Integrated Report 2024
02
03
04
05
About Integrated Report 2024
TDK at a Glance
Founding Story
Changes in TDK’s Business
About TDK
22
23
30
34
35
43
44
47
48
49
50
51
52
56
58
67
68
69
Review of the Previous Medium-term Plan
New Medium-term Plan
Message from the CFO
TDK’s Current Businesses
Strategy by Segment (Passive Components,
Sensor Application Products,
Magnetic Application Products and
Energy Application Products)
Pre-financial Capital That Backs
TDK’s Value Creation
Message from the CTO
IP Strategy
Development of New Business and
New Products
Design and Production (Monozukuri)
Quality Assurance
Marketing
Message from the CPSO and
General Manager, Human Resources HQ
People Strategy
Sustainability (Response to Climate Change,
Response to TCFD, Other Environmental
Initiatives, Respect for Human Rights)
DX Promotion
Advance Group Governance
Risk Management
71
72
76
77
78
79
80
81
82
84
86
87
88
89
90
Changes in TDK’s Governance/
TDK’s Board Culture
A Talk by Outside Directors
Corporate Governance Structure
Strengthening of the Board of Directors’
Monitoring Function
Operational Policy and Yearly Agenda for
Board of Directors Meetings
Activities of Advisory Committees and
Other Similar Meetings
Succession Plan
Skills Matrix
Remuneration for Executives
Effectiveness Evaluation of
the Board of Directors
Directors, Audit & Supervisory Board
Members, and Corporate Officers
Key Financial Data for the Past 10 Years
Consolidated Business Results Highlights
IR Activities
Corporate Information
Chapter 1
TDK’s
Long-term Vision
Chapter 2
TDK’s
Growth Strategies
Chapter 3
TDK’s
Governance
The motif of the cover design are
the words “TDK United.”
TDK United is intended to represent
the organizational culture toward
which TDK aspires, namely: A fusion
of abundant individual characteristics,
which promotes mutual understanding
while developing the strengths and
capacities of individual team
members and companies and
creates value through teamwork.
About the cover design
13
17
Long-term Vision
Key Issues (Materiality)
As we head into a new growth stage, we will
transform ourselves, enhancing our own
capabilities in order to contribute to Social
Transformation exemplified by GX and DX
06
Message from
the President & CEO
Noboru Saito
Representative Director
President & CEO
Data Section
01
TDK Integrated Report 2024
About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
Growth Strategies
Contents
Contents
Reporting Scope
Coverage period: FY March 2024 (April 1, 2023–March 31, 2024)
(Information on some activities in and after April 2024 is also included.)
Organizations covered: TDK Corporation and the TDK Group
Accounting standard: Unless otherwise noted, US-GAAP until FY March 2020 and IFRS from FY March 2021.
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.
Narrative
Comprehensiveness
• Sustainability Website
• Corporate Governance
Reports*
*Statutory and Timely Disclosure Documents
• Securities Reports*
• Financial Results*
• Medium-term Plan
• Performance Briefings
• Notice of Convocation of
General Meeting of
Shareholders*
• Shareholder Newsletters
• Investors’ Guide
Integrated Reports
Pre-financial
Financial
Editorial Policy
The report conveys our stance on how highly diverse TDK United team members (employees)
are accelerating the transformation of TDK itself and enhance corporate value so that we can
continue to contributing to the transformation of society through our business.
• Long-term Vision TDK Transformation
• Key issues (materiality) and KPIs which should be addressed toward the realization of
Long-term Vision
• Medium-term Plan and implementation strategies back-cast from the Long-term Vision
• Strengthen management focusing on cash flows
• Enhance business portfolio management(Emphasizing ROIC)
• Evolve the Ferrite Tree (Pre-financial capital)
• Capital allocation : medium-term policy and strategies
As a follow-up to the 2023 edition, we maintained the format whereby division heads
discuss in their own words the initiatives that will lead to enhance corporate value.
Key Points of Integrated Report 2024
Starting with the 2021 edition, TDK changed the title of its Annual Report
to Integrated Report as a dialogue tool to convey a more accurate
understanding of our comprehensive growth story including financial and
pre-financial aspects on the part of stakeholders and enhance
stakeholder engagement.
Starting with the 2024 edition, the structure of each page has been
organized by making reference to the Guidance for Collaborative Value
Creation formulated by the Ministry of Economy, Trade and Industry of Japan.
About Integrated Report 2024
Positioning of the Integrated Report
Since FY March 2025, the Integrated Report has also been positioned as the highest-level
disclosure document within our information disclosure structure. We reviewed production
systems, and following deliberation by the Disclosure Committee, our internal organization,
we made the integrated report subject to reporting at Executive Committee meetings and
Board of Directors meetings.
Highly comprehensive information that could not be included in this Integrated Report
is reported in various disclosure documents and posted on the TDK website as indicated in
the positioning diagram above.
02
TDK Integrated Report 2024
About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
Growth Strategies
Contents
TDK has over 250 locations across more than 30 countries and regions. We lead the world in magnetic technology and operate in the four business segments of Passive Components,
Sensor Application Products, Magnetic Application Products, and Energy Application Products, as well as Other business. We focus on three markets: automotive, ICT, and industrial equipment.
A global electronics technology company and a world leader in electronic solutions for the smart society
Established
1935
Number of employees
Approx.100,000
Percentage of
overseas employees
Approx. 90%
Overseas sales ratio
Approx. 90%
Research and
development expenses
(% to net sales)
9.0%
Female manager ratio
22.0%
Operating profit
¥172.9 billion
Operating profit margin
8.2%
Capex
¥218.6 billion
Net sales
¥2,103.9 billion
Business Overview
Main high market share products
Sales by market
ICT 56.7%
Automotive 22.0% Industrial
equipment
Other 3.8%
Other
2.5% / ¥51.8 billion
Passive
Components
•Capacitors (Ceramic, Aluminum electrolytic
and film capacitors)
•Inductive devices •Other passive components
26.9% / ¥565.6 billion
Sensor
Application
Products
•Temperature and pressure sensors /
Magnetic sensors / MEMS sensors
8.6% / ¥180.5 billion
Magnetic
Application
Products
•HDD magnetic heads
•HDD suspension assemblies •Magnets
8.7% / ¥184.2 billion
Energy
Application
Products
•Energy devices (rechargeable batteries)
•Power supplies
53.3% / ¥1,121.7 billion
Small capacity
batteries
No. 1
Signal
EMC filters
No. 1
Passive
Temperature
sensors
No. 1
Sensor
Energy
(50%–60%)
(45%–50%)
(35%–40%)
Ceramic
capacitors for
automobiles
No. 2
Passive
(35%–40%)
Sales
composition
(FY March 2024)
HDD
suspension
assemblies
No. 1
Magnetic
(40%–45%)
17.5%
*TDK Group
TDK at a Glance (FY March 2024)
03
TDK Integrated Report 2024
About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
Growth Strategies
Contents
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.”
An Angora fur business was one of Saito’s many early
endeavors. However, this business did not go smoothly and
he was unable to find any customers.
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
Founder Kenzo Saito
A coil that uses
a ferrite core
Dr. Yogoro Kato (left) and Dr. Takeshi
Takei (right) facing each other with a
ferrite core
use company capital for a purpose outside Kanegafuchi
Boseki’s business, so he provided his personal funds to Saito.
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. Dr Kato’s statement that
“innovative work is the source of true industry,” inspired Kenzo
Saito to found TDK Corporation (originally known as Tokyo
Denki Kagaku Kogyo K.K.) on December 7, 1935, with the
purpose of marketing this original material invented in Japan.
At the time, as it was yet unclear whether “ferrite” would
have a future or not, this act demanded “courage” and the
will to pursue a “vision.” As a result of joint research by the
Tokyo Institute of Technology and TDK, a product called
ferrite core was produced and applied for the first time
worldwide in 1937 in a number of Japanese wireless
communication units and radios. By the end of the World
War II, as many as 5 million units had been shipped by TDK,
thereby creating a foundation of trust in the company. The
two major wins that Saito staked his career on were the
founding of TDK and the creation of the Science and
Technology Agency. Saito’s spirit of creativity from the time of
TDK’s founding, expressed as “creating values that do not
yet exist in the world from the level of materials,” was
adopted as the Corporate Motto in 1967.
Contribute to culture and
industry through creativity
“Vision, Courage, Trust”
TDK Transformation
Accelerating transformation
for a sustainable future
Key issues (materiality) which
should be addressed toward
the realization of Long-term Vision
Action plan for the next 3 years
to realize the Long-term Vision
Values/codes/rules that serve as the base
of TDK Group’s Value Creation
“Contribute to culture and industry through
creativity” is TDK’s Corporate Motto, and
“Vision, Courage, Trust” are the Corporate
Principles. Based on this unchanging spirit,
we revised the existing TDK Value Structure
in FY March 2025 and formulated a new
Long-term Vision, key issues (materiality),
and Medium-term Plan.
TDK Value Structure
Founding Story
04
TDK Integrated Report 2024
About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
Growth Strategies
Contents
2010
2000
2003
1990
1980
1935
1970
2023
2020
(Net sales)
Magnetic tapes
Capacitors
Magnets
Ferrites
Inductors
Diffusion of
electric products
Diffusion of cassette tapes
Diffusion of personal computers and
continued expansion of memory capacity
Diffusion of smartphones and
continued upgrading of functions
Diffusion of cloud computing
Accelerated electrification of
automobiles
Increased
performance of AI
Sensors &
actuators
Batteries
RF components
Power
modules
HDD heads
Others
TDK has grown by evolving its electronic materials technologies, which began with ferrite, while also
changing its business portfolio. To supply products that meet the needs of society, we have been
promoting technological innovations which we achieve through the application of our core
technologies, including materials rooted in ferrite as well as process technology, while also actively
transitioning our main business portfolio while maintaining our view of the changing times.
What we have changed
Product and business portfolio
Global expansion and
global market share
Expansion of the Ferrite Tree
Diversity in management
Governance structure
Quality First
Our unique corporate culture
• TDK’s founding spirit
• Open corporate culture
• Venture spirit
Human resources-oriented
management
Materials × process technology
What we will not change
Changes in TDK’s Business
05
TDK Integrated Report 2024
About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
Growth Strategies
Contents
As we head into a new growth stage,
we will transform ourselves, enhancing
our own capabilities in order to
contribute to Social Transformation
exemplified by GX and DX
Message from the President & CEO
06
TDK Integrated Report 2024
About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
Growth Strategies
Contents
Representative Director, President & CEO
Noboru Saito
It has been exactly two years since I became president.
Looking back at those two years has really reinforced my
sense that TDK is a company with unlimited potential. One
major reason I feel this way lies in our embracement of
diversity, in all its many forms.
Today, the TDK Group has over 250 locations operating
in more than 30 countries and regions worldwide. We have in
excess of 100,000 employees, about 90% of whom are
non-Japanese. This global company has many team
members (employees) working all over the world who have
outstanding abilities and unique personalities, and new value
is generated every day as each of these individuals fully
demonstrates their capabilities.
I personally spent more than 20 years of my 30 years
with TDK working overseas, and have experienced for myself
the power of diversity in multiple countries. Particularly
significant were the approximately five years I spent, just
before becoming president, in charge of the sensor
application products business (as business company CEO).
The sensor business is composed of seven Group
companies, and is a global business with operations in 13
countries and regions—something of a “mini TDK.” Intending
to rebuild the business, which was struggling at the time, I
moved its business division to the United States and relocated
there myself, spending about four years engaged in a series of
trial-and-error efforts with different local team members.
Eventually, we succeeded in bringing the business into the
black, a result I think we accomplished thanks to our bringing
together the collective abilities of our diverse members. That
experience has given me a great deal of confidence as I
undertake my duties today as leader of the Group.
The strength of diversity lies not simply in having a lot of
individuals with different personalities and abilities. It requires
a connection, harmony, a fusion. In that sense, I believe
TDK’s true strength as an enterprise is an organizational
culture that allows our diverse human resources to maximize
their individuality, motivation, and abilities. Having people
from different backgrounds and cultures understand one
another through close communication, freely exchanging
their individual ideas and sharing technology and
information—that is what enables us to discover new
technologies, business ideas, and even solutions to
intractable issues.
Since becoming president, I have visited a wide range of
our business sites, both in and outside of Japan, and have
engaged in dialogue with team members at each of those
locations. This has also allowed me to reaffirm that, no
matter where I go, a strong culture is being nurtured that
allows those team members to exert their individuality. Those
visits have also convinced me that if we can manifest the
power latent in TDK, we can continue to generate new value
for society.
Another reason I sense such enormous potential in TDK is
the long-term growth prospects for the business. Looking
back over the past two years, while we have seen an
economic recovery associated with a normalization following
the COVID-19 pandemic, we also saw conditions
surrounding our business change dramatically, from
increased geopolitical risks raised by Russia’s invasion of
Ukraine, soaring energy prices driven by that invasion, and a
sudden, progressive drop in the value of the yen. Many of
these factors also represented headwinds for the company.
That said, seen from a more expansive, long-term view,
we believe the world has continued to transform in line with
two major trends. One is the green transformation (GX), a
fundamental reevaluation of the role of energy as part of
efforts to realize a decarbonized society. The other is the
digital transformation (DX), in which information and
communication technologies and AI will greatly alter the
nature of our society, industries, and daily lives.
TDK has a firm grip on core fields in GX, such as our
rechargeable battery business. We have established the
largest share of the global small capacity battery market, and
through our joint ventures with CATL, aim to expand our
share of the medium capacity battery market as well.
Meanwhile, taking the sensor business I mentioned
earlier as an example, sensors are among the most important
devices in the advancement of DX. This is because to
analyze and explicate various physical phenomena in the
real world using computers, it is necessary to first convert
those phenomena into digital data through the use of
sensors. Focusing on this field, with its presumed long-term
growth potential, we began several years ago to make
aggressive investments, including M&A, that today have
resulted in our sensor business growing to become one of
TDK’s pillar businesses.
The past two years have reinforced a sense of
unlimited potential
A product portfolio essential to transformation
in the era of GX and DX
Message from the President & CEO
07
TDK Integrated Report 2024
About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
Growth Strategies
Contents
Going forward, we can look forward to an even greater
expansion of the areas in which sensors play a role. Edge
computing, in which data is processed at the applications
closer to data sources, is expanding across a variety of
fields in order to reduce the processing burden on data
centers, and TDK is moving to launch a new business in
response to this trend.
These two trends will, without a doubt, accelerate even
further going forward. In response, TDK can continue to
contribute by providing a diverse range of technologies,
products, and solutions built on its accumulated technology.
While there is no end to the TDK products we might list as
assisting in the advancement of GX and DX, in addition to
existing products, we continue to research and develop new
products and technologies in response to the new needs of
society, and I believe that going forward, TDK can continue
to maintain and expand its competitive advantage in each of
these markets.
In FY March 2022, the TDK Group began advancing Value
Creation 2023, the previous Medium-term Plan, which
reached its final fiscal year in FY March 2024.
When I first assumed the post of president in April 2022,
the company was highly reliant on profit from small capacity
batteries. For TDK to achieve a new growth stage (a “second
chapter” of growth), I believed we needed to try to diversify
our revenue sources, and we have thus focused on growth in
three priority businesses: Strengthening our business in
medium capacity batteries; growth of the sensor business;
and regrowth of the passive components business. In my
assessment, we have made a certain amount of progress in
all three of these areas over the three years of the previous
Medium-term Plan.
In the medium capacity battery business, the joint
ventures we launched two years ago with CATL has now
begun full-scale operations, and has begun solidifying the
foundations for dramatic growth in the near future. Similarly,
the passive components business has seen growth in
multilayer ceramic chip capacitors (MLCCs) and inductors as
new revenue sources. In the sensor business, TMR and
MEMS sensors are beginning to take shape as contributors
to overall profit.
With efforts to diversify revenue source progressing, we
were also able to more flexibly allocate capital in response
to changing conditions in each business. In terms of cash
flow, we were able to achieve one of our financial targets—
positive free cash flow (FCF) after shareholder returns for
the cumulative three-year period—despite a ¥110.0 billion
advance payment to ensure the long-term stable supply of
cobalt and other battery materials in the first fiscal year of
the previous Medium-term Plan. This was in part due to an
improvement in working capital and increased cash inflow
from the sale of equipment to our joint ventures in medium-
capacity batteries. With regards to capital investment, we
ended up slightly above our cumulative three-year plan of
¥750.0 billion, at ¥785.6 billion, but in my estimation, this
allowed us to make solid advance investments in
businesses where growth can be expected.
While we have thus been able to advance restructuring
in our business structure and continue to invest for the
future, a number of issues (challenges) remain to be
overcome if TDK is to become a more resilient enterprise. I
think the most significant issues is improving profitability.
Unfortunately, we failed to reach either of the two targets
set out in the previous Medium-term Plan—operating profit
of 12% and ROE of 14%. This was in part due to the rapid
stagnation of the HDD market resulting in a decline in
profitability for related businesses, but another major factor
was that, over the three years of the plan, we did not make
as much progress as expected in transforming magnets
and other turnaround businesses. This is something we
have reflected on in our new Medium-term Plan started in
FY March 2025, under which our policy will be to focus on
executing proactive business portfolio management.
Before describing the new Medium-term Plan, I would like to
talk about the background and intent behind our Long-term
Vision, which was announced at the same time. In a word,
our objective in formulating this Long-term Vision was to
present to those both in and outside the company a concrete
image of our vision for TDK over the next 10 years.
Over the past two years, the social and economic
environment in which TDK does business has undergone
dizzying changes that might best be described as an
upheaval. These changes in conditions, taking place over
short-term cycles, are likely to arise in the future as well,
across a variety of fields. For TDK as a global company to
target sustained growth in the midst of those changes, it is of
course crucial that we work to develop and implement
detailed, three-year Medium-term Plan. I have come to
Targets for
FY3/24
Results for
FY3/24
Net sales
Operating profit margin
ROE
FCF after shareholder
returns
Capex
(cumulative 3 year)
¥2,000.0 billion
12.0%
14.0%
Positive
¥750.0 billion
¥2,103.9 billion
8.2%
7.9%
¥52.9 billion
¥785.6 billion
Targets and results in KPIs of the previous
Medium-term Plan
Defining a Long-term Vision for what
we want to be 10 years from now
Summary of Value Creation 2023,
the previous Medium-term Plan
Message from the President & CEO
08
TDK Integrated Report 2024
About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
Growth Strategies
Contents
strongly believe that doing so is premised on taking a long-
term view to determine what sort of future we should aim to
achieve for ourselves, which in turn will require thinking about
a roadmap for getting there for the company as a whole.
This is an issue that we have frequently discussed at our
monthly Board of Directors meetings. Naturally, verifying and
closely examining quarterly progress with our Medium-term
Plan is an important management responsibility. Encouraged
by our outside directors, however, who insisted the board
should also spend time discussing how the entire Group will
move ahead going forward, and set goals from a longer-term
perspective, myself and the rest of management worked
together through numerous discussions to clarify a vision for
TDK. That became the Long-term Vision presented here.
Transformation, the word that forms the core of that
vision, incorporates two meanings. One represents our desire
to continue contributing to society as society itself continues
to transform into the future. The other represents our
commitment to continuing to transform ourselves to maintain
those contributions. In the sense that we will continue to
transform ourselves in order to contribute to society over the
long term, this Long-term Vision might be seen as a resetting
of our founder’s aspiration to “contribute to culture and
industry through creativity,” as presented in our Corporate
Motto, as a goal for the future.
The new Medium-term Plan, launched this spring, was
formulated based on the question of what we need to
accomplish now, backcasting from “TDK Transformation,” the
Long-term Vision. The period of the new Medium-term Plan,
as part of a ten-year span going forward, is positioned as a
time to strengthen our business foundations as we move
toward our envisioned future. I believe the new Medium-term
Plan can be divided broadly into three key points.
The first is strengthening management focusing on
cash flows. This is based on increasing operating cash flow
captured from business activities, or “earning capability.” To
date, the Group has responded to changes in business
environment by making use of M&A opportunities while also
flexibly rearranging its business portfolio to increase the
earning capability of the Group as a whole. Our operating
cash flow, which maintained a level of ¥100.0 billion on a
moving average basis over the past three years, has
improved to a current level of about ¥200.0 billion. Our goal
under the new Medium-term Plan is to raise this level
further, to ¥340.0 billion.
The second key point is to enhance business portfolio
management (emphasizing ROIC). For about the past 20
years, TDK has engaged in financial management with an
emphasis on cost of capital, using a proprietary index we call
TDK Value Added (TVA). In FY March 2022, we introduced
the matrix for inclined allocation of capex, and have worked
to optimize investment allocations by stratifying our
approximately 80 cash-flow business units (CBUs) along two
axes: BizROA (ROIC) and business potential. Further, starting
with the term of the new Medium-term Plan, we will apply
this two-axis map of investment allocation to our business
portfolio management as well. For businesses falling below
• Contribute to the transition towards a sustainable
future by accelerating the transformation of
society and advancements in technology enabled
by electronic devices developed through leveraging
cutting-edge innovation in materials, processes,
and software technology.
• Become the No.1 partner growing alongside our
worldwide customers by pursuing continuous
“transformation”.
Long-term Vision TDK Transformation
Overview of the new Medium-term Plan
Message from the President & CEO
09
TDK Integrated Report 2024
About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
Growth Strategies
Contents
the minimum hurdle rate of 10%, we will move to quickly
conduct appropriate monitoring, and swiftly execute
measures aimed at a turnaround. At the same time, we plan
to strengthen investment allocation in growth areas.
These measures are based on our reflecting on the fact
that improvements to turnaround businesses did not
progress as expected during the period of the previous
Medium-term Plan, and I refer to them collectively as
proactive business portfolio management. By engaging in
proactive business portfolio management, including the
transfer of individual business units to the best owner, we aim
to achieve a company-wide ROIC of 8% or more and
operating profit of 11% or more in FY March 2027, the final
fiscal year of the new Medium-term Plan.
The third theme of the new Medium-term Plan is
strengthening “pre-financial capital.” Pre-financial capital is
TDK’s unique name for what is called non-financial capital.
