs and expectations of
customers speedily, because we can develop products
from materials in-house. Almost without exception, our
developed products employ typically TDK technology.
To further accelerate this original Monozukuri
(manufacturing excellence) of TDK, our Technology and
Intellectual Property HQ is focusing on three angles. The
first is R&D of so-called disruptive technology that brings
about radical innovation in existing technology and
business. In the world of electronics, an innovative
technology appears that makes it difficult for an existing
technology to survive. For example, the cathode-ray tube
disappeared following the appearance of flat-panel
displays, such as liquid-crystal and plasma screens. With
an eye on future technological trends, our aim is to play a
leading role in innovation.
The second angle is to develop basic technologies,
such as process technology and evaluation and simulation
technology, that can be commonly used throughout the
Group. And the third angle is to research what
technological domains TDK should tackle with a view to
the solution of future social challenges.
TDK was established in 1935 in accordance with the
founder’s dream and belief in commercializing ferrite, an
original magnetic material of Japan, and contributing to
the development of society by boosting local employment
and safeguarding people’s lives. In the field of R&D, we
have continuously inherited this philosophy as our
corporate motto of “Contribute to culture and industry
through creativity.”
Building research setups suited to regional
characteristics and realizing strategic
international collaboration
Customer needs have advanced in recent years, and the
business of supplying not only electronic devices but also
their modularization and systematization is becoming
increasingly important. TDK, which has based its business
on Japan’s materials technology, has abundant experience
in making products, but systematization requires new
knowledge. In addition, we must also enhance our market-in
planning capabilities to quickly grasp the future technologies
and challenges expected by customers and markets.
Each region where the TDK Group operates has its
own customer needs and technological strengths. In
accordance with these regional characteristics, I want us
to build the optimum technological development
structures and to respond to the needs of the time.
For example, the United States has many users of
state-of-the-art electronic devices; it is a market with the
world’s foremost needs in software, system development,
and so on. Therefore, we have set up an R&D organization
in the United States specializing in software and system
development, and we have appointed Jim Tran, who
previously was responsible for product management at
Qualcomm in the United States, to take charge of it. Tran
serves as a corporate officer of TDK, and under his
powerful leadership, we are strengthening our
development regime there.
The European market, meanwhile, has many leading
makers of automobiles and industrial equipment, so we
will improve our R&D organization there so as to respond
to technological requirements in these fields. In Japan, we
do, of course, respond to the wide-ranging technological
needs of domestic customers, and we will further
strengthen our R&D functions in such areas as materials
research and process development, which have been
TDK’s forte ever since its founding.
In addition, we are further bolstering collaboration with
sites, for example by getting European sites to assemble
piezoelectric devices developed in Japan as applications
for automobiles in Europe. One example of the results of
development through such collaboration is the i3 Micro
Module (see page 46), the world’s first ultracompact
sensor module featuring embedded edge AI. This module
has been modularized and systematized in the United
States using devices developed in Japan. It not only
makes users easier to aggregate, integrate, and process
data, which was difficult before, but also, because it is
ultracompact and battery-powered, realizes ideal
predictive maintenance without physical constraints like
wiring. In recognition of its role as a proposal-type product
in contributing to the elimination of downtime in various
industrial equipment, in October 2022 the i3 Micro Module
won the grand prix in the Smart x Industries category of
the CEATEC AWARD 2022. We will continue to actively
engage in such joint international collaboration.
Focusing research on the solution of
future social challenges
We are also actively conducting research on what
technological domains—in other words, what future
technologies—TDK should tackle with a view to the
solution of future social challenges.
For example, we have identified Beyond 5G, IoT,
Robotics, AR/VR, Medical/Health Care, Mobility ADAS/EV,
and Renewable Energy as the seven focal areas (Seven
Seas), and steady progress is being made here. In the area
of Beyond 5G, we are promoting R&D on antenna
technology for the upgrading of millimeter-wave and
terahertz band base stations jointly with the National
Institute of Advanced Industrial Science and Technology
and Osaka University as an industry-government-academia
Ferrite Tree
Isolator
MEMS Sensor
SAW Filter
HDD Suspension
GMR/TMR Sensor
LTCC-RF (HMLTM)
HDD Head
Power Inductor
Choke Coil
Aluminum Capacitor
Film Capacitor
EMC Filter
Current Sensor
Multilayer Inductor
Transformer
Signal Inductor
Ferrite Core
Noise Suppression Sheet
Li-ion Battery
Absorber
Magnetic Tape
xEV DC/DC Converter
EMC Chamber
Switching Power Supply
MLCC
Camera Module Actuator
Bonded Magnet
Neodymium Magnet
Piezo Actuator
Multilayer Varistor
Ferrite Magnet
NTC Sensor
Pressure Sensor
Material Science
(Magnetic/Dielectric/Piezo/Semiconductor/Electric Chemical Material)
Process Technology
(Powder Metallurgy/Thick-film/Thin-film)
Ferrite
40
41
collaboration project. In this project, we are aiming to
circuit, as a device, that can conduct memory and
establish materials technology, materials evaluation
computation functions simultaneously.
technology, antenna design technology, and so on toward
Actually, we know that if a technology called magnetic
the practical use of antennas responding to the 100–300
tunnel junction (MTJ), which is used in magnetic heads, is
GHz frequency band, which is being considered for use as
applied in this device, we can reduce the amount of
a post-5G next-generation communication standard.
electricity consumed to about 1/300th of the present level.
Also, in the area of Renewable Energy, in October
I hope we can put this device on the market.
2022 we established the Co-creation Research Center for
Renewable Energy Conversion Devices and Materials
jointly with Tohoku University in Japan. This center is
promoting R&D toward the practical use of next-generation
wind power generation systems, including research into
As General Manager, Technology and Intellectual Property
new methods of solving technological issues associated
HQ, one of the things that I place importance on and
with offshore wind power generation.
want to pass on to the next generation is TDK’s culture of
Furthermore, to upgrade materials technology, which
encouraging engineers to think about themes themselves
is an important core technology essential for tackling the
and make challenges. At TDK many of our engineers are
Seven Seas, we are actively utilizing materials informatics
nurturing themes of interest to them, topics in which they
(MI). The conventional materials development process
have spotted potential, and so on. There are many
technologies in each industrial field thanks to information
Based on this setup, going forward we will build a
consumed a huge amount of time and labor power,
people who are steadily continuing their research. It is
obtained from customers through the Corporate
robust patent network in each business that rival
because after the engineers had made their theoretical
such initiatives that lead to TDK’s unique technologies
Marketing & Incubation HQ, our Group-wide marketing
companies will find difficult to avoid and strengthen our
calculations, we had to search for new materials by
and products.
function, and through TDK Ventures, which handles our
advantage in the market. In addition, we will, of course,
repeatedly making prototypes of candidate materials and
As an engineer, I was involved in ceramic-related
CVC function, about the cutting-edge technologies of
increase license revenue utilizing the patents in our
carrying out physical property evaluations. In contrast,
materials development. Even when told to stop by my
startups and new business models. I think this gives rise
possession, and we also will regularly implement the
because MI can analyze huge volumes of experimental
bosses, there were times when I could not give up and
to a positive spiral in which we can quickly understand
maintenance of intellectual property, including the
data and papers using AI, big data, machine learning, and
secretly continued my research on techniques and
so on, it shows the way toward candidates for desired
materials that interested me personally. And lo and behold,
new materials and manufacturing methods without
in many cases my efforts led to unexpected results, such
actually making any prototypes. Moreover, another merit of
as our development of the X8R device that can withstand
MI is that it helps to stimulate flashes of inspiration in
temperatures of up to 150°C. I think TDK has a unique
engineers. It is my hope that MI, which comes up with
culture in which engineers not only do what they are asked
the reasons and intentions behind customer
requirements and speed up development.
abandonment of patents that have become less important.
One more thing that I am actively promoting is the
inclusion of intellectual property strategy into the Group’s
business strategy and the utilization of intellectual property
landscaping to capitalize on IP in management. This idea
stemmed from the question of whether intellectual
solutions that never occur to humans, will provide new
but also pursue themes that fascinate them by themselves.
For a high-tech company like TDK, patents and other
property could be not only defensive but also an offensive
hints for engineers to work on.
One of my missions, I believe, is to transmit this culture, so
intellectual property are an essential management
tool in business development. Rather than simple patent
We are also challenging technologies that look even
I am creating opportunities for our young engineers to
resource for maintaining and strengthening our
mapping, I want us to develop a management tool
farther into the future than the Seven Seas. For example,
make presentations on technological themes that they
competitive advantage in the market. At present TDK
combining various information, such as technological
of the electricity consumed in the world today, data
come up with themselves.
possesses about 18,000 patents; we are especially strong
trends in the market, R&D trends in rival companies, and
processing by data centers and so on accounts for an
Another feature of TDK is our deep knowledge and
in the materials and product design fields.
TDK’s business and product roadmaps, to analyze the
extremely large share. Recently Chat GPT, an AI chatbot,
wide-ranging technology, which enable us to engage in
Following the globalization of business in recent years,
current situation and compile future strategy.
has been in the news a lot. In the future, when such services
discussions with customers about future technologies and
as well as Japan, our patent applications are increasing in
The key to the success of this IP landscaping, I
begin to be used routinely, the load on data processing used
products. Our technologies cover almost every area of
North America, China, and Europe too, but there are still
believe, lies in whether the responsible personnel in each
in data centers and communications-related base stations
electronics, including materials, electronic components,
problems relating to the acquisition and utilization of
division can be made to think that they want to utilize it in
is going to increase enormously. At present energy is used
sensors, recording devices, and batteries. Also, we have
patents overseas. Therefore, we are setting up intellectual
their own business division too. Our aim is to develop a
to cool them down. But if the amount of energy consumed
five core technologies supporting our Monozukuri—materials
property divisions in business companies in each region
tool that can be utilized not only at the top management
in data processing in the first place can be lowered, we
technology, which pursues the properties of materials from
and endeavoring to conduct patent applications and
level but also in business and technical management in
can surely realize more efficient operations.
the atomic level; process technology, which bring out the
intellectual property management in accordance with the
each business division.
For this purpose, we are researching a neuromorphic
properties of materials to the utmost; evaluation and
business characteristics and laws and regulations of each
Going forward, while making full and effective use of
device that emulates the human brain and is characterized
simulation technology, which accurately analyzes ultra-fine
region. In addition, our corporate intellectual property
these IP strategies, we will continue to promote R&D and
by having both memory and computation functions
technology; product design technology, which enables
department supports patent applications and management
product development, realize competitive advantage, and
together. At present computation takes place at a high
development of the best devices, modules, and
by the head office’s R&D departments and the intellectual
achieve medium- and long-term business growth in line
speed and large capacity by taking data from the memory
applications; and production engineering, which makes it
property strategies of each business division and each
with our corporate vision and the direction of our
and returning it. Obviously, this requires a huge amount of
possible to manufacture products of the same quality
region. It also devotes much effort toward securing and
business strategy.
energy. The device that we are developing is an
anywhere in the world.
epoch-making technique that renders such read/write
In addition to these five core technologies, TDK is in
appointing personnel with a good knowledge of
technologies and intellectual property, including principal
unnecessary, because we are trying to make a neural
a position to quickly get to know about future
modules and software.
development regime there.
wiring. In recognition of its role as a proposal-type product
The European market, meanwhile, has many leading
in contributing to the elimination of downtime in various
makers of automobiles and industrial equipment, so we
industrial equipment, in October 2022 the i3 Micro Module
will improve our R&D organization there so as to respond
won the grand prix in the Smart x Industries category of
to technological requirements in these fields. In Japan, we
the CEATEC AWARD 2022. We will continue to actively
do, of course, respond to the wide-ranging technological
engage in such joint international collaboration.
needs of domestic customers, and we will further
strengthen our R&D functions in such areas as materials
research and process development, which have been
TDK’s forte ever since its founding.
In addition, we are further bolstering collaboration with
We are also actively conducting research on what
sites, for example by getting European sites to assemble
technological domains—in other words, what future
piezoelectric devices developed in Japan as applications
technologies—TDK should tackle with a view to the
for automobiles in Europe. One example of the results of
solution of future social challenges.
development through such collaboration is the i3 Micro
For example, we have identified Beyond 5G, IoT,
Module (see page 46), the world’s first ultracompact
Robotics, AR/VR, Medical/Health Care, Mobility ADAS/EV,
sensor module featuring embedded edge AI. This module
and Renewable Energy as the seven focal areas (Seven
has been modularized and systematized in the United
Seas), and steady progress is being made here. In the area
States using devices developed in Japan. It not only
of Beyond 5G, we are promoting R&D on antenna
makes users easier to aggregate, integrate, and process
technology for the upgrading of millimeter-wave and
data, which was difficult before, but also, because it is
terahertz band base stations jointly with the National
TDK’s business started with the invention and
have continuously inherited this philosophy as our
ultracompact and battery-powered, realizes ideal
Institute of Advanced Industrial Science and Technology
commercialization of ferrite, a magnetic material, and
corporate motto of “Contribute to culture and industry
predictive maintenance without physical constraints like
and Osaka University as an industry-government-academia
the development of society by boosting local employment
and safeguarding people’s lives. In the field of R&D, we
subsequently spread to derivatives, piezoelectric materials,
through creativity.”
and semiconductors, developing into today’s wide range
of technologies and products that we call the Ferrite Tree.
The main features of TDK’s technological development is
that we can develop and propose devices and
applications meeting the needs and expectations of
customers speedily, because we can develop products
Customer needs have advanced in recent years, and the
from materials in-house. Almost without exception, our
business of supplying not only electronic devices but also
developed products employ typically TDK technology.
their modularization and systematization is becoming
To further accelerate this original Monozukuri
increasingly important. TDK, which has based its business
(manufacturing excellence) of TDK, our Technology and
on Japan’s materials technology, has abundant experience
Intellectual Property HQ is focusing on three angles. The
in making products, but systematization requires new
first is R&D of so-called disruptive technology that brings
knowledge. In addition, we must also enhance our market-in
about radical innovation in existing technology and
planning capabilities to quickly grasp the future technologies
business. In the world of electronics, an innovative
and challenges expected by customers and markets.
technology appears that makes it difficult for an existing
Each region where the TDK Group operates has its
technology to survive. For example, the cathode-ray tube
own customer needs and technological strengths. In
disappeared following the appearance of flat-panel
accordance with these regional characteristics, I want us
displays, such as liquid-crystal and plasma screens. With
to build the optimum technological development
an eye on future technological trends, our aim is to play a
structures and to respond to the needs of the time.
leading role in innovation.
For example, the United States has many users of
The second angle is to develop basic technologies,
state-of-the-art electronic devices; it is a market with the
such as process technology and evaluation and simulation
world’s foremost needs in software, system development,
technology, that can be commonly used throughout the
and so on. Therefore, we have set up an R&D organization
Group. And the third angle is to research what
in the United States specializing in software and system
technological domains TDK should tackle with a view to
development, and we have appointed Jim Tran, who
the solution of future social challenges.
previously was responsible for product management at
TDK was established in 1935 in accordance with the
Qualcomm in the United States, to take charge of it. Tran
founder’s dream and belief in commercializing ferrite, an
serves as a corporate officer of TDK, and under his
original magnetic material of Japan, and contributing to
powerful leadership, we are strengthening our
EX
Quality Management
Asset Efficiency Improvement
collaboration project. In this project, we are aiming to
establish materials technology, materials evaluation
technology, antenna design technology, and so on toward
the practical use of antennas responding to the 100–300
GHz frequency band, which is being considered for use as
a post-5G next-generation communication standard.
Also, in the area of Renewable Energy, in October
2022 we established the Co-creation Research Center for
Renewable Energy Conversion Devices and Materials
jointly with Tohoku University in Japan. This center is
promoting R&D toward the practical use of next-generation
wind power generation systems, including research into
new methods of solving technological issues associated
with offshore wind power generation.
Furthermore, to upgrade materials technology, which
is an important core technology essential for tackling the
Seven Seas, we are actively utilizing materials informatics
(MI). The conventional materials development process
consumed a huge amount of time and labor power,
because after the engineers had made their theoretical
calculations, we had to search for new materials by
repeatedly making prototypes of candidate materials and
carrying out physical property evaluations. In contrast,
because MI can analyze huge volumes of experimental
data and papers using AI, big data, machine learning, and
so on, it shows the way toward candidates for desired
new materials and manufacturing methods without
actually making any prototypes. Moreover, another merit of
MI is that it helps to stimulate flashes of inspiration in
engineers. It is my hope that MI, which comes up with
solutions that never occur to humans, will provide new
hints for engineers to work on.
We are also challenging technologies that look even
farther into the future than the Seven Seas. For example,
of the electricity consumed in the world today, data
processing by data centers and so on accounts for an
extremely large share. Recently Chat GPT, an AI chatbot,
has been in the news a lot. In the future, when such services
begin to be used routinely, the load on data processing used
in data centers and communications-related base stations
is going to increase enormously. At present energy is used
to cool them down. But if the amount of energy consumed
in data processing in the first place can be lowered, we
can surely realize more efficient operations.
For this purpose, we are researching a neuromorphic
device that emulates the human brain and is characterized
by having both memory and computation functions
together. At present computation takes place at a high
speed and large capacity by taking data from the memory
and returning it. Obviously, this requires a huge amount of
energy. The device that we are developing is an
epoch-making technique that renders such read/write
unnecessary, because we are trying to make a neural
circuit, as a device, that can conduct memory and
computation functions simultaneously.
Actually, we know that if a technology called magnetic
tunnel junction (MTJ), which is used in magnetic heads, is
applied in this device, we can reduce the amount of
electricity consumed to about 1/300th of the present level.
I hope we can put this device on the market.
Self-thinking by engineers in
a typically TDK culture
As General Manager, Technology and Intellectual Property
HQ, one of the things that I place importance on and
want to pass on to the next generation is TDK’s culture of
encouraging engineers to think about themes themselves
and make challenges. At TDK many of our engineers are
nurturing themes of interest to them, topics in which they
have spotted potential, and so on. There are many
people who are steadily continuing their research. It is
such initiatives that lead to TDK’s unique technologies
and products.