We view all initiatives related to technological capability,
human capital, our customer base, organizational capability
and so on as leading to the creation of financial value in the
future, and thus I decided to refer to these as “pre-financial”
rather than “non-financial.”
TDK’s founding began with ferrite, and thus we call the
expanded range of products and technologies that have
grown from that single element the Ferrite Tree (see page 29).
In that sense, the pre-financial activities as noted earlier can be
said as equivalent to the roots of this tree. With these roots
planted firmly in the ground, the tree can spread its branches
and grow to even greater heights. To achieve the Long-term
Vision we have established, we intend to further strengthen
sharing within the company of an awareness of the importance
of pre-financial capital, which forms the roots of our business
activity, connecting that in turn to a new value creation process.
Of the various types of pre-financial capital, I place the
greatest emphasis on people, because people are the root of
value creation that supports sustained corporate growth. As I
noted at the beginning, TDK’s strength lies not only in the
diversity of its human resources, but in an organizational
culture that allows us to maximize the hidden power of that
diversity. Of our current workforce of approximately 100,000
team members, about 80% have joined us through M&A,
and even in the case of an acquired company, we respect
the culture they have developed. Our approach of proactively
learning whatever we can from the other party now
permeates our entire Group.
Underlying this approach is a culture of “functional
equality” that has been handed down at TDK over the years.
Based on the belief that there are no hierarchies among the
functions and roles of the individual divisions, everyone,
regardless of position, can respect one another on an equal
footing, and can say what needs to be said. TDK has long
valued this kind of organizational culture. We believe that the
fusion that grows out of the meeting of different cultures and
Corporate value
Maximize FCF generation
−
Cost of capital (WACC)
Expected growth rate
Key points
Strengthen management
focusing on cash flows
Evolve the Ferrite Tree
(Pre-financial capital)
Enhance business
portfolio management
(Emphasizing ROIC)
1
2
3
P.26
P.29, P.43
P.27
(¥ billion)
Three-year average
FY3/25–FY3/27
¥340 bn
Level
FY3/2000
FY3/05
FY3/10
FY3/15
FY3/20
FY3/25
0
50
100
150
200
250
300
OCF supported by HDD-related business
OCF supported by rechargeable battery business
The small capacity battery business grew
Earning source trends
Revenue sources to
be diversified
Profitability of the
passive
components
business
deteriorated
Profitability of the
passive
components
business
improved
Profitability of the
passive
components
business
improved
2002
Deterioration of business
environment due to burst
of IT bubble
2007
The recording
media business
sold
2009
Deterioration of
business environment
due to the global
financial crisis
2017
The SAW device
business sold to
Qualcomm
2022
Established the joint ventures
(JVs) with CATL for medium
capacity batteries
2024–
Active growth investment
2017
Sensor
Acquired
InvenSense and
ICSense
2015
Sensor
Acquired
MICRONAS
2008
Electronic components
Acquired EPCOS
2005
Lithium-ion batteries
Acquired ATL
From FY3/2000
Introduction of TVA (EVA)
From FY3/11
Introduction of BizROA (ROIC)
From FY3/22
Introduction of the
matrix for inclined
allocation of capex
From FY3/25
Introduction of business portfolio
management
2023
ML automation
(Software)
Acquired
Qeexo
13%
4%
5%
58%
14%
Sales proportion (%)
5%
Minimum
hurdle rate
over 10%
Profitability
Low
profitability
Growing
Profit enhancement
Next generation
Challenging
Strategic restructuring
Profit base
BizROA (ROIC)
Business potential
Businesses to
be intensively
monitored
High
Low
High
Low
Plasma application
Ferrite
core
Ferrite
core
Core
memory
Multilayer
ceramic
capacitor
Ring varistor
Disc type ceramic capacitor
Tx coil unit (Plating)
Noise suppressing sheet
Optical disk
VHS
Multilayer
inductor
Multilayer
inductor
Audio
cassette
tape
Audio
cassette
tape
TMR sensor
Edge AI
Camera module actuator
Suspension
Film capacitor
Lithium-ion battery
Radio wave
absorber
Flash memory applied device
Thin-film RF
component
Thin-film
inductor
Motion
sensor
EMC test
system
Thin-film
magnetic
Head
Thin-film
magnetic
Head
PowerHap
PiezoHapt
NTC sensor
Cera Charge
Piezo actuator
Multi-layer
integrated
device
SAW filter
Multilayer NTC
thermistor
Multilayer RF
component
DCDC converter (μPOL)
Bidirectional Converter
Wire wound EMC filter
Wire wound inductor
Power
supply
Transformer
NTC thermistor
Ferrite
Ferrite
Group’s
culture
Materials × Processes technology
Human capital
Organizational
capability
Customer base
New Medium-term Plan: Key points
Greater focus on strengthening
pre-financial capital
Message from the President & CEO
10
TDK Integrated Report 2024
About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
Growth Strategies
Contents
personalities is, in fact, what drives the creation of innovative
technologies and products.
We have worked rigorously to create systems for taking
full advantage of diversity in terms of Group governance as
well. As of June 2024, half of our corporate officers consist of
non-Japanese nationals. In addition, viewing Empowerment
and Transparency as a basic policy, we have established
Global Common Regulations as rules that every team member
of the Group must follow and apply them to effective
governance. At the same time, we have actively promoted
empowerment to regional headquarters and core subsidiaries
to ensure individuals can maximize their own personalities and
abilities. By giving regional headquarters not only management
functions but also marketing and R&D capabilities, we are
working to evolve into an autonomous, decentralized
organization capable of developing more dynamic strategies.
Among our initiatives aimed at further strengthening
corporate governance, beginning in June 2024 our directors
will be structured with a majority of outside directors. To
ensure management has an even stronger understanding of
the importance of pre-financial capital, we have added
pre-financial indices, including CO2 emissions reductions and
Team Member Engagement Survey scores to the indices
linked to corporate officer remuneration.
One other factor I emphasize in pre-financial capital is
“quality.” This is one reason why, since becoming
president, I have continued to call on the entire group to
put “Quality First.”
Quality in this case refers not only to product quality, but
quality in a much broader sense, encompassing, for example,
streamlining production or improving yield rates, strengthening
marketing, or improving working environments and enhancing
employee motivation. Since this “quality” is something that
can be improved and enhanced through our own individual
efforts, regardless of changes in external conditions, we can
refer to it as our own capabilities. I treat these own capabilities
as one more area of potential for growth.
For example, in FY March 2024, the energy application
products business saw net sales decline 4.4% year on year
due to lower smartphone production and intensifying price
competition, yet also saw a significant improvement in
operating profit, which was up 32.7% year on year. This was
due the automation of production at each site and the result
of improved yield rates through the use of DX (an
improvement in quality costs)—in short, achievements based
on these own capabilities. Going forward, I think that if all of
our business around the world were to reassess their own
positions, they might discover any number of things they can
or should do to improve their own capabilities.
To respond to the global rise in geopolitical risks, the
Group is moving quickly to optimize its manufacturing sites
and reform its supply chain, but those efforts come with a
dilemma in the form of rising costs. I hope that by seeking to
strengthen our own capabilities, we will be better able to
absorb those cost increase, and maintain and improve our
global cost competitiveness.
TDK, born about 90 years ago as a venture company,
continues to hand down its legacy spirit of taking on
challenges without fear of failure or risk, a spirit that is shared
throughout the entire company. In that sense, my
understanding of TDK is as a giant venture company with
over ¥2 trillion in sales and 100,000 employees.
As I noted in the previous Integrated Report, if we were
to liken ourselves to a group of musicians, I think a big jazz
band, and not an orchestra, would be a better metaphor for
TDK, which brings together players with diverse and varied
skills, technologies, and personalities. As the CEO of TDK
United, I am not the conductor of this big band, but its leader
and manager. Each team member must be personally
invested in doing what they can and should do as their own
business, which we call “Jibungoto” in Japanese, while my
job is to work to ensure they can demonstrate their creativity,
motivation, and aspirations in the best way possible.
Business environment will continue to change going
forward, including unpredictable upheavals such as the
COVID-19 pandemic. We will continue moving forward
steadily even as we respond flexibly to such changes, step-
by-step in accordance with our current Medium-term Plan,
while keeping our eyes firmly on what we want to be in the
future as set out in our Long-term Vision. To repeat, I believe
that TDK has unlimited potential.
Finally, I would like to say one more thing to our
shareholders and investors: I feel the enormous potential I
sense in TDK has not yet been adequately shared with each
of you. I think a reason for this is also a lack of
communication between ourselves and all of you.
Therefore, going forward we will expand the range of
and opportunities for dialogue with our shareholders and
investors, which I hope will ensure that as many of you as
possible can come to understand the unlimited potential of
TDK that I myself sense. We look forward to your continued
warm support. Thank you.
To our stakeholders
Message from the President & CEO
11
TDK Integrated Report 2024
About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
Growth Strategies
Contents
TDK Transformation
Long-term Vision
Key Issues (Materiality)
13
17
Chapter 1
TDK’s
Long-term Vision
12
TDK Integrated Report 2024
About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
Growth Strategies
Contents
TDK formulated the Long-term Vision “TDK Transformation,”
based on the Corporate Motto “Contribute to culture and
industry through creativity” and Corporate Principles “Vision,
Courage, Trust,” as an expression of our aspirations for the
next 10 years. This Long-term Vision incorporates
transformation in the sense of contributing to the
transformation of society as well as the sense of internal
transformation, that is, the continuous transformation of
TDK itself. TDK Transformation incorporates our desire to
accelerate these two cycles and contribute to the realization
of a sustainable future.
Until now, TDK has contributed to social transformation
by providing products that are essential to the applications
that drive industry in each era including audio and video
devices, PCs, and smartphones.
The transformation of society, including green
transformation (GX) and digital transformation (DX), is
expected to accelerate even more in the future. In conjunction
with this, TDK will continue to expand the areas in which it is
able to make contributions.
In accordance with this Long-term Vision, we will
accelerate the transformation of society and advancements
in technology enabled by electronic devices developed
through leveraging cutting-edge innovation in materials,
processes, and software technology, contributing to the
transition toward a sustainable future. We will also continue
our own transformation to become the No. 1 partner
growing alongside our worldwide customers.
• Contribute to the transition towards a
sustainable future by accelerating the
transformation of society and
advancements in technology enabled by
electronic devices developed through
leveraging cutting-edge innovation in
materials, processes, and software
technology.
• Become the No.1 partner growing
alongside our worldwide customers by
pursuing continuous “transformation”.
“TDK Transformation,” Our Long-term Vision
Long-term Vision
13
TDK Integrated Report 2024
About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
Growth Strategies
Contents
TDK has focused on applications that can impact on social
transformation as the “Seven Seas.”*
Moving forward, in a society equipped with 6G
networks, the Metaverse, smart cities, clean energy,
electrified vehicles, and various devices will become
terminals that are connected to networks. This means that
data transmission volume will increase dramatically. In such
a society, the global electricity supply will be outpaced by
the power consumption of data centers, creating demand
for the improved energy efficiency of various electronic
components. We expect we will see the continued growth of
domains that can benefit from high-value-added electronic
components and materials that contribute to increased
energy efficiency by achieving low power consumption, size
reductions, and low CO2 emissions.
Realize a circular
economy
Renewable
energy + Energy
storage systems
Ultra-high accuracy sensors
that back safety operation
Wearable
devices
xEVs
connected with
smart grids
AI-powered
smartphones
Metaverse
implemented
in a society
Power supplies for
LED displays improve
conversion efficiency
Magnetocardiograph (MCG)
Predictive
maintenance
preventing
anomalies
Improve efficiency in
data processing
Autonomous driving
helping a sustainable
traveling
Social
Transformation
Advancement of
Technology
TDK
Transformation
Decarbonization, energy saving,
energy storage
AI, automation & labor-saving
*Seven Seas The focal areas where TDK’s applications are dominantly present. Please see the website for more information. https://www.tdk.com/en/about_tdk/seven-seas/index.html
Image of social transformation TDK projects
Green
Transformation
Digital
Transformation
Capability of
management
transformation
Strategic
position
Industrial robots helping
labor-saving
Long-term Vision
Social Transformation
14
TDK Integrated Report 2024
About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
Growth Strategies
Contents
our Company’s business model, which consists of two key
drivers: The capability of management transformation—how
to win, shown on the left, and the strategic position—where
to play, shown on the right. With strengthening both the
capability to envision the future to identify long-term trends of
society and technology, and the capability to execute our
vision, on the foundation of transforming human capability by
diversity, we will constantly secure investment capacity and
implement optimal investment, which enable us to enhance
We believe that it is important to accelerate transformation
for TDK as a whole for continuous contributing to social
transformation. Over the years, we have used both organic
growth and M&A to refresh our business portfolio and achieve
business growth. We will contribute to the transition towards a
sustainable society as the No.1 partner based on establishing
leading position by electronic devices developed through
leveraging cutting-edge innovation in materials, processes and
software technology in organic growth and M&A. This shows
capability of management transformation. We will contribute
to the realization of a sustainable society to elevate our
positioning. We will accomplish this by evolving and
accelerating the cycle of rapidly identifying customer needs
and providing broad-based solutions, from unique materials
to systems. We believe that TDK’s unique values and
corporate culture, which we have developed for a long time,
will support the growth of “capability of management
transformation” and “strategic position.”
Capability of management transformation—How to win
Constant securing of investment capacity
and optimal investment
Capture needs of market/customer to
realize First-to-Market
Dialogues with
customers
Deepen existing
strengths
Provide solution from conceptual base
Explore
new strengths
Human resource transformation
Transformation through promoting and cultivating diverse pool of human
resources to further enhance competitive advantage
Capability to envision
the future
Capability to foresight from
the long-term
(Tech. x Market)
Capability to execute
Proactive business
portfolio management
High level of quality
Optimization of production technology
Strategic position—Where to play
Customers
First-to-Market
Software
HMI
Environmental
adaptability,
ultra-low power
consumption
and decarbonization
Technologies of
thermal management,
EMC, and
modularization
Miniaturization,
lightweight,
and flexibility
Improved reliability,
innovation in new
raw materials and
processes
System
Module
Parts
Material
Market-in
Concept-out
TDK
TDK Venture Spirit
Ensuring empowerment
and transparency
Respect for
acquired companies
Cultures learning from
each other on a global base
Integrating top-down
and bottom-up approaches
Functional
equality*
TDK’s business model
Earning
capability
&
Investment
capability
*Functional equality - is one of our values to encourage discussions in an open and equal atmosphere, based on functions (roles) rather than hierarchy.
Long-term Vision
TDK’s Transformation
15
TDK Integrated Report 2024
About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
Growth Strategies
Contents
16
Outcome
Impact
Output
Products and services
INPUT
Pre-financial
capital
Activity
Business model
TDK Transformation
Accelerating transformation for a sustainable future
Materials x Processes technology x Software technology
Human capital
Organizational
capability
Customer base
Photo acoustic
glucose
monitoring
RF devices for
quantum computer
InCellSense
Plasma application
Disc type
ceramic capacitor
Thin-film
magnetic
Head
Thin-film
magnetic
Head
Audio
cassette
tape
Audio
cassette
tape
Ferrite
core
Ferrite
core
Core
memory
Multilayer
ceramic capacitor
Multilayer
inductor
Multilayer
inductor
Ring varistor
VOC multi gas sensor
Tx coil unit (Plating)
Noise suppressing sheet
Optical disk
VHS
NH3 fuel cell
ESS
TMR sensor
FCLM
SpinPD
Neuromorphic device
Edge AI
Bio magnetic sensor
Camera module actuator
Suspension
Film capacitor
Lithium-ion battery
Radio wave
absorber
Flash memory applied device
Thin-film RF
component
Motion sensor
Thin-film
inductor
EMC test
system
Cardio-
vascular
monitoring
PowerHap
PiezoHapt
CO2 gas sensor
NTC sensor
Multilayer NTC thermistor
Cera Charge
Piezo actuator
Multi-layer
integrated
device
SAW filter
LN thin-film
Multilayer RF
component
DCDC converter (μPOL)
WPT
Bidirectional Converter
Wire wound EMC filter
Wire wound inductor
Power supply
Transformer
NTC thermistor
New Business
Ferrite
page 29
Ferrite Tree
page 43
Pre-financial Capital That Backs TDK’s Value Creation
Capability of
management
transformation
Strategic
position
Decarbonization,
energy saving,
energy storage
AI, automation &
labor-saving
Green
Transformation
Digital
Transformation
• Realize a zero-carbon society
• Improve energy efficiency
• Realize a circular economy
• Industrial revolution of the skies
• Close the digital divide
• New experiences through
the social implementation of
metaverse
• Predictive maintenance
preventing anomalies
• Improve data efficiency for
a wealthy life
• Extension of healthy life
expectancy
Value Creation Process to Realize the Long-term Vision
Long-term Vision
TDK Integrated Report 2024
About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
Growth Strategies
Contents
From the perspective of achieving our long-term vision
based on our Corporate Motto and Corporate Principles, we
took into consideration our long-term strategies as well as
risks and opportunities and reviewed the key issues
(materiality) that have a real impact on the value creation
capability of the TDK Group.
In the past, materiality was positioned and selected as
CSR key issues, but the new materiality was extracted from
our long-term strategy for enhancing corporate value, and
the action strategy is reflected in our new Medium-term
Plan, which started in FY March 2025.
The materiality of the TDK Group is premised on the
long-term creation of value for not only investors, but all
stakeholders including customers, suppliers, and team
members (employees) and focuses on issues that help
maximize TDK’s corporate value.
Key issues (materiality) of TDK
Key issues (materiality) of TDK
Value creation and establishment of competitive advantage through business activities
Strengthening of the management foundation that envisions and realizes the future
Summaries of previous materiality are posted on the sustainability website.
https://www.tdk.com/en/sustainability/tdk_sustainability/tdk-materiality/updates/
Create customer value and
build strong relationships
• Build, maintain and deepen trust
with customers
• Access in-depth sources of
customer needs
Advance group governance
• Improve the business portfolio
continuously
• Empowerment & Transparency
Address environmental and
social issues
• Respect human rights
• Address climate change
Contribute to social
Transformation through R&D
• Continue commercialization of
advanced technology
• Realize intellectual property
investment and utilization that
contributes to business
Stabilize supply of high-quality products and
increase production efficiency
• Maintain the capability to introduce products into market quickly
and to ramp up mass production
• Improve predictability by sharing know-how
• Pursue zero defect and promote in-house production
• Maintain diversity in products, technologies and involved markets
Transformation through promoting and cultivating diverse pool of
human resources to further enhance competitive advantage
• Promote diversity, equity and inclusion driven by inclusive leadership practices
• Develop organizational capability to enhance innovation and efficiency
• Improve team member (employee) health and engagement
17
TDK Integrated Report 2024
About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
Growth Strategies
Contents
Key Issues (Materiality)
Area
Theme
Background of materiality setting and vision
Main KGIs/KPIs*for long/mid- term
Target* for mid-term KPI
Human
Resources
Transformation
through promoting
and cultivating
diverse pool of
human resources
to further enhance
competitive
advantage
( P.56)
Promote diversity, equity and inclusion
driven by inclusive leadership practices
Ensure the diversity of the TDK Group’s human resources and promote leadership
practices that enable each individual to fully develop their abilities and strengths.
L Improve diversity in management team
M Female ratio of participants in Global Management Development Programs
30%
Develop organizational capability to
enhance innovation and efficiency
Develop business entrepreneurs who can identify market needs and propose value
to our customers to maximize the use of the TDK Group’s assets and enhance the
organization’s ability to create new businesses.
L No. of business entrepreneurs developed **
M Number of overall participants in Global Management Development Programs
500 participants or more
Improve team member (employee)
health and engagement
Promote an environment in which team members (employees) can work
enthusiastically to ensure the diversity of the TDK Group’s human resources by
enhancing team members (employees) engagement and health so that each
individual can fully demonstrate their abilities.
L Improve Engagement survey score
M 1) Engagement survey measurement (communication)
2) Participant rate of engagement survey
1) 75pts. or more
2) 80% or more
Governance
Advance group
governance
( P.27, P.68)
Improve the business portfolio
continuously
Optimize the corporate-wide business portfolio by identifying areas that need to be
put in place.
L Weighted average score of business portfolio
M Amount of loss reduction in businesses with operating losses
Target achieved: 100%
Empowerment & Transparency
Strengthen risk management by strengthening group governance and introducing a
new ERM system, which TDK’s governance is based on a policy of Empowerment &
Transparency.
L No. of significant Global Common Rule (GCR) violations
M No. of follow-ups for significant GCR violation
100%
Environmental
and Social
Issues
Address
environmental and
social issues
( P.58, P.65)
Respect human rights
Respect the human rights of our stakeholders based on the values of the Code of
Conduct, recognize the potential impact of all corporate activities on human rights,
and promote activities to mitigate such impact.
L Mitigated/corrected significant risks from supplier audits
M Ratio of progress in planning annual onsite audits
100%
Address climate change
Strengthen our activities to reduce greenhouse gas emissions and promote
measures to address climate change in order to realize a net-zero CO2 emissions
society by 2050.
L CO2 net emissions
M 1) Scope 1+2 emissions reduction
2) Basic unit for energy reduction
1) 42% (Term FY March 2031 goal
compared to FY March 2022)
2) 15.7% (Term FY March 2027
goal compared to FY March 2021)
Customer
Create customer
value and build
strong relationships
( P.51)
Build, maintain and deepen trust with
customers
Aim to increase customer satisfaction and expand our market share by building,
maintaining, and deepening relationships of trust with our customers, taking
advantage of our extensive track record of business with industry-leading customers.
L Customer satisfaction survey score**
M Resolved and feedbacked rate for issues identified from the survey**
100%
Access in-depth sources of customer
needs
Through strengthening our ability to envision the future, enhance our ability to create
businesses from both technology and market perspectives, and expand sales in new
applications.