As an engineer, I was involved in ceramic-related
materials development. Even when told to stop by my
bosses, there were times when I could not give up and
secretly continued my research on techniques and
materials that interested me personally. And lo and behold,
in many cases my efforts led to unexpected results, such
as our development of the X8R device that can withstand
temperatures of up to 150°C. I think TDK has a unique
culture in which engineers not only do what they are asked
but also pursue themes that fascinate them by themselves.
One of my missions, I believe, is to transmit this culture, so
I am creating opportunities for our young engineers to
make presentations on technological themes that they
come up with themselves.
Another feature of TDK is our deep knowledge and
wide-ranging technology, which enable us to engage in
discussions with customers about future technologies and
products. Our technologies cover almost every area of
electronics, including materials, electronic components,
sensors, recording devices, and batteries. Also, we have
five core technologies supporting our Monozukuri—materials
technology, which pursues the properties of materials from
the atomic level; process technology, which bring out the
properties of materials to the utmost; evaluation and
simulation technology, which accurately analyzes ultra-fine
technology; product design technology, which enables
development of the best devices, modules, and
applications; and production engineering, which makes it
possible to manufacture products of the same quality
anywhere in the world.
In addition to these five core technologies, TDK is in
a position to quickly get to know about future
The five core technologies supporting TDK manufacturing
Materials
technology
Process
technology
Evaluation and
simulation
technology
Product design
technology
Production
engineering
technology
The culmination of over
85 years of experience
and know-how
Realizes control on the
nanometer level
Accurately analyzes
ultra-fine technology
Creating product value
with accumulated
know-how and new
ideas
Outstanding facilities
developed and
manufactured in-house
technologies in each industrial field thanks to information
obtained from customers through the Corporate
Marketing & Incubation HQ, our Group-wide marketing
function, and through TDK Ventures, which handles our
CVC function, about the cutting-edge technologies of
startups and new business models. I think this gives rise
to a positive spiral in which we can quickly understand
the reasons and intentions behind customer
requirements and speed up development.
Utilizing IP landscaping to strengthen
IP strategy
For a high-tech company like TDK, patents and other
intellectual property are an essential management
resource for maintaining and strengthening our
competitive advantage in the market. At present TDK
possesses about 18,000 patents; we are especially strong
in the materials and product design fields.
Following the globalization of business in recent years,
as well as Japan, our patent applications are increasing in
North America, China, and Europe too, but there are still
problems relating to the acquisition and utilization of
patents overseas. Therefore, we are setting up intellectual
property divisions in business companies in each region
and endeavoring to conduct patent applications and
intellectual property management in accordance with the
business characteristics and laws and regulations of each
region. In addition, our corporate intellectual property
department supports patent applications and management
by the head office’s R&D departments and the intellectual
property strategies of each business division and each
region. It also devotes much effort toward securing and
appointing personnel with a good knowledge of
technologies and intellectual property, including principal
modules and software.
Based on this setup, going forward we will build a
robust patent network in each business that rival
companies will find difficult to avoid and strengthen our
advantage in the market. In addition, we will, of course,
increase license revenue utilizing the patents in our
possession, and we also will regularly implement the
maintenance of intellectual property, including the
abandonment of patents that have become less important.
One more thing that I am actively promoting is the
inclusion of intellectual property strategy into the Group’s
business strategy and the utilization of intellectual property
landscaping to capitalize on IP in management. This idea
stemmed from the question of whether intellectual
property could be not only defensive but also an offensive
tool in business development. Rather than simple patent
mapping, I want us to develop a management tool
combining various information, such as technological
trends in the market, R&D trends in rival companies, and
TDK’s business and product roadmaps, to analyze the
current situation and compile future strategy.
The key to the success of this IP landscaping, I
believe, lies in whether the responsible personnel in each
division can be made to think that they want to utilize it in
their own business division too. Our aim is to develop a
tool that can be utilized not only at the top management
level but also in business and technical management in
each business division.
Going forward, while making full and effective use of
these IP strategies, we will continue to promote R&D and
product development, realize competitive advantage, and
achieve medium- and long-term business growth in line
with our corporate vision and the direction of our
business strategy.
42
43
Quality Management
Supply Chain Management
Monozukuri Realizing a High Level of Quality
as a Global Supplier
Enhancing customer satisfaction as much as
possible by fostering the 3Qs of human resource
quality, technological quality, and systematic
quality in pursuit of zero-defect product quality
Takeshi Takahashi
Corporate Officer
Chief Officer of Quality, Safety and Environment
and General Manager, Quality Assurance HQ
As one of the leading companies in the electronic
components industry, TDK believes that quality is the crux
for building trust with society and customers, and we
continuously strive to improve quality as a top-priority
issue. Accordingly, we are pursuing zero-defect product
quality in quality management—in other words, the pursuit
of zero defects throughout the product lifecycle, from not
only the shipment stage but also the distribution stage, the
stage of assembly by customers, and onto the stage of
use by consumers and final disposal.
To achieve our objective, at the moment we are
bolstering efforts in four steps: identification of causes,
outflow prevention activities, preventative and predictive
activities, and upstream-management-type manufacturing
that does not produce defects. In each step, we are
improving ways and means to raise the quality awareness
of employees and promoting activities to eliminate defects
in design, material, process, and management through
integration with digital transformation (DX). In addition, we
are striving to predict and prevent the outbreak of
in-process defects through DX technology, including the
building of basic technologies for deep learning*1 and AOI. *2
If we can continue to constantly supply high-quality
products in this way, the degree of customer satisfaction
with TDK products is sure to be optimized. Going forward,
by further strengthening our quality assurance activities
based on the 3Qs of human resource quality,
technological quality, and systematic quality and by
Pursuit of zero-defect product quality by DX
capitalizing on the expanding synergy effect that comes
from diversity, which is our strength as a global enterprise
gained through M&A, we will become a truly leading
company in the electronic components industry.
*1 Deep learning is a type of machine learning that boosts learning ability by combining
artificial neural networks imitating the neural circuits of the human brain, thereby
enabling the learning of various things and response to complicated problems.
*2 AOI stands for automated optical inspection, which refers to the quality inspection
of products by means of continuous photography using a high-resolution camera
system with different light sources, such as fluorescence, ultraviolet rays, LED
(light-emitting diode), and infrared rays.
What are the “3Qs”?
Fostering the 3Qs
Main measures of the QAHQ
Human Resource Quality
Sustained quality
improvement activities
facilitated by raising quality
awareness and practical skills
Technological Quality
Sustained quality assurance
initiatives keyed to
improvements in quality
technology and preventive
measures
• Upgrading of the abilities of engineers
and workers by quality education
• Enhancement of quality awareness
through small group activities
• Promotion of the globalization of
compliance and other quality
education by utilizing DX
• Product analysis and reliability test
support to Business Groups (BGs)
• Improvement of process quality and
raising of inspection process levels by
means of tools
• Design support by system
development utilizing AI
• Establishment of product security
regulations for IoT products and its
evaluation technology
Systematic Quality
Sustained quality improvement
activities mobilizing quality
management systems structured
to integrate TDK’s distinctive
Monozukuri know-how with
international standards
• Reliable response to Global Common
Regulations by the entire TDK Group
• Monitoring of laws and regulations and
Group-wide rollout of information
• Building of customer-oriented quality
management system
l
V
a
u
e
g
a
n
e
d
i
Big data analysis
Visualization of
a quality defect
Identification of
a quality-defect cause
Prevention of any
quality-defect outflow
AI Technology
Prediction of a quality
defect and alert
Advance avoidance of
a quality defect
No quality defects
created
Building smart factories achieving
seamless integrated management
to realize Industry 4.0
Hisayuki Abe
General Manager,
Production HQ and General Manager,
Production Strategy Planning Group
Over many years TDK has accumulated Monozukuri
capabilities to give shape to and mass-produce
electronic components born from our original materials
technology, from the stage of product prototypes to
quality design, process design, process building, and the
refinement of quality through worksite competence. And
this know-how is still evolving through the integration of
TDK’s five core technologies.
The challenge for us now is to build smart factories
achieving seamless integrated management from the
acceptance of orders to production and shipment. For
this purpose, we are aiming for Monozukuri that realizes
high productivity and stable quality by deploying not only
TDK’s core technologies and know-how but also such
state-of-the-art technologies as big data, AI, and
sensing technology.
For example, by utilizing sensing technology, we can
visualize invisible phenomena as wave forms and numerals
and realize nonstop equipment that predicts the outbreak
of future trouble and defects from minor changes and nips
them in the bud. Furthermore, since we would be able, by
means of electric current and vibration sensing, to
diagnose various situations in real time, such as
equipment process fluctuations or transportation
abnormalities, it would be an effective means of checking
whether equipment is repeating correct operations.
Going forward, we will absorb various technologies
and know-how in our bid to realize the “Quality First” and
new value creation advocated by TDK.
Quality refinement
Automation
Autonomy
Smart factories
Product design
Process design
Process development
Equipment development
Worksite competence
Building of
mass-production lines
Utilization of big data by
mass-production lines
Automated transportation
Automated operations
Utilization of AI
Feedback / Feedforward
Sensing technology
Analysis technology
Seamless integrated management from
acceptance of orders to production
and shipment
Reduction of energy intensity and utilization of renewable energy
i
l
E
v
o
v
n
g
M
o
n
o
z
u
k
u
r
i
Utilization of sensing for feedback / feedforward between contiguous equipment
Supplier
Customer
Robotics (Robots automatically transport semifinished
products to the next equipment.)
M
o
n
o
z
u
k
u
r
i
P
r
e
s
e
n
t
Supplier
Characteristics
•Realizes nonstop
production lines
ensuring quality and
productivity.
•Realizes sustainable
Monozukuri.
Customer
Step 1: Discovery
Step 2: Analysis
Step 3: Prevention
Step 4: Prediction
Step 5: Control
Humans transport semifinished products emerging from equipment.
44
45
EX
Asset Efficiency Improvement
Strengthening Marketing, Innovation, and
Incubation Capabilities Across the Group
At CM&I we propagate early market trends
and support market-in product developments
—including cooperations with external
partners and incubation activities.
Michael Pocsatko
Senior Vice President
General Manager, Corporate Marketing &
Incubation HQ
In April 2021, the Corporate Marketing & Incubation (CM&I)
HQ was established as a new organization with the goal to
look into the future identifying “Mega Trends” and to
accelerate incubation activities—communicating and
collaborating across innovators both inside and outside the
company. This is creating a strong outside-in perspective,
a more customer-oriented approach and language.
Additionally, it is our task to have a broad,
company-wide view to bring together TDK’s diverse
technological know-how and study the potential of future
combinations. In all these roles, by adopting not only a
market-in but also a product-out approach across the
Group, we can promote product development that responds
swiftly to market dynamics, thus we create and incubate
new products/solutions which do not exist in TDK’s portfolio.
In fiscal 2023, the Corporate Marketing team continued
its ongoing investigation, exploration, identification, and
dissemination of mega trend intelligence in the context of
TDK’s Seven Seas, our focal seven areas (see page 14).
Also, the members facilitate market desirability, feasibility, and
viability studies for emerging TDK technologies. Moreover,
the team is championing external alliances with key value
add entities across a variety of market verticals. These results
enabled the team to make tangible achievements, such as
the development of the new i3 Micro Module, which is a
Responding to market potential/needs in
a cross-sectional manner
Customers
Sales &
IC Collab &
Digi Marketing
BC / BG
External
Consultants
Tech&IP
HQ
TDK
Ventures
groundbreaking sensor module (see the column below).
The team strives to deliver new corporate value
through innovation and novel approaches to address the
pain points of both established as well as emerging
customers. Our aim is to generate a strong, contagious,
lasting, bridge building and transformative mindset for the
team. After two years activities, everybody has truthfully
internalized this direction and lived up to it in every way.
We also observe strong support and collaboration for our
new ideas from all TDK Innovators. I’m very grateful and
believe we will be able to accelerate the CM&I
contributions to TDK, customers & society.
i3 Micro Module—realization of predictive maintenance based on edge AI,
ultracompact sensor module redefines the status quo of equipment maintenance.
In recent years, manufacturing sites are expected predictive maintenance, which reduces the
downtime and raises productivity, by predicting problems and performing maintenance preemptively,
instead of reacting only after breakdowns have occurred. To meet these needs, TDK has developed
i3 Micro Module—the world’s first ultracompact sensor module featuring embedded edge AI.
This module enables users to facilitate data aggregation, integration, and processing, which had
been difficult in the past, and to achieve sensing without physical constraints like wiring due to an
ultracompact, battery-powered wireless sensor module. As part of the transition toward smart
factories, i3 represents one of TDK’s smart edge sensor platform solutions which is scheduled for
release to the market in 2023.
Driving the creation of synergy within and
outside the Group, aiming to realize
TDK’s vision and fulfill my mission.
Jim Tran
Corporate Officer
General Manager, Americas HQ and Deputy
General Manager, Technology & Intellectual
Property Center
My mission as a corporate officer, and the head of TDK
USA Corporation (TUC) is to create and drive
cross-synergies across multiple functions like the CM&I
HQ, Technology & Intellectual Property HQ, and the
various Group companies and other regional
headquarters. For this reason, we are broadening our
scope to not just TUC, but with a wider view
encompassing the entire Group.
External relationships are essential to complement
what the Group lacks. To this end, through partnerships
with external companies, M&A, or the CVC support, we
are pursuing the creation of synergies in line with the
Seven Seas—our seven focal areas. For example, the
acquisition of Qeexo, Co., which develops a platform for
automated machine-learning, in January 2023 (see the
column below) is one of the achievements. Looking
forward, by combining their expertise with TDK’s
industry-leading knowledge in areas like sensors and
batteries, we anticipate being able to propose innovative
solutions to drive digital transformation (DX) across a wide
range of industrial fields.
The reason I joined the TDK Group in June 2021 is
because I felt it presented an opportunity to realize my
longstanding passion, which is to find technologies to
help society for the future. I thought I had some degree
Profile
Mr. Tran graduated with a BSEE and begin his career as an engineer
at Boeing, while concurrently earning his MSEE. Following this, he
transferred to Qualcomm as a member of their marketing and
product management team. Leveraging his experience as an
engineer, Mr. Tran made significant contributions across a broad
range of product sectors. He was also involved in the establishment
of a joint venture with TDK. After leaving, he joined TDK in June 2021
and held multiple marketing and general management positions
within the company before assuming his current role in October 2022.
of knowledge of TDK’s business and technologies, but
after actually working here, I experienced its allure
firsthand. In addition to the advanced technology, what
particularly surprised me was the culture of TDK, where
people treat each other with respect and value the
opinions of others. TDK, possesses an openness to hear
the opinions of the people, is indeed a global company
with the diversity required for a future society. I feel that
the regional headquarters and the Group companies
around the world can each bring their strengths and
create a powerful synergy.
Leveraging these strengths to lead robust growth
across the entire Group is not only my role within TDK, but
it is key to fulfilling my mission.
Acquiring Qeexo with an automated machine learning (ML) technology to
enable complete smart edge platforms
In January 2023, TDK acquired the U.S.-based company Qeexo, Co. to strengthen their foundation in both hardware and
software development. This move is aimed at accelerating the development of smart sensor platforms, for which demand is
growing globally.
Qeexo, a venture-backed spin off from Carnegie Mellon University, recognized as a world leading institution in computer
science, is the first company to automated successfully end-to-end machine learning for
edge devices. By combining their expertise in ML automation with TDK’s leadership
positions in sensors, batteries, and other critical components, TDK aims to become a
leading company in the field of smart edge solutions.
46
47
Pursuing Both Delegation of Authority and Internal Controls
Delegation of Authority
Building a framework through the delegation
of authority to strengthen regional
headquarters functions, establish R&D and
marketing functions, and enable a flexible
response to conditions in each region
Unique employee culture for value creation
Based on our corporate motto of “Contribute to culture
and industry through creativity,” TDK’s corporate culture is
our stance of delivering value to customers through the
collaboration beyond national borders of team members
(employees) with diverse personalities working around the
world. Even today, when the TDK Group has expanded to
more than 30 countries and regions, this corporate culture
remains unchanged. Regarding M&A, rather than
controlling acquired companies, we adopt a policy of
post-merger integration (PMI) by which we maintain equal
relationships and respect one another’s corporate culture.
In this way, we position acquired companies as partners
and accept their technologies, strengths, and values,
thereby creating synergy on a global scale.
Examples of major acquisitions in recent years
2000 Headway (U.S.)
2005 Lambda Power Group
(now TDK-Lambda, Japan)
2005 ATL (Hong Kong, China)
2007 Magnecomp (Thailand)
2008 EPCOS (now TDK Electronics, Germany)
2016 Micronas (now TDK-Micronas, Germany)
2016 Hutchinson (U.S.)
2017 ICsense (Belgium)
2017 InvenSense (U.S.)
Organization building to display diverse strengths
To realize growth amid a volatile environment, it is
necessary to build a management setup emphasizing
agility. Based on a spirit of enhancing Empowerment and
Transparency, while abiding by corporate ethics, laws and
regulations, and commercial customs, we are establishing
Group governance that respects diversity and realizing a
proactive management setup.
As a Group governance setup to realize Empowerment
and Transparency, we are adopting a matrix management
system based on two axes—the business axis, which is
the chain of command for the execution of work, and the
function axis, which involves the support of business
operations and monitoring of the state of operations by
headquarters functions.
To operate this function axis globally, we have set up
regional headquarters in Japan, Europe, Americas and
China. In cooperation with the global headquarters, these
regional headquarters implement support and monitoring of
our subsidiaries in each region. To further strengthen these
regional headquarters functions, since October 2022 we
have appointed both the heads of the regional headquarters
for the Americas and China as corporate officers. We have
also established R&D and marketing functions in tune with
the special characteristics of each region, thus forming
setups capable of responding to regional needs and
technological trends in a timely manner.