L No. of future pillar businesses to be created through collaboration with
related divisions
M Launch of new business divisions
Target achieved: 100%
R&D
Contribute to
social
Transformation
through R&D
( P.44)
Continue commercialization of
advanced technology
Create future core businesses through collaboration with related divisions to search
for technological seeds that will create new markets and cultivate new customers for
the realization of social transformation.
L No. of themes transferred for the creation of future pillar businesses by
promoting collaboration with related divisions
M No. of theme selected and started
4
Realize intellectual property investment
and utilization that contributes to
business
Create value by linking our intellectual property investment strategy to the goals of
our business and R&D strategies: business success and R&D strategy success.
L Percentage of intellectual assets (patents) tied to IP strategy for business
and R&D themes
M Elaborating IP strategy
Target achieved: 100%
Design
Production
Stabilize supply of
high-quality
products and
increase
production
efficiency
( P.49, P.50)
Maintain the capability to introduce
products into market quickly and to
ramp up mass production
Maintain and improve the ability to bring products to market quickly and increase our
competitive advantage by creating innovative ideas and ramping up mass production
system based on an aggressive culture.
L Success rate for new product introduction**
M Completion rate of quality improvement activities of new product samples**
100%
Improve predictability by sharing
know-how
Continuously improve predictability up to mass production to enhance manufacturing
capabilities for launching new products and improve the new product launch rate.
L Percentage of new products launches achieved**
M Progress on new product development plan**
Plan progress rate: 100%
Pursue zero defect and promote
in-house production
Improve our competitive advantage by making it difficult for other companies to enter
the market and imitate us, through improvement activities aimed at achieving a zero
defect rate and thorough in-house production of production tools and jigs, as well as
in-house production of product components.
L Total failure cost ratio
M No. of completed various types of quality compliance training
3 per fiscal year
Maintain diversity in products,
technologies and involved markets
Aim to expand the range of our proposals by maintaining a wide variety of markets
and product lineups, as well as the diversity of process technologies. Further
promotes collaboration strategically and proactively.
L Market share of specific business**
M Score of customer satisfaction survey**
Target achieved: 100%
The following have been set as KPIs for materiality.
Key Issues (Materiality) List
* KGIs for L =Long-term, KPIs for M =Mid-term, Unless otherwise specified, long-term is assumed to for approx. 10 years and mid-term approx. 3 years. ** A certain business company only
Key Issues (Materiality)
18
TDK Integrated Report 2024
About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
Growth Strategies
Contents
Previously TDK’s materiality was set from a perspective emphasizing CSR. Through the latest revision, aimed at
enhancing corporate value in the medium to long term, TDK has made its materiality easier to understand for
stakeholders by positioning materiality as an important domain toward the realization of its Long-term Vision
embodying its Corporate Motto and Corporate Principles. In the process of compilation, TDK has narrowed down
its salient points to reflect the views of stakeholders both inside and outside the company. Going forward, it may
perhaps be necessary to add materiality if there are shortages, prioritize issues, and change and respond. In
practice on the ground, it is the job of management to clarify what “to do” and what “not to do” in efforts to
address materiality and sort out what is feasible. In the sense that TDK has begun its evolution toward corporate
value management, the latest systemic uplift deserves positive evaluation. I hope that it yields results and rises to
the level of being a model for other companies.
The three experts engaged in dialogue with Shuichi Hashiyama,
TDK Corporate Officer and General Manager of the Corporate Strategy HQ.
Excellent framework takes shape but also important to review flexibly in the light of practice
Koji Nitto
Regarding the composition of TDK’s newly set materiality, it is well arranged and easy to understand. At the top
they place “Establishment of value creation and competitive advantage through business activities,” and at the
bottom they have “Strengthening of the management base to envision and realize the future.” Investors no
doubt will be watching closely how future cash flow will be created through materiality. While incorporating the
TDK style, it will be important to clarify the relationship between overall strategy and KPIs. In addition, if the KPIs
do not function as expected, TDK will be required to verify what has caused the bottleneck and utilize the
results in the next plan. Furthermore, to bridge the gap between corporate executives and the capital markets, it
will be necessary to engage in appropriate communication while cleverly explaining impact materiality in an
integrated manner.
Hoping for the capability to link KPIs and sustained earning power and to realize long-term strategy
TDK’s newly set materiality were derived by integrating financial and impact factors, and as a result, I feel that they
were carefully analyzed and well arranged. I have no objection to a company setting materiality by focusing on the
long-term maintenance of competitiveness. However, the viewpoint that creating a positive impact on the
environment and society, which is the foundation of economic activity, is important too. It would be even better if
TDK showed its commitment to the issues of climate change and human rights as well. To incorporate DE&I into
materiality, it is important to consider what indicators should be set and by what methods they should be
managed. On the business side, the supply of products capable of contributing to the reduction of CO2 is
considered to be the source of TDK’s competitiveness, and there is a possibility of entry into such fields as green
transformation (GX). I look forward to seeing TDK make appeals socially by putting forth qualitative stories and also
take active steps to tackle such challenges as human rights issues in the supply chain.
Looking forward to steady efforts based on strong commitment and specific indicators and
management techniques
Nitto Koji Office (Former
Director, Senior Managing
Executive Officer, CFO, and
Senior General Manager of
Global Strategy HQ of
OMRON Corporation)
Minoru Matsubara
Executive Officer in charge
of the Responsible
Investment Division,
Resona Asset Management
Co., Ltd.
Takeshi Mizuguchi
President, Takasaki City
University of Economics
TDK’s key issues (materiality), which plot the enhancement
of corporate value and adopt the concept of synchronizing
the sustainability of both society and company, comprise
financial materiality (important items for TDK) and impact
materiality (important items for stakeholders). After deriving
financial materiality and impact materiality, we closely
examined the two and selected our materiality.
Process of identifying financial materiality
Financial materiality was derived using a backcasting
perspective based on our Long-term Vision by taking into
consideration the sources of long-term competitiveness that
were discussed and identified by top management,
corporate officers, and next-generation candidates for
director positions as well as the items derived from
indicators that were recognized as being significant with
PBR through model analysis of the quantitative relationship
between general ESG indicators and PBR, and
management risks that should be emphasized in enterprise
risk management (ERM).
Process of identifying impact materiality
Impact materiality was derived by creating a long list based
on the European Sustainability Reporting Standard (ESRS)
and narrowing down the items.
To confirm the appropriateness of and any shortages in
the new materiality from the perspective of stakeholders,
we conducted dialogues with three experts in February
and March 2024 to obtain their
wide-ranging opinions of the
materiality draft under
consideration by TDK.
Materiality identification process
Comments of the experts
Key Issues (Materiality)
Identification Process/Comments of the Experts
19
TDK Integrated Report 2024
About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
Growth Strategies
Contents
In endeavoring to maximize long-term corporate value, TDK
emphasizes PBR 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.
TDK’s materiality Relationship to financial results Relationship to pre-financial results
* The relationship to financial results is set for the short and medium-term (for approx. 3 years), and the relationship to pre-financial results is set for the long-term (for over 3 years).
Financial capital
Manufactured capital
Materiality
Human capital
Intellectual
capital
Natural capital
Corporate value
Pre-financial results
Financial results
Maximization of
long-term
corporate value
Business model
PER
ROE [%]
PBR
ROIC [%]
Operating profit margin [%]
Fixed asset turnover ratio [times]
Capital cost [%]
Financial leverage
Latent growth rate [%]
Maintain diversity in products, technologies and involved markets
Continue commercialization of
advanced technology
Realize intellectual property investment
and utilization that contributes to business
Improve predictability by
sharing know-how
Empowerment &
Transparency
Develop organizational
capability to enhance
innovation and efficiency
Pursue zero defect and promote
in-house production
Improve team member
(employee) health
and engagement
Build, maintain and
deepen trust
with customers
Promote diversity, equity and
inclusion driven by inclusive
leadership practices
Access in-depth sources of
customer needs
Cash conversion cycle [month]
Improve the business
portfolio continuously
Social value
creation
Respect human rights
Address climate change
Maintain the capability to introduce products into
market quickly and to ramp up mass production
Pre-financial
capital
Social and
relationship
capital
Key Issues (Materiality)
Relationship between Materiality and Corporate Value
20
TDK Integrated Report 2024
About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
Growth Strategies
Contents
Chapter 2
TDK’s
Growth Strategies
Review of the Previous Medium-term Plan
New Medium-term Plan
Message from the CFO
TDK’s Current Businesses
Strategy by Segment
(Passive Components, Sensor Application
Products, Magnetic Application Products and
Energy Application Products)
Pre-financial Capital That Backs
TDK’s Value Creation
Message from the CTO
IP Strategy
Development of New Business and
New Products
Design and Production (Monozukuri)
Quality Assurance
Marketing
Message from the CPSO and
General Manager, Human Resources HQ
People Strategy
Sustainability
(Response to Climate Change,
Response to TCFD,
Other Environmental Initiatives,
Respect for Human Rights)
DX Promotion
Advance Group Governance
Risk Management
22
23
30
34
35
43
44
47
48
49
50
51
52
56
58
67
68
69
How will we
Transform?
21
TDK Integrated Report 2024
Contents
About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
Growth Strategies
Operating
cash flow
(OCF)
900.0
Capex
750.0
EBITDA
65%
Energy
380.1
Passive
191.7
Magnetic
126.6
Energy
450.0
Passive
150.0
Operating
cash flow
(OCF)
888.8
Capex
785.6
EBITDA
74%
Magnetic
120.0
Shareholder
returns
FCF after
shareholder returns
FCF after shareholder returns
+52.9
Other
investments
54.2
CVC 37.8
Investment
in CJV and
others 16.4
Sensor
20.0
Sensor
65.2
Other
22.0
Other
10.0
(¥ billion)
(¥ billion)
Cash-IN
Cash-OUT
Cash-OUT
Cash-IN
Disposal of
equipment
107.3
Disposal of
equipment
107.3
Shareholder
returns
103.4
Shareholder
returns
103.4
Initial plan
Result
When drafting the previous Medium-term Plan, from FY
March 2022 to 2024, TDK was promoting growth strategy
focused on the diversification of revenue sources to follow
small capacity batteries as a profit contributor. In other
words, the plan focused on propelling the Company towards
a new growth stage. As a result, the Company diversified its
revenue sources, made progress in cash management, and
was successful in recording positive free cash flow after
shareholder returns for the cumulative three-year period.
On the other hand, issues remained as operating profit
margin and ROE fell short of targets. This was due to the
rapid stagnation of the HDD market resulting in a decline in
profitability for related businesses, and efforts to improve the
profitability of other turnaround businesses did not proceed
as planned.
Achievement
Issues
Passive Components
• Significantly increased production capacity of products for
automobiles, such as MLCCs
• Continuous developing high-value-added products
• Productivity improved
• Accelerate developing new products
• Optimization of manufacturing sites
Sensor Application
Products
• Improved profitability, established positive profit
• Profit of TMR sensors improved due to expansion of usage and
investment in increased production has been decided to expand more
• Profitability improvement of the MEMS microphone
business has been delayed
Magnetic Application
Products
• Commenced mass production of next-generation technology MAMR
• Developing HAMR has progressed
• Withdrawal from the suspension application products business has
been decided
• Profitability of the HDD-related business deteriorated
• Profitability improvement of the magnet business
has been delayed
Energy Application
Products
• Market share of small capacity batteries increased, and
profitability improved
• Manufacturing sites in India commenced cell productions
• JVs in medium capacity batteries commenced full-scale operations
and achieved positive profit
• Accelerate developing new products
• Optimization of manufacturing sites
Targets and results in KPIs of the previous
Medium-term Plan
Capital allocation in the previous Medium-term Plan
Achievement and issues by segment
Targets
for FY3/24
Results
for FY3/24
Net sales
Operating profit margin
ROE
FCF after shareholder returns
Capex
(cumulative 3 year)
¥2,000.0 billion
12.0%
14.0%
Positive
¥750.0 billion
¥2,103.9 billion
8.2%
7.9%
¥52.9 billion
¥785.6 billion
22
TDK Integrated Report 2024
About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
Growth Strategies
Contents
Review of the Previous Medium-term Plan—Value Creation 2023
Back-casted from the Long-term Vision
Previous Medium-term Plan
New Medium-term Plan
Technological
capability
Human capital
Organizational
capability
Customer base
Pre-financial capital
• Management that emphasizes cash flows and BizROA (ROIC)
• Implementation of growth strategies through business portfolio management
FY3/22
FY3/25
FY3/28
Back-casted
Strengthening profitability
of core business
Addressing turnaround
business
Organic & inorganic growth
Balance of centripetal and
centrifugal forces
Long-term Vision
• Contribute to the transition toward a sustainable future by accelerating the transformation of society and
advancements in technology enabled by electronic devices developed through leveraging cutting-edge
innovation in materials, processes, and software technology.
• Become the No. 1 partner growing alongside our worldwide customers by pursuing continuous “transformation.”
Streng
the
nin
g b
usi
nes
s f
ou
nd
ati
on
Tow
ard
a n
ew
sta
ge o
f ev
olut
ion
and
gro
wth
Di
ve
rsi
fyin
g re
venu
e sou
rces
Pos
itive
of F
CF
TDK Transformation
Accelerating transformation for a sustainable future
This new Medium-term Plan from the FY March 2025 was
formulated by outlining what we want to be and future vision
in light of the long-term social transformation ahead, and
bask-casting from that point.
As we work towards achieving our Long-term Vision,
we view the period of this Medium-term Plan as a time to
strengthen our business foundation. We believe that issues
that need to be addressed during this period include
strengthening profitability of core businesses and addressing
turnaround businesses.
Positioning of the New Medium-term Plan
23
TDK Integrated Report 2024
About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
Growth Strategies
Contents
Strengthen management
focusing on cash flows
1
Enhance business portfolio management
(Emphasizing ROIC)
2
Evolve the Ferrite Tree
(Pre-financial capital)
3
Key points
P.26
P.29, P43
P.27
Corporate
value
=
Maximize FCF generation
Cost of capital
(WACC)
Expected
growth rate
It is vital for enhancing our corporate value to maximize free
cash flow (FCF) generation, reduce the cost of capital, and
increase the expected growth rate.
Based on this thinking, the new Medium-term Plan,
which is positioned as a period for strengthen business
foundations, has three pillars.
1. Strengthen management focusing on cash flows
2. Enhance business portfolio management
(Emphasizing ROIC)
3. Evolve the Ferrite Tree (Pre-financial capital)
Plasma application
Ferrite
core
Ferrite
core
Core
memory
Multilayer
ceramic
capacitor
Ring varistor
Disc type ceramic capacitor
Tx coil unit (Plating)
Noise suppressing sheet
Optical disk
VHS
Multilayer
inductor
Multilayer
inductor
Audio
cassette
tape
Audio
cassette
tape
TMR sensor
Edge AI
Camera module actuator
Suspension
Film capacitor
Lithium-ion battery
Radio wave
absorber
Flash memory applied device
Thin-film RF
component
Thin-film
inductor
Motion
sensor
EMC test
system
Thin-film
magnetic
Head
Thin-film
magnetic
Head
PowerHap
PiezoHapt
NTC sensor
Cera Charge
Piezo actuator
Multi-layer
integrated
device
SAW filter
Multilayer NTC
thermistor
Multilayer RF
component
DCDC converter (μPOL)
Bidirectional Converter
Wire wound EMC filter
Wire wound inductor
Power
supply
Transformer
NTC thermistor
Ferrite
Ferrite
Group’s
culture
Materials × Processes technology
Human capital
Organizational
capability
Customer base
(¥ billion)
Three-year average
FY3/25–FY3/27
¥340 bn
Level
FY3/2000
FY3/05
FY3/10
FY3/15
FY3/20
FY3/25
0
50
100
150
200
250
300
OCF supported by HDD-related business
OCF supported by rechargeable battery business
The small capacity battery business grew
Earning source trends
Revenue sources to
be diversified
Profitability of the
passive
components
business
deteriorated
Profitability of the
passive
components
business
improved
Profitability of the
passive
components
business
improved
2002
Deterioration of business
environment due to burst
of IT bubble
2007
The recording
media business
sold
2009
Deterioration of
business environment
due to the global
financial crisis
2017
The SAW device
business sold to
Qualcomm
2022
Established the joint ventures
(JVs) with CATL for medium
capacity batteries
2024–
Active growth investment
2017
Sensor
Acquired
InvenSense and
ICSense
2015
Sensor
Acquired
MICRONAS
2008
Electronic components
Acquired EPCOS
2005
Lithium-ion batteries
Acquired ATL
From FY3/2000
Introduction of TVA (EVA)
From FY3/11
Introduction of BizROA (ROIC)
From FY3/22
Introduction of the
matrix for inclined
allocation of capex
From FY3/25
Introduction of business portfolio
management
2023
ML automation
(Software)
Acquired
Qeexo
13%
4%
5%
58%
14%
Sales proportion (%)
5%
Minimum
hurdle rate
over 10%
Profitability
Low
profitability
Growing
Profit enhancement
Next generation
Challenging
Strategic restructuring
Profit base
BizROA (ROIC)
Business potential
Businesses to
be intensively
monitored
High
Low
High
Low
24
TDK Integrated Report 2024
About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
Growth Strategies
Contents
New Medium-term Plan: Key Points
The new Medium-term Plan has set the pre-financial KPIs in
addition to the conventional financial KPIs; it is based on the
ways of thinking to enhance our corporate value through
pursuing not only the financial value but the pre-financial value,
the source of future financial value, and balancing between the
achievement of the short to medium-term target and the
activities to continuously generate value in the long-term.
We aim to achieve beyond these KPIs by strengthening
the business portfolio transformation, including addressing
turnaround businesses, and the pre-financial capital, in
addition to ensuring the growth strategies of core businesses.
Our company-wide performance indicators will be
operating profit margin and ROE, unchanged from before,
and ROIC with the aim of improving profitability.
To achieve these targets, we will continue to invest
aggressively in priority growth businesses to improve our
earning capability and accelerate the implementation of
appropriate measures for turnaround businesses, thereby
improving capital efficiency further and engaging in proactive
business portfolio management with a heightened awareness
of the cost of capital.
BizROA (ROIC)
15
10
5
0
(%)
12.0
8.0
5.3
WACC 7%
FY3/24
FY3/27
How we want to be
Operating profit margin
15
10
5
0
(%)
15.0
11.0
8.2
FY3/24
FY3/27
How we want to be
ROE
15
10
5
0
(%)
15.0
10.0
7.9
FY3/24
FY3/27
How we want to be
FY3/24
FY3/27
How we want to be in
the medium-to long-term
Growth
Efficiency
Financial
soundness
KPIs
Net sales [¥ billion] (CAGR)
ROE
BizROA (ROIC) (>WACC)
Operating profit margin
Shareholders’ equity ratio
D/E ratio
Team member engagement survey
Communication score
Response rate
CO2 emission reductions*
(SBTi Scope1+2, vs. FY3/22)
Exchange rate assumptions
2,103.9
7.9%
5.3% (<7.0%)
8.2%
50%
0.4x
67 pts.
80%
42.9%
¥144/US$
2,500.0 (approx. 5%)
10% or more
8% or more
11% or more
50% level
0.3–0.4x
75 pts. or more
80% or more
23.3%
¥135/US$
(10% or more)
15% or more
12% or more
15% or more
42.0%
¥135/US$
Financial
indicator
Pre-financial
indicator
* SBTi is an initiative that supports companies in setting scientifically based environmental goals. In order to achieve the goal stated in the Paris Agreement of limiting the rise in global average
temperature to within 1.5˚C compared to pre-industrial levels, SBTi provides companies with criteria that can be used in goal setting. We have set the gradually required CO2 emission reduction
rate calculated based on these criteria as the target for FY March 2027 Plan. However, it is expected that this target will be achieved ahead of schedule in FY March 2024. This is because of
the proactive introduction and promotion of renewable energy (Scope 2). We are currently planning significant production increases and expansion of sites in our Medium-term Plan, and at this
point, we consider the target to be reasonable. Please note that FY March 2024 Result is estimate amount. Furthermore, TDK has submitted a commitment letter to SBTi and is currently work-
ing towards obtaining certification for our reduction targets.
New Medium-term Plan
25
TDK Integrated Report 2024
About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
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Contents
Financial/Pre-financial KPIs
(¥ billion)
Three-year average
FY3/25–FY3/27
¥340 billion
Level
FY3/2000
FY3/05
FY3/10
FY3/15
FY3/20
FY3/25
0
50
100
150
200
250
300
The period of OCF supported by the HDD-related business
The period of OCF supported by
the rechargeable battery business
The small capacity battery business grew
Earning source trends
Revenue sources to
be diversified
Profitability of the
passive
components
business
deteriorated
Profitability of the
passive
components
business
improved
Profitability of the
passive
components
business
improved
2002
Deterioration of business
environment due to burst
of IT bubble
2007
The recording
media business
sold
2009
Deterioration of
business environment
due to the global
financial crisis
2017
The SAW device
business sold to
Qualcomm
2022
Established the joint ventures
(JVs) with CATL for medium
capacity batteries
2024–
Active growth investment
2017
Sensor
Acquired
InvenSense and
ICSense
2015
Sensor
Acquired
MICRONAS
2008
Electronic components
Acquired EPCOS
2005
Lithium-ion batteries
Acquired ATL
From FY3/2000
Introduction of TVA (EVA)
From FY3/11
Introduction of BizROA (ROIC)
From FY3/22
Introduction of the
matrix for inclined
allocation of capex
From FY3/25
Introduction of business portfolio
management
2023
ML automation
(Software)
Acquired
Qeexo
Thus far, we have transformed our business portfolio and increased our earning capability by utilizing organic growth and M&A.
This graph shows our three-year moving average operating cash flow. In the past, this was around ¥100 billion, improved to around ¥200 billion, and will aim for roughly ¥340 billion during the term
of the new Medium-term Plan.
Three-year average operating cash flow target level of ¥340 billion
Operating cash flow (OCF) history on a three-year moving average
Strengthen Management focusing on Cash Flows
New Medium-term Plan
26
TDK Integrated Report 2024
About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
Growth Strategies
Contents
Starting in FY March 2022, TDK has stratified approximately
80 cash-flow business units (CBUs) in four segments into six
levels based on two axes—BizROA (ROIC) and business
potential—and has clarified the strengths of investment
allocation to transform and optimize the business portfolio.