Furthermore, in addition to our internally generated
organic growth so far, TDK has acquired growth-phase
companies and aimed for the growth of the TDK Group.
When utilization of the management system already
possessed by the acquired company is deemed to be
effective and efficient, we position the former headquarters
of the acquired company as a core subsidiary and
encourage it to play a part in the function axis.
Group management structure with the policy of Empowerment and Transparency
Function-related direction and supervision
Business-related direction and supervision
Function axis
HQ functions
Global HQ
Regional HQs
Corporate
functions
(technological
development,
human resources,
legal affairs,
finance &
accounting, quality
assurance, etc.)
Japan
Europe
Americas
China
Board of Directors
President
Executive Committee Meeting
Business
Business
axis
axis
BC
BC
BC
Subsidiaries
Core
subsidiaries
Core
subsidiaries
Core
subsidiaries
Subsidiary
group
Subsidiary
group
Subsidiary
group
Other
subsid-
iaries
Other
subsid-
iaries
Other
subsid-
iaries
KITEI Project envisions building of autonomous and decentralized organization
In order to turn the diversity of the TDK Group into a strength in the true sense, in recent years we have devoted much effort to
building an organization that binds the potential and energy of team members (employees) around the world. As one aspect of
these initiatives, we are promoting the KITEI Project to establish a global governance structure. This project envisions the
building of an autonomous and decentralized organization centered on the concept of empowerment and transparency. While
establishing basic rules that every member of the TDK Group must follow as the Global Common Regulations, we are building
a structure that enables dynamic decision making on the frontlines by delegating authority to Group companies.
Compilation of the TDK Navigation Book to share TDK’s corporate culture throughout the entire Group
TDK was founded as a venture company in 1935 with the aim of commercializing ferrite, a magnetic
material invented at the Tokyo Institute of Technology in Japan. Based on the founding spirit of
“Contribute to culture and industry through creativity,” which is our corporate motto, we have been
creating and supplying value to all stakeholders. In March 2022 we compiled the online TDK
Navigation Book and made it available to all members on the Group’s intranet. The contents of the
TDK Navigation Book include a history of the TDK Group, thoughts and values that should be
shared by members, an outline of the Group’s management, corporate ethics and the fundamental
Global Common Regulations that should be observed, and a glossary of acronyms used in the Group.
48
49
Supply Chain Management
Supply Chain Management
Basic policy
As materiality that should be addressed by the entire
Group, TDK cites “enhance global procurement
capabilities and mechanisms,” “ensure responsible
procurement,” and “ensure societal and environmental
consideration in the supply chain” with the aim of building
a competitive supply chain.
TDK recognize that stakeholders have expectations for
not only response and compliance with legislation and
international industrial standards in the supply chain but
also the execution of social responsibilities, such as
support for suppliers, and the minimization of social
impact caused by corporate (business) activities, such as
the problem of conflict minerals.
Today, when consideration of social issues, such as
human rights, and the environment has become an
essential condition of business, such initiatives clearly have
an influence on relations with business partners and
investment decisions by shareholders and investors.
We have numerous manufacturing sites and about
4,500 suppliers around the world. The promotion of societal
and environmental consideration at these sites and suppliers
is highly significant not only for TDK but also for society at
large. Given our position as both supplier and buyer, we are
conducting various initiatives from each of these standpoints.
As a buyer
In fiscal 2023 TDK’s CSR compliant supplier rate,
including newly affiliated Group companies, exceeded our
target to reach 100%. Also, while 15 suppliers
implemented CSR audits in fiscal 2023, the number
planning to do so in fiscal 2024 is 22 companies.
Regarding sub-contractors, in conjunction with a
renewal of the survey form, we aim to implement 100%
self-checks in the two years of fiscal 2023–24.
Responsible sourcing of minerals
In fiscal 2023, as in past years, we requested that
suppliers continue to make procurements from
RMAP-compliant smelters. We requested maximum efforts
from suppliers whose compliance we could not confirm.
Unfortunately, because of striking changes in the social
situation due to Russia’s invasion of Ukraine and other
factors, the ratio of suppliers confirmed to be procuring
from RMAP-compliant smelters was just 86.5%, which
meant that our target was not achieved.
For fiscal 2024 also, we have set “a ratio of at least
92% of suppliers recognized as procuring the 3TG
minerals from RMAP-conformant refineries” as a common
KPI of the TDK Group and will continue to promote
Group-wide efforts. Specifically, we will continue our
requests to suppliers and, in response to inquiries from
customers, make even more proactive efforts to provide
pertinent replies. Furthermore, since collaboration with
industrial organizations is essential to solve the expanding
problem of responsible sourcing of minerals, we will
continue to participate in such industrial discussions.
Supply chain performance data
Category
Item
Number of manufacturing sites covered by CSR self-checks
Number of manufacturing sites covered by labor,
human rights and ethics risk assessment
Initiatives as
a supplier
Number of manufacturing sites performed CSR
voluntary audits by third-party organizations
Number of employees participated in CSR internal
auditor training (accumulated)
% of customers covered by the satisfaction evaluation*1
% of A rank customers*2
Number of dispatch companies covered by CSR
self-checks (dispatch companies used by
manufacturing sites in high-risk countries of Asia)
CSR-compliant supplier ratio
Ratio of suppliers confirmed conflict-free*3
Initiatives as
a buyer
Responsible
sourcing of
minerals
Unit
Site
%
Site
%
Site
Person
%
%
Company
%
%
%
2019
2020
2021
2022
2023
81
100
81
100
5
253
7.0
89.8
81
100
94.4
92.6
78
100
78
100
5
303
7.3
93.8
73
100
96.1
93.1
79
100
79
100
6
303
6.6
95.9
78
100
98.0
94.5
80
100
80
100
5
333
5.8
96.8
68
100
99.0
93.6
80
100
80
100
10
374
5.6
95.0
61
100
100
86.5
Number of conflict minerals survey*4
Number
2,381
2,423
2,832
2,810
3,167
*1 % of sales amount (consolidated)
*2 % of customers who evaluated their satisfaction as “A rank” (fully satisfied), calculated by aggregating satisfaction evaluations provided by customers
*3 The target mineral is 3TG (3TG: tantalum, tin, tungsten, and gold)
*4 Number of responses that were generated by TDK Corporation
Introduction of our activities
As a supplier
Starting in fiscal 2022, we launched an initiative to conduct
either the Responsible Business Alliance (RBA)-authorized
audit, a customer CSR audit, or a CSR assessment based
on the RBA VAP Operations Manual at all manufacturing
sites at least once every three years. In the two years of
fiscal 2022–23, 63% of sites accepted audits, so our
target by the end of fiscal 2023 was achieved.
In fiscal 2024 we will pour further energy into each
activity aimed at achieving our plan, and, while keeping a
close eye on trends at the RBA, pursue efforts on a global
level to strengthen CSR management in accordance with
RBA standards.
(FY)
Human rights due diligence
The TDK Group undertakes human rights due diligence processes and promotes its due diligence activities in line with the
procedures set out in the UN Guiding Principles on Business and Human Rights. We also continue to dialogue with
internal/external parties and stakeholders to make our activities more effective.
Human rights due diligence process of TDK Group
Policy Commitment
Risk Identification
and Assessment
Prevention / Remediation
Measures and
Periodic Review
Reporting
Dialogue
• Implement measures for
each key theme and
undertake periodic review
• Training
• Sustainability Website
• Human Rights Statement
• TDK Code of Conduct
• Identify potential human rights
• TDK Group Policy on
Human Rights
• TDK Supplier Code of
Conduct
issues in the value chain
• Evaluate risks by probability,
human rights impact, and scale
of our company’s leverage
• Prioritize key themes based
on risk evaluation result
• Assess detailed risks for each
key theme
• Assess potential human
rights risks in potential new
business relationships
created through M&A and
similar transactions
Initiatives for prevention and reduction of human rights risks
In 2020 TDK joined the RBA, an organization which is dedicated to improving social, environmental, and ethical conditions in
the global supply chains. TDK utilizes the RBA code of conduct as the standard to promote our CSR activities in manufacturing
sites. For the prioritized human rights key themes described above, we conduct activities to prevent and reduce risks in
alliance with the RBA’s code of conduct, assessment items, and audit frameworks.
50
51
EX
EX Initiatives
Looking ahead to 2050
As materiality to be tackled by the Group as a whole, TDK
calls for the effective use of energy and expanded use of
renewable energy toward the realization of net zero CO2
emissions by 2050, the supply of products and solutions
to create clean energy and realize a zero-carbon society,
and the supply of products and solutions to realize an
energy-efficient society by storing, converting, and
controlling energy.
In addition, TDK already achieved carbon neutrality in
fiscal 2015 through the concept of balancing CO2
emissions from its manufacturing sites by means of TDK
products that improve energy efficiency and thereby
contribute to CO2 reduction. Currently TDK is promoting
further net zero CO2 emissions from the perspective of the
entire supply chain. Specifically, TDK is strengthening its
activities for the reduction of greenhouse gas emissions,
including further expansion of the scope of coverage to
include emissions in other Scope 3 categories as well as
Scope 1, Scope 2, and Scope 3 Category 11 and the
setting of key performance indicators and monitoring
indicators, toward the realization of a society with net zero
CO2 emissions by 2050. In the TDK Environmental Action
2025—our medium-term action plan—we aim to achieve
50% renewable energy at our manufacturing sites by 2025.
As proclaimed in the TDK Environmental Charter, TDK
recognizes the importance of adopting measures to
counter climate change and respecting biodiversity and
the limited resources of the Earth. Under the slogan of
“Eco TDK,” TDK will further promote related activities,
including the realization of a circular economy.
A history of TDK’s environmental activities
TDK
Environmental Vision
2035
Aiming to
halve life-cycle
CO2 emission
intensity
(compared to Fiscal 2015)
TDK
Environmental Action
2025
Integration of environmental load
by CO2 equivalence
and implementation
of activities toward achieving
the ideal targets
of the TDK Environmental
Vision 2035
2035
2016
TDK
Environmental Action
2015
Practice
of environmental
management
From image formation
to crux of management
TDK
Environmental Action
2020
Environmental
growth strategy
Toward an age
of product discrimination
through environmental
performance
2011
TDK
Environmental Action
2010
Strengthening
of environmental
management system (EMS)
Response to risk management
and circular society
Net zero CO2
emissions
Promotion of further
net zero CO2
emissions
from the perspective
of the entire
supply chain
2050
2006
2003
Concept of carbon neutrality at TDK achieved in 2014
Activities to make smaller
Activities to make larger
2014
Achievement of carbon neutrality at TDK
Achievement of TDKʼs own targets* outlined
in TDK Environmental Action 2020 ahead of schedule.
*Balancing of Scope 1 and Scope 2 emissions
by reduction of emissions in Scope 3 Category 11
CO2 emissions
from production
activities
(environmental
load)
Reduction of CO2
emissions
by products
(environmental
contribution)
TDK Environmental Vision 2035
Halving the CO2 emission intensity from
a life-cycle perspective by 2035
TDK defined the ideal state of TDK in 2035 as “the operation
under the environmental load within natural circulation,” and
formulated the TDK Environmental Vision 2035, which aims to
“halve the CO2 emissions intensity from a life-cycle perspective
by 2035.” This stance stems from the belief that minimizing the
environmental load in business activities, and revitalizing the
natural environment, is the duty of companies that supply
products designed to contribute to its customers and the
society. Moreover, modeled on the United Nations Climate
Change Conference (COP 21) Paris Agreement, which seeks
to curb global warming by achieving a balance between
greenhouse gas emissions and absorption sources, this is also
considered the ideal corporate posture for all TDK activities.
Within TDK Environmental Vision 2035, the declaration is
made to reduce the environmental load from a lifecycle
perspective. This represents an initiative not limited to
measures at the manufacturing stage in factories and the use
stage for customers, aspects outlined in the conventional TDK
Environmental Action 2020 policy. To expand in this way, we
deem it critical for all TDK Group employees to share the
same vision and move forward with the same objectives in
mind. The “revitalizing and protecting the global environment”
expressed in this corporate vision refers to the skillful
operation of our business hand in hand with the natural
environment. Without that commitment, there will be no
sustainable development on the horizon. The entire Group
shares an Arubeki-Sugata (ideal process) and undertakes
voluntary initiatives in pursuit of that vision.
TDK Environmental Vision 2035
Procurement
Disposal
Development/
Production
Use
Logistics
“The operation under the environmental load
within natural circulation”
“Halve the CO2 emission intensity from
a life-cycle perspective by 2035”
Reduction of CO2 emissions at manufacturing sites
At TDK, we are working at “effective use of energy” and
“expanded use of renewable energy” in order to reduce
CO2 emissions at our manufacturing sites.
In fiscal 2023 CO2 emissions decreased by 18.7% from
the previous year to 1.383 million tons due to the expanded
introduction of renewable energy. Going forward, we will
promote reduction efforts rooted in manufacturing activities
across the entire Group based on a policy, as advocated in
TDK’s materiality, of achieving the effective use of energy
and the expanded use of renewable energy toward the
realization of net-zero CO2 emissions by 2050.
Trends in CO2 emissions at manufacturing sites (global)*1
CO2 emissions (left) Intensity (fiscal 2015=100) (right)
(ten thousand t-CO2)
400
300
200
100
0
167
155.8
176.8
170.1
48.2
138.3
2019
2020
2021
2022
2023
100
75
50
25
0
(FY)
Trends in volume of total energy consumption
and intensity
Volume of total energy consumed (left) Intensity (right)
(GWh)
5,000
4,000
3,000
2,000
1,000
0
4,464
4,753
(GWh/millions of yen)
0.0040
4,630
3,789
3,761
0.0027
0.0027
0.0028
0.0028
0.0030
0.0030
0.0025
0.0025
0.0021
0.0021
2019
2020
2021
2022
2023
0.0030
0.0020
0.0010
0
(FY)
Percentage of electricity from renewable energy
sources introduced*2
(%)
100
80
60
40
20
0
20.3
18.2
23.9
30.0
39.9
Target:
FY2026 50%
50
2019
2020
2021
2022
2023
2026
(FY)
*1,2 The measurement and calculation methods, as well as the numerical results for fiscal 2020 and beyond, have been verified by a third-party.
52
53
EX
Expansion of contributions to reduction of CO2 emissions through products
Expanding the reduction of CO2 emissions through
products (product contributions) is one of the core
initiatives within the TDK Environmental Vision 2035 and
Environment, Health and Safety Action 2025. To mount
potent appeals for the social contributions by TDK
products as the fruits of technical initiatives, these product
contributions have been calculated and disclosed. Public
awareness activities are also being advanced to gain
understanding of the contributions of electronic
components as intermediary parts, along with moves to
formulate coherent industry standards for calculation
methods positioned to serve as the basis for earning
appropriate evaluations of product contributions
performance, and the results were released in the form of
guidance by industry groups.
Based on these results, TDK established the Guideline
for Calculation of Product Contributions and is promoting
the diffusion of global calculation work throughout the
entire TDK Group by adding the calculation of product
contributions to assessment requirements at the product
development stage. Going forward, TDK will continue to
establish calculation rules and endeavor to disseminate
them throughout the Group.
The contribution to CO2 reduction by products in fiscal
2023 was 4.233 million tons, a year-on-year increase of
42.6%. In terms of intensity, it was a 24.3% rise over the
previous fiscal year, and so we were able to achieve our
Response to TCFD
target by a wide margin.
Going forward, we will strive to develop eco-friendly
products that contribute toward reducing the environmental
load of customers and society and to popularize such
products by publicizing their value.
Trends in CO2 emission reductions by products*
Automotive (incl. HEVs and EVs) (left)
Industrial equipment & general electric appliances (left)
ICT (left) Intensity (FY2015=100) (right)
(ten thousand t-CO2)
500
168.0
160
423.3
296.9
263.3
214.9
226.7
2019
2020
2021
2022
2023
120
80
40
0
(FY)
400
300
200
100
0
*The calculation method was reviewed by a third party.
*The product contributions have been calculated based on the internal guidelines
compliant with IEC’s “TR62726 Guidance on Quantifying Greenhouse Gas Emission
Reductions from the Baseline for Electrical and Electronic Products and Systems”; The
Institute of Life Cycle Assessment, Japan’s “Guidelines for Assessing the Contribution
of Products to Avoided Greenhouse Gas Emissions”; and JEITA’s “Guidance on
Calculating GHG Emission Reductions Contribution of Electronic Components.”
In May 2019 TDK expressed its approval of the Task Force
on Climate-related Financial Disclosures (TCFD), which
makes recommendations to analyze and disclose
information on the impact of climate change on corporate
finances. Established in 2015 by the Financial Stability
Board (FSB), an international body that aims to stabilize
the financial system, the TCFD makes proposals that are
expected to be a catalyst for promoting information
disclosure within companies and organizations and
encouraging dialogue between financial institutions and
business corporations.
TDK, under the TDK Environmental Vision 2035, is
committed to halving the CO2 emission intensity from a
life-cycle perspective by 2035 across the entire value
chain, from procurement to disposal. TDK is
progressively working on activities that assessing the
risks and opportunities posed by climate change to its
business, coupled with appropriate information
disclosure, indispensable for balancing future business
growth and the building of a sustainable society.
In accordance with the TCFD framework, we disclose
TDK’s initiatives to tackle the problem of climate change.
Governance
Board’s oversight of climate-related risks
At TDK, the environmental officer carries out a management
review more than once a year of the state of progress in
environment-related matters, including climate change, as
well as plans and risks. The results of the management
review and matters requiring management decisions are
deliberated in the Executive Committee and, if necessary,
the Board of Directors.
Management’s role in assessing and managing
climate-related risks
Positioning
Regarding risks relating to the environment, including
climate change, TDK has clarified the responsibilities of the
environmental officer, who is appointed by the chief
executive officer.