With respect to BizROA (ROIC), we set a minimum hurdle
rate of 10%, and we invest with priority businesses that clear
this hurdle and have high future potential.
Starting with the period of the new Medium-term Plan
Implementing proactive business portfolio
management
(from FY March 2025), we evolved from a two-axis map of
investment allocation to a two-axis map of our business
portfolio. We will invest management resources with a focus
on businesses that clear the minimum hurdle rate and are
expected to grow in the future while appropriately monitoring
businesses that fall below the minimum hurdle rate and
regarding which there are concerns about future growth
(“Businesses to be intensively monitored” in the business
portfolio map below) and implement prompt measures to
achieve a turnaround. We will also investigate the competitive
advantages and sustainability of businesses from a best
owner perspective and reinforce proactive portfolio
management, even for those businesses with operating profit
margins in the black.
By implementing these measures, we will improve the
corporate BizROA (ROIC), secure permanent surplus
capacity for investment in order to allocate management
resources to growth areas, and improve opportunities for
optimal investment in growth businesses, thereby
reinforcing the balance of the business portfolio throughout
the company.
13%
4%
5%
58%
14%
Sales proportion (%)
5%
Minimum
hurdle rate
over 10%
Profitability
Low
profitability
Growing
Profit enhancement
Next generation
Challenging
Strategic restructuring
Profit base
BizROA (ROIC)
Business potential
Businesses to
be intensively
monitored
High
Low
High
Low
Discuss direction of
business at Executive
Committee Meetings
Implement
No signs of
improvement
Transfer
the business to
the best owner, etc.
Improve
BizROA (ROIC)
Restart
investing
At the Executive
Committee and the BoD
meetings, discuss
response policy and
timeframe for turnaround
businesses based on
10% minimum hurdle rate
and business potential
Retry
Discussion
Implement measures for
early turnaround
Business portfolio map
Proactive business portfolio management
∙ BizROA (ROIC) = Business OP after tax and before distribution of corporate expenses / business assets.
∙ The 10% minimum hurdle rate is calculated, considering the 7% corporate WACC and corporate expenses.
Enhancing Business Portfolio Management
New Medium-term Plan
27
TDK Integrated Report 2024
About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
Growth Strategies
Contents
Going forward, we will strive to promote and reinforce
business portfolio management in each of the 80 CBUs with
the objective of improving ROIC in each segment as
indicated in the diagram. Starting in the new Medium-term
Plan period, we will place greater emphasis on asset
profitability by disclosing ROIC target and actual values in
each segment, and in our dialogue with investors, we plan to
engage in more specific discussions based on the asset
profitability of each business.
Over the medium to long term, we will implement
measures to enhance profitability relating to magnetic
application products and sensor application products with
the objective of clearing the minimum hurdle rates.
Emphasis on asset profitability
Until now, we have been working to transform and strengthen
our business portfolio through M&A and divestment, taking
into consideration the competitive advantages of our
management resources and industry lifecycles.
For example, we divested our audio tape business in the
2000s. We also achieved a turnaround for SAW devices by
introducing TDK process technologies into EPCOS and
increasing added value. Later, we sold the business to
Qualcomm for about ¥300.0 billion in 2017 from the
perspective of the best owner. We then used the proceeds
from that sale to acquire InvenSense with the aim of
reinforcing the sensor business, and we have expanded and
enhanced our sensor product portfolio.
Past example
BizROA (ROIC)
Business potential
‘80s
‘90s
‘00s
Withdrawal
High
High
Low
Low
BizROA (ROIC)
High
Low
2017–
2007–
SAW
devices
Divestment
Business potential
High
Low
2022–
2022–
2025– 2022–
2015–
Micronas
2017–
MEMS
micro-
phone
TMR
sensors
2017–
MEMS
motion
sensors
BizROA (ROIC)
High
Low
Business potential
High
Low
30.0
20.0
10.0
0.0
-10.0
-20.0
-5.0
5.0
Sales growth (Three-year CAGR)
25.0
15.0
35.0
BizROA (ROIC)
(%)
(%)
FY3/24
Energy
FY3/27
Energy
FY3/27
Passive
FY3/27
Sensor
FY3/24
Passive
FY3/27
Magnetic
FY3/24
Magnetic
FY3/24
Sensor
Minimum hurdle rate
Sensor application products
business
Passive components
(SAW devices) business
Chart for growth and capital efficiency by segment
BizROA (ROIC) by segment
Audio tape business
Company-wide
Passive Components
Sensor Application
Products
Magnetic Application
Products
Energy Application
Products
FY3/21
5.2%
—
—
—
—
FY3/24
5.3%
7.7%
1.2%
-12.2%
21.5%
FY3/27
(target)
8.0%
15.0%
8.0%
4.0%
18.0%
Enhancing Business Portfolio Management
New Medium-term Plan
Strengthen business portfolio
28
TDK Integrated Report 2024
About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
Growth Strategies
Contents
Materials × Processes technology × Software technology
Photo acoustic
glucose
monitoring
RF devices for
quantum computer
InCellSense
Plasma application
Disc type
ceramic capacitor
Thin-film
magnetic
Head
Thin-film
magnetic
Head
Audio
cassette
tape
Audio
cassette
tape
Ferrite
core
Ferrite
core
Core
memory
Multilayer
ceramic capacitor
Multilayer
inductor
Multilayer
inductor
Ring varistor
VOC multi gas sensor
Tx coil unit (Plating)
Noise suppressing sheet
Optical disk
VHS
NH3 fuel cell
ESS
TMR sensor
FCLM
SpinPD
Neuromorphic device
Edge AI
Bio magnetic sensor
Camera module actuator
Suspension
Film capacitor
Lithium-ion battery
Radio wave
absorber
Flash memory applied device
Thin-film RF
component
Motion sensor
Thin-film
inductor
EMC test
system
Cardio-
vascular
monitoring
PowerHap
PiezoHapt
CO2 gas sensor
NTC sensor
Multilayer NTC thermistor
Cera Charge
Piezo actuator
Multi-layer
integrated
device
SAW filter
LN thin-film
Multilayer RF
component
DCDC converter (μPOL)
WPT
Bidirectional Converter
Wire wound EMC filter
Wire wound inductor
Power supply
Transformer
NTC thermistor
New Business
Ferrite
Ferrite
Plasma application
Ferrite
core
Ferrite
core
Core
memory
Multilayer
ceramic
capacitor
Ring varistor
Disc type ceramic capacitor
Tx coil unit (Plating)
Noise suppressing sheet
Optical disk
VHS
Multilayer
inductor
Multilayer
inductor
Audio
cassette
tape
Audio
cassette
tape
TMR sensor
Edge AI
Camera module actuator
Suspension
Film capacitor
Lithium-ion battery
Radio wave
absorber
Flash memory applied device
Thin-film RF
component
Thin-film
inductor
Motion
sensor
EMC test
system
Thin-film
magnetic
Head
Thin-film
magnetic
Head
PowerHap
PiezoHapt
NTC sensor
Cera Charge
Piezo actuator
Multi-layer
integrated
device
SAW filter
Multilayer NTC
thermistor
Multilayer RF
component
DCDC converter (μPOL)
Bidirectional Converter
Wire wound EMC filter
Wire wound inductor
Power
supply
Transformer
NTC thermistor
Ferrite
Ferrite
Noise suppressing sheet
Radio wave
absorber
Disc type ceramic
capacitor
NTC thermistor
Core memory
Ring varistor
Wire wound
inductor
Transformer
Ferrite
Ferrite
Group’s
culture
Materials × Processes technology
Human capital
Organizational
capability
Customer base
Human capital
Organizational
capability
Customer base
The Ferrite Tree is a concept that expresses the history and
transitions that TDK’s business has continuously undergone
since its establishment with ferrite as its founding business,
in other words, the Ferrite Tree represents TDK’s growth
trajectory. TDK’s generations of products are shown linked
by the technology connections of its four major
innovations—ferrite, audio cassette tapes, fine multilayering
technology, and thin-film head technology. Since the
commercialization of ferrite, TDK’s founding business, the
Ferrite Tree has grown technology branches and leaves
through the development of materials, processes, and
derivative technologies and the expansion of TDK’s business
portfolio through M&A.
By conducting R&D and refining our core technologies,
we will grow the Ferrite Tree even larger.
Ferrite
Music cassette tapes
Thin-film head
technology
Fine multilayering
technology
What is the Ferrite Tree?
• We have gained competitive advantage through the materials and processes
technology we have cultivated since our founding.
• In addition to R&D, we have strengthened our technologies in sensors and
software through M&A.
• Even if we divest or withdraw from businesses, the technologies are accumulated
at TDK and applied to current products.
1970s
Ferrite Tree
Present
Ferrite Tree
Future
Ferrite Tree
Evolution of the Ferrite Tree
29
TDK Integrated Report 2024
About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
Growth Strategies
Contents
Among the financial targets advocated in the previous
Medium-term Plan, Value Creation 2023, I placed special
importance on achieving a positive free cash flow (FCF) after
shareholder returns for the cumulative three-year period.
Although the achievement of this target looked in danger for
a while due to some unplanned expenditures, such as an
advance payment of ¥110.0 billion to ensure the long-term
stable supply of cobalt and other battery materials, we aimed
to maximize the free cash flow through the rigorous selection
of investments and improvement of working capital. As a
result, our cumulative free cash flow after shareholder returns
substantially exceeded ¥50.0 billion, and we were able to
meet the target. The Finance & Accounting HQ greatly
contributed to this serial process of improvement too. In the
battery business especially, the accounting department took
the lead in tackling restructuring, including reduction of
inventory and other assets. These efforts are contributing to
the maintenance and strengthening of stable earning
capability and competitive advantage not impacted by
changes in the business environment. By sharing these
success stories globally with accounting managers at our
sites, I intend to strengthen the capability of the entire TDK
Group to create cash flow.
On the flipside, issues remained on the side of profit levels
and capital efficiency. In particular, ROE reached only around
8%, against a target of 14%. I see this outcome as a major
issue. To explain the causes in terms of external factors and
internal factors, the biggest external factor was the sharp
change in the market environment. Because of the COVID-19
pandemic, the supply-demand environment for each
business changed considerably. In particular, the HDD head
market entered an adjustment phase that was way beyond
our anticipation. Demand in the market as a whole fell a lot,
and income deteriorated so much that the HDD head
business had to record a deficit.
As for internal factors, it must be said that our capability
to forecast future demand was far from adequate. Regarding
the passive components business in particular, there was a
considerable downturn compared with initial demand
forecasts, and downward revisions were unavoidable right
from the first quarter of the FY March 2024. Furthermore, the
failure of the improvement of turnaround businesses to
advance according to plan was also a major factor. In the
previous Medium-term Plan, we managed investment
allocation by mapping around 80 cash-flow business units
(CBUs) in six categories along the two axes of BizROA
(ROIC) and business potential. As a result, among the CBUs
identified as turnaround businesses, we were able to decide
on our speedy withdrawal from deficit businesses, such as
the suspension application products business. Regarding
such deficit businesses as magnets and MEMS
microphones, however, investment in the update of
equipment and so on was necessary to an extent to meet
the quality requirements of customers, so we were unable to
Achieved positive free cash flow after shareholder
returns for the cumulative three-year period
Review of the previous Medium-term Plan
Failure to achieve ROE target due to such factors as
unexpected macro-environmental changes and lagging
improvement of turnaround businesses
Message from the CFO
Aiming to further enhance corporate
value by promoting cash-flow
management and business portfolio
management toward realization of our
Long-term Vision
Representative Director,
Senior Executive Vice President,
and Chief Financial Officer
Tetsuji Yamanishi
30
TDK Integrated Report 2024
About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
Growth Strategies
Contents
achieve an improvement in profitability.
In these circumstances, regarding capital allocation, I think
we were able to implement investment appropriately in
response to changes in the business environment. For
example, actual capital expenditure (capex) amounted to
¥785.6 billion, only slightly higher than the initial plan of
¥750.0 billion. If the increased portion due to the weak yen is
excluded, it was efficient capex made in response to the
supply-demand environment.
Regarding shareholder returns, the target for cumulative
dividend payout ratio over the three-year period was 30%.
Although profits did not reach the goals set out in the
Medium-term Plan, in view of the fact that the target for free
cash flow was achieved, we implemented dividend payout
according to schedule.
The new Medium-term Plan, which got off to a start in FY
March 2025, uses BizROA (ROIC) as a key financial
indicator; the policy is to disclose it for each business
segment. TDK has been using this indicator previously to
manage investment allocation to each CBU, but we judged
that using ROIC also as an indicator to measure the
profitability of businesses and the results of efforts to
enhance corporate value was more consistent.
We have set an ROIC target of 8% or more for the final
fiscal year of the three-year Medium-term Plan and 12% or
more as our medium- to long-term aim. The corresponding
ROE will be 10% or more in the final fiscal year of the plan
and 15% or more as our medium- to long-term aim. To
achieve these targets, we will promote the following two
measures. First, we will actively invest in growth businesses
and grow the top line. Second, we will exit from deficit
businesses and endeavor to turn around businesses whose
BizROA (ROIC) falls below the minimum hurdle rate even
though they are yielding a profit.
In the new Medium-term Plan we assume that the debt-to-
equity (D/E) ratio will continue to be 0.3–0.4 times. If we
assume that the ratio of equity attributable to owners of the
parent company is 50% or more and liquidity on hand needs
for 2.5–3 months, I think this level of interest-bearing debts is
reasonable. However, if funding becomes necessary for
large-scale M&A or growth investment, in the future we may
need to raise the level of interest-bearing debts. Accordingly,
in the sense also of adequately securing funding capability, I
think it is necessary to maintain a level of 0.3–0.4 times.
One major point of regret about the previous Medium-term
Plan is the fact that improvement of the profitability of
turnaround businesses did not proceed as we would have
liked. Among them, there were also not a few cases in which
effective steps toward improvement were not taken because
of delayed response. In the light of this reflection, our policy in
the new Medium-term Plan is to promote proactive business
portfolio management aimed at taking the necessary steps
and achieving a quick turnaround in the case of not only
deficit businesses, obviously, but also businesses that, even if
they are profitable, do not meet the rules in terms of capital
efficiency and business potential.
Strengthen business portfolio management
Free cash flow before shareholder returns
for the cumulative three-year period
Shareholder returns
BizROA (ROIC)
¥156.0 billion
Results for the cumulative
period from FY3/22 to
FY3/24
Dividend payout ratio
30%
Consideration and implementation of
flexible utilization of surplus funds
Share buyback
New Medium-term
Plan target
(5% up)
FY3/27 target
8% or more
How we want to be in
the medium to long term
12% or more
¥260.0 billion
35%
Balance sheet structure
*1 If a demand for funds arises due to large-scale investment and lending, etc.,
the utilization of loans exceeding this scope will be considered too.
D/E ratio
Maintain
0.3–0.4 times*1
Shareholders’ equity ratio
50% level
Basis for setting KPIs : Calculated at cost of shareholders’ equity
8% and WACC 7%.
Financial KPIs for the new Medium-term Plan
Setting a new target for ROIC and promoting
improvements in capital efficiency
Financial policy in the new Medium-term Plan
Promoting proactive business portfolio management
based on two-axis map of ROIC and business
growth potential
Maintaining a D/E ratio of 0.3–0.4 times and securing
surplus capability for flexible funding
Capital allocation in response to environmental
changes and implementation of shareholder returns
as planned
Message from the CFO
31
TDK Integrated Report 2024
About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
Growth Strategies
Contents
The minimum hurdle rate for capital efficiency, which
incorporates corporate expenses into TDK’s WACC (7%),
has been set at 10%. CBUs that do not meet these rules of
10% ROIC and business potential will be positioned as
businesses to be intensively monitored. Among them, we
will hold discussions with the responsible personnel in
especially high-priority CBUs and business groups (BGs)
and business companies (BCs) and have them submit
improvement plans. Countermeasures will be implemented
after gaining the approval of the Executive Committee
Meetings (ECMs). Time limits will be set. If improvement
targets are not met within the time limit, we will consider an
exit strategy, including transferring best owner. As the CFO,
my important mission is to navigate this process of
business portfolio management, in other words, the series
of initiatives from discussions with CBUs to the careful
examination and approval of their improvement plans,
monitoring of the state of implementation, and evaluation, in
a responsible manner.
The improvement of turnaround business alone will lead only
to diminished equilibrium. It is also important to strengthen
the earning capability of current main businesses, create new
growth businesses through backcasting from our Long-term
Vision of “TDK Transformation,” and optimize our business
portfolio. In the new Medium-term Plan we estimate free
cash flow after shareholder returns for the cumulative three-
year period to be about ¥110.0 billion, which is more than
double the amount actually achieved in the period of the
previous Medium-term Plan. Our policy is to give priority to
the allocation of these funds to growth investment. At the
present point in time, M&A is not included in the new plan.
But if we receive a promising new business plan or
investment proposal from a business company, we want to
implement it if warranted after careful examination of the
plan’s feasibility, potential, profitability estimates, and so on.
Through the implementation of such business portfolio
management, TDK endeavors to strengthen human capital,
which is one of our important pre-financial capitals. For
example, it is the general managers of BCs and BGs who
make presentations to the ECM and so on to explain their
business plans, report on the progress of business
achievements, and communicate important matters, such as
capital investment. But in the case of business portfolio
management, it is mainly the responsible personnel at CBUs
that are the targets of proactive business portfolio
management who are made to explain improvement
measures and the state of progress. Thus, we hope to
promote changes in the way of thinking and improved skills
13%
4%
5%
58%
14%
5%
Minimum
hurdle rate
over 10%
Profitability
Low
profitability
Growing
Profit enhancement
Next generation
Challenging
Strategic restructuring
Profit base
BizROA (ROIC)
Business potential
Businesses
to be
intensively
monitored
Sales proportion (%)
High
Low
High
Low
Business portfolio map
Capital allocation plan (FY3/25 to FY3/27 accumulated)
Appropriate capital
policies
• Dividends based on a target payout
ratio of 35%
• Consider/implement a return policy if
surplus funds are expected after
considering growth investment needs
• When considering strategic
investments, give top priority to
investments for long-term growth
(expansion of existing businesses,
inorganic growth through M&A, etc.)
• Acquire long-term growth opportunities
through venture investments
• Strengthen investments in core
businesses
• Limit investment in turnaround
businesses to renewal projects
1,000.0
(888.8)
*Figures noted in brackets come from the previous Medium-term Plan
Proactive business
portfolio
management
OCF
Energy
320.0 (380.1)
Passive
200.0 (191.7)
Sensor
80.0 (65.2)
Magnetic
60.0 (126.6)
Other
40.0 (22.0)
Total
700.0 (785.6)
Enhancement of
corporate value
BizROA (ROIC)
8% or more
(WACC7%)
150.0 (103.4)
Shareholder returns
150.0 (54.2)
Strategic investments
Capex
Strengthen dialogue with
capital markets
(¥ billion)
Focusing on the creation of new growth businesses
and the development of future executives
Message from the CFO
32
TDK Integrated Report 2024
About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
Growth Strategies
Contents
among CBU personnel and nurture human resources
capable to taking part in management in the future.
Under the new Medium-term Plan, we are scheduled to
create a three-year cumulative operating cash flow of about
¥1 trillion and, of that, allocate ¥700.0 billion to capex.
Specifically, the plan is to invest about 40% of that sum in
energy application products. This means mainly investment
in small capacity batteries for smartphones. The smartphone
market is not in a situation where the number of
manufactured units is going to increase greatly, but battery
performance is evolving at a rapid pace, so investment is
necessary for the development and production of new
products. Incidentally, no major investment has been
scheduled for medium capacity batteries, for which
investment was finished in the previous Medium-term Plan. In
addition, about 30% is scheduled to be allocated to passive
components, about 15% to sensor application products, and
the rest to HDD-related business and other products.
In the period of the previous Medium-term Plan, the
market environment for HDD-related products deteriorated
considerably. From a long-term perspective, however, the
volume of data generation worldwide is certain to expand
as a result of the increased use of AI and other factors. The
use of flash memory is progressing as a means of
temporarily storing data, but in the long term I think
excellent cost-performance HDDs will continue to be the
mainstream in the storage of large amounts of data. Going
forward, shipments of magnetic heads for nearline storage
are expected to increase toward a full-scale recovery of
demand during the period of the next Medium-term Plan
and beyond. TDK’s policy is to promote a mass-production
setup targeting demand from leading hyperscalers
advancing investment in AI servers and to actively
implement investment toward HDD-related product
innovations with an eye on the market launch of HDD heads
using heat-assisted magnetic recording (HAMR) technology,
which enables the further high densification of HDDs.
In accordance with our recognition that the medium- to long-
term enhancement of corporate value will lead to the higher
shareholder value, TDK’s basic policy is to strive toward the
stable increase of dividends through the growth of earnings
per share (EPS). As a result of the previous Medium-term Plan,
improvement of our financial condition progressed to a certain
extent. For example, cumulative free cash flow after
shareholder returns turned positive. In view of this trend, in
the new Medium-term Plan we have decided to strengthen
shareholder returns with the aim of raising the dividend
payout ratio from the existing level of 30% to 35%. Regarding
cash that remains in surplus even then, while taking the stock
market situation and other factors into consideration, we will
consider further return measures, such as the share buybacks.
In the market, although our stock price has remained
firm, I think it is still at a low level. Our price-to-book ratio
(PBR) is showing signs of improvement too, but it has not
reached a point of maintaining a level of 2.0 or more. I think
the main causes, unsurprisingly, are the fact that
improvements in turnaround businesses are not advancing
according to plan and that there are still many businesses
with BizROA (ROIC) falling below the desired level.
In the period of the new Medium-term Plan, we will
definitely achieve proactive business portfolio management
and steadily raise BizROA (ROIC). As the social
implementation of AI and other state-of-the-art technologies
accelerates, the business opportunities for the TDK Group
should further expand in the future. To clearly perceive such
trends of the times, and to achieve sustained business growth
and the enhancement of corporate value in the medium to
long term, we will always implement measures looking ahead
to the future. I ask for the continued and further support of
our shareholders and investors in this endeavor.
Shareholder returns
Period of the new
Medium-term Plan
Period of the previous
Medium-term Plan
30%
Dividend payout ratio
35%
Dividend payout ratio
FY3/22
FY3/24
FY3/25
(Projection)
FY3/23
35.6
35.3
35.2
22.6
120.0
116.0
106.0
78.3
120
100
80
60
40
20
0
(JPY)
60
50
40
30
20
10
0
(%)
Annual dividends Dividend payout ratio
Strengthening shareholder returns by raising dividend
payout ratio from 30% to 35%
To shareholders and investors
Creating about ¥1 trillion in operating cash flow and
allocating ¥700.0 billion to capex
Message from the CFO
33
TDK Integrated Report 2024
About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
Growth Strategies
Contents
Passive Components
Sensor Application Products
Magnetic Application Products
Energy Application Products
Net sales
(¥ billion) /
OP margin
(%) /
ROIC (%)
Products
Competitors
Capacitors
Multilayer ceramic chip capacitors, aluminum
electrolytic capacitors, film capacitors, etc.
Inductive devices
SMD power supply inductors, signal EMC filters,
transformers, ferrite cores, etc.
Other passive components
High-frequency components (high-frequency
filters, etc.), Piezoelectric material products and
circuit protection components (varistors,
arresters, etc.), anechoic chambers, etc.
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, Panasonic,
SUNLORD (China), etc.
Energy devices
Small capacity batteries (for smartphones, tablet
devices, notebook computers, wearable devices,
game consoles, etc.), medium capacity batteries
(for residential energy storage systems,
commercial energy storage systems, electric
motorcycles, drones, power tools, etc.)
Power supplies
Programmable power supplies (for inspecting),
POL converters, switching power supplies (AC-DC,
DC-DC), automotive DC-DC converters, 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.
Sensors
Temperature sensors, pressure sensors and
magnetic sensors (Hall sensors and TMR sensors)
MEMS sensors (MEMS motion sensors and
MEMS microphones)
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-related devices
HDD heads, HDD suspension applications, etc.
Magnets
Ferrite magnets for small motors, neodymium
magnets for xEV drive motors, neodymium
magnets for industrial equipment motors, 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.
FY3/22
FY3/23
FY3/24
41.6
79.7
81.4
FY3/22
FY3/23
FY3/24
34,218 34,522 33,678
Capex (¥ billion)
Number of employees
15.1
16.3
9.5
507.8
578.8
565.6
FY3/22
FY3/23
FY3/24
Net sales OP margin ROIC
Net sales OP margin ROIC
Net sales OP margin ROIC
Net sales OP margin ROIC
FY3/22
FY3/23
FY3/24
10.9
17.1
34.3
FY3/22
FY3/23
FY3/24
7,783
7,274
7,567
Capex (¥ billion)
Number of employees
-0.2
-1.2
6.3
3.5
3.3
1.2
130.8
169.5
180.5
FY3/22
FY3/23
FY3/24
FY3/22
FY3/23
FY3/24
52.5
53.8
23.0
FY3/22
FY3/23
FY3/24
13,580
11,683
9,297
Capex (¥ billion)
Number of employees
3.3
1.8
-22.0
-28.1
-19.3
-12.2
248.4
200.6
184.2
FY3/22
FY3/23
FY3/24
FY3/22
FY3/23
FY3/24
175.7
114.0
70.4
FY3/22
FY3/23
FY3/24
54,288
41,945 43,198
Capex (¥ billion)
Number of employees
15.1
12.8
15.6
12.6
21.5
17.4
965.3
1,173.4
1,121.7
FY3/22
FY3/23
FY3/24
*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.
16.4
17.0
7.7
TDK’s Current Businesses (FY March 2024)
34
TDK Integrated Report 2024
About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
Growth Strategies
Contents
The electronic components business environment is in the
midst of a period of great change. As the social transformation
including GX and DX undergoes, the electrification of
automobiles will advance and generative AI, which is rapidly
proliferating, will be introduced to smartphones and PCs in
the future, making these devices even smarter. In addition,
robots and renewable energy will likely become more
common. We will take this time of change as an opportunity
to provide to the world products that can contribute to the
automobiles and devices of a new era.
Our core competencies are electronic materials
technologies and production process technologies, and
we will maximize our strengths by integrating these with
digital technologies. To do this, we must transform
ourselves. We will reorganize our development
organizations for new technology and establish a
development structure that spans departments so that we
can anticipate customer needs and seeds and quickly
develop and product while sharing information globally. In
addition, we will optimize operations by introducing new
supply chain management systems and reorganizing
production sites while taking into consideration responses
to geopolitical risks. We will also establish data analysis
functions in Europe and Japan to reinforce quality and
manufacturing and raise production efficiency.
578.8
565.6
507.8
FY3/22
FY3/23
FY3/24
FY3/25
FY3/26
FY3/27
7.7
16.3
15.1
9.5
17.0
16.4
CAGR 5–8%
15.0
Passive Components
Net sales (¥ billion)
OP margin (%)
BizROA (ROIC) (%)
Net sales and BizROA (ROIC) targets
To-be in the long-term
• Further strengthen high-reliability products for powertrains
• Launch new products for ADAS use
• Optimize investments and manufacturing sites in line with
market growth
• Improve quality and productivity
• Combine materials and optimal production methods, e.g.,
winding, layering, and thin-film technologies
• 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
• Combination of materials and processes technology
• Long-standing quality track record in the automotive market
• High-reliability eco-friendly technologies, e.g., high-temperature
and high-voltage
• In-house production engineering technology
Competitive advantage
Growth strategies
• Increase in added value and number of components due to the
progress of xEVs and ADAS of vehicles
• Increase in demand for low power consumption passive
components, e.g., AI servers
• Increase in demand for high-value-added custom products for
industrial equipment use
Business opportunities
Risks and issues
Taro Ikushima
CEO, Electronic
Components
Business Company
Measures to improve net sales and BizROA (ROIC)
Net sales
BizROA
(ROIC)
• Expand sales due to advances in xEVs and ADAS
• Expand sales due to the recovery of demand in
industrial equipment markets
• Increase profits by expanding the capacity and
increasing sales of high-value-added products
• Investment amounts to remain flat from the previous
Medium-term Plan
Priority products and estimated market share
50–55%
Share No. 2
Share No. 2
Share No. 1
Share No. 1
Share No. 1
Ceramic capacitors
for automobiles
Film capacitors
Inductors EMC filters
Varistors
PTC Thermistors
35–40%
15–20%
45–50%
55–60%
Strategy by Segment
35
TDK Integrated Report 2024
About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
Growth Strategies
Contents
The market for automotive passive components is expected
to grow with a compound annual growth rate in excess of
12% on a value demand basis. We expect solid growth in
demand for MLCCs as well as inductors, piezoelectric
protection components, and other components.
There are also expectations that the number of
components used in xEVs will increase steadily. In tandem
with this trend, we will substantially increase our production
capacity for our main products including MLCCs and film
capacitors to steadily meet this demand.
FY3/23
FY3/24
FY3/25
FY3/26
FY3/27
FY3/28
FY3/29
MLCC
Inductor
Estimated market demand for automotive
passive components
Number of components usage per gasoline vehicles vs. xEVs
TOPICS
(TDK forecast)
CAGR 12%
High Voltage
Contactor
Piezo
Protection
MLCCs
Inductors
Piezoelectric
Products
5,000
450
100
ICE
6,000
600
140
HEV
8,000
650
160
PHEV
10,000
700
180
BEV
Market growth
New needs for passive components in AI markets
In conjunction with the rapid development of AI, the AI
computing market is expected to undergo substantial
growth in the future. In this market, the demand is
increasing not only for software including AI services, but
also for hardware, such as the electronic components used
by processors and peripheral devices, and in 2030, we
expect the growth rate to exceed 36% compared to 2023.
As the performance of the processors used in AI servers
improves, the electricity consumption of and the amount of
heat generated by power supplies are also expected to
increase greatly. To solve these issues, TDK is conducting
research on next-generation power supply methods that
can save energy by reducing resistance component.
Until now, a horizontal power supply method where
electronic components are located around a processor
was the mainstream. We believe that future trends will
include, for example, an increase in vertical power supply
methods, where the power supply and electronic
components are placed directly under the processor, and
integrated voltage regulators (IVRs) that are mounted on
the board.
If these new technologies can be achieved in the
future, we expect that power loss will be reduced by the
equivalent of several nuclear power plants compared to
conventional power supply methods.
These new technologies will require ultra-compact and
ultra-thin electronic components, and for this reason, TDK
is developing next-generation inductors that use the
winding, multilayering, and thin-film technologies and
multilayer thin-film capacitors, which we have developed
over many years so that we can respond to these needs.
Growth of the AI computing market
Software Hardware Service
(10 USD billion)
Hardware
CAGR 36.8%
PCB
Processor
VR
VR
VR
PCB
Processor
VR
VR
PCB
Processor
VR
VR
VR
Horizontal power supply method
(conventional method)
Vertical power supply method
(next-generation method)
IVR (next-generation method)
2023
2030
(TDK forecast)
1,500
1,000
500
0
Strategy by Segment Passive Components Segment
36
TDK Integrated Report 2024
About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
Growth Strategies
Contents
1.2
3.5
169.5
180.5
130.8
-1.2
3.3
6.3
-0.2
CAGR 8–11%
8.0
FY3/22
FY3/23
FY3/24
FY3/25
FY3/26
FY3/27
In Sensor Application Products segment, we have set a
Long-term Vision of: “Create different and Connect” (create
things which differ from those that have come before; and
actively connect all things to each other). We will repeat the
cycle of “market-in,” to apprehend the needs of the market
and of our customers, followed by “concept-out,” to deliver
customized solutions at the concept level, to make a reality
of being “first-to-market.” We will meanwhile strive to achieve
improved margins by also putting into practice rigorous
company-wide “quality first.” Specifically, with the aim of
delivering products of value that satisfy the needs of our
customers, we will expedite the market launch of products,
including offering them in both single sensor and user-friendly
sensor modules. TDK has furthermore begun to offer
high-precision position sensors that combine a TMR sensor
with a MEMS motion sensor, utilizing TDK’s magnetic
technology, to apprehend the needs of customers seeking
high-precision position detection.
We are moreover endeavoring to create an organizational
structure oriented around the market, to achieve prompt
market-in as part of our own transformation. In addition, we
are actively planning to enhance our Monozukuri
(manufacturing excellence) capabilities by fully leveraging
TDK’s production technologies, know-how, and human
resources, while also promoting a production base strategy
to bolster cost competitiveness and the supply chain.
Share No. 1
Share No. 3
Share No. 3
Temperature sensors
Magnetic sensors
MEMS Motion sensors
35–40%
20–25%
15–20%
Sensor Application Products
Net sales (¥ billion)
OP margin (%)
BizROA (ROIC) (%)
Net sales and BizROA (ROIC) targets
Measures to improve net sales and BizROA (ROIC)
Net sales
BizROA
(ROIC)
• Increase sales due to increased demand for TMR
sensors
• Expand sales of MEMS microphones
• Increase earnings from TMR sensors
• Improve profitability of MEMS sensors
• Improve earnings from temperature and
pressure sensors
• Increase investment amounts from the previous
Medium-term Plan
Priority products and estimated market share
To-be in the long-term
• Increased demand for sensors due to the utilization of AI
• Increased business opportunities due to electrification of vehicles
• Establishment of top position leveraging the cooperative
relationships of existing and new businesses
Business opportunities
• Establish a “market-in” business approach, which captures
market/customer needs to achieve “first-to-market,” and a
“concept-out” approach, which provides solutions based on
concepts
• Expand collaboration with technology leaders and game
changers that drive the industry forward
• Optimize the internal resources by transformation of
organization structure
Growth strategies
• TMR technology derived from long accumulated magnetic and
thin-film technologies
• Temperature sensors with top share in the automotive market
• Our unique production methods, materials and processes
technologies
• MEMS design technology and magnetic circuit design
technology
• IC design capabilities of IC Sense and InvenSense, including
expertise of sensor characteristics
• Product development capabilities by combining sensors and
software
Competitive advantage
• The rise of new competitor companies
• Unpredictable price fluctuations in energy, raw materials, and
distribution costs
• Geopolitical issues
Risks and issues
Takao Tsutsui
CEO, Sensor
Systems Business
Company
Strategy by Segment
37
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Expansion of sensor products into
the automotive market
TDK sensor products are deployed in a range of applications.
Among these, we are seeing the expansion of applications
of TMR sensors, as well as temperature and pressure
sensors, into the automotive market.
TMR sensors
Demand for TMR sensors can be expected to increase in
line with the electrification of automobiles, including the
shift to xEVs. We are also utilizing technology developed in
products for the ICT market
to develop products for the
automotive market, and have
finalized an augmentation
of the Asama Techno
Factory to enhance our
production system.
TOPICS
TDK estimates that demand for sensor components will grow
at a compound annual growth rate of 6% in line with the
growing demand for EX and DX. By market, we estimate that
growth in the automotive, ICT, and industrial equipment
markets, will respectively progress in the manner illustrated in
the below graph.
Temperature and pressure sensors
For xEVs, thermal management systems to control the
temperatures of various vehicle components have become
extremely complex. This is because there is a greater need
than is the case in engine vehicles to better regulate heat
to realize comfortable driving conditions while conserving
battery power. In line with progress in the shift to xEVs,
opportunities for TDK temperature and pressure sensors
to contribute are expanding.
For example, unlike conventional air conditioning
management in vehicles, BEVs require a heat pump that
uses the properties of liquids and gases—namely the fact
temperatures will rise in response to increases in pressures
and fall when pressure is reduced—to adjust the temperature
of the coolant, which serves as the medium for heat
transfer. TDK temperature and pressure sensors may be
deployed to fulfill this role, due to the necessity to control
the temperature of this heat pump using pressure.
In addition to the above, it is anticipated that
temperature and pressures sensors will be deployed in a
variety of other applications, including battery
management systems.
Operations at factory in Hungary
(temperature sensors)
Market-in/concept-out business approach
Sensor demand estimate by industry
Module
System
Parts
Material
Market-in
Concept-out
Customers
TDK
Auto-
motive
ICT
Ind & HA
FY3/23
FY3/24
FY3/25
FY3/26
FY3/27
FY3/28
FY3/29
Demand CAGR 6%
Our sales target
CAGR 8–11%
Examples of automotive products in use
Expansion of Asama Techno Factory
Market growth
(TDK forecast)
EPS steer by wire
• Steering angle sensor
e-axle / Traction motor
• Motor angle sensor
Electric mechanical brake system
• Angle sensor for brake motor
Battery management system
On board charger (OBC)
Invertor
• Current sensor
Strategy by Segment Sensor Application Products
38
TDK Integrated Report 2024
About TDK
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Contents
Share No. 3
Share No. 1
HDD heads
HDD suspension
assemblies
20–25%
40–45%
-19.3
-28.1
200.6
184.2
248.4
1.8
-12.2
-22.0
3.3
CAGR 8–11%
4.0
Magnetic Application Products
Net sales (¥ billion)
OP margin (%)
BizROA (ROIC) (%)
Net sales and BizROA (ROIC) targets
Measures to improve net sales and BizROA (ROIC)
Net sales
BizROA
(ROIC)
• Recovery of data center demand
• Continued expansion of near-line HDD market
• Profitability improvement of HDD heads and
suspensions
• Improved productivity of magnets
• Curtailment of investment from
the previous Medium-term Plan
• No new investments, only renewals
Priority products and estimated market share
Magnetic Application Products business’s mission is clear: to
maintain its status as the premier independent manufacturer
in magnetic head storage, meeting the demands of the
large-capacity data storage era. Our vision encompasses
restoring profitability and ensuring business sustainability,
advancing innovative technologies, particularly in
heat-assisted magnetic recording (HAMR) magnetic heads,
and scaling up of Tri-SA suspension shipments. Moreover, as
for our efforts to deepen digital transformation, we’re
enhancing our data analytics and mining capabilities, and
integrating them into our development and production
processes to drive efficiency and innovation.
In FY March 2024, we saw a sudden slowdown in the
market, but the data center market also appears to be
bottoming out, so we expect the market see continued
growth in the future. We will improve profitability by gradually
increasing the mass production ratio of high-value-added
products such as microwave-assisted magnetic recording
(MAMR) technology while also incorporating the benefits of
the restructuring implemented during the previous
Medium-term Plan.
To-be in the long-term
• Maintain MAMR technology leadership, accelerate development
of HAMR technology, and prepare for mass production
• Optimize production capacity and operations
• Strive to increase market share of Tri-SA suspensions to
support high capacity near line drives
• Ability to continuously develop and mass produce new
technology products
• Optimize production capacity and operations by continuously
working on automation and increasing the use of big data
• Increase in demand for data storage due to the progress of AI
technologies and the spread of cloud services
• Leading in medium- to long-term innovation in cutting-edge
technologies
• 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
Business opportunities
Growth strategies
Competitive advantage
Risks and issues
Albert Ong
CEO, Magnetic
Heads Business
Company
FY3/22
FY3/23
FY3/24
FY3/25
FY3/26
FY3/27
Strategy by Segment
39
TDK Integrated Report 2024
About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
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Contents
TOPICS
HDD technology roadmap
HGA demand forecast
MAMR and HAMR, next generation magnetic recording technologies
Tri-SA suspension demand forecast
(TDK forecast)
(TDK forecast)
FY3/23
FY3/24
FY3/25
FY3/26
FY3/27
FY3/28
FY3/29
FY3/23
FY3/24
FY3/25
FY3/26
FY3/27
FY3/28
FY3/29
(Mpcs)
(M Head)
Enterprise Nearline 3.5" 2.5"
2014
2016
2018
2020
2022
2024
2026
DSA
Tri-SA
Suspension
Head
Writer
TMR
TDMR
Reader
PMR
SMR
MAMR
HAMR
The evolution of technologies in HDD heads and
suspensions
TDK has developed innovative head technologies over the
years. In 1987, we developed the thin-film magnetic head,
which significantly increased recording density over
conventional heads. In 2005, we commercialized the
perpendicular magnetic recording (PMR) head, which broke
the density limitations of Longitudinal Magnetic Recording.
The perpendicular TMR head, which incorporates
high-sensitivity TMR technology, has pushed recording
densities even further, enabling higher-capacity HDDs.
On the other hand, with the higher-capacity HDDs,
the size of a recording bit within the
recording (magnetic) layer has become so
small that writing using current magnetic
head technology is approaching the limits
of physics. Two recording technologies is
available to solve this problem: MAMR and
HAMR. In the near future, the movement
of mass production of HAMR is expected to realize as
seen in the HDD technology roadmap below. We will
accelerate to develop HAMR towards the full-scale of
mass production.
In suspension products, the dual stage actuator (DSA)
system used to be the mainstream, gradually shifting
toward the Tri-SA system.
TDK will put next generation Tri-SA suspensions for
high-capacity nearline HDDs on the market to expand
further its share.
Demand for head gimbal assemblies (HGAs) bottomed out in
FY March 2024, and will have a tendency to increase in the
medium- to long-term due to an increase of the amount of
data transaction generation and an expansion of HDD
storage volume. With suspensions as well, demand for the
Tri-SA system is expected to increase by roughly three times
due to an increase in high-capacity models.
Market growth
Strategy by Segment Magnetic Application Products
40
TDK Integrated Report 2024
About TDK
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Data Section
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Contents
Share No. 1
Share No. 1
Small capacity
batteries
Power supplies
for industrial use
50–60%
15–20%
In our energy application products segment, we seek to
contribute to “TDK Transformation” in two fields. The first is
our contributions to achieving a sustainable society that give
consideration to the environment, such as GX and EX. In our
medium capacity batteries business, we will push forward on
expanding our energy storage system (ESS) for commercial
and industrial use and promote making renewable energy the
main source of power. In our industrial power-supply
business, in addition to our existing product portfolio, we will
expand our renewable energy and battery-related products.
With respect to the electrification of vehicles, we will create
the infrastructure for a full-scale launch of batteries for
electric motorcycles.
Second is our contribution toward transforming people’s
lives into ones that are better and richer. The silicon
anode-using lithium batteries that TDK has developed were
installed in smartphones for the first time in the world last year.
It is a technology that achieves higher energy density
compared to conventional batteries, and can provide one
with a real sense of how smartphones are lighter and thinner.
By using innovative new technologies of this sort, we hope to
deliver a new user experience to the world.
Fumio Sashida
CEO,
Energy Solutions
Business Company
Energy Application Products
17.4
12.6
1,173.4
1,121.7
965.3
12.8
21.5
15.6
15.1
CAGR 2–5%
18.0
To-be in the long-term
• Maintain and enhance top position in the market for small
capacity batteries by continuous development of cutting-edge
technologies
• Establish the top position in the medium capacity battery
market as a supplier
• Further enhance market competitiveness by strengthening
differentiation technologies and cost competitiveness
• Further expansion of applications requiring high-performance
rechargeable batteries
• A boost in the high-end smartphone market due to the
expansion of high-function devices, such as foldable
smartphones and AI smartphones
• Increased added-value in LIB due to silicon anodes and other
new differentiation technologies
• Expansion of the storage battery market and demand for
related devices due to the accelerated introduction of
renewable energy (rechargeable battery and industrial power
supply businesses)
• Local demand increase in growth markets such as India
Business opportunities
Growth strategies
• Ability to develop cutting-edge technologies as a technology
leader in the industry
• Capability of management transformation based on “Capability
to envision the future” and “Capability to execute”
• High-reliability mass production technology, thorough safety
risk management
• Cost optimization technology and production engineering
technology capabilities
• Broad customer base and long-term partnerships
Competitive advantage
• 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
Risks and issues
Priority products and estimated market share
Measures to improve net sales and BizROA (ROIC)
Net sales
BizROA
(ROIC)
Net sales (¥ billion)
OP margin (%)
BizROA (ROIC) (%)
Net sales and BizROA (ROIC) targets
Effect of material price reduction
• Expand small capacity battery high-value-added
products
• Expand medium capacity batteries business
• Maintain and improve profitability of small capacity
batteries
• Increase earnings from medium capacity batteries
• Optimize business assets including investments
FY3/22
FY3/23
FY3/24
FY3/25
FY3/26
FY3/27
Strategy by Segment
41
TDK Integrated Report 2024
About TDK
Message from the President & CEO
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Data Section
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Contents
2020
2021
2022
2023
2024
2025–
ED (Wh/L)
(Year)
Silicon anodes
Conventional products
60%
70%
80%
90%
100%
0
5
10
15
20
25
30
Retention of discharge capacity(%)
Years
Conventional products
New products
Comparison of retention of discharge capacity and life span
With regard to small capacity batteries, we will support the
evolution of small electronic devices such as smartphones
through advanced and innovative technologies.