In addition, to strengthen the risk management
framework, TDK has established committees directly under
the Executive Committee. Of them, the Enterprise Risk
Management (ERM) Committee has been set up with the
aim of ensuring a company-wide response to factors
impeding the achievement of business targets and business
operations, including climate change. The ERM Committee
discusses important matters among environmental risks,
including climate change. The chair of the ERM Committee
is a corporate officer appointed by the CEO.
Responsibilities
Regarding a company’s social responsibility, TDK
recognizes that coexistence with the global environment is
an important issue in management and has established
the post of environmental officer. Appointed by the CEO,
the environmental officer takes responsibility for
environmental management in general, including climate
change. In addition, the head of the Safety and
Environment Group of the Sustainability Promotion HQ,
Strategy
In the Medium-Term Plan “Value Creation 2023” that started
in fiscal 2022, TDK advocates the basic policy of accelerating
digital transformation (DX) and energy transformation (EX)
in order to enhance customer experience and consumer
experience (2CX) and to create value for a sustainable
society. As well as setting the TDK Group’s materiality as
management issues that should be tackled to realize the
Medium-Term Plan, we have positioned EX (contributing to
energy and environmental solutions by minimizing waste
heat and noise with electronic devices) as a business
domain on which TDK focuses for both social value
creation and corporate growth, and we are addressing it as
one aspect of our business strategy.
which has been established under the environmental
officer, is given responsibility for implementing
environmental management, including climate change. In
the TDK Group, all business groups, departments, sites,
manufacturing subsidiaries, and head office functions
come together in unison to work toward realizing the goals
of the TDK Environmental Vision 2035 (operate under an
environmental load within natural circulation and halve the
life-cycle CO2 emission intensity by 2035).
Among environmental risks, including climate
change, important matters are reported through the
ERM Committee to the Executive Committee and the
Board of Directors.
Content of responsibilities
The Safety and Environment Group of the Sustainability
Promotion HQ sets Group-wide targets for environmental
matters, including climate change, and identifies
environment-related risks for the Group. The ERM
Committee identifies Group-wide risks in accordance with
risk management regulations and handles problems relating
to climate change as one aspect of Group-wide risks.
Monitoring
The achievements of environmental activities, including
activities relating to climate change, are reported in the
management report, and more than once a year the
environmental officer carries out a management review,
discussing and deciding important matters in the promotion
of environmental activities, such as the compilation of
reports and medium- to long-term targets for major KPIs
and energy-saving investment. In addition, matters in this
management review that are deemed to exert an important
impact on management, such as visions and large-scale
investment, are discussed in the Executive Committee and,
if necessary, the Board of Directors.
Specifically, we are promoting the effective use of
energy and the expanded use of renewable energy toward
the realization of net-zero CO2 emissions in 2050.
Furthermore, we are striving to provide products and
solutions for creating clean energy to realize a zero-carbon
society and to supply products and solutions for bringing
about an efficient energy society through the storage,
conversion, and control of energy.
In these circumstances, TDK conducted scenario
analysis with the aim of analyzing business risks and
opportunities in problems related to climate change and
reflecting the results in strategy.
54
55
EX
Results of scenario analysis
In accordance with the Practical guide for Scenario
Analysis in line with the TCFD recommendations issued by
the Ministry of the Environment, TDK implemented scenario
analysis based on the following preconditions:
Preconditions
Assumed period: fiscal 2031
Applicable scope: Entire TDK Group
Adopted scenarios: 2˚C scenario (Sustainable Development
Scenario [SDS] and New Policies Scenario [NPS] of the International
Energy Agency [IEA]), 4˚C scenario (the IEA’s Current Policies
Scenario [CPS], Stated Policies Scenario [STEPS], and
Representative Concentration Pathway [RCP] 6.0 scenario)
The following are the main risks and opportunities
identified based on the scenario analysis. Under the 2˚C
scenario, in which countries’ regulations through
decarbonization policies become stricter, we understood the
possibility of transitional risks occurring with the introduction
of carbon pricing and higher cost of renewable energy. The
analysis estimated the financial impact of these risks in
2030 to be 5.9 billion yen in the case of carbon pricing and
17.6 billion yen for renewable energy. In the automotive
market, which is one of TDK’s key markets, since the shift
to electric vehicles will progress, we also recognized the
possibility of expanded sales opportunities for EV-related
products and battery-related risks and opportunities.
Under the 4˚C scenario, the analysis also showed the
possibility of increased risks of flooding due to the frequent
outbreak of abnormal weather.
Classification
Risks and
opportunities
Occurrence*
Main countermeasures
Carbon pricing / carbon-emission
targets of each country
Risk
Medium/long
term
• Promotion of the effective use of energy, expanded use of renewable energy,
etc. at manufacturing sites toward the realization of net-zero CO2 emissions
in 2050
Increase of energy costs due to
rise in renewable energy ratio
Risk and
opportunity
Medium/long
term
Transition
risks
Increase in price of cobalt
and lithium
Risk
Short-long
term
• Promotion of the effective use of energy at manufacturing sites toward
the realization of net-zero CO2 emissions in 2050
• Promotion of the development of products for renewable energy, etc.
• Monitoring of raw material price trends and implementation of risk hedging
at time of procurement
• Implementation of long-term supply contracts
• Reduction of amount of cobalt and lithium used in products, etc.
Increase of new business chances
due to expansion of EV market
Development of next-generation
battery materials
Increase of customer
demands regarding RE100
Opportunity
Risk and
opportunity
Risk and
opportunity
Medium/long
term
• Promotion of product development with an eye on EV market expansion
Long term
• Promotion of the development of all-solid-state batteries
Short-long
term
• Analysis of customer initiatives to respond to climate change
• Compilation of plan to introduce renewable energy, etc.
Physical
risks
Increase of business risks due
to rise in flooding
Risk
Medium/long
term
• Implementation at sites of measures to counter flooding risks
• Promotion of BCP response, building of BCM framework, etc.
*Time horizon: “short-term” is expected to be less than 1 year, “medium-term” between 1 and 3 years, and “long-term” between 3 and 20 years.
Risk management
To strengthen its risk management structure, TDK has
established several committees that report directly to the
Executive Committee. Among these committees, the ERM
(Enterprise Risk Management) Committee has been
organized for the purpose of taking a company-wide
approach to factors that may hinder the achievement of
business goals and business operations, and assesses
Metrics and targets
TDK has stated its aim to achieve net-zero CO2 emissions
by 2050 in the “TDK Group’s Materiality” and has also set
the goal of “halving the life-cycle CO2 emission intensity by
2035” in the “TDK Environmental Vision 2035”. Based on
this vision, we have established the action items and
target values in the “TDK Environmental, Health and Safety
Activities 2025” as our basic environmental plan through
2025, and are monitoring progress. In 2022, we have also
important risks for management. Climate change risk is
identified and assessed as one of them. Regarding risks
deemed by the assessment to require Group-wide efforts,
including climate change risk, the ERM Committee checks
the progress of countermeasures approved by the Executive
Committee and, after completion of the countermeasures,
obtains the approval of the Executive Committee.
announced our commitment to obtain SBT certification
and are currently working toward it.
GHG emissions (kt-CO2)
Fiscal 2023
Total emissions
Scope1
Scope2
Scope3
27,882
146
1,237
26,499
Other Environmental Initiatives
Approach to biodiversity
At TDK, we recognize the importance of biodiversity
and aim to avoid or minimize the negative impacts of
our business activities on the global environment and
ecosystems. Throughout the entire supply chain, from
the procurement of raw materials to product disposal,
we strive to operate with little environmental load and
to conserve forestry resources and water resources.
In collaboration with external partners, such as local
communities, we also promote ecosystem restoration
activities and initiatives to realize a circular economy
that does not harm the cycle of nature.
All TDK employees are aware of the impact on the
environment from production activities. We consider
the relationship between business operations and the
environment and strive to protect an affluent global
environment. The TDK Environmental Charter, revised
in April 2018, expressly provides that employees are
to consider contributions to ecosystems and take
proactive action at all times.
Please refer to the Sustainability Website for details.
Approach to Biodiversity
https://www.tdk.com/en/sustainability2022/
environmental_responsibility/biodiversity
Effective use of resources
Amid the need to shift to a circular society, from the
perspective of the effective use of limited resources,
TDK achieved its own standard of zero emission in
fiscal 2007 and, since then, has maintained this level
and promoted initiatives to curb the discharge of
waste itself. In addition, TDK makes regular visits to
recycle businesses to check that recycling is being
conducted properly.
The total amount of waste in fiscal 2023 was
130,696 tons, an 11.5% decline from the previous
fiscal year. Furthermore, in terms of waste discharge
intensity, it was a 24.4% improvement over the
previous fiscal year, and thus met the target.
Going forward, we are committed to promoting
comprehensive process improvements and continued
efforts to reduce waste in terms of both efficient
utilization of resources and improvement in the yield rate.
Please refer to the Sustainability Website for details.
Effective Use of Resources
https://www.tdk.com/en/sustainability2022/
environmental_responsibility/limited-resources
Reduce risks of chemical use
Our Approach to chemicals management is as follows:
Management of chemical substances in products
In 2004, TDK introduced the “Environmental Product
Quality Management” (EPQM) as a system to prevent
and control exposure to hazardous substances in
products that threaten human health and the
environment, and we operate it within our Quality
Management System (QMS).
Management of chemical substances in
manufacturing processes
We have been promoting the integrated management of
chemical substances globally with the goals of
understanding the hazardousness and danger of chemical
substances, and improving safety in their handling in
compliance with each nation’s laws and the like.
Please refer to the Sustainability Website for details.
Reduce Risks of Chemical Use
https://www.tdk.com/en/sustainability2022/
environmental_responsibility/chemicals-management
Water resources conservation
From the procurement of raw materials to the disposal
of products, TDK strives for operations with little
environmental load throughout the entire supply chain.
Similarly, we promote the conservation of forestry
resources and water resources. In line with the TDK
Environmental Charter, we aim for “Develop and
Prosper in Harmony with the Global Environment.”
Every single employee will act positively by thinking
about the impact of production activities on the
environment and the relationship between corporate
activities and the environment, endeavoring to conserve
an affluent global environment, and constantly paying
heed to contributions to preserve the ecosystem.
Furthermore, in consideration of business
characteristics, TDK has specified the key SDGs that
we will focus on and clarified our policy of solving
issues, including water-related problems, through
technological development in our main businesses. As
a water-related example, we are promoting the
development of various sensors in accordance with
Goal 12 of the SDGs, which is titled “Responsible
consumption and production.” In addition, we are
reducing water withdrawal in manufacturing processes.
Please refer to the Sustainability Website for details.
Water Resources Conservation
https://www.tdk.com/en/sustainability2022/
environmental_responsibility/water-resources
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57
Chapter 3
How Is TDK’s
Governance
Evolving?
Corporate Governance Structure
Basic stance and structure
Emphasis on enhancing corporate value
As a company with an Audit & Supervisory Board, TDK
strives to ensure the soundness, compliance, and
transparency of management through the introduction of
various mechanisms to strengthen corporate governance
with the aim of enhancing long-term corporate value.
Regarding the Board of Directors, we strive for swift
management decision-making by having a small number
of members, and we actively appoint independent outside
directors with no conflicts of interest so as to strengthen
monitoring functions. Discussions are conducted from a
long-term perspective. In addition, to strengthen
supervisory functions over management, three committees
have been established as advisory bodies to the Board of
Corporate governance organization chart
Directors (the Nomination Advisory Committee,
Compensation Advisory Committee, Corporate
Governance Committee).
Regarding the execution of business, TDK endeavors
to ensure swift decision-making and to clarify responsibility
and authority in business execution through the adoption
of a corporate officer system. In addition, regarding global
Group management, TDK trusts people who share the
same goals and principles and delegates authority to
them. Furthermore, to ensure transparency toward
stakeholders, TDK advocates a policy of Empowerment
and Transparency and is promoting reforms to realize an
autonomous and decentralized organization.
Reports and submits proposals
Elects and dismisses
Reports
Elects and dismisses
Elects and dismisses
Ordinary General Meeting of Shareholders
Board of Directors
(Directors and Audit &
Supervisory Board
Members attend
the meetings)
Audits
Board of Audit &
Supervisory Board Members
Reports
Audit & Supervisory
Board Members Office
Nomination Advisory
Committee
Reports
President
Reports
Reports
Cooperates
Reports
A
c
c
o
u
n
t
i
n
g
A
u
d
i
t
o
r
s
Compensation Advisory
Committee
Corporate Governance
Committee
Instructs
Reports
Management Review &
Support Group
Cooperates
Executive Committee
Meeting
Reports
Enterprise
Risk Management
Committee
Reports
Reports
Compliance Committee
Reports
Help Lines
(Consultation services)
Corporate Officers
Crisis Management
Committee
Information Security
Committee
Disclosure Committee
Divisions and Group Companies
History of corporate governance reforms
2002
Establishment of the Compensation
Advisory Committee
(chaired by an outside director)
Number of directors reduced from 12 to 7
Appointment of first outside director
2009
2015
Appointment of two
non-Japanese corporate
officers
Appointment of one more
outside director for a total
of three
Decision reached on basic
policy that at least one-third of
directors should be
independent outside directors
First implementation of
effectiveness evaluation of the
Board of Directors
2018
Establishment of the
Corporate Governance
Committee
2004
Appointment of first
non-Japanese
corporate officer
2008
Establishment of
the Nomination Advisory
Committee
(chaired by an outside
director)
2012
Appointment of an outside
director as chair of the
Board of Directors
2020
Appointment of first
female director
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59
Message from the Chairman
Passing down an open culture that
incorporates diverse opinions and
leads to better conclusions
Shigenao Ishiguro
Chairman & Director
Renewing the Corporate Governance
Committee as a venue for discussing
a medium- to long-term vision for governance
In March 2022 I stepped down as president and was
appointed the Chairman & Director who is not corporate
officer following the General Meeting of Shareholders in
June of the same year. Accordingly, I handed over all
executive authority to Noboru Saito, who assumed the
position of Representative Director, President and CEO.
As I am no longer in an executive role, I no longer attend
Executive Committee Meetings (ECMs) and leave the
proceedings of the Board of Directors entirely in the hands
of chair of the Board. My own understanding of my
position is that I am to support the Board of Directors and
our various committees so that they can engage in
open-minded discussions and proper decision-making. At
times I may offer a perspective close to the business
execution side, supplementing explanations of matters to
outside directors to assist in ensuring smooth discussion.
At other times, I may point out issues facing current
business execution from a high-level perspective or speak
out on medium- to long-term management themes, taking
advantage of my six years of experience leading business
execution in an effort to assist the Board of Directors and
the executive divisions from a variety of angles.
The first project I tackled after my appointment was a
renewal of the Corporate Governance Committee, of
which I serve as chair myself. The Committee had of
course been engaged in deliberations regarding
governance and how it operates, but its members were
comprised of representatives on the executive side. Their
main focus was more on analyzing and evaluating the
status quo, including review of reports meant to fulfill legal
requirements, and the Committee was not acting as a
forum for discussion of such issues as how to evolve
TDK’s management style and governance structures for
the future. Since it can be difficult to discuss these issues
out of the blue at Board meetings, we need to fully
discuss them from a variety of perspectives and develop
several drafts in advance.
Following last year’s General Meeting of Shareholders,
we thus restructured the Corporate Governance
Committee to serve as a venue for discussing how the
company should be managed in the medium- to long-term
view. The Committee would comprise all of the company’s
outside directors, inside directors including the president
and myself, and the General Manager of the Corporate
Strategy HQ (corporate officer). In its first year, the
Committee took up and held discussions of the issue of
handing down the Board culture, an issue that had been
pointed out in the effectiveness evaluation of the Board of
Directors. In this, its second year, the Committee plans to
take up discussion of how we should change governance
at TDK for the future, its main subject of deliberation.
Raising the level of governance among
executive divisions and bringing well thought-
out conclusions to the Board of Directors
Since the early 2000s, TDK has worked to establish a
corporate governance structure that was quite advanced
for the time, including inviting outside directors, separating
management and execution through the introduction of a
corporate officer system, and establishing both a
Nomination Advisory Committee and a Compensation
Advisory Committee. The Board of Directors was
structured at an early stage for an independent outside
director to serve as chair; Mutsuo Iwai currently serves as
the sixth outside chairman. Since 2016, when I became
President and CEO, we have continued to focus on an
creating an environment that ensures the psychological
safety of Board attendees and allows everyone to speak
freely, part of our efforts to make Board of Directors
meetings a forum where more substantive discussions can
take place. The Board of Directors office has also focused
on strengthening the support functions.
As a result of these efforts, I feel a very positive culture
is beginning to form in which Board members can freely
express what they believe to be right regardless of their
positions, and can discuss issues while elevating one
another’s work. That said, even though an outstanding
Board culture has been developed, there is the risk that it
could be altered or lost as people and the organization
itself change. This is why the last fiscal year’s effectiveness
evaluation of the Board of Directors pointed out that this
culture should be systematically shared and passed down
across generations by documenting it in some form or
another and setting guidelines. I was also aware of the
importance of doing this, so the Corporate Governance
Committee has been engaged in discussion of specific
initiatives since the last fiscal year.
This unique culture, which allows people to speak
freely regardless of their positions, must also be further
instilled and handed down not only within the Board of
Directors, but among our executive divisions as well. It is
of utmost importance that at the ECM, as well as at
meetings of each Business Company (BC) and Business
Group (BG), participants speak freely and openly, and that
constructive discussions are held that incorporate diverse
opinions. I believe that the value of a company is
determined by whether it is able to present its Board of
Directors with conclusions that have been well thought
through and refined through such a process. This is
because while the Board of Directors sets the overall
direction for management and determines the pros and
cons of measures from a broad perspective, it is the
executive divisions, including the front-line BCs and BGs,
that are capable of initiating and refining specific measures
for the business. For this reason, we must continually
strengthen governance of the executive divisions even as
we work to enhance the effectiveness of the Board. Once
the level of governance on the business execution side is
enhanced, we can make further progress in delegating
authority from the Board of Directors to the executive
function, thus further increasing the speed of
decision-making and business execution. I am confident
that encouraging this kind of positive cycle will lead a
medium- to long-term improvement in corporate value,
thus increasing stakeholder satisfaction.