We will enhance the user experience through advanced
technologies. Specifically, silicon based on a new structure
will improve stability during charging and discharging.
Increasing the silicon content to improve energy density is
conducive to such purposes as downsizing and lowering
profiles as well as longer periods of use.
In India, we began the pack production process for batteries
in 2017. In 2022, we also started cell production. In 2025,
we plan to begin production in Sohna, India.
With regard to materials procurement initiatives, we will
work to strengthen our value chain and maximize business
value, including strategic initiatives such as investments in
materials suppliers.
In the area of medium capacity batteries, we will pursue the
following three core values to attain in the medium to long
term our target position of being number one in the world:
TDK is targeting the markets for such applications as ESS,
electric motorcycles, and power devices (such as drones).
Our ability to deliver products tailored to the needs of our
customers and the characteristics of devices thanks to being
able to draw on a broad range of aspects as our materials
Road map of energy density
Medium capacity battery market demand growth
Manufacturing site in Xiamen, Fujian
FY3/23
FY3/24
FY3/25
FY3/26
FY3/27
FY3/28
FY3/29
CAGR 10%
Our sales target
CAGR 20%
India new factory overview
Phase 1
India new factory
Phase 1 construction progress
technologies and product platforms is one of our strengths.
We aim to expand our market share with technology and
product strategies that further increase customer value. In
particular, for the ESS market, we aim to expand our market
share with extremely long-life (20 to 25 years) span products
based on the life spans of solar power panels and for power
devices, Jumbo-Power, which provides high output power.
We will work to expand the capacity of new manufacturing
sites to meet demand and sales growth going forward, with
our goal of cementing our status as number one in the
industry in terms of Q (Quality), C (Cost), and D (Delivery).
Medium capacity batteries growth strategy
1. Superior Customer Service
3. Maximize business value by strengthening the value chain
2. Technology Advancement
3. Operational excellence
2. Implement a China plus one strategy in view of
geopolitical risks
1. Offer new value through innovative technologies
Small capacity batteries growth strategy
(TDK forecast)
Strategy by Segment Energy Application Products
42
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About TDK
Message from the President & CEO
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Data Section
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Contents
Materials × Processes technology × Software technology
Human capital
Organizational
capability
Customer base
Photo acoustic
glucose
monitoring
RF devices for
quantum computer
InCellSense
Plasma application
Disc type
ceramic capacitor
Thin-film
magnetic
Head
Thin-film
magnetic
Head
Audio
cassette
tape
Audio
cassette
tape
Ferrite
core
Ferrite
core
Core
memory
Multilayer
ceramic capacitor
Multilayer
inductor
Multilayer
inductor
Ring varistor
VOC multi gas sensor
Tx coil unit (Plating)
Noise suppressing sheet
Optical disk
VHS
NH3 fuel cell
ESS
TMR sensor
FCLM
SpinPD
Neuromorphic device
Edge AI
Bio magnetic sensor
Camera module actuator
Suspension
Film capacitor
Lithium-ion battery
Radio wave
absorber
Flash memory applied device
Thin-film RF
component
Motion sensor
Thin-film
inductor
EMC test
system
Cardio-
vascular
monitoring
PowerHap
PiezoHapt
CO2 gas sensor
NTC sensor
Multilayer NTC thermistor
Cera Charge
Piezo actuator
Multi-layer
integrated
device
SAW filter
LN thin-film
Multilayer RF
component
DCDC converter (μPOL)
WPT
Bidirectional Converter
Wire wound EMC filter
Wire wound inductor
Power supply
Transformer
NTC thermistor
New Business
Ferrite
Group’s culture
Just as its roots below the ground are vital for a tree to
grow, so the enhancement of pre-financial capital, such as
technological capability, human capital, organizational
capability, and customer base, are important for the further
substantial evolution and growth of the ferrite tree. The
technological capability, organizational capability, and
customer base we cultivate for the success of a single
business, including some failures, are shared across the
company and inherited for the next opportunities.
Also, at the foundation of the pre-financial capital is our
Group’s culture we have embraced since our founding, our
venture spirit and a functional equality. Functional equality is
one of our values to encourage discussions in an open and
equal atmosphere, based on functions (roles) rather than
hierarchy. Have the courage to take on new challenges and
embracing a functional equality. Encourage open discussion
as equals regardless of role or title and respect the existing
cultures of the companies we acquire. Learn from each other
globally and generate a unique synergy. By valuing this
culture, we have successfully created innovative new
products throughout the years.
At TDK, corporate management must pursue more than
financial value. It is also critical that we increase our
corporate value by balancing ESG and other activities that
generate pre-financial value. TDK considers technological
capability, human capital, organizational capability, and
customer base and so on, which are called “non-financial
capital” in general, to be capital that generates future cash
flows and expresses it “pre-financial capital.”
Our thinking regarding pre-financial capital
Customer base
Organizational capability
Value creation process through pre-financial capital (Examples of the sensor business)
Apply world-class thin-film
and magnetic technologies
and develop through
behind-the-scenes research
Technological
capability
Take on numerous challenges
with our venture spirit
Organizational
capability
Identify and M&A with unique
technologies
Respect acquired companies’
culture and diversity
Technological capability/
organizational capability
Diverse team members work
around the world
Fusion through “empowerment”
and “functional equality”
Human capital/
organizational capability
Introduce TDK Quality
into acquired companies
Strengthen the global
HR system
Organizational capability/
human capital
Suggestions and feedback
from worldclass customers
Customer base
Evolving and expanding
the Ferrite Tree
Sharing successes
and failures
Promoting team members from
acquired companies
Implementing global
management
Detecting trends
Technological capability
Human capital
pages 29, 44
page 52
page 51
pages 58, 67, 68
• Over 100,000 team members,
about 90% of whom work overseas
• Appointing members to important
positions, including came from
acquired and other companies
• Continuously evolving the
Ferrite Tree
• Highly refined manufacturing
technologies
• Deep connections to the world’s
leading customers (High share of
the global market)
• Sustainability activities
• DX initiative
• Group governance
• Unique Group’s culture, such as
venture spirit and permeating the
“functional equality.”
Pre-financial Capital That Backs TDK’s Value Creation
43
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About TDK
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Long-term Vision
Governance
Data Section
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Core
technologies
Process
Production
Engineering
Evaluation &
Simulation
Product
Design
Materials
The culmination of 89 years
of experience and know-how
of material design and
ultra-fine structure
realizes control
on the
nanometer level
Materials technology
Process
technology
Evaluation & simulation
technology
Production engineering technology
Product design
technology
is applied to accurately
measure and analyze
ultra-fine structure and
noises by electronic
devices
combines expertise
with innovation to
create new ideas
Outstanding technology
to develop and produce
the machines of the
original design
TDK has declared in our Long-term Vision “TDK Transformation”
that we will “become the No.1 partner growing alongside our
worldwide customers by pursuing continuous transformation,”
As CTO, I believe that putting a further polish on the
technology that above all is a TDK forte is crucial toward
making that statement a concrete reality. Our greatest
technological strengths lie in materials, but that is not limited
solely to our capability to develop and manufacture superior
materials. The very fact that we have strengths in core
technologies related to Monozukuri (manufacturing
excellence) in the forms of the know-how about how to use
materials based on a deep understanding of their physical
properties and the process technologies for getting the most
of the materials’ physical properties makes it possible for us
to propose technologies that will help our customers to set
their products apart.
Another major advantage is that we can develop a wide
range of products by structuring these technologies as a
technological base and platform, rather than hanging on to
them as individual elemental technologies. These technologies
include materials technology sourced from ferrite; process
technology including thin-film deposition, multilayer process,
and micro-fabrication; evaluation and simulation technology for
realizing smooth development; product design technology for
integrating multiple components to achieve high performance;
and production engineering technology that provide for stable
mass production. We at TDK have effectively used these
platforms to quickly deliver solutions that respond to the
changes and increasing sophistication in the technological
requirements of our customers, and we have broken ground
on new product domains.
One of the leading examples is our battery business,
which has grown into the Group’s largest business. A major
key of the innovation of film-type lithium-ion batteries, which
TDK has made practical use, is the mixing and coating
technologies used to form electrodes on ultrathin sheets.
That in turn is a further advance on the technologies TDK
had cultivated for years in the cassette tape business.
Magnetic sensors are another product that is a TDK forte.
The unique materials and process technologies used for
these are further refinements of the technologies we
cultivated with magnetic heads for hard disks.
Furthermore, TDK has developed the new nine-axis
sensor by combining this magnetic sensor technology with
the six-axis motion sensor technology of North America’s
The five core technologies supporting TDK’s Monozukuri
Message from the CTO
Putting a further polish on the technology platform
that is a TDK forte
Our goal is to become the No.1 partner
contributing together with our worldwide
customers toward realizing a sustainable
future by putting a further polish on our core
technologies for Monozukuri
Director, Senior Vice President,
Chief Technology Officer, and
General Manager of Technology and
Intellectual Property HQ
Shigeki Sato
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InvenSence, a company that TDK acquired in 2017. The fact
that these can detect absolute position and direction on their
own means there is no need for an external micro controller
or CPU to do the calculations, enabling smaller sizes and
power savings. TDK plans to develop them as essential, key
parts for the AR/VR goggles that are expected to serve as
the information devices that will come after smartphones, as
well as for robot controls and so forth.
Thus, at TDK, we have refined the technologies
developed in one of our businesses to create a platform, and
we have managed to develop more advanced new products
and new technologies. In order to further strengthen these
technology platforms, we need to first further refine
technologies for materials, processes, and the like in each
business division. In addition, as CTO and general manager
of the Technology and Intellectual Property HQ, using the
following three approaches I intend to accelerate the
development of our technology platforms.
The first is to search for and take the lead in developing
“Disruptive Technology” that could possibly replace current
products and technologies. For example, in the field of
recording media, as a result of technological innovations,
magnetic tape has been replaced with various anchor
products including optical media, followed by HDDs, SDDs,
and so forth. The crucial thing is to recognize these signs and
prepare the next move in advance so that one can accurately
respond to these changes in technological trends and market
demands. I believe that, even if a given product is one for
which TDK holds the largest market share, at the same time
we have to do research and development on new
technologies whose impact may be so much that we need to
terminate that product in the future.
The second is our response to cutting-edge technologies.
For example, we will research how new technologies such as
AI, AR/VR, and digital twinning can be incorporated into
existing TDK businesses, and move forward with preparations
for advancing into new technological domains.
The third approach is to further advance the analytical
evaluation and simulation technology that is also a part of our
company-wide technology platforms. It is necessary for us to
develop a more substantial environment for realizing
smoother technological development in each business
division. By steadily carrying out these measures, I hope that
we can turn TDK’s technological advantages into something
more rock-solid.
Another crucial point when it comes to realizing “TDK
Transformation” is strengthening our capability to envision the
future. TDK is a company that has grown making use of its
technological capability, and is one where the “technology-
out, product-out” orientation remained strong. One of our
greatest strengths has been that not only our engineers but
also top management and staff from sales and administrative
divisions were quite familiar with the technologies, used that
to come up with strategies, and were able to understand the
issues facing our customers. However, with such changes to
the environment as a worsening of the climate change
problem and the digitalization of society accelerating, we will
have to not only understand the issues that our customers
face today but also their visions for the future. If we do not
work together with our customers to envision and then make
practical the products and technologies needed to realize a
sustainable future, we will not be able to “become the No.1
partner growing alongside our worldwide customers by
pursuing continuous transformation.”
In 2021, we established our Corporate Marketing &
Incubation (CM&I) HQ, a cross-business organization meant to
further strengthen this market-in concept. CM&I HQ sweeps its
antenna across TDK’s wide-ranging markets, customers, and
product applications while also making use of information about
the latest technological trends obtained from TDK Ventures,
which is our corporate venture capital firm investing globally,
to search for themes for new product and technological
development to respond to changes in the environment.
By strengthening collaboration among divisions including
the CM&I HQ and our technology divisions going forward, we
will percolate this market-in concept throughout the company
and further strengthen our capability to envision the future as
the TDK Group. We will also establish a framework wherein
our human resources performing their various functions from
a variety of countries and regions work together, where they
envision the future together with our customers from both
technology and market perspectives, and where they
promote new business development and innovation.
Strengthening our capability to develop software will also be
a major issue going forward. To date, TDK has grown as a
hardware manufacturer that develops and supplies
electronic devices and the like. However, as our customers’
needs have grown more sophisticated and diverse, in recent
years there have been more and more cases where rather
than only devices we are delivering modules that incorporate
software into devices or multiple devices and systems with
modules installed.
For example, a temperature sensor is a device that
detects temperatures changes as a change in a resistance.
However, the function that our customers need is not that
resistance but rather of a specific temperature display, as they
will take whatever actions in conjunction with temperature
changes. In order to realize such functions at a higher level
and realize better solutions to our customers’ issues, rather
than just supply individual devices we need to have the
capability ourselves to also develop and supply software that
gets the most out of those devices’ performance.
Of course, to accomplish this we need to research to
grasp what sorts of functions our customers want from our
Message from the CTO
Getting market-in concept to permeate into an
organization that is technology oriented, and
strengthening the capability to envision the future
Strengthening our capability to respond to software,
realizing better solutions to our customers’ issues
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About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
Growth Strategies
Contents
devices now and what sorts of functions they will want in the
future. Furthermore, we still have insufficient numbers of
software engineers in the Group. Our plan is to push forward
to achieve a balance between strengthening such research
and broadening our software development system.
Furthermore, I believe that not only our software engineers
but also the engineers responsible for designing the devices
themselves and developing the materials for them will need to
further hone their knowledge and skills regarding software.
This is because, in order to provide our customers with better
solutions, it will be crucial for our hardware and software
engineers to think together not about developing hardware
and software separately but rather how to design them as a
total system. They will need to design hardware and develop
materials that anticipate the software that will be installed.
Essential to TDK maintaining and strengthening its
competitive advantages in the market is making effective
use of its intellectual properties, including patents. In
response to the globalization of our businesses and R&D,
we have established intellectual property divisions at our
business companies in each region. Each business
company works together with our corporate intellectual
property divisions on patent applications and intellectual
property management in accordance with the business
characteristics and laws and regulations of each region.
Furthermore, we have introduced our “IP Landscape” as a
tool for not only “protecting” our technologies and
businesses through intellectual property, but also for
“proactive” that apply intellectual property information
toward future business growth. Rather than being a simple
patent map, this is an analytical tool that superimposes
information about technology trends in the market, trends
among competitors, our own business and product
roadmaps, and so forth. It is used at management level for
formulating strategy, and also for the management of
business and technologies in each business division.
Going forward, we will further develop this initiative and
further strengthen the Group’s intellectual property intelligence
functions. Namely, we will of course analyze and determine
how to obtain patents and how to manage and use intellectual
property in each part of the world, but also—with IP providing
our point of view—what sort of development to pursue in the
future and in which directions to pursue business. Toward that
end, staff in a wide range of divisions that includes not only
intellectual property divisions but also corporate planning, each
business division, and R&D must make effective use of the IP
landscape. Meanwhile, it is crucial that the intellectual property
divisions go beyond their simple staff functions to raise their
status from an intellectual property standpoint to that of
strategic advisors and in-house consultants who help each
division with making correct analyses and decisions about
information. Setting our sights on such a transformation and
organizational evolution, we are currently working to
strengthen collaborations between the Technology &
Intellectual property HQ, the CM&I HQ, the Corporate Strategy
HQ, the Finance & Accounting HQ, and other divisions.
We are now accelerating to transform ourselves for realizing
our Long-term Vision “TDK Transformation,” but at the same
time there are also those things that we must uphold. These
are our Corporate Motto of “Contribute to culture and
industry through creativity,” and our Corporate Principles of
“Vision, Courage, Trust” This is because TDK engages in a
variety of businesses worldwide, and for “TDK United”—
which includes overseas subsidiaries and companies joined
the Group through M&A—to continue to grow with a sense
of togetherness, it must have such philosophy and a sense
of values that provide a core common to the entire company.
Providing a major force toward making these a reality is
TDK’s unique R&D culture, where engineers think up their
own themes and take on their own challenges. In fact, most
engineers at TDK not only take on development themes that
have come down from the top, but have also continued
steady research on themes that are of personal interest to
them and themes in which they have discovered possibilities.
The company also has a culture of supporting rather than
rejecting autonomous activities by its engineers. There have
been more than a few instances of new products and
technologies resulting from this bottom-up R&D work, and
they have been used to solve issues faced by customers.
In order for TDK to continue coming up with innovations
and lead the market in technology, I believe this unique
culture must be carefully handed down and developed
further. In particular, I want to see emerging talent more
proactively take on the challenge of new technological
themes. The development of quite novel technologies
frequently comes with failures and setbacks, but there is
nothing to be gained if you worry about that and give up on
taking the challenge in the first place. I believe that it is
extremely important for engineers to learn from their failures
in order to hone their skills. Even with a failure, if you can
carefully analyze the reasons for it, the next time you won’t
repeat the same mistake and possibility of succeeding at
those things you attempt will rise. For that reason, I am
requesting that everyone to write reports about those matters
where they have failed. If you share them with everyone, then
not only that person but other members, too, will be able to
avoid failing in the same way.
In this way, if there is something to be gained from failures
rather than viewing them all in a negative light, I believe that
those failed attempts at taking on challenges should be
evaluated in a positive light. I want to see this positive way of
thinking reflected in our evaluation systems going forward,
and create an environment where engineers do not fear failure
but rather can take on the challenges of coming up with
innovations with even greater courage than ever.
Making effective use of our IP landscape, and
strengthening IP intelligence functions
Handing down a culture where every engineer finds their
own development themes and takes on challenges
Message from the CTO
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About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
Growth Strategies
Contents
Intellectual
property
function
Promoting an “proactive” IP intelligence strategy to enhance our capability to envision the future
Based on our Long-term Vision of “TDK Transformation,” TDK
has set its sights on being the “No. 1 partner to our worldwide
customers,” as we actively work with customers to conceive of
and realize products and technologies to support a sustainable
future. To enhance our capability to envision the future, TDK
does not confine itself to “protecting” intellectual property
activities that protect its core technologies via patents, but
additionally promotes an “proactive” IP intelligence strategy, by
which it links intellectual property information to returns in the
form of business growth by actively utilizing this information to
make new proposals to our customers and to develop new
products and technologies. Specifically, we are strengthening
the inter-functional collaboration between the intellectual
property divisions and corporate planning, marketing, finance,
corporate venture capital (CVC), and other divisions, while
pursuing new value creation utilizing intellectual property as its
guiding perspective. This is enabling us to realize, for example,
proper disclosure of pre-financial information in compliance
with the Corporate Governance Code; IP landscaping
practices to link intellectual property information with
marketing; and better investment decisions in tech start-ups.
IP intelligence plays an additional important role in the
formulation of business and R&D strategies by our business
and technology divisions. For example, if a customer or
competitor undertakes a newspaper announcement or
issues a press release, our intellectual property divisions will
analyze aspects including each company’s aims and product
strategy, based on factors such as its patent application
patterns, and report this information to the business and
technology divisions as important information for TDK’s own
strategic planning. A company’s strategies for development
investments can be understood as a line through completing
analyses of its number of patent applications and trends in its
areas of focus over time. It is then possible to infer a
company’s development and business strategies by
matching this information with the points represented by
newspaper announcements and press releases. Combined
analyses of IP and non-IP information of this kind allow the
visualization of trends among customers and competitors
and thereby support improved decision-making.
We do not only provide IP intelligence at the request of
business and technical divisions, but we aim to make IP
intelligence a regular part of their activities.
Sharing best practices worldwide
TDK has welcomed a variety of overseas corporations into
the Group through cross-border M&A. Intellectual property
systems differ from country to country, and distinct
workstyles and cultures also exist at companies that have
joined the Group through such M&A. With this in mind, and
to realize optimal IP management on a global level, TDK
implements IP management that respects the local
characteristics and the unique features of each company
through the delegation of authority and increased
transparency in its activities. As a result, diverse best
practices and IP intelligence have been generated at
respective sites, with these then shared across all Group
companies to further enhance the intellectual property
activities of the entire TDK Group.
Making
decisions
Finance and
tax affairs
R&D
Corporate
planning
Sustainability
Business
planning
Marketing
Legal affairs
Identifying
business
challenges
Analyzing
IP and
non-IP
information
Instilling normalization
Creating
easy-to-
understand
recommen-
dations
EMEA
Other
Japan
China & Asia
USA
Patent portfolio size Representative development site Knowledge sharing
Strengthening inter-functional collaboration and
seeking value creation utilizing intellectual property as
its guiding perspective
Analyzing IP and non-IP information to support
improved decision-making
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Message from the President & CEO
Long-term Vision
Governance
Data Section
Growth Strategies
Contents
IP Strategy
48
To contribute to the transformation of society, TDK is
developing a variety of new products by applying the
spintronics technologies that it has accumulated through
HDD head manufacturing and combining materials and
process technologies as well as software technologies. We
introduce three examples of applications achieved through
the inter-organizational activities that we are emphasizing.