The Corporate Governance Committee intends to
engage in full-fledged discussions regarding a vision for
corporate governance at TDK going forward, with
consideration of both the Board of Directors and our
executive divisions.
Roles and authorities of the Board of Directors, ECM, and BCs/BGs
Empowerment
Board of Directors
Review
Thorough
discussion
Shifted from consideration of individual
cases to discussion of important issues
involving corporate management
Transparency and
reporting
Diversity/Inclusion
The smartest structure
and culture for arriving at
better wisdom
Empowerment
Proposal
ECM
Review
Proposal
Thorough
discussion
Business Company/Group
Accountability
Responsibility and
identity as team
members
Transparency and
reporting
Corporate governance at TDK is based first of all on conducting rigorous discussions within the ECM on the business execution
side. The Board of Directors then issues its management decisions based on even more thorough discussion of the conclusions
presented by the ECM that also incorporate outside perspectives. This not only increases management transparency and ensures
trust, but also speeds management decision-making by advancing the delegation of authority to the business execution side. In
this way, the Board of Directors and the executive side maintain an appropriate relationship of both tension and trust and an
ongoing cycle of rigorous discussion, ensuring transparency, and delegation of authority, creating a balance between effective
governance and management speed. Note that the number of members on both the Board and the ECM is limited to achieve
active, effective discussions while also ensuring diversity. To ensure fairness in these discussions, both groups are comprised of
members that do not include the individuals responsible for the respective businesses.
60
61
Strengthening of the Board of Directors’ Monitoring Function
Appointment of outside directors
Persons recruited as independent outside directors have a
wealth of practical experience relating to corporate
management and are able to provide advice from an
independent perspective regarding general management for
enhancing TDK’s corporate value. To secure the independence
of outside directors and outside Audit & Supervisory Board
members recruited to the board, TDK established “items to be
verified regarding independence” by making reference to
“Securing Independent Director(s)/Auditor(s)” of the Securities
Listing Regulations and “the Guidelines Concerning Listed
Company Compliance,” etc., established by the Tokyo Stock
Exchange, Inc. The directors’ terms of office are set at one
year to give shareholders an opportunity to cast votes of
confidence regarding directors’ performance every fiscal year.
Composition of directors and Audit &
Supervisory Board members (as of June 22, 2023)
Outside Directors
3
(including 1 woman)
Inside: 6
Outside: 6
Outside Audit &
Supervisory
Board Members
3
(including 1 woman and
1 non-Japanese)
Inside Directors
4
Inside Audit &
Supervisory
Board Members
2
Emphasis on external and medium- to long-term perspectives
TDK’s basic policy is to have a small number of members (up to
10 persons) on the Board of Directors so as to expedite speedy
management decision making. At present there are seven
directors sitting on the board. In addition, in order to strengthen
the management supervision function, TDK’s basic policy is that
one-third or more of these directors should be independent
outside directors with no conflict of interests. Currently three of
the seven directors sitting on the board are outside directors.
Furthermore, in principle an independent outside director serves
as the chairperson of the Board of Directors. Of the four inside
directors, while one of them is not concurrently a corporate
officer, the other three are responsible for nonbusiness divisions,
giving them an overview of the company as a whole.
Meeting attendance record
Members of Advisory Committees (as of June 22, 2023)
Nomination
Advisory
Committee
Compensation
Advisory
Committee
Corporate
Governance
Committee*
Noboru Saito
Tetsuji Yamanishi
Representative
Director
Representative
Director
Shigenao Ishiguro
Director
Kozue Nakayama
Mutsuo Iwai
Shoei Yamana
Outside
Director
Outside
Director
Outside
Director
(Chair)
(Chair)
(Chair)
* One more person who is corporate officer, GM, Corporate Strategy HQ
Meeting attendance record
fiscal 2023
Board of Directors
Audit &
Supervisory Board
Nomination Advisory
Committee
Compensation Advisory
Committee
Corporate Governance
Committee
Noboru Saito
Representative Director
10 out of 10*
Tetsuji Yamanishi
Representative Director
14 out of 14
Shigenao Ishiguro
Director
Shigeki Sato
Director
Kozue Nakayama
Outside Director
Mutsuo Iwai
Outside Director
14 out of 14
14 out of 14
14 out of 14
13 out of 14
Shoei Yamana
Outside Director
10 out of 10*
—
—
—
—
—
—
—
10 out of 10*
—
—
12 out of 12
—
12 out of 12
11 out of 12
5 out of 5*
5 out of 5*
—
7 out of 7
6 out of 7
10 out of 10*
5 out of 5*
Satoru Sueki
Takakazu Momozuka
Jun Ishii
Douglas K. Freeman
Michiko Chiba
Full-Time Audit &
Supervisory Board Member
Full-Time Audit &
Supervisory Board Member
Outside Audit &
Supervisory Board Member
Outside Audit &
Supervisory Board Member
Outside Audit &
Supervisory Board Member
* Following appointment in June 2022.
14 out of 14
15 out of 15
14 out of 14
15 out of 15
14 out of 14
15 out of 15
14 out of 14
15 out of 15
14 out of 14
15 out of 15
—
—
—
—
—
—
—
—
—
—
2 out of 3
—
3 out of 3
—
3 out of 3
3 out of 3
3 out of 3
—
—
—
—
—
Content of deliberations in the Board of Directors, etc.
Regarding the content of deliberations in the Board of
Directors, every year we consider the content of matters
relating to management strategy, governance, and the
activities of headquarters functions, as well as resolution items
stipulated by law, etc., compile an annual agenda schedule,
and operate the Board of Directors accordingly. This yearly
agenda is studied in the Corporate Governance Committee,
and issues extracted in the effectiveness evaluation of the
Board of Directors are also included in the yearly agenda, with
the Board of Directors discussing its response to them.
In addition, besides discussions in meetings of the Board
of Directors, we regularly organize gatherings and offsite
meetings for outside directors only to deepen their studies
and deliberations.
Activities of the Board of Directors and other similar bodies
Main agenda items in the Board of Directors (fiscal 2023)
Management
strategies
•State of progress/verification of the Medium-Term
Plan and current-term management plan (entire the
TDK Group and main business sectors)
•Financial strategy, fund plan
•Effectiveness evaluation of the Board of Directors
•Group governance, Group risk management,
Governance
compliance management
•Internal audit report
•Internal control system and state of operation
Headquarters
functions
•Sustainability
•Global human resource strategy
•Technology development strategy, production
engineering strategy, intellectual property strategy,
quality assurance
•Management system, supply chain management
As well as the above, the Board of Directors discussed business matters,
capital investment, business tie-up, etc.
Discussions outside the Board of Directors
Meetings of outside directors only
From the perspective of enabling outside directors to contribute
positively to discussions in the Board of Directors, meetings of outside
directors and outside Audit & Supervisory Board members only are held
regularly. In these meetings, they exchange information and share
understanding based on their independent and objective positions.
Off-site meetings (participated in by all directors and
Audit & Supervisory Board members)
Off-site meetings, in which all directors and Audit & Supervisory Board
members participate and engage in free discussions, are held
regularly with the purpose of deepening discussions in the Board of
Directors and enhancing its effectiveness. Discussion topics are
decided based on opinions from outside directors.
Main agenda items in the Nomination Advisory
Committee (fiscal 2023)
•Organization of board advisory committees for
the next term
•Organization of corporate officers for
Officer structure
the next term
•Selection of director candidates
•Selection of Audit & Supervisory Board member
candidates
Governance
•Succession planning
•Skills matrix
•Retirement age of corporate officers
Main agenda items in the Compensation Advisory
Committee (fiscal 2023)
Remuneration of
directors and
corporate officers
Executive
remuneration of
major subsidiaries
•Corporate officer results-linked bonuses for the
current term
•Executive remuneration table for the next term
•Corporate officer results-linked bonus target
value for the next term
•Executive remuneration of overseas subsidiaries
Main agenda items in the Corporate Governance
Committee (fiscal 2023)
•TDK’s corporate governance ideals and policies, TDK’s board culture
•Effectiveness evaluation of the Board of Directors
•Internal control system and state of operation
•Annual agenda schedule for the Board of Directors meetings
62
63
Risk Management
Group Governance
Risk management structure
Empowerment and Transparency in business execution
In aiming for sustainable growth, the TDK Group promotes
company-wide measures against factors (risks) that hinder the
achievement of organizational goals and implements
company-wide risk management (Enterprise Risk Management;
ERM) activities to appropriately manage them. TDK’s basic policy
for risk management is to ensure that each organization within the
TDK Group takes appropriate risks in order to create corporate
value and prevent damage to corporate value by appropriately
identifying and responding to opportunities and risks.
In order to consider and implement measures related to
ERM activities and strengthen risk management activities, we
have established an ERM Committee chaired by a corporate
officer appointed by the president. The ERM Committee
clarifies the role of each organization in risk management
activities and promotes the PDCA cycle of a series of risk
management activities, from identification of risks to
evaluation, consideration of countermeasures,
implementation, monitoring, and improvement.
Risk Management Policies & Strategies
Risk Management Structure
Risk Management Infrastructure
Risk Management Process
Plan
Do
Check
Act
Identify
Assess
Draft
Measure
Execute
Monitor
Improve
Step
Identify
Assess
Purpose of activity
Identifying risks surrounding the TDK Group
Among the identified risks, from the perspective of the magnitude of the impact on the TDK Group if they occur, narrow down and
prioritize the risks that should be strengthened from the perspective of both management (top-down) and on-site (bottom-up)
Draft Measure
To prevent risks from materializing, consider measures from the perspective of avoidance, transfer, reduction, acceptance, etc.
Execute
Monitor
Improve
Implement measures to prevent risks from materializing
Monitor whether the measures are functioning properly and whether there are any signs of manifestation
Review the results of risk management activities and consider improvements
Bold delegation of authority and
ensuring of transparency
Appointment of non-Japanese
corporate officers
TDK promotes reforms toward an autonomous and
decentralized organization through a basic policy of
Empowerment and Transparency, by which authority is
delegated to reliable people who share our goals and
principles, efforts are made toward speedy decision-making,
and transparency to stakeholders is ensured.
In addition, in HQ functions also, the Global HQ promotes
collaboration with Business Companies (BCs) and Business
Groups (BGs) around the world by supplying horizontal
functions, such as technological development, human
resources, and legal affairs, and the Regional HQs in Japan,
Europe, Americas, and China actively delegate authority to the
frontlines by building systems providing meticulous support.
TDK began encouraging globalization at an early stage,
appointing a non-Japanese person as a corporate officer in
2004 and promoting the globalization of management by
increasing the number of non-Japanese corporate officers
since then. Today, at a time when both the overseas sales
ratio and the overseas employee ratio about 90%, 50% of
TDK’s corporate officers are non-Japanese.
The TDK Group implemented numerous M&A of overseas
companies, and the globalization and diversification of
management structures has become an important issue. We
are working to recruit outstanding human resources from
around the world under the Human Resources HQ
established in Germany in 2018.
(as of the end of June 2023)
Michael Pocsatko
Senior Vice President
Andreas Keller
Senior Vice President
Albert Ong
Corporate Officer
Ji Bin Geng
Corporate Officer
General Manager, Corporate
Marketing & Incubation HQ
Chief People and Sustainability
Officer and General Manager,
Human Resources HQ
Chief Executive Officer of Magnetic
Heads Business Company, and
General Manager of HDD
Components Business Group of
Magnetic Heads Business Company
General Manager of Energy Devices
Business Group of Energy Solutions
Business Company
“Residual Risk” heatmap
Werner Lohwasser
Corporate Officer
Roshan Thapliya
Corporate Officer
Ludger Trockel
Corporate Officer
Joe Kit Chu Lam
Corporate Officer
As a risk assessment, each term the residual risk (i.e., after
control by the measures taken so far) is examined from the
perspective of the three elements of management resources
(people, goods, and money), relationships with internal and
external stakeholders, reputation, and BCP. We calculate the
magnitude of the impact on the TDK Group from the above
and combine it with the possibility of the risk materializing to
create a residual risk heat map to visualize and evaluate the
priority of risk countermeasures. The results of these risk
assessments and the status of countermeasures are
deliberated at the Executive Committee and reported to the
Board of Directors. In addition, the validity of the heat map is
verified at least once during the period, and the assessment
of residual risk is reviewed if necessary.
M
a
g
n
i
t
u
d
e
o
f
i
m
p
a
c
t
Level 5
Level 4
Level 3
Level 2
Level 1
Level 1
Level 2
Level 3
Level 4
Possibility to materialize
Business Risks
Code of Conduct
https://www.tdk.com/en/ir/tdk_management_policy/risks/index.html
https://www.tdk.com/en/about_tdk/code_of_conduct/index.html
Chief Operating Officer of Electronic
Components Business Company
Chief Digital Transformation Officer
and General Manager,
Management System HQ
CSO, Electronic Components
Business Company (ECBC) and
General Manager, ECBC Sales &
Marketing Group, Electronic
Components Business Company
General Manager, China HQ
Composition of Corporate Officers
Jim Tran
Corporate Officer
General Manager, Americas HQ and
Deputy General Manager, Technology
& Intellectual Property Center
non-Japanese
9
as of
the end of June
2023
Japanese
9
64
65
A Talk with Outside Directors
Further pursuing the Board of Directors’ functional
improvement to contribute to the sustained
enhancement of TDK’s value
Iwai: Generally speaking, TDK’s executive functions are
speedy. They receive our opinions with sincerity, and when
something cannot be done, they answer clearly, “Can’t be
done.” In that sense, they are extremely reliable.
Raising the Board’s effectiveness by
promoting the delegation of authority
Iwai: In meetings of the Board of Directors, rather than
reports and explanations, I try to allot as much time as
possible to discussions, but I feel there is still room for
improvement here. For example, we should be able to
narrow down more the agenda items raised in Board
meetings. In the past few years TDK’s delegation of
authority to divisions has advanced quite a lot. There is
nothing we can do about matters that must be formally
taken up by the Board, but I think it would be a good idea
to steadily increase the number of matters that can be
decided by the executive side.
Yamana: Agreed. I think that as much as possible we
should delegate the power to make decisions on detailed
matters relating to business to the executive side and free
up Board meetings to focus discussions on larger topics,
such as matters relating to the business structure as a
whole, the future image of the company, and issues that
should be included in the Medium-Term Plan.
Iwai: I also think that when matters are referred to the
Board, it should be stated more clearly what exactly
needs to be judged and what exactly needs to be
decided. Since we are supplied with materials beforehand
and receive sufficient explanations, there is no need for a
repeat of discussions and detailed reports on the
decision-making process on the same level of intensity as
executive meetings.
Yamana: The basic mission of us outside directors is to
capitalize on our varied backgrounds and experiences to
put forward perspectives that do not exist within the
company, like “Have you thought about this angle?” and
“Judging from my own special field, I would say we are
lacking in this respect.” In that sense, conversely
speaking, I think there are topics that need to be
discussed more by the Board.
Protecting the fine Board culture that
has been inherited
Iwai: Exactly two years have passed since I became an
outside director of TDK. How time flies! From the start I
sensed that TDK’s Board of Directors had an excellent
atmosphere in which there was no discrimination
between inside and outside directors, including members
of the Audit & Supervisory Board, and everyone could
equally and freely express their opinions. I think this is the
type of Board culture that has been passed down at
TDK. Since being appointed chair of the Board of
Directors in June 2022, I have been trying hard not to
damage this culture.
Yamana: I have been participating since the last fiscal
year, and it’s certainly true that TDK’s Board of Directors is
a place where extremely open-minded discussions take
place. Since last fiscal year Shigenao Ishiguro, the
previous president of TDK, has been serving as a bridge
between the inside executive team and us outside
directors in his unique position as the Chairman & Director
who is not corporate officer. I think this also has been a
factor in enlivening deliberations.
Iwai: In the last fiscal year, in addition to our regular
meetings, we also broadened opportunities for discussing
topics that are considered important in the medium and
long term. Candid talks were held in offsite meetings of
Board of Directors members and also quarterly gatherings
of outside directors and outside Audit & Supervisory
Board members.
Yamana: In these offsite meetings and gatherings of only
outside directors and outside Audit & Supervisory Board
members, even more open and frank discussions than
usual can be held, can’t they? We then ask Mr. Iwai to
summarize various selected requests on such issues as,
for example, the exchange rate problem or risk management
and relay them to the president or the Board of Directors
office. And I am always very impressed by the unexpectedly
speedy response to submitted questions, improvement
proposals, and so on.
Mutsuo Iwai
Outside Director
Chair of the Board,
Member of Nomination Advisory Committee,
Member of Compensation Advisory Committee
Member of Corporate Governance Committee
Worked at Japan Tobacco and Salt Public Corporation and
Member and Chairperson of the Board of JT and became
an outside director of TDK in June 2021. Became Chair of
the Board in June 2022.
Iwai: You’re right. Regarding the TDK Group’s risk
management in particular, I think it would be a good idea
not only to receive reports from the executive side but also
to have a bit more discussion involving us outside
directors and top management. The executive side makes
arrangements to an extent, such as risk maps, and
adopts countermeasures for each risk. But when seen
from the outside, the whereabouts of risks that should be
taken into consideration, and the method of response, are
bound to differ.
Yamana: Absolutely. For example, at present geopolitical
risks are mounting on a worldwide scale, and as a
response it is necessary to think about the dispersal of
production and sales sites. At the same time, though, as
our overseas competitors are gaining strength, site
dispersal is also a demerit in terms of cost competitiveness.
In this complex situation, the problem is how to balance
risk response and cost reduction. I really want us to have
such in-depth discussions in Board meetings.
Cohesiveness of sustainability activities
and business
Iwai: I think outside directors share a common problem
awareness about how to contribute to enhancing TDK’s
corporate value from a medium- to long-term perspective.
Mr. Yamana, how do you see the company going forward?
Yamana: I think a big strength of TDK is its high-precision
manufacturing excellence taking advantage of its
technological capabilities cultivated over many years in the
field of materials. At the same time, TDK’s overseas
business development has advanced enormously, and it
now unearths market and customer needs around the
world and links them to steady growth. Going forward, I
want and expect TDK to combine these two strengths to
create new value in business. As I said earlier, though,
cost competitiveness is also important in establishing
absolute supremacy globally. In particular, raw material
prices and energy costs are spiraling at the moment, so
how to absorb them and how to provide added value are
Shoei Yamana
Outside Director
Chair of Compensation Advisory Committee,
Member of Nomination Advisory Committee,
Member of Corporate Governance Committee
After serving as Director, President and CEO, and Representative
Executive Officer of Konica Minolta, Inc., and Director, Executive
Chairman and Executive Officer of the said company, became
an outside director of TDK in June 2022. Became Chair of the
Compensation Advisory Committee.
going to be serious issues.
Iwai: From a medium- to long-term perspective, initiatives
to achieve sustainability also are going to be an increasingly
essential factor for corporate growth in the future. In this
respect, I am aware that TDK is properly rotating the PDCA
[plan-do-check-act] cycle here too. But ideally, I would like
TDK to further increase the cohesiveness between
sustainability activities and business.
Yamana: The question of how to integrate business
activities and contributions to social value and the global
environment is also an important issue in the next
Medium-Term Plan, which is currently being compiled, and
I want to see even deeper discussions on this topic. In the
Compensation Advisory Committee, which I chair, a
matter being studied is how to link efforts on the
non-financial side, such as ESG initiatives, to the
remuneration of corporate officers.
Iwai: One more issue that has been pointed out in offsite
meetings and on other occasions is information
transmission as a company. TDK has many good features
and does various wonderful things, but outsiders don’t
Iwai: After my appointment, because of the prolonged
know very much about them. I make suggestions on this
COVID-19 pandemic, we were unable to visit sites around
matter from time to time, arguing that this situation is
the world. But last fiscal year, at long last, we were able to
extremely wasteful.
do so on multiple occasions. Among others, we visited
Yamana: It’s not simply a matter of only conveying the
InvenSense, our sensor subsidiary in the United States,
excellence of TDK’s products and solutions. We need to
and were invited to an industrial trade show and various
think also about how to storify TDK’s strengths and
in-house events. This enabled us to deepen our
transmit them to society and investors. In addition,
understanding of the company as a whole.
transmission within the company is important too. TDK
Yamana: They were valuable opportunities for us to learn
has an extremely large number of team members
as outside directors, weren’t they? In particular, the
(employees) overseas, and I think the image of the TDK
chance to directly talk with local management at
Group varies by business and region. In that sense, the
InvenSense was a big plus. By hearing the true feelings of
Engagement Survey, which conducted in February 2023,
team members, we got a sense from the atmosphere
deserves attention.
there of what they are trying to do going forward. They
also gave us a test drive in a car equipped with new
sensor solutions, which really made me aware of the
potential of this business. I would like to have more
opportunities for such experiences.
Iwai: While we are further deepening our knowledge of
TDK, I have a feeling that I would like people in TDK to get
to know a little bit more about us too. That is one reason
why I participate in events both inside and outside the
company as much as possible. For example, I think
maybe there could be gatherings like townhall meetings
between outside directors and team members.
Yamana: What you mean is that you want us to be a more
visible presence within the company, right? I agree. But for
the Board of Directors to engage in constructive discussions,
it is also important to maintain a kind of tense relationship. In
practice, as you know, there are cases in which matters
coming from the executive side are sent back. Going
forward, while building a base of trust, I want us to fulfill our
mission as outside directors with a sense of tension.
66
67
Iwai: Exactly two years have passed since I became an
done.” In that sense, they are extremely reliable.
Iwai: Generally speaking, TDK’s executive functions are
speedy. They receive our opinions with sincerity, and when
something cannot be done, they answer clearly, “Can’t be
outside director of TDK. How time flies! From the start I
sensed that TDK’s Board of Directors had an excellent
atmosphere in which there was no discrimination
between inside and outside directors, including members
of the Audit & Supervisory Board, and everyone could
Iwai: In meetings of the Board of Directors, rather than
equally and freely express their opinions. I think this is the
reports and explanations, I try to allot as much time as
type of Board culture that has been passed down at
TDK. Since being appointed chair of the Board of
Directors in June 2022, I have been trying hard not to
damage this culture.
possible to discussions, but I feel there is still room for
improvement here. For example, we should be able to
narrow down more the agenda items raised in Board
meetings. In the past few years TDK’s delegation of
Yamana: I have been participating since the last fiscal
authority to divisions has advanced quite a lot. There is
year, and it’s certainly true that TDK’s Board of Directors is
nothing we can do about matters that must be formally
a place where extremely open-minded discussions take
taken up by the Board, but I think it would be a good idea
place. Since last fiscal year Shigenao Ishiguro, the
to steadily increase the number of matters that can be
previous president of TDK, has been serving as a bridge
decided by the executive side.
between the inside executive team and us outside
Yamana: Agreed. I think that as much as possible we
directors in his unique position as the Chairman & Director
should delegate the power to make decisions on detailed
matters relating to business to the executive side and free
Iwai: You’re right. Regarding the TDK Group’s risk
up Board meetings to focus discussions on larger topics,
management in particular, I think it would be a good idea
such as matters relating to the business structure as a
not only to receive reports from the executive side but also
whole, the future image of the company, and issues that
to have a bit more discussion involving us outside
should be included in the Medium-Term Plan.
directors and top management. The executive side makes
Iwai: I also think that when matters are referred to the
arrangements to an extent, such as risk maps, and
Board, it should be stated more clearly what exactly
adopts countermeasures for each risk. But when seen
needs to be judged and what exactly needs to be
from the outside, the whereabouts of risks that should be
decided. Since we are supplied with materials beforehand
taken into consideration, and the method of response, are
and receive sufficient explanations, there is no need for a
bound to differ.
repeat of discussions and detailed reports on the
Yamana: Absolutely. For example, at present geopolitical
decision-making process on the same level of intensity as
risks are mounting on a worldwide scale, and as a
executive meetings.
response it is necessary to think about the dispersal of
Yamana: The basic mission of us outside directors is to
production and sales sites. At the same time, though, as
capitalize on our varied backgrounds and experiences to
our overseas competitors are gaining strength, site
put forward perspectives that do not exist within the
dispersal is also a demerit in terms of cost competitiveness.
company, like “Have you thought about this angle?” and
In this complex situation, the problem is how to balance
“Judging from my own special field, I would say we are
risk response and cost reduction. I really want us to have
lacking in this respect.” In that sense, conversely
such in-depth discussions in Board meetings.
speaking, I think there are topics that need to be
discussed more by the Board.
who is not corporate officer. I think this also has been a
factor in enlivening deliberations.
Iwai: In the last fiscal year, in addition to our regular
meetings, we also broadened opportunities for discussing
topics that are considered important in the medium and
long term. Candid talks were held in offsite meetings of
Board of Directors members and also quarterly gatherings
of outside directors and outside Audit & Supervisory
Board members.
Yamana: In these offsite meetings and gatherings of only
outside directors and outside Audit & Supervisory Board
members, even more open and frank discussions than
usual can be held, can’t they? We then ask Mr. Iwai to
summarize various selected requests on such issues as,
for example, the exchange rate problem or risk management
and relay them to the president or the Board of Directors
office. And I am always very impressed by the unexpectedly
speedy response to submitted questions, improvement
proposals, and so on.
Iwai: I think outside directors share a common problem
awareness about how to contribute to enhancing TDK’s
corporate value from a medium- to long-term perspective.
Mr. Yamana, how do you see the company going forward?
Yamana: I think a big strength of TDK is its high-precision
manufacturing excellence taking advantage of its
technological capabilities cultivated over many years in the
field of materials. At the same time, TDK’s overseas
business development has advanced enormously, and it
now unearths market and customer needs around the
world and links them to steady growth. Going forward, I
want and expect TDK to combine these two strengths to
create new value in business. As I said earlier, though,
cost competitiveness is also important in establishing
absolute supremacy globally. In particular, raw material
prices and energy costs are spiraling at the moment, so
how to absorb them and how to provide added value are
A Talk with Outside Directors
Skills Matrix/Succession Plan/Nomination Advisory Committee
going to be serious issues.
Iwai: From a medium- to long-term perspective, initiatives
to achieve sustainability also are going to be an increasingly
essential factor for corporate growth in the future. In this
respect, I am aware that TDK is properly rotating the PDCA
[plan-do-check-act] cycle here too. But ideally, I would like
TDK to further increase the cohesiveness between
sustainability activities and business.
Yamana: The question of how to integrate business
activities and contributions to social value and the global
environment is also an important issue in the next
Medium-Term Plan, which is currently being compiled, and
I want to see even deeper discussions on this topic. In the
Compensation Advisory Committee, which I chair, a
matter being studied is how to link efforts on the
non-financial side, such as ESG initiatives, to the
remuneration of corporate officers.
Iwai: One more issue that has been pointed out in offsite
meetings and on other occasions is information
transmission as a company. TDK has many good features
and does various wonderful things, but outsiders don’t
know very much about them. I make suggestions on this
matter from time to time, arguing that this situation is
extremely wasteful.
Yamana: It’s not simply a matter of only conveying the
excellence of TDK’s products and solutions. We need to
think also about how to storify TDK’s strengths and
transmit them to society and investors. In addition,
transmission within the company is important too. TDK
has an extremely large number of team members
(employees) overseas, and I think the image of the TDK
Group varies by business and region. In that sense, the
Engagement Survey, which conducted in February 2023,
deserves attention.
Fulfilling our mission as visible
outside directors
Iwai: After my appointment, because of the prolonged
COVID-19 pandemic, we were unable to visit sites around
the world. But last fiscal year, at long last, we were able to
do so on multiple occasions. Among others, we visited
InvenSense, our sensor subsidiary in the United States,
and were invited to an industrial trade show and various
in-house events. This enabled us to deepen our
understanding of the company as a whole.
Yamana: They were valuable opportunities for us to learn
as outside directors, weren’t they? In particular, the
chance to directly talk with local management at
InvenSense was a big plus. By hearing the true feelings of
team members, we got a sense from the atmosphere
there of what they are trying to do going forward. They
also gave us a test drive in a car equipped with new
sensor solutions, which really made me aware of the
potential of this business. I would like to have more
opportunities for such experiences.
Iwai: While we are further deepening our knowledge of
TDK, I have a feeling that I would like people in TDK to get
to know a little bit more about us too. That is one reason
why I participate in events both inside and outside the
company as much as possible. For example, I think
maybe there could be gatherings like townhall meetings
between outside directors and team members.
Yamana: What you mean is that you want us to be a more
visible presence within the company, right? I agree. But for
the Board of Directors to engage in constructive discussions,
it is also important to maintain a kind of tense relationship. In
practice, as you know, there are cases in which matters
coming from the executive side are sent back. Going
forward, while building a base of trust, I want us to fulfill our
mission as outside directors with a sense of tension.
Skills matrix of Directors and Audit & Supervisory Board Members of the Company
Corporate
Management
Global
Business
Experience
Sales/
Marketing
ESG/
Sustainability
Technology/
Research &
Development
Manufacture/
Production
Technology
Finance/
Accounting
Legal/
Compliance/
Risk Management
Name
Position
Noboru Saito
Tetsuji Yamanishi
Representative Director
President and CEO
Representative Director
Executive Vice President
D
i
r
e
c
t
o
r
s
Shigenao Ishiguro
Chairman & Director
Shigeki Sato
Director
Senior Vice President
Kozue Nakayama
Outside Director
Mutsuo Iwai
Outside Director
Shoei Yamana
Outside Director
B
o
a
r
d
M
e
m
b
e
r
s
A
u
d
i
t
&
S
u
p
e
r
v
i
s
o
r
y
Takakazu Momozuka
Masato Ishikawa
Douglas K. Freeman
Chizuko Yamamoto
Takashi Fujino
Full-time Audit &
Supervisory Board Member
Full-time Audit &
Supervisory Board Member
Outside Audit &
Supervisory Board Member
Outside Audit &
Supervisory Board Member
Outside Audit &
Supervisory Board Member
Fields where the Company especially expects Directors and Audit & Supervisory Board Members
to demonstrate their skills
Skills the Company expect
Reasons for selecting the skills in question
Corporate Management
To contribute to a sustainable society and increase corporate value, the ability to perform in corporate management and to manage and supervise executive divisions
is required.
Global Business Experience
Experience and knowledge in global business are essential in TDK where over 90% of net sales is recorded outside of Japan.
Sales/Marketing
ESG/Sustainability
Sales and marketing skills are necessary to understand market demands and create new business opportunities from the conception of both technologyout and market-in.
An adequate understanding of ESG and sustainability, one of the most crucial issues in present-day society, is an important ability to supervise the corporate management.
Technology/Research & Development
As under the corporate motto “Contribute to culture and industry through creativity”, the Company aims to be a company that brings the well-being to all people
through technology.
Manufacture/Production Technology
An adequate understanding and passion for Monozukuri (manufacturing experience) is required as quality and reliability of products are the foundation of TDK’s business.
Finance/Accounting
To aim for sustainable growth and carry out necessary investments, knowledge in finance and accounting, which supports a sound and solid financial basis, is required.
Legal/Compliance/Risk Management
Legal, compliance and risk management skills are necessary to respond to the trust of all stakeholders and to increase corporate value in a sound and sustainable manner.
Composition and role of the Nomination Advisory Committee
The Nomination Advisory Committee, which is an advisory body of the Board of Directors, is
chaired by an outside director, and a majority of its members are outside directors. Regarding the
nomination of directors, Audit & Supervisory Board members, and corporate officers, it not only
discusses the expected conditions but also, through future-oriented proactive deliberations,
seeks to raise the quality of discussions by selecting issues, holding discussions and interviews
both in formal committee meetings and offsite gatherings, and sharing objective evaluations by
third-party bodies.
Succession plan initiatives
On the occasion of the selection of the president in the last fiscal year, the Nomination Advisory
Committee held repeated discussions over a lengthy period of time. Evaluating and selecting
someone is no easy task. The current president was selected in consideration of such factors as
what kind of leadership is necessary in view of the increasingly uncertain future and whether that
person would be acceptable to team members. The next succession plan began immediately
after the current president’s appointment. Through training programs carried out by the Human
Resources HQ based on a global-scale talent pool, and with the active involvement of outside
directors, deep discussions will be held on what kind of succeeding setup will form the
foundation of TDK’s growth and, together with information from the executive side, not only the
presidential post but also a cabinet-level team will be promoted.
Kozue Nakayama
Outside Director
Chair of Nomination
Advisory Committee
Member of Compensation
Advisory Committee
Member of Corporate
Governance Committee
After working at Nissan Motor
Co., Ltd. and Yokohama City
and as President and
Representative Director of
Pacific Convention Plaza
Yokohama, became an
outside director of TDK in
June 2020. Became chair of
the Nomination Advisory
Committee in June 2021.
68
69
Effectiveness Evaluation of the Board of Directors
Continuous improvement based on effectiveness evaluation
TDK conducts an effectiveness evaluation of the Board of
Directors each year in order to verify whether the functions
expected of the Board of Directors are properly performed
and enhance such functions. Also, TDK requests a third-party
evaluation institution to evaluate the effectiveness of the
Board of Directors periodically (about once every three years)
in order to verify it from a neutral and objective standpoint.
Given that a third-party evaluation organization conducted
a survey in fiscal 2022, in the Board of Directors evaluation for
fiscal 2023, the Corporate Governance Committee (Chair:
Shigenao Ishiguro, Chairman & Director who is not also a
Corporate Officer) conducted the initial evaluation from a
neutral standpoint, and after discussions by the Board of
Directors, the Board of Directors conducted the final evaluation.
As for the issues identified in the evaluation for the
previous fiscal year, TDK implements remedial measures and
verifies their results, thereby creating a cycle for continuous
improvement of governance.
The Board of Directors evaluation process and governance improvement cycle
Evaluation process
Improvement cycle
Questionnaire
Interviews
Discussions
Evaluation results
November–December
Questionnaire to all Directors
and Audit & Supervisory
Board members
December-January
Individual interviews with all
Directors and Audit &
Supervisory Board members
March–April
Analysis and summary reported
and discussed in the Corporate
Governance Committee and
Board of Directors
April
Resolution on evaluation
results by the Board of
Directors
•Reports relating to issues identified in the evaluation
planned in the Board of Directors annual schedule
•Implementation of improvement measures
•Verification of results in the next Board of Directors
evaluation
•The above cycle of evaluation, identification of issues,
improvement, and evaluation (verification) is rotated every
year to ensure continuous improvement of governance.
Improvement
Evaluation process
Improvement
Evaluation process
Questionnaire Items (Major Items)
Role and function of the Board of Directors
(questions and free answers)
Size and composition of the Board of Directors
(questions and free answers)
Operation of the Board of Directors (questions and
free answers)
Composition and role of the Nomination Advisory
Committee (questions and free answers)
Operation of the Nomination Advisory Committee
(questions and free answers)
Composition and role of the Compensation
Advisory Committee (questions and free answers)
Operation of the Compensation Advisory Committee
(questions and free answers)
Support system for Outside Directors (questions and
free answers)
Role of the Audit & Supervisory Board members and
expectations of the Audit & Supervisory Board
Members (questions and free answers)
Relationship with investors and shareholders
(questions and free answers)
Governance structure of TDK and effectiveness of
the Board of Directors in general (free answers)
Self-evaluation by Directors and Audit & Supervisory
Board members (free answers)
Addressing issues identified in the effectiveness evaluation
Objective “Sustainable enhancement of corporate value”
Strategy
Risk Management
Governance
Fiscal 2022
evaluation results
(issues)
Monitoring of
the Medium-Term Plan
Deepening discussions on the
group’s risk management
Succession of the Board
members and the board culture
Fiscal 2023
initiatives
Adequate reporting/deliberations
were conducted at the Board of
Directors’ meetings.