TDK focused on new Planar Waveguide Technology* that
neither uses a lens nor mirror in order to achieve significant
reduction in module size. Laser beams emitted from the new
module are visualized onto a MEMS mirror, then reflected off a
lens and projected directly onto the eye’s retina. Unlike how
one sees real objects, images projected directly onto the
retina will always be sharp, without the need to adjust focus.
When used in AR glasses, which layer images over the view of
an environment, all elements stay in focus, making it possible
to provide a more realistic and higher-quality AR experience.
With the expansion of AI usage, the energy consumed by
computers has been increasing explosively. TDK is developing
a spin memristor, an analog memory element that electrically
mimics the synapses in the human brain. Devices that utilize
this technology, known as neuromorphic devices, are
expected to be over 100 times more energy-efficient than
conventional devices.
The i3 Micro Module, an ultracompact sensor module with
onboard edge AI, integrates various sensors (vibration,
temperature, sound, barometric pressure, etc.), edge AI, and a
mesh network function and can confirm the status of machinery
and equipment without relying on humans, minimizing down
time and contributing to a higher productivity. By adding Auto
ML edge AI functions from Qeexo, high added value from edge
sensing combined with edge AI can be achieved, making it
possible to provide sensing solutions that contribute to the
implementation of DX and improved productivity by customers.
Full color laser module
Neuromorphic devices
A solution business that integrate sensors,
edge AI, and networks
* Planar Waveguide Technology: The technology for forming optical waveguides similar to
those in fiber optics, but on a planar substrate
1
2
3
1
3
2
Metaverse implemented in a society
Improve efficiency in data processing
Predictive
maintenance
preventing
anomalies
Sensor module
Machine learning
AR glasses, etc
Data center
Predictive maintenance solutions
• TDK established AI venture, TDK SensEI Pte. Ltd
https://www.tdk.com/en/news_center/press/20240730_01.html
TDK Integrated Report 2024
About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
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Contents
Development of New Business and New Products
Example of Initiative
Development of Monozukuri human resources
At TDK, the Production HQ is focusing its efforts on the training of human resources to
reinforce Monozukuri. We conduct training on the fundamentals and key points of Monozukuri
and systematically and continuously develop human resources who can drive the evolution of
manufacturing sites.
Veteran team members (employees) with high levels of knowledge on Monozukuri pass
their varied expertise down to other members, developing human resources who can perform
core roles in manufacturing. We also conduct training for IT and maintenance engineers and
introduce new technology by inviting external lecturers to give talks.
Integrated measures from order receipt to shipment
Human resource development training
technologies such as DX and AI to fortify our Monozukuri
foundations and take measures to accelerate the pace of
development and reform business.
In this way, we will optimize the allocation of resources to
innovative elemental technologies, processes, and device
development Group-wide so that we can improve our
Monozukuri capabilities in parallel from a variety of angles
while enhancing Monozukuri human resource training to
make maximum use of individual capabilities and generating
new value.
TDK is taking action to optimize its entire value chain. In April
2023, we created a system that integrates all processes from
receipt of orders to transportation and includes the pursuit of
zero defects, responses to procurement, geopolitical risks,
and so on to ensure stable supplies of high-quality products
to customers around the world. For example, we are globally
deploying a production system that centrally manages
information on the place of origin of raw materials used in
production around the world, the substances contained in
products, and the laws and regulations of relevant countries.
We are also conducting common governance operations so
that we can respond to a variety of conceivable risks.
Initiatives throughout the entire value chain
Reinforcing Monozukuri by optimizing our
production technology portfolio
General Manager, Production HQ and General Manager,
Production Strategy Planning Group
Hisayuki Abe
In order to achieve our Long-term Vision of becoming the
No.1 partner, growing alongside our worldwide customers,
we need to transform TDK’s Monozukuri (manufacturing
excellence). TDK has adopted a medium- to long-term
perspective and is advancing and deepening the basic
technologies (five core technologies) that support our current
production activities while developing unique technologies
that adopt perspectives such as energy conservation.
Over the medium term, we will advance development of
production processes from an early stage so that we can
respond immediately to the product roadmaps of business
divisions. Over the long term, we will take active measures to
advance technology, including internal and external
technologies as well as technologies from other industries,
and undertake innovative Monozukuri. We will also employ
Regarding CO2 emissions reductions as well, in addition
to reducing emissions generated in production, we are also
cutting Group-wide CO2 emissions from the entire value
chain, including Scope 3.
Technology
Governance
Risk management
Sharing best practices
Reducing environmental impacts
Creation of new products using original technology
Energy reduction technologies
Increasing development and production
efficiency through DX and AI technologies
Suppliers
Procurement
Production
plans
Production
Shipment &
transportation
Customers
Design and Production (Monozukuri)
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Message from the President & CEO
Long-term Vision
Governance
Data Section
Growth Strategies
Contents
Digital transformation of design review:
introduction of AI concierge functions
TDK’s Quality Assurance HQ believes that creating
high-quality new products will require upstream
approaches that start with product design and is
developing AI concierge functions that can be used
during all design review stages. Simply put, an AI
concierge function refers to an advisory function that
draws designers’ attention to things they may overlook.
During day-to-day development work, it is necessary to
quickly find the needed decision-making materials from
within a massive amount of technical information. The
AI serves as a concierge to provide advice on this.
Many business organizations in the TDK Group
have accumulated extensive know-how in product
design. Representative examples of this are the valuable
lessons contained within the troubleshooting that has
been performed in the past. By having an AI concierge
extract information during each stage of design review,
it will be possible, for example, even for new engineers
who were recently hired to identify optimal solutions
equivalent to those found by seasoned veterans.
The TDK Group will proceed in step with this global
trend and create products that even more customers
can use with confidence.
What are the “3Qs”?
* EPQ: Environmental product quality
3Qs
Measures
Human Resource Quality
Sustained quality improvement
activities facilitated by raising quality
awareness and practical skills
· Introduction of DX to QC
education and implementation
of small-group activities
· Development of on-site DX
human resources through the
implementation of DX in quality
management operations
Technological Quality
Sustained quality assurance
initiatives keyed to improvements
in quality technology and
preventive measures
· Development of autonomous AI
control systems
· Introduction of AI concierge
functions to design review
Systematic Quality
Sustained quality improvement
activities mobilizing quality
management systems structured
to integrate TDK’s distinctive
Monozukuri know-how with
international standards
· Establishment of reliability
technology in response to new
customer requirements and
applications
· Establishment of supply chain
management that includes EPQ*
and software requirements that
anticipate future markets
satisfaction as goals in the new Medium-term Plan. To
achieve these goals, we are reinforcing upstream
management in terms of both software and hardware.
Specifically, we are developing autonomous AI control
systems that can enable equipment to automatically set
manufacturing conditions and adjust equipment, introducing
AI concierge functions in design reviews, and taking other
DX measures.
To anticipate and respond to application changes by
customers in recent years, we will seek to anticipate changes
in reliability requirements for products and establish
advanced reliability technologies. Through these activities, we
will reinforce upstream management.
Quality Assurance
Corporate Officer
Chief Officer of Quality,
Safety and Environment and General Manager,
Quality Assurance HQ
Takeshi Takahashi
Reinforcing upstream management through
digital transformation of the 3Qs
TDK is further reinforcing its quality assurance activities with
the 3Qs—human resource quality, technological quality, and
systematic quality as the theme. In addition to existing
measures to address these “3Qs,” we are introducing
technologies such as analysis of big data and deep
learning. We are supporting design through system
development using prediction and prevention of in-process
problems and AI with these tools and achieving upstream-
management-type quality assurance that prevents defects
in the product planning and equipment design stages.
We set pursuit of zero-defect product quality, reduction
of quality failure costs, and enhancement of customer
Example of Initiative
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TDK Integrated Report 2024
About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
Growth Strategies
Contents
of the Hill,” to ensure the early adoption of our ideas. To
create something new, we sometimes consider system or
even software business models. Concretely, the CM&I-team
ideates to generate new revenue, accelerates growth through
incubation projects, establishes new internal startups and
consolidates incubation activities and processes.
We embrace the new corporate strategic direction of
transformation through a diverse toolbox of novel
methodologies including bridge building between crucial TDK
innovators such as technology and intellectual property (Tech
& IP) HQ, TDK Ventures, Business Companies, and other
internal and external global partners.
We intensify homegrown entrepreneurship in the form of
TDK’s initial internal startups (TDK Kindergarten), and the
scaling of incubation projects like i3 Micro Solution—realization
of predictive maintenance based on edge AI.
To enhance support for Tech & IP HQ, the two departments
will jointly develop, establish, and deploy an innovation
process management system to raise the commercial
success rate of R&D. CM&I will support Tech and IP HQ with
market and customer “in” development requirements, as well
as define market potential for technology, product, and
solution “out” projects. The teams will collaborate to validate
desirability, feasibility, viability, and customer value.
We will delve deeper into market and technology mega
trends, customer and partner requirements through cross
functional technology roadshows, user experience (UX)
caravans and pinpoint research.
Strengthened cooperation with Tech & IP HQ
Working on a project created by TDK Kindergarten
Marketing
Senior Vice President
General Manager, Corporate Marketing & Incubation HQ
Michael Pocsatko
CM&I initiatives to expand business activities
The Corporate Marketing & Incubation (CM&I) HQ vision is to
transform TDK and expand by Exploration. CM&I was
established as a cross-business organization to quickly
identify market and customer needs and to strengthen the
market-in function so that TDK can respond promptly to
potential needs and collaborate across the organization.
We promote a “Market Centric – Customer Pain”
focused approach to develop and implement new Business
Models. We strive to enable “best in class” products = “King
Internal incubator program
TDK Kindergarten
Internal incubator program TDK Kindergarten aims to
create TDK’s next superstars by empowering a
culture of entrepreneurship within the organization.
The program is designed to ideate, create, and
accelerate groundbreaking ideas by leveraging TDK’s
core capabilities.
We always start with customer pain so that we do
not build something that nobody wants to use or buy.
TDK team members (employees) with an idea can
explore his/her dream by understanding customer
pains, how they behave, and how they make decisions.
We differentiate between must solve and nice-to-solve
customer pains. We validate or invalidate hypotheses.
We are planning to provide a fellowship program so that
more TDK members learn the new customer-centric
agile working style.
Example of Initiative
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About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
Growth Strategies
Contents
societal service. We call this vision, TDK Transformation.
We are dedicated to nurturing a sustainable future while
continually enhancing corporate value, in order to be the
customer’s indispensable No.1 partner. Spearheading this
mission is the Sustainability Promotion Headquarters, which is
committed to realizing a sustainable society in harmony with
TDK’s Long-term Vision “TDK Transformation,” to accelerate
transformation for a sustainable future.
To fulfill this agenda, we foster a culture of My
Sustainability Action (MSA), where each team member is
empowered to act with personal dedication and a proactive
desire to contribute. This ethos extends beyond mere
compliance to encompass a broader range of global
issues, making sustainability a personal responsibility for all
TDK members.
Since the establishment of Sustainability Promotion
Headquarters in 2019, we have cultivated a system where
frontline members actively consider how to leverage our
technology to address diverse challenges, integrating these
solutions into our business strategies. Rather than viewing
sustainability initiatives as mere costs, we have embraced
them as opportunities for innovation and future growth.
In the upcoming fiscal year, my focus will center on three key
areas outlined in our Medium-term Plan: fostering value
creation through engagement in MSA, strengthening our
social responsibility management system, and addressing
global environmental challenges.
I plan to enhance team member engagement by
leveraging our Group’s shared platforms, such as MSA and
MSA Guides, and by promoting internal and external initiatives
through the DX for Sustainability+ project. Over the past five
years, we have undertaken more than 80 projects as part of
our global management development programs, with
At the core of the TDK Group lies a robust management
structure that oversees the growth and development of
over 100,000 team members (employees) across a
network of more than 100 companies worldwide. This
expansive network not only focuses on maximizing each
member’s value-creation capabilities but also cultivates
an environment conducive to individual growth. This
approach serves as the bedrock of TDK’s success,
offering substantial potential for continued expansion
and development.
As Andreas Keller, who is spearheading TDK’s Human
Resources HQ, enters his second year as Chief People
and Sustainability Officer, he aims to illuminate how the
TDK Transformation fosters sustainability and
future-shaping capabilities
Profile
Andreas Keller joined the company in 2000 and has held several positions.
Prior to assuming his current role, he served as Executive Director of Human
Resources and Supply Chain Management at TDK Electronics Europe GmbH.
In 2017, he was appointed General Manager of Human Resources and
Administration Headquarters. In April 2023, he was appointed Chief People and
Sustainability Officer, where he leads the development and implementation of
human resources and sustainability strategies. He concurrently holds the
position of General Manager of Human Resources Headquarters, overseeing
the strategic direction of human resources initiatives.
company will expedite its transformation journey. By
amplifying the intersection of human resources and
sustainability initiatives, TDK is set to embark on a path
of accelerated growth and innovation.
I feel that the world presents TDK with numerous
environmental, social, governance (ESG) issues, often
associated with the environment. However, sustainability
encompasses a broader spectrum beyond environmental
concerns, including social and governance aspects. Our
Long-term Vision and aim are built on two main pillars: TDK’s
contribution to societal transformation and its internal
evolution to enhance effectiveness and drive growth for better
Empowering team members to drive value creation
Sustainability initiatives for the year ahead
Message from the CPSO and General Manager, Human Resources HQ
Senior Vice President
Chief People and Sustainability Officer and General Manager,
Human Resources HQ
Andreas Keller
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TDK Integrated Report 2024
About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
Growth Strategies
Contents
the health and engagement of our team members.
Regarding environmental and social issues, my focus is on
addressing these challenges while upholding human rights
and tackling climate change.
We have been actively developing the next generation of
business entrepreneurs and planning for succession through
a variety of programs, including the Global Management
approximately one-third of them touching on sustainability in
some capacity. These projects have played a crucial role in
raising awareness among our members, fostering a common
understanding of sustainability within the Group.
Looking ahead, I aim to accelerate TDK’s sustainability
transformation by further encouraging active participation in
our projects. For me, sustainability encompasses achieving
a balance between environmental and social concerns and
economic prosperity. I believe that prioritizing the continuous
development and well-being of our team members is key
to establishing TDK as a sustainable organization—one
that contributes to building a sustainable company,
society, and future.
TDK has identified the promotion and cultivation of a diverse
pool of human resources as one of its key issues (materialities)
in realizing our Long-term Vision. We particularly focus on
enhancing team member engagement to bolster sustainable
human capital for continued growth and development. Under
my leadership, I aim to foster a corporate culture that values
diversity, promotes inclusive leadership, and empowers all
members to make meaningful impacts.
Success cannot be achieved in isolation or by working
within organizational silos. We all share a collective
responsibility, and it is essential to connect and collaborate
across departments and organizational boundaries to thrive.
To foster diversity, equity, and inclusion within our
organization, I am committed to appointing leaders from
diverse backgrounds and cultivating inclusive leadership
styles. Leaders who draw on diverse experiences and
knowledge accelerate the transformation of the entire
Group through inclusive leadership. Secondly, I aim to
enhance our organizational capabilities to drive innovation
and efficiency. Lastly, I am committed to further improving
Human resources strategy
Advancing leadership and organizational growth
TDK initiatives developing tomorrow’s leadership
Development Programs and TDK Kindergarten where internal
start-ups are nurtured. Guided by our principles of
Empowerment and Transparency, we ensure that all Group
companies adhere to the same programs and objectives,
while granting each company and leader the autonomy to
handle detailed planning and on-site management. This
approach, underpinned by mutual support and the sharing of
progress and information, is essential for the success of
inclusive leadership.
Our Long-term people strategy
• Contribute to the transition towards a sustainable future by accelerating the transformation of society and advancements in
technology enabled by electronic devices developed using cutting-edge innovation in materials, processes,
and software technology.
• Become the No. 1 partner growing alongside our worldwide customers by pursuing continuous “transformation.”
Leaders and HR Functions collaborate to increase value of human capability in talent, organization and leadership.
Together they foster a corporate culture that values diversity, promotes inclusive leadership practices, and
creates an environment where all team members feel valued & included and create impact.
Long-term
Vision
Execute Global Management Development Programs to
develop future leaders, create & manage succession
plan to all TDK key positions, and enable talent mobility.
Develop and implement health programs, listen to and act on team member voices to improve engagement
and retention, enhance employer branding, and develop TDK as an employer of choice.
Our leaders lead by example. They actively demonstrate
inclusive practices, drive TDK Transformation, and
promote culture. They are evaluated on clear goals,
open feedback, & broad value creation.
Create a continuous learning culture to improve
individual and team capability, communication, and
productivity through an operating model that integrates
and digitalizes organizational processes.
TDK United HR
Transforming Human
Capability with
Empowerment &
Transparency
Attract and develop diversified and intelligent team
members to enhance competitiveness. We find talented
people worldwide and enable them to create impact.
Attract and Develop Talent
Inclusive Leadership Practices
Organization Capability and Efficiency
Team Member Health and Engagement
Global Leadership Pipeline
Message from the CPSO and General Manager, Human Resources HQ
53
TDK Integrated Report 2024
About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
Growth Strategies
Contents
from varied approaches, fostering a vibrant exchange of
ideas. I am committed to ensuring that we continue this
balanced approach, rather than focusing too heavily on one
perspective over the other.
Reflecting on our company’s growth and workforce
demographics, when I joined TDK in 2000, we had roughly
35,000 members. Since then, numerous companies have
joined us through mergers and acquisitions. Now, we have
around 100,000 members. About 80% of our members
joined TDK through M&A activities. Of the roughly 100,000
members, about 11,000 are based in Japan, with the
remaining 90,000 located outside of Japan. This diversity is
what makes TDK so unique. I have noticed that human
One aspect that concerns me is how we can sustain our
progress while considering the global landscape. It is
common knowledge that Japanese companies often seek to
adopt Western management styles when expanding globally.
However, I firmly believe that TDK’s true success lies in our
capability to blend both approaches. That is why our top
leadership program, the Global Executive Management
Program (GEMP), collaborates with both a top Western
business school in Barcelona and a Graduate School of
Leadership and Innovation in Tokyo. In the last leadership
program session, roughly half of the participants were
Japanese, with the other half coming from various countries
worldwide, resulting in a diverse mix. Participants learned
resources leaders from other Japanese global companies
have been reaching out to us, interested in learning how we
manage such a diverse population. This uniqueness gives us
a significant advantage compared to our competitors.
To achieve our vision of becoming our customers’ No. 1
partner, we must transition from a product-out approach to
one centered on discussing and co-creating various futures
with them. This shift requires foresight capabilities, where
each team member envisions potential market scenarios.
I believe the following three approaches can enhance our
members’ future envisioning capabilities.
Firstly, we aim to foster an environment that encourages
innovation. By decentralizing authority to our subsidiaries
and implementing programs like TDK Kindergarten, we
encourage creativity and entrepreneurial thinking. Through
this program, TDK’s first internal start-up business has been
underway, which aims to solve electromagnetic compatibility
(EMC) for consumer electronic companies. We will continue
the program to bring out the creativity and future vision of our
team members.
Secondly, we prioritize knowledge sharing and
collaboration across regions and divisions through
Weconnect, a group-wide e-Learning platform. This platform
facilitates the creation and dissemination of courses, enabling
members to acquire skills quickly and efficiently. For instance,
our global leaders collaborated to develop standardized
quality training modules. These modules were created
through working groups, validated by our headquarters, and
then translated into multiple languages for global accessibility.
This streamlined process ensures that all team members can
swiftly access and exchange the knowledge and skills
essential to TDK. Furthermore, these courses undergo
continuous evaluation and improvement, allowing us to
maintain updated and relevant content. By doing so, we not
only enhance individual capacity for future envisioning and
TDK global HR - focus & priorities
Top Management
Successor Candidates
Future Management
Candidates
General Manager
Deputy General Manager
Subsidiary Presidents
Other key positions
* All systems we introduce in Global HR are GDPR compliant
Recruiting process with TDK United Branding approach
Global Recruiting
Implement to next level globally
Global Competencies & Appraisal Standard
Plan and develop successors for all top key positions
Succession Planning & Executive Development
Strengthen TDK’s commitment to DE&I
Diversity, Equity, & Inclusion
Human Growth
Management Development Programs
Digital Learning
Global Communication & English Training
Establish Efficient Global HR Platform* (DX HR Processes)
Improve
Global
Communication
Improve Team
Member
Engagement
Improve
Health
Develop Next Generation
Talent
Management
System
Talent
Pipeline
Strengthening our foresight capabilities
Message from the CPSO and General Manager, Human Resources HQ
54
TDK Integrated Report 2024
About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
Growth Strategies
Contents
will enhance and leverage our Group’s common
communication platforms to foster cross-cultural
understanding and embrace a feedback culture.
Additionally, we aim to enhance operational efficiency by
promoting greater transparency through increased sharing of
information and evaluations with senior leaders and
executives. Achieving these objectives necessitates
harnessing the strengths of Europe, America, Asia, and
Japan to bolster our readiness to navigate any global
business environment. I see it as my mission to propose and
implement effective initiatives in pursuit of these goals, and I
am fully committed to realizing them. Through the integration
of our human resources and sustainability initiatives, we will
continue to advance our TDK Transformation, paving the way
for a future of sustainable growth and innovation.
structure. This realization, informed by my background in
supply chain management, spurred me to devise a plan to
appoint human resources leaders from Group companies
and regions worldwide. Presenting this proposal to the
then-president Ishiguro, he promptly granted me the
authority to proceed with the initiative under TDK’s auspices.
Subsequently, I empowered human resources leaders
across U.S., Asian, and European Group companies for
global projects. They had autonomy while collaborating
closely with me. This approach empowered them to present
their initiatives directly to management and the CEO, instilling
a sense of responsibility and pride in their newfound roles,
which, in turn, fueled their motivation and yielded positive
outcomes. Consequently, we fostered an organizational
culture characterized by Empowerment and Transparency.
This cultural shift, along with our distinct team
management approaches, transformed within our Human
Resources HQ. Previously comprising solely Japanese
members, the HQ now boasts approximately 20 non-
Japanese managers and leaders, reflecting a more
diverse composition.