Appeals to stakeholders were
discussed multiple times inside
and outside the Board of
Directors.
The ERM Committee and
Compliance Committee
periodically reported on
company-wide risks, which
were discussed by the Board
of Directors.
The Nomination Advisory
Committee and Corporate
Governance Committee
established a skills matrix and
board culture.
Wide-ranging discussion
from medium- to long-term
perspectives
Drastic market changes
and geopolitical risks
Optimal future governance for
enhancing corporate value
Discussion of
the fiscal 2023
evaluation
Shift to initiatives
with a greater
awareness of
external factors
New issues
Further evolution of board
discussions
Responding to rapidly
changing market trends
Strengthening engagement
with stakeholders
TDK has achieved growth through
delegation of authority that promotes rapid
and autonomous decision-making and
transparency in business execution
(Empowerment and Transparency). In order
to sustain growth and promote further
enhancement of corporate value, the Board
of Directors should evolve its discussions
to another level. The Board of Directors
needs to further delegate authority to the
executive side and focus the Board’s
discussions on bigger picture, medium- to
long-term themes to deepen the
discussion. It is also important for the
executive side to continue to appropriately
share information with the Board members
in order to ensure effective discussions at
the Board of Directors meetings.
In this difficult-to-predict
era of rapid economic,
social, and political change
on a global scale, it is
necessary to enhance
marketing strategies,
including market analysis
on a global scale, and the
ability to respond to
geopolitical and
geo-economic risks in
order to achieve sustainable
growth and increase
corporate value over the
medium to long term.
In order to enhance TDK’s corporate
value, it is necessary for all stakeholders
to have a deeper understanding of TDK’s
growth potential and competitive
advantage. To this end, the Board of
Directors should be deeply involved in the
development of the Medium-Term Plan
for TDK’s growth potential, while at the
same time discussing and encouraging
stronger engagement with investors and
other stakeholders by the executive side
(information dissemination,
communication, brand enhancement, etc.).
In addition, it would be beneficial
for the Board of Directors to be more
open to employees as the entire group
works toward the common goal of
TDK’s sustainable growth and
enhancement of corporate value over
the medium to long term.
* The survey is multifaceted, with detailed sub-items underneath the major items described above. While certain question items are not changed in the effectiveness evaluation
questionnaire in order to enable continuous measurement each year, the other question items are reviewed each year in order to enhance the quality of the evaluation. Also, many
“free comment fields” are provided in order to collect different and various opinions and suggestions without regard to the questionnaire items.
Fiscal 2024: Promotion of initiatives to solve the above issues
70
71
Remuneration System
Remuneration system linked to medium- to long-term corporate value
Basic policy
In designing the remuneration system for Directors and Audit
& Supervisory Board members, TDK emphasizes linkage with
short-term and medium- to long-term results. Also, to
promote as much as possible behavior on the part of
directors geared toward enhancing corporate results and
stock value and sustainably increase the corporate value of
the overall TDK Group by constantly pursuing the formulation
of a competitive remuneration system to secure diverse and
excellent human resources.
Decision-making process
TDK has in place a Compensation Advisory Committee acting
as an advisory body to the Board of Directors, which is
chaired by an Independent Outside Director and of which a
majority of the members are composed of Independent
Outside Directors. The Committee examines the remuneration
system and the level of remuneration pertaining to Directors
and Corporate Officers of TDK, submits a report to the Board
of Directors, and thereby contributes to the securement of
transparency of the remuneration decision-making process
and appropriateness of individual remunerations in light of
corporate business performance, individual performance and
general industry standards, among other factors. The
remuneration of Directors and Corporate Officers of TDK is
discussed by the Compensation Advisory Committee and
then resolved by the Board of Directors.
Structure of remuneration
The remuneration of Directors and Corporate Officers is
composed of basic remuneration, results-linked bonus as a
short-term performance linkage system and stock-linked
compensation as a medium- to long-term performance
linkage system.
Results-linked bonus is designed to fluctuate in
accordance with the consolidated operating results in a single
year (operating profit, ROE) and the degree of attainment
against target values in the business of which each Director or
Corporate Officer is in charge. As to a part of stock-linked
compensation, TDK uses some consolidated performance
indicators from the Medium-Term Plan, and adopts a system
where the number of shares to be delivered fluctuates based
on the degree of achievement of the targets, for the purpose
of further increasing the linkage between remuneration for
Directors and Corporate Officers and TDK’s medium- to
long-term performance and corporate value.
Type of remuneration
Details of remuneration
Basic remuneration
Monetary compensation paid monthly
Results-linked bonus
Monetary compensation which is paid at predetermined times each year with an emphasis on the
linkage with short-term performance. The amount of the bonus fluctuates within a range of 0% to
200% of the standard payment amount depending on the degree of attainment of targets, using the
consolidated results (operating income, ROE), the targets set for each division in charge and other
indicators for the fiscal year under review.
Fixed/Fluctuating
Fixed
Fluctuating
(single fiscal year)
Post-delivery
type stock
remuneration
Restricted
stock unit
(RSU)
RSU is a type of stock remuneration which is issued based on continuous service. In case of RSU,
subject to continuous service for a period of three years from the first day of the first year to the last
day of the last year of the Medium-Term Plan (or a period of three years or more as determined by
the Board of Directors of the Company, the “Target Period”), a pre-determined amount of the
Company’s shares and money is delivered after the end of the Target Period.
Fixed
Performance
share unit
(PSU)
PSU is a type of stock remuneration which is issued based on performance. In case of PSU, an
amount of the Company’s shares and money calculated in accordance with the degree of
achievement of performance targets set by the Medium-Term Plan is delivered after the end of the
Target Period. The degree of achievement of performance targets shall vary from 0% to 100%
depending on the degree of achievement of consolidated performance targets (operating profit,
ROE) outlined in the Medium-Term Plan.
Fluctuating
(medium- to
long-term)
Notes: Directors and Audit & Supervisory Board Members remuneration classification for results-linked compensation, nonmonetary compensation and other remuneration is as follows.
Classification
Basic remuneration
Results-linked bonus
RSU*1
PSU*2
Results-linked compensation, etc.
Non-monetary compensation, etc.
Other compensation, etc.
*1 Under RSU, the stock remuneration portion is classified as “non-monetary compensation, etc.” and the monetary compensation portion is classified under “other compensation, etc.”
*2 PSU is classified as “results-linked compensation, etc.” and the stock remuneration portion is also classified as “non-monetary compensation, etc.”
Eligible for payment
Classification
Basic remuneration
Results-linked bonus
Post-delivery type stock remuneration
RSU
PSU
Directors concurrently serving as corporate officers
Directors not concurrently serving as corporate officers
Outside directors
Audit & Supervisory Board members
72
Breakdown of remuneration for Directors concurrently serving as Corporate Officers (for standard payments)
Basic remuneration
42%
Results-linked bonus
25%
Post-delivery type stock
remuneration
33%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Indicators related to performance-linked remuneration, reasons for selecting the indicators,
and methods for determining the amount of performance-linked remuneration
In calculating results-linked bonuses, the amount is designed to fluctuate within a range of 0% to 200% of the standard payment amount
depending on the degree of attainment of targets, using the consolidated results for each fiscal year (operating profit, ROE) and the
indicators set for each division in charge. The reason for selecting these indicators is to use the same indicators as management targets with
an emphasis on the linkage with short-term performance. The targets and results for the main indicators that relate to results-linked bonuses
in fiscal 2023 under review are as follows.
Consolidated operating profit
¥182,700 million (target), ¥168,827 million (result)
Consolidated ROE
12.7% (target), 8.3% (result)
The number of the Company’s shares to be delivered and the amount of money to be paid as PSUs will be calculated based on the
degree of attainment of the performance targets of the Medium-Term Plan. The degree of attainment of performance targets will vary in
the range of 0% to 100%, depending on the degree of attainment of the consolidated performance targets (operating profit, ROE) in the
Medium-Term Plan. The reason for selecting these indicators are to use the same indicators as management targets under the
Medium-Term Plan with an emphasis on the linkage with medium- to long-term performance and corporate value. The targets for the
indicators that relate to PSUs in the Medium-Term Plan, which will end in the fiscal 2024, are as follows.
Consolidated operating profit
(cumulative amount for three years)
¥635,100 million (target)
Consolidated ROE (amount for the last year) 16.8% (target)
The Company plans to deliver its shares and cash from the fiscal 2024 onward for the RSU plan and from the fiscal 2025 onward for the
PSU plan.
Trends in total amount of remuneration for Directors and Audit & Supervisory Board Members
Outside Audit & Supervisory Board Members Inside Audit & Supervisory Board Members Outside Directors Inside Directors
(Millions
of yen)
Operating
profit
700
ROE
¥93.4 billion
¥208.7 billion*1
¥89.7 billion
¥107.8 billion
¥97.9 billion
¥111.8 billion*2
¥166.8 billion
¥168.8 billion
9.2%
19.8%*1
7.8%
9.7%
6.7%
8.5%*2
11.6%
8.3%
29
58
42
477
27
27
58
51
58
45
367
377
58
46
314
24
30
58
55
268
35
61
48
36
62
48
42
62
52
497
454
390
600
500
400
300
200
100
0
2016
2017
2018
2019
2020
2021
2022
2023
(FY)
*1 Includes ¥144.4 billion in gains from business transfer to Qualcomm
*2 TDK has voluntary adopted the IFRS on its consolidated financial statements in the annual Securities Reports from the fiscal 2022 in place of the US-GAAP.
The figures for the fiscal 2021 are also presented in accordance with IFRS.
73
Directors, Audit & Supervisory Board Members, and Corporate Officers
(As of the end of June 2023)
Directors
Audit & Supervisory Board Members
Corporate Officers
Noboru Saito
Representative Director
Tetsuji Yamanishi
Representative Director
Shigenao Ishiguro
Chairman & Director
Shigeki Sato
Director
Takakazu Momozuka
Full-time Audit &
Supervisory Board Member
Masato Ishikawa
Full-time Audit &
Supervisory Board Member
Kozue Nakayama
Outside Director
Mutsuo Iwai
Outside Director
Shoei Yamana
Outside Director
Summary of career
Summary of career
Summary of career
Apr. 1982 Entered Nissan Motor Co., Ltd.
Apr. 1983 Entered Japan Tobacco and
Apr. 1977 Entered Minolta Camera Co.,
Sep. 2010 Deputy General Manager of
Global Branding Division of
the said company
Mar. 2011 Retired from the said
company
Apr. 2011 Entered Yokohama City
Apr. 2012 Director General of Culture
and Tourism Bureau of the
said city
Jun. 2018 President and Representative
Director of Pacific Convention
Plaza Yokohama (resigned in
Jun. 2020)
Jun. 2019 Outside Audit & Supervisory
Board Member of Imperial
Hotel, Ltd. (present post)
Jun. 2020 Outside Director of the
Company (present post)
Outside Director of Isuzu
Motors Limited (present post)
Jun. 2022 Outside Director of Nanto
Bank, Ltd. (present post)
Salt Public Corporation
Ltd.
Jun. 2005 Senior Vice President and
Jan. 2001 CEO of Minolta QMS Inc.
Vice President of Food
Business Division of Food
Business of Japan Tobacco
Inc. (“JT”)
Jun. 2006 Member of the Board and
Executive Vice President;
President of Food Business
of JT
Jun. 2008 Executive Vice President;
Chief Strategy Officer of JT
Jun. 2010 Member of the Board and
Senior Vice President; Chief
Strategy Officer and
Assistant to CEO in Food
Business of JT
Jun. 2011 Member of the Board of JT
Executive Vice President of
JT International S.A.
Jun. 2013 Senior Executive Vice
President; Chief Strategy
Officer of JT
Jan. 2016 Executive Vice President;
President of Tobacco
Business of JT
Mar. 2016 Representative Director and
Executive Vice President;
President of Tobacco
Business of JT
Jan. 2020 Member of the Board of JT
Mar. 2020 Member and Deputy
Chairperson of the Board of
JT
Jun. 2020 Outside Director of Benesse
Holdings, Inc. (present post)
Jun. 2021 Outside Director of the
Company (present post)
Mar. 2022 Member and Chairperson of
the Board of JT (present
post)
Jul. 2002 Executive Officer and General
Manager of Management
Planning Division of Minolta
Co., Ltd.
Deputy General Manager of
Image Information Products
General Headquarters, Image
Information Products
Company of the said
company
Aug. 2003 Senior Executive Officer of
Konica Minolta Holdings, Inc.
(current Konica Minolta, Inc.)
Oct. 2003 Senior Executive Officer of
the said company and
Managing Director of Konica
Minolta Business
Technologies, Inc.
Jun. 2006 Director and Senior Executive
Officer in charge of Corporate
Strategy of Konica Minolta
Holdings, Inc.
Apr. 2011 Director and Senior Executive
Officer of the said company
Representative Director and
President of Konica Minolta
Business Technologies, Inc.
Apr. 2013 Director and Senior
Managing Executive Officer
of Konica Minolta, Inc.
Apr. 2014 Director, President and CEO,
and Representative Executive
Officer of the said company
Apr. 2022 Director, Executive Chairman
and Executive Officer of the
said company (present post)
Jun. 2022 Outside Director of the
Company (present post)
Jun. 2023 Senior Advisor of Konica
Minolta, Inc. (present post)
Jun. 2023 Outside Director of ZENSHO
HOLDINGS CO., LTD.
(present post)
Douglas K. Freeman
Outside Audit &
Supervisory Board Member
Chizuko Yamamoto
Outside Audit &
Supervisory Board Member
Takashi Fujino
Outside Audit &
Supervisory Board Member
Summary of career
Summary of career
Summary of career
Apr. 1990 Entered Goldman Sachs
Japan Co., Ltd.
Apr. 1996 Registered as lawyer in Japan
Joined Mitsui, Yasuda, Wani
& Maeda
Jun. 1997 Joined Hamada Law Offices
Sep. 2002 Registered as lawyer in New
York, the United States of
America
Sep. 2002 Joined Sullivan & Cromwell
LLP
Sep. 2007 Principal of Law Offices of
Douglas K. Freeman (present
post)
Feb. 2016 Outside Director of U-Shin
Ltd.
Apr. 2019 Professor of Keio University
Law School (present post)
Jun. 2019 Outside Audit & Supervisory
Board Member of the
Company (present post)
Oct. 1992 Entered Tohmatsu & Co.
(current Deloitte Touche
Tohmatsu LLC)
Apr. 1979 Entered Asahi Glass Co., Ltd.
(current AGC Inc.) (“AGC”)
Jan. 2009 Executive Officer and General
Apr. 1996 Registered as certified public
accountant
Manager of Corporate
Planning Office of AGC
Jul. 2010 Partner of Deloitte Touche
Tohmatsu LLC
Jul. 2019 Permanent Officer of
Japanese Institute of Certified
Public Accountants, Tokyo
Chapter
Sep. 2019 Member of Regulations and
Institutions Committee of
Japanese Institute of Certified
Public Accountants, Tokyo
Chapter
Jun. 2020 Principal of Chizuko
Yamamoto CPA Office
(present post)
Aug. 2020 Outside Audit & Supervisory
Board Member of Ozu
Corporation (present post)
Jun. 2021 Outside Director of Tokyo
Rope Mfg. Co., Ltd. (present
post)
Jun. 2023 Outside Audit & Supervisory
Board Member of the
Company (present post)
Jan. 2010 Senior Executive Officer, CFO
and General Manager of
President Office of AGC
Mar. 2010 Director, Senior Executive
Officer, CFO and General
Manager of President Office
of AGC
Jan. 2015 Director, Senior Executive
Officer, and Assistant to
President of AGC (retired in
Mar. 2015)
Advisor of Ise Chemicals
Corporation
Mar. 2015 Representative Director,
President and Chief
Executive Officer of Ise
Chemicals Corporation
(retired in Mar. 2019)
Jun. 2021 Outside Director of Kyokuto
Boeki Kaisha, Ltd. (present
post)
Jun. 2023 Outside Audit & Supervisory
Board Member of the
Company (present post)
President and CEO
Noboru Saito
Executive Vice President
Tetsuji Yamanishi
Senior Vice Presidents
Michael Pocsatko
Andreas Keller
Shigeki Sato
Corporate Officers
Albert Ong
Fumio Sashida
Ji Bin Geng
Werner Lohwasser
Taro Ikushima
Shuichi Hashiyama
Roshan Thapliya
Ludger Trockel
Takao Tsutsui
Ikuo Fukuchi
Joe Kit Chu Lam
Jim Tran
Takeshi Takahashi
74
75
Total assets
1,239,553
1,404,253
1,450,564
1,664,333
1,905,209
1,992,480
1,943,379
2,359,663
Consolidated Business Results Highlights
(Year ended March 31, 2023, and as of March 31 of each year)
Consolidated business highlights*1
Net sales
(Overseas sales)
Cost of sales
Selling, general and administrative expenses
Operating profit
Profit before tax
Profit from continuing operations before income taxes
Net profit attributable to owners of parent
Capital expenditures
Depreciation and amortization
Research and development expenses
Net cash provided by operating activities
Net cash used in investing activities
Net cash provided by financing activities
Cash and cash equivalents at end of period
3/2014
984,525
890,520
763,572
179,896
36,616
39,772
16,288
68,606
83,109
63,385
127,308
(55,438)
(56,118)
250,848
3/2015
1,082,560
989,348
802,225
199,795
72,459
74,517
49,440
102,525
80,249
70,644
142,850
(127,312)
(35,243)
265,104
3/2016
1,152,255
1,061,203
831,123
227,185
93,414
91,839
64,828
160,674
83,224
84,920
151,563
(140,585)
29,305
285,468
3/2017
1,178,257
1,073,024
855,948
239,446
208,660
211,717
145,099
167,631
87,491
91,254
160,136
(71,111)
(37,753)
330,388
3/2018
1,271,747
1,158,004
928,525
257,630
89,692
89,811
63,463
178,612
92,171
102,641
91,310
(246,099)
110,088
279,624
3/2019
1,381,806
1,268,437
985,321
287,561
107,823
115,554
82,205
173,592
106,631
115,155
140,274
(140,179)
9,435
289,175
Total equity attributable to owners of parent
Working capital
Number of shares issued (thousands)
635,327
279,504
129,591
738,861
352,364
129,591
675,361
289,760
129,591
793,614
388,542
129,591
824,634
296,899
129,591
877,290
208,165
129,591
Per-share data*2
Net profit attributable to owners of parent (basic)
¥129.47
¥392.78
¥514.23
¥1,150.16
¥502.80
¥651.02
5,050
70.00
54.1
90.5
6.4
3.7
2.7
1.4
5,865
90.00
22.9
91.4
6.5
6.7
7.2
3.7
5,355
120.00
23.3
92.1
7.4
8.1
9.2
4.5
6,289
120.00
10.4
91.1
7.7
17.7
19.8
9.3
6,532
130.00
25.9
91.1
8.1
7.1
7.8
3.6
6,947
160.00
24.6
91.8
8.3
7.8
9.7
4.2
Total equity attributable to owners of parent
Dividends
Payout ratio (%)
Key financial ratios
Overseas sales ratio (%)
R&D expenses to net sales ratio (%)
OP margin (%)
Return on equity (ROE) (%)
Return on assets (ROA) (%)
Non-financial indicators
Number of employees
Overseas employee ratio (%)
TDK has voluntary adopted the IFRS on its consolidated financial statements in the annual Securities Reports from
the fiscal 2022 in place of the US-GAAP. The figures for the fiscal 2021 are also presented in accordance with IFRS.
Account titles are presented in accordance with the IFRS.
3/2020
3/2021 (IFRS)
3/2022 (IFRS)
3/2023 (IFRS)
Millions of yen
1,363,037
1,252,634
959,714
289,771
97,870
95,876
57,780
173,429
124,984
117,489
222,390
(41,964)
(121,769)
332,717
1,479,008
1,361,803
1,052,410
328,217
111,814
117,263
74,681
212,196
148,356
127,409
230,855
(231,488)
21,082
380,387
958,929
202,547
388,772*2
1,902,124
1,753,086
1,338,276
410,568
166,775
172,490
131,298
291,337
177,031
165,250
178,987
(281,546)
113,743
439,339
3,041,653
1,300,317
470,814
388,772
843,957
247,577
129,591
¥457.47
6,681
180.00
39.3
91.9
8.6
7.2
6.7
2.9
¥197.06
¥346.44
2,530
60.00
30.4
92.1
8.6
7.6
8.5
3.5
3,431
78.33
22.6
92.2
8.7
8.8
11.6
4.9
2,180,817
2,004,381
1,596,295
434,803
168,827
167,219
114,187
275,709
206,285
179,467
262,772
(234,402)
14,947
506,185
3,147,027
1,458,446
603,000
388,772
Yen
¥301.19
3,845
106.00
35.2
91.9
8.2
7.7
8.3
3.7
83,581
89.1
88,076
89.8
91,648
90.3
99,693
90.7
102,883
90.7
104,781
90.7
107,138
90.6
129,284
92.0
116,808
90.8
102,908
88.9
*1 In accordance with the provisions of ASC No. 205-20, “Presentation of Financial Statements–Discontinued Operations,” operating results related to the data tape business and the
*2 TDK split one share of its common stock into three shares with the effective date of October 1, 2021. Number of shares issued, net profit attributable to owners of parent (basic) per
Blu-ray business are separately presented as discontinued operations in the consolidated statements of operations for fiscal 2014. However, overseas sales, depreciation and
amortization, research and development expenses include the amounts of discontinued operations.
share, total equity attributable to owners of parent per share and dividends per share are calculated assuming that the share split was implemented at the beginning of the fiscal 2021.
76
77
Consolidated Business Results Highlights
(Year ended March 31, 2023, and as of March 31 of each year)
Net sales / overseas sales ratio
Operating profit / OP margin
Net sales (left) Overseas sales ratio (right)
Operating profit (left) OP margin (right)
ROE / ROA
ROE ROA
2,180.8
91.9
(Billions of yen)
2,500
2,000
1,500
1,000
500
0
2014 2015 2016 2017 2018 2019 2020
2021
2022
2023
(%)
100
80
60
40
20
0
(FY)
(Billions of yen)
250
200
150
100
50
0
(%)
25
20
15
10
5
0
168.8
7.7
(%)
20
15
10
5
0
TDK has voluntary adopted the IFRS on its consolidated financial statements in the annual Securities Reports from
the fiscal 2022 in place of the US-GAAP. The figures for the fiscal 2021 are also presented in accordance with IFRS.
Account titles are presented in accordance with IFRS.
Cash flows
Net cash provided by operating activities
Net cash used in investing activities Free cash flow
(Billions of yen)
350
210
0
-210
-350
8.3
3.7
262.8
28.4
-234.4
US-GAAP
IFRS
US-GAAP
IFRS
US-GAAP
IFRS
In fiscal 2023 net sales increased 14.7% from the previous year to a record high of
¥2,180.8 billion. Demand continued to be stagnant in the ICT market. In the
automotive market, however, although some concern about a semiconductor
shortage remained, the number of produced automobiles gradually recovered,
reaching a higher level than the previous term. In line with the advance of xEVs, the
number of automotive components installed is increasing, so demand for components
also became robust. In the industrial equipment market, demand for renewable energy
and residential energy storage systems increased in the wake of a sharp rise in energy
prices. Overseas sales ratio decreased 0.3 percentage points to 91.9%.
In fiscal 2023 operating profit reached ¥168.8 billion, up 1.2% year on year, which,
excluding the business transfer gains recorded in fiscal 2017, was the highest
ever. The OP margin was 7.7%. Operating profit was attributed as a result of the
promotion of rationalization and cost reduction efforts mainly for rechargeable
batteries and passive components, as well as the benefits from restructuring
during the previous fiscal year and streamlining of SG&A expenses, in addition to
the positive effect of the yen’s depreciation amounting. In fiscal 2017 TDK
recorded capital gains of ¥144.4 billion (based on the US-GAAP) following a
business tie-up and agreement to establish a joint venture with Qualcomm.
As a result of a decline in the net profit attributable to owners of parent, in fiscal
2023 ROE decreased by 3.3 percentage points over the previous fiscal year to
8.3% and ROA by 1.2 percentage points to 3.7%. In the past ROE and ROA
hovered at a low level, but they improved following restructuring from fiscal 2012.
In fiscal 2017 they increased considerably due to the recording of capital gains
from the transfer of business to Qualcomm.
2014 2015 2016 2017 2018 2019 2020
2021
2022
2023
(FY)
2014 2015 2016 2017 2018 2019 2020
2021 2022
2023
(FY)
2014 2015 2016 2017 2018 2019 2020
2021 2022 2023
(FY)
US-GAAP
IFRS
In fiscal 2023 free cash flow registered a surplus of ¥28.4 billion. In fiscal 2022
there had been a deficit of ¥102.6 billion, including an advance payment of about
¥110.0 billion for the stable procurement of battery materials. But in fiscal 2023
operating cash flow increased due mainly to an improvement in the earning
capacity of passive components and sensor application products. In addition to
this improvement in the earning capacity of passive components, such as
MLCCs, and sensor application products, such as TMR sensors, operating cash
flow is trending upward due to an improvement in working capital.
Net profit attributable to owners of parent
Capital expenditures / depreciation and amortization
R&D expenses / R&D expenses to net sales ratio
Number of employees / overseas employee ratio
Capital expenditures Depreciation and amortization
R&D expenses (left) R&D expenses to net sales ratio (right)
Number of employees (left) Overseas employee ratio (right)
(Billions of yen)
150
120
90
60
30
0
114.2
(Billions of yen)
300
240
180
120
60
0
275.7
206.3
(Billions of yen)
200
(%)
10
(Persons)
160,000
150
100
50
0
179.5
8.2
8
6
4
2
0
120,000
80,000
40,000
0
88.9
102,908
(%)
100
80
60
40
20
0
2014 2015 2016 2017 2018 2019 2020
2021 2022
2023
(FY)
2014 2015 2016 2017 2018 2019 2020
2021 2022
2023
(FY)
2014 2015 2016 2017 2018 2019 2020
2021 2022
2023
(FY)
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
US-GAAP
IFRS
US-GAAP
IFRS
US-GAAP
IFRS
(As of the
end of FY)
Net profit attributable to owners of the parent in fiscal 2023 amounted to ¥114.2
billion, down 13.0% year on year. As a result of the review of future changes in
demand and projections, TDK posted ¥47.7 billion in impairment losses and
restructuring costs mainly for businesses facing challenges in improving
profitability. ¥12.0 billion in income from decrease in retirement benefit liabilities
due to extension of retirement age is also recorded.
Capital expenditures amounted to ¥275.7 billion in fiscal 2023, down 5.4% year
on year, and depreciation and amortization expenses reached ¥206.3 billion, up
16.5%. Under the current Medium-Term Plan, whose first year was fiscal 2022,
TDK initially planned for capital expenditures of ¥750.0 billion in total for three
years. As of the announcement of the full year financial result for fiscal 2023 (April
28, 2023), TDK is planning to increase capital expenditures to ¥830.0 billion in
total for three years, including about ¥90.0 billion as a result of an increase due to
foreign exchange fluctuations, in order to make upfront investment in businesses
which are expected to grow in the future.
Total equity attributable to owners of parent /
ratio of equity attributable to owners of parent
Total equity attributable to owners of parent (left)
Ratio of equity attributable to owners of parent (right)
(Billions of yen)
1,500
3,147.0
1,200
900
600
300
0
1,458.4
46.3
(%)
80
60
40
20
0
(As of the
end of FY)
Total assets
(Billions of yen)
3,600
2,700
1,800
900
0
2014 2015 2016 2017 2018 2019 2020
2021 2022
2023
US-GAAP
IFRS
(As of the
end of FY)
2014 2015 2016 2017 2018 2019 2020
2021 2022
2023
US-GAAP
IFRS
At the end of fiscal 2023 trade receivables and property, plant, and equipment had
increased, and total assets amounted to ¥3,147.0 billion, up 3.5% year on year. As
of March 31, 2023, the balance of liquid funds, which includes cash and deposits
with banks, short-term investments, and marketable securities, etc., amounted to
¥522.4 billion. The balance of debt with interest, which includes loans from banks,
corporate bonds, and lease obligations, amounted to ¥752.2 billion.
As of the end of fiscal 2023, equity attributable to owners of the parent company
amounted to ¥1,458.4 billion, an increase of 12.2% over the previous fiscal year
end. Retained earnings rose by ¥80.0 billion and other capital components by
¥77.7 billion over the previous fiscal year end. The ratio of equity attributable to
owners of parent rose by 3.5 percentage points to 46.3%.
78
For the fiscal 2023, TDK recorded ¥179.5 billion, an increase of 8.6% from the
previous year. R&D expenses have continuously increased since fiscal 2012, so
that we can respond to rapid technological innovation in the electronics market
and maintain high competitiveness.
The total number of employees at the end of fiscal 2023 was 102,908. In addition,
the overseas employee ratio was 88.9% as of the end of fiscal 2023. TDK has
continuously engaged in a wide range of initiatives of “HR Management” to attract
and retain talented human resources.
TDK’s stock price and volume
Volume in a month (left) Stock price (right)
(Millions of shares)
80
60
40
20
0
1
2
3
4
5
6
7
8
9
10
11
12
1
2
3
4
5
6
7
8
9
10
11
12
1
2
3
2021
2022
2023
*TDK split one share of its common stock into three shares with the effective date of October 1, 2021. For the period prior to September 2021, the volume and stock price prior to
the stock split are adjusted to the post stock split values.
(Yen)
6,000
4,500
3,000
1,500
0
79
Corporate Information
(As of March 31, 2023)
IR Activities
Corporate name
TDK Corporation
Common stock
¥32,641,976,312
Stakeholder engagement – Disclosure of dialogue with stakeholders
Corporate
headquarters
Nihonbashi Takashimaya Mitsui
Building, 2-5-1, Nihonbashi,
Chuo-ku, Tokyo 103-6128
Securities traded
Tokyo Stock Exchange
Date of
establishment
December 7, 1935
Authorized
number of shares
1,440,000,000 shares
Number of
shares issued
388,771,977 shares
Number of
shareholders
33,282
Securities code
6762
Number of
employees
(consolidated)
102,908
Transfer agent
Sumitomo Mitsui Trust Bank, Limited
1-4-1, Marunouchi, Chiyoda-ku,
Tokyo 100-8233
Independent
registered public
accounting firm
KPMG AZSA LLC
(the Japan member firm of
KPMG International)
Principal shareholders (10 largest shareholders)
Name of shareholder
Number of shares held
(thousands of shares)
Percentage of number of
shares held in the total
number of issued shares* (%)
The Master Trust Bank of Japan, Ltd. (Trust account)
Custody Bank of Japan, Ltd. (Trust account)
STATE STREET BANK WEST CLIENT - TREATY 505234
SSBTC CLIENT OMNIBUS ACCOUNT
JP MORGAN CHASE BANK 385781
HSBC HONGKONG-TREASURY SERVICES A/C ASIAN EQUITIES DERIVATIVES
BBH FOR GLOBAL X LITHIUM AND BATTERY TECH ETF
JP MORGAN CHASE BANK 385632
JPMorgan Securities Japan Co., Ltd.
GOVERNMENT OF NORWAY
*Other than the above, the Company holds 9,490 thousand shares of treasury stock.
107,822
55,184
7,453
6,779
4,803
4,758
4,500
4,456
3,790
3,759
28.43
14.55
1.96
1.79
1.27
1.25
1.19
1.17
1.00
0.99
Status of ownership
Japanese securities firms 4.08%
Japanese individuals, etc. 6.19%
Japanese corporations 0.66%
Treasury stock 2.44%
Foreign institutions and individuals 38.80%
Japanese financial institutions 47.83%
Disclosures of information
Objectives of investor relations activities
The TDK Group maintains fairness and transparency by
means of timely and accurate disclosure of certain information
to its shareholders/investors and other stakeholders. In
addition, the TDK Group shall actively and widely
communicate with society, and its shareholders/investors,
customers, business partners, employees, and local
communities, and shall pay heed to their expectations and
needs, and values and opinions that are different from those
of the TDK Group, which shall, from time to time, be reflected
in the TDK Group’s corporate activities.
The objectives of the TDK Group’s investor relations activities
are to develop a long-term relationship of trust with
stakeholders by fulfilling its responsibilities not only to
shareholders, who have entrusted administration of the
company to management, but also to all other stakeholders
including investors and analysts, through the faithful and fair
disclosure of information, and also to obtain their confidence
and esteem through bilateral communication. In order to
pursue these objectives at all times, the TDK Group
continuously discloses necessary information and conducts
investor relations activities in such a manner that third-party
opinions can be used to improve management.
State of implementation of dialogue with shareholders
Item
Content
Main respondents in dialogue
with shareholders
Mainly the president, corporate officer of finance & accounting; executives; and the IR & SR Group, a
dedicated team handling shareholder and investor response. (The number of meetings for each respondent
are given below.)
Profile of shareholders with
whom dialogue conducted
Dialogue is conducted with active and passive institutional investors both in Japan and overseas; investors
with various investment styles, such as growth and value investing; and diverse shareholders.
Main dialogue topics and matters
of interest to shareholders
Constructive and lively dialogue takes place on such topics as management policy, problem awareness,
financial strategy, progress of individual business strategies, progress of initiatives involving ESG and other
non-financial activities, and response to geopolitical risks.
State of feedback of shareholder opinions
and concerns to the management team
and Board of Directors
In-house feedback is being strengthened. For example, the numerous opinions and issues raised in the
dialogue with shareholders and investors are sorted in the IR & SR Group and reported to the Board of
Directors every quarter. Number of reports in fiscal 2023: 4
Matters introduced as
a result of feedback
Issues currently under consideration
as a result of feedback
We are improving the disclosure of information in line with the information disclosure needs of shareholders and
investors. Specifically, we are promoting the upgrading of information management for non-financial activities to
enable us to properly convey how non-financial activities contribute to the enhancement of corporate value.
Linkage of non-financial and ESG matters to the remuneration of corporate officers.
Investor relations organization
Number of annual discussions
Securities
analysts, etc.
President
Corporate Strategy HQ
Shareholders
and investors
IR & SR Group
IR
SR
Fiscal 2023
No. of times
Financial statement briefings for analysts and
institutional investors
Number of Management meetings (president and
corporate officer of finance & accounting)
Number of individual meetings (include conferences)
Conferences hosted by securities companies
Overseas roadshows
4
50
347
7
2
External evaluation of TDK’s IR activities
Integrated report
IR website
Nikkei Integrated Report Award 2022
Excellence Award
BroadBand Security, Inc.
Gomez IR Site Ranking 2022
Silver Prize
Daiwa Investor Relations Co. Ltd.
Internet IR 2022
Sustainability Excellence Award
Daiwa Investor Relations Co. Ltd.
Internet IR 2022
Commendation Award
Nikko Investor Relations Co., Ltd.
All Japanese Listed Companies’
Website Ranking 2022
All Markets Ranking, AAA Website
80
81
TDK Corporation
Nihonbashi Takashimaya Mitsui Building,
2-5-1, Nihonbashi, Chuo-ku, Tokyo 103-6128
https://www.tdk.com/en/index.html
Integrated Report 2023