In April 2023, I was honored with the appointment as
Chief People and Sustainability Officer. As the head of
Human Resources HQ, I perceive the significance of this role
lies in the inherent connection between people and
sustainability. Having witnessed firsthand how fostering
connections and nurturing individual growth generates value
and opens avenues for new possibilities, I firmly believe that
human resources are indispensable for both the sustainability
and growth of our company and society.
I am committed to my ongoing personal growth in
tandem with TDK’s development, as together, we continue
our transformative journey. Our vision is to establish an
autonomous and sustainable organization where our talented
leaders inspire and empower their team members to think
and act independently, guided by the principle of “empower
minds, Ignite action.” To address areas for improvement, we
proposal-making but also foster collaboration by co-creating
new courses with colleagues worldwide.
Lastly, we focus on improving team member
engagement and well-being. Through events, engagement
surveys, and initiatives promoting empowerment and
transparency, we create an environment where every team
member feels valued and can contribute meaningfully.
Implementing these programs that prioritize our
principles of Empowerment and Transparency enables TDK
to gain insight into the perspectives and experiences of each
team member. This allows us to promptly identify and
address any issues that arise.
For example, during last year’s engagement survey
across all Group companies, many team members reported
encountering procedural barriers when attempting tasks
beyond their company’s scope. In response, we introduced a
global IT system to digitize decision-making processes,
improving organizational efficiency. This initiative exemplifies
our commitment to the PDCA cycle, where we use survey
results to pinpoint on-site and organizational issues and
implement effective solutions.
Moving forward, we will continue to strengthen both
individual and organizational foresight capabilities, fostering a
cohesive team dedicated to our shared goals while
empowering each member to implement their own MSA by
thinking and acting proactively.
Initially, I was not an expert in sustainability, much like when I
started in human resources. My background was in supply
chain management. However, thanks to the knowledgeable
individuals at TDK, I am learning something new every day.
Shortly after assuming the role of General Manager of
Human Resources HQ in 2017, I recognized the critical
importance of enhancing our global human resources
development to strengthen the Group’s organizational
Male
54%
Female
46%
Male
90%
Female
10%
2024
2016
Global HR structure (male/female)
Global HR structure (Japanese/non-Japanese)
Japanese
26%
Non-
Japanese
74%
2024
Japanese
90%
Non-
Japanese
10%
2016
Empowering TDK Transformation through my own
personal transformation
Message from the CPSO and General Manager, Human Resources HQ
55
TDK Integrated Report 2024
About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
Growth Strategies
Contents
56
Human capital disclosure indicators and initiatives
is an idea for a solutions business utilizing edge AI which was
generated from horizontal connections by the triggered of the
corporate officer-ranked training, and which is currently tabled
for further work toward commercialization at a future point.
Implementing measures to enhance horizontal
connections in this way expedites the processes of securing
and developing talents while at the same time hastening the
assignment and promotion of the right people in the right
places, regardless of nationality. We also anticipate that it will
serve to create workplace environments which attract a
diverse range of individuals, thus facilitating the achievement
of Materiality 3 (Improve team member (employee) health
and engagement.)
Meanwhile, we will actively invest in various education
and training programs and recruit highly professional people
to enhance our software technology, which is indispensable
to the achievement of our Long-term Vision.
We anticipate that, as an outcome of these initiatives, a
virtuous cycle will be created whereby the diverse pool of
human resources will directly effect on our competitiveness. We
also believe that further enhancing our “capability to envision
the future” as well as our “capability to execute” toward
achieving transformation will facilitate a cycle of value creation,
with new businesses thus created from a diversity of ideas.
INPUTS
OUTPUTS
OUTCOME
Impact on
our finance
Pre-financial
and HR
activities
We are accelerating to transform ourselves through our
“capability to envision the future,” “capability to execute the
envisioned future,” and “capability of human resource
transformation” to ensure it continues to contribute to Social
Transformation based on its Long-term Vision. The diversity of
our human resources is one of TDK’s strengths. We believe
that strengthening the relationships between our diverse
human resources beyond boundaries of the Group
companies will facilitate an enhancement of our capability to
envision the future as well as to our capability to execute. We
have therefore set out three themes for human resources key
issues (materiality), which we will focus on over the period of
new Medium-term Plan.
With regard to Materiality 1 (Promote diversity, equity
and inclusion driven by inclusive leadership practices), we
have established a global human resource development
system (see page 55), and have adopted the best practices
of our acquired companies.
For Materiality 2 (Develop organizational capability to
enhance innovation and efficiency), we hold a leadership
program which brings together management and future
leader candidates with a wide variety of backgrounds from
throughout the world. Trainees on this program build
horizontal connections between themselves who would not
normally interact in their daily work.
From ideas generated from this program, in addition to
facilitating the successful establishment of a system called the
“TDK Kindergarten” (see page 51), an internal incubator
program to offer an environment to identify, create, and scale
new business creations, a number of candidates for business
commercialization have now started to emerge. One example
Transformation through promoting and
cultivating diverse pool of human resources to
further enhance competitive advantage
Linkage between investment in human capital and
value creation
• Increase of education expenses
• Increase in recruiting-related costs
(Pre-financial investment)
• Diverse pool of human resources
directly effect on our competitiveness
• Improve the capabilities to envision
the future and transform ourselves
• Generating new businesses from a
diversity of ideas
• Increase in the number of attendees
of TDK Kindergarten and other
internal entrepreneurial programs
• Identify potential candidates and
develop next generation
• Optimization of business operations
by promoting the appointment of
the right person to the right position,
regardless of nationality
• Progress in succession plans at
all levels
Materiality 1
Promote diversity, equity and
inclusion driven by inclusive
leadership practices
• Establish Global HR development
system
• Promoting diversity
• Adopt effectively the knowledge of
our acquired companies
Materiality 3
Improve team member (employee)
health and engagement
• Create and organize workplace
environment to attract a diverse
range of individuals
• Improve engagement
Materiality 2
Develop organizational capability
to enhance innovation and
efficiency
• Global leadership
• Improve global communication to
build horizontal connections up
• Global learning platforms
People Strategy
TDK Integrated Report 2024
About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
Growth Strategies
Contents
57
We develop business entrepreneurs who are able to generate
innovation and create new business. Specifically, we strive to
develop leaders who demonstrate the capability to create
business that contributes to the reinforcement and expansion
of continuous commercialization of cutting-edge technology
from a market-in perspective that understands the needs of
the market and customers and a concept-out perspective
that can propose value from a concept-based approach that
adopts customized solutions.
To accelerate innovation, it is also important that we
notice new things and make discoveries by combining
knowledge from different fields and different time frames that
at a glance do not seem to intersect. As TDK United, we will
continue reinforcing various global programs that instill
business entrepreneurship so that we can make maximum
use of the Group’s assets and enhance collaborative
capabilities for creating new innovation and businesses.
TDK commenced full-fledged activities to promote DE&I in
2020. We set a target for TDK Corporation of increasing the
ratio of women in managerial positions to 15% by 2035. We
held the career development seminars focusing on change of
thinking for female team members and conducted mentoring.
As a result, as of April 2024, the ratio increased by 4.8%,
which was more than double the level four years ago at the
start of these measures.
In 2023, we established a global DE&I team and took
steps to strengthen Group collaboration and initiatives,
including formulating a global approach for promoting DE&I
throughout the TDK Group worldwide, engaging the Global
HR organization in a DE&I survey to help set strategic
direction, and conducting activities globally on International
Women’s Day. The most recent ratio of women in managerial
positions for the TDK Group as a whole was 22.0%.
In addition to supporting the active participation of women,
we have also initiated measures to raise understanding and
encourage respect for the dignity of the LGBTQ+ community.
In 2023, we implemented measures such as holding a study
session on LGBTQ+ issues with the participation of corporate
officers in Japan including the president and about 90 managers.
(1) Promote DE&I
(2) Develop organizational capability to enhance
innovation and efficiency
In February 2023, TDK conducted the first Team Member
Engagement Survey (“My Voice”) of Group team members
worldwide. Going forward, in order to create a working
environment which both measures engagement and ensures
that each individual can flourish, we have established targets
relating to team member engagement in the Medium-term
Plan, as one of the assessment indicators for Performance
Share Units (PSUs) as performance-based stock
remuneration for corporate officers.
Also, we have set the KPIs for this survey for FY March
2027. One is at least 80% of the response rate, to maintain the
same level of the previous survey in February 2023. The other
is at least 75 points of the communication score, the previous
survey score was 67 points, which requires an improvement
of 12%. We believe that focusing on communication is
effective due to the fact that it has the potential to influence
many aspects of engagement, including leadership and
barriers to duties execution.
(3) Improve team member (employee) health
and engagement
Key initiatives in people strategies
Three key themes for transformation through promoting and cultivating diverse pool of
human resources to further enhance competitive advantage
Ratio of women in managerial positions
Scene from training
• Establish readily-accessible communication channels
• Design clear processes
• Support global collaboration
• Support effective communication by leaders
Create a working environment so that the “people”
who are responsible for executing
transformation can be more active themselves
* Figures are the ratios of women in managerial positions as of the day after the last day of
the fiscal year (i.e., April 1)
0
25
15
20
10
5
(%)
Non-consolidated
Global
FY3/20
FY3/24
FY3/23
FY3/22
FY3/21
22.0
4.8
4.3
3.7
3.0
2.0
22.0
22.0
Actions
Team member
engagement
(TME) KPIs
Vision to be
achieved
(2) Response rate
Maintain a level of at least 80%
(industry benchmark of 75%)
(1) Improvement ratio in communication scores
Improved by 12%
(Ratio of improvement required to achieve target score of 75)
Link to PSUs
Target amount paid for
100% achievement of KPI
People Strategy
TDK Integrated Report 2024
About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
Growth Strategies
Contents
TDK will aim to achieve our target for the reduction of CO2
through a dual approach of promoting a transition to
renewable energy (RE) and engaging in activities to improve
energy productivity (EP).
As a BtoB (Business to Business) company, TDK stands in
the midstream of the supply chain. Our aim is to reduce the
environmental load throughout the entire lifecycle of
products by achieving energy saving and lighter products
together with customers. In particular, as a drive to
introduce RE, we have joined the RE100 initiative and aim
to switch all of our production sites both in Japan and
overseas to 100% RE-derived electricity by 2050. We are
making this challenge not only in response to demands
from society and stakeholders but also to fulfill our own
social responsibility. TDK is actively promoting the
introduction of RE globally, and in 2023 we succeeded in
attaining 100% RE-derived electricity at all our
manufacturing sites in Japan. Thanks to these
achievements, we achieved our RE-derived target of 55%
of electricity consumed worldwide in FY March 2024, two
years ahead of the original schedule.
TDK’s mission is to establish our presence as a company
contributing to a sustainable future. This is because we
believe that this approach is necessary for us to grow
together with society and to create sustainable value through
initiatives that combat climate change. Therefore, the TDK
Group has identified our response to climate change as a
important issue in our key issues (materiality) and is
conducting activities accordingly toward realization of the
TDK Environmental Vision 2035 (The operation under the
environmental load within natural circulation, halve the CO2
emissions intensity from a life-cycle perspective by 2035).
Furthermore, since our goals are consistent with the
1.5˚C target, we have received recognition of the Science
Based Targets initiative (SBTi). This approach shows clearly
that TDK aims for net zero by 2050 and is a declaration of
our determination to take steps to combat climate change.
As one aspect of measures to combat climate change, we
have set CO2 reduction as a KPI and are promoting efforts
toward its achievement. As a measure to permeate efforts to
tackle environmental problems among the management, we
have linked the goal of CO2 reduction with the remuneration
of directors and Audit & Supervisory Board members. In
addition, we are forcefully promoting the use of renewable
energy (RE). TDK is promoting climate-change
countermeasures throughout the entire organization and is
playing a positive role toward the realization of a sustainable
society. Through these efforts, TDK grows together with
society and fulfills our social responsibility as a company, and
at the same time we are showing that we directly link these
efforts to the sustained growth of our business.
TDK has been promoting energy-saving activities heretofore,
but in the present state of ongoing growth, there are limits to
the reduction of total energy consumption. Therefore, in
place of energy saving, which placed the emphasis on
energy reduction, we are introducing the effective use of
energy, in other words, the improvement of energy
productivity, as a new guideline. Our aim is to double EP,
which is defined as net sales divided by energy consumption,
over the 25 years from 2020 to 2045. Through EP activities,
which are the crux of this initiative, we will respond to
climate-change risks. EP activities will be a continuous
endeavor in which the energy perspective is included along
with quality improvement and productivity improvement,
which TDK has been tackling heretofore as the essence of
the manufacturing business. Through these EP activities, we
will strengthen TDK’s Monozukuri (manufacturing excellence)
and accelerate the reduction of CO2. And TDK will continue
to march forward with the aim of both achieving further
corporate growth and contributing to the realization of a
sustainable society.
EP activities
Image of transition to RE and EP improvement toward 2045
2020
(Present)
(Target year)
2045
Net sales Energy consumption RE consumption
Energy productivity (Net sales/Energy consumption)
Double energy productivity
Sustainability
Response to Climate Change
Please refer to the Sustainability Website for details.
Environmental Policy and Environmental Vision
https://www.tdk.com/en/sustainability/
environmental_responsibility/policy-vision
RE and EP initiatives
Transition to RE
58
TDK Integrated Report 2024
About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
Growth Strategies
Contents
At TDK, we are tackling the effective use of energy and
expanded use of renewable energy in order to reduce CO2
emissions at our manufacturing sites. In FY March 2024 CO2
emissions decreased by 40% from the previous year to 0.827
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.
Reduction of CO2 emissions at manufacturing sites
Dr. Marisa Rico (left side of
photo), coordinator of the
materials science laboratory
Mr. Victor Alcaide Lozano
(right side of photo), Director
of Product Marketing for PEC
HP Capacitors
TDK Electronics
Components, S.A.U., Spain.
Trends in CO2 emissions at manufacturing sites (global)*
Aiming to achieve both corporate growth and CO2
reduction for sustainable management
Trends in volume of total energy consumption and intensity
Percentage of electricity from renewable energy
sources introduced
* The measurement and calculation methods, as well as the numerical results for FY March
2020 and beyond, have been verified by a third party.
FY3/20
FY3/21
FY3/22
FY3/23
FY3/24
FY3/26
(%)
20
60
100
80
40
0
30.0
23.9
18.2
39.9
55.2
50
Target:
FY3/26 50%
4,338
(GWh)
(GWh/millions of yen)
FY3/20
FY3/21
FY3/22
FY3/23
FY3/24
Volume of total energy consumed (left) Intensity (right)
0
0.0010
0.0020
0.0040
0.0030
0
5,000
4,000
3,000
2,000
1,000
0.0021
0.0021
4,744
4,463
3,761
4,654
0.0028
0.0028
0.0030
0.0030
0.0025
0.0025
0.0021
0.0021
FY3/20
FY3/21
FY3/22
FY3/23
FY3/24
CO2 emissions (left) Intensity (FY3/15 = 100) (right)
(ten thousand t-CO2)
0
100
200
400
300
0
50
25
75
100
170.1
138.3
176.8
155.8
82.7
29.9
No action
2035
EP Activity
RE Activity
CO2 Emission
CO2
Sustainability
Response to Climate Change
Leading the development and commercialization
of sustainable films for capacitors
Innovative sustainable films are applied in TDK’s film
capacitor series ModCap. The use of eco-friendly
materials further improves products initially
contributing to the environment. All ModCap products
use bio-circular materials to pursue high
environmental performance.
We are constantly investigating different approaches
related to the circular economy to extend the lifecycle of
our components, reduce material required, and better
manage end-of-life waste. Therefore, we are actively
collaborating with suppliers to develop new sustainable
materials without compromising on the final material
properties. During our activities, a revolutionary proposal
of applying bio-based films, which are already a well-
known solution for packaging, especially for the food
sector, to our capacitors was made.
This biobased film has the very same electrical and
physical properties and performance as conventional
products. The technology can be applied to other film
capacitors in addition to ModCap.
Example of Initiative
59
TDK Integrated Report 2024
About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
Growth Strategies
Contents
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
Aiming to realize carbon neutrality by 2050, manufacturers
around the world are endeavoring to reduce CO2 emissions
through their products. Furthermore, by measuring the CO2
emissions of products and comparing them with previous
ones, manufacturers are publicizing the improved performance
of new products. Also, when purchasing such items as TV
sets, household electric appliances, and cars, it has become
routine for consumers to check CO2 emissions at shops, in
catalogs, online, and so forth. In the European Union, efforts
have been made since 2018 to display common energy labels
on household electric appliances, such as refrigerators and
washing machines, showing their environmental performance
so that consumers can check when making a purchase.
Expansion of contributions to reduction of
CO2 emissions through products
0
200
300
600
500
400
0
100
100
50
150
200
(ten thousand t-CO2)
Automotive (incl. HEVs and EVs) (left)
Industrial equipment and general electric appliances (left)
ICT (left) Intensity (FY3/15 = 100) (right)
FY3/20
FY3/24
FY3/23
FY3/22
FY3/21
423.3
296.9
263.3
226.7
520.7
214.2
Trends in CO2 emission reductions by products*
How product contribution is calculated
* 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.”
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 FY
March 2024 was 5.207 million tons, a year-on-year increase
of 23%. In terms of intensity, it was a 27.5% rise over the
previous fiscal year, and so we were able to achieve our
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.
The concept of product contribution: By calculating the amount of CO2 reduced through efficiency improvements and weight reduction in energy-saving products and multiplying them by annual
sales volumes, the amounts contributed to the reduction of CO2 can be broken down by industrial sector and by product group.
Benchmark
Product
New
Product
Product Contribution
(in tons of CO2)
Annual Sales Volume
Product Contribution by
Industrial Sector/Product
Category
(in tons of CO2)
Efficiency
Improvements
Weight
Reduction
Reduction
of energy
or fuel
Calculate
CO2-
equivalent
Amount of electricity consumed during product use (kWh)
Sustainability
Response to Climate Change
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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 President & CEO, the
CPSO takes responsibility for environmental management in
general, including climate change. In addition, the head of
the Safety, Environment and Social Group of the
Sustainability Promotion HQ, 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.
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, Environment and Social 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
Enterprise Risk Management Regulation 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 CPSO
carries out a management review, discussing and deciding
In May 2019 TDK expressed its support 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.
The TDK Environmental Vision 2035 calls for “halving the
CO2 emissions intensity from a lifecycle perspective by 2035”
throughout the entire value chain from procurement to
disposal. Believing that assessing the risks and opportunities
to our business due to climate change and appropriately
disclosing information are going to be essential for both
achieving corporate growth and building a sustainable society
in the future, TDK is steadily addressing these matters.
TDK’s initiatives to address the issues of climate change
are disclosed below according to the TCFD framework.
Board’s oversight of climate-related risks
At TDK, the CPSO carries out a management review more
than four times 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 CPSO,
who is appointed by the President & CEO. In addition, the
Enterprise Risk Management (ERM) Committee discusses
important matters among environmental risks, including
climate change.
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.
TDK has designated the vision of what we want to be for TDK
in 10 years as our Long-term Vision, the “TDK Transformation.”
which declares “Contribute to the transition towards a
sustainable future by accelerating the transformation of society
and advancements in technology enabled by electronic
devices developed through leveraging cutting-edge innovation
in materials, processes, and software technology” and
“Become the No.1 partner growing alongside our worldwide
customers by pursuing continuous ‘transformation.’”
(
page 13 Long-term Vision)
To realize it, TDK has reidentified key issues (materiality) and is
accelerating the shift to renewable energy and innovation
toward reducing power consumption and enhancing efficiency
of material technology and material function to support in
terms of addressing global warming and energy security.
Strategy
Governance
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Sustainability
Response to TCFD
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:
Assumed period: FY March 2031
Applicable scope: Entire TDK Group
Adopted scenarios: 1.5°C scenario (Net Zero Emissions by
2050 [NZE] 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 1.5°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 ¥11.4 billion in the case of carbon pricing and ¥15.5
billion 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.
Physical Risk Response Plans
As a physical risk relating to climate change, TDK has
specified the increase of business risks due to increased
flooding. Regarding water risks at all manufacturing sites of
the TDK Group, we conduct investigations in accordance
Main risks and opportunities
Classification
Risks and
opportunities
Occurrence*
Main countermeasures
Transition
risks
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
· 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.
Increase in price of
cobalt and lithium
Risk
Short-long
term
· 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
Opportunity
Medium-long
term
· Promotion of product development with an eye on EV market
expansion
Development of
next-generation battery
materials
Risk and
opportunity
Long term
· Promotion of the development of all-solid-state batteries
Increase of customer
demands regarding
RE100
Risk and
opportunity
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.
Sustainability
Response to TCFD
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with the TCFD using two global evaluation tools—the WWF
Water Risk Filter and the Aqueduct, announced by the World
Resources Institute (WRI). This enables us to identify highly
water-stressed regions. Among other things, each site
implements measures to counter flooding risks, promotes
BCP response, and builds a BCM framework.
Risks which are significant for management is assessed as a
part of comprehensive risks in the ERM Committee.
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.
Medium- to long-term targets
In the TDK Group’s key issues (materiality) we declare our
aim of realizing net-zero CO2 emissions by 2050, and in the
TDK Environmental Vision 2035 we set the target of halving
the CO2 emission intensity from a life-cycle perspective by
2035 (compared to FY March 2015). Based on this vision, as
an environmental basic plan up to 2025, we have stipulated
activity tasks and objectives in the TDK Environment, Health
and Safety Action 2025 and are managing progress. In
addition, in June 2024 we received a certification of the
Science Based Targets initiative (SBTi).
In response to the final recommendations of the Task
Force on Nature Related Financial Disclosures (TNFD),
and in accordance with the guidance, we began an
assessment of our dependencies, impacts, risks, and
opportunities relating to natural capital in general,
including biodiversity.
Medium- to long-term targets
TDK Group’s key issues
(materiality)
Strengthen our activities to reduce greenhouse gas emissions and promote measures to address climate
change in order to realize a net-zero CO2 emissions society by 2050. (Scope 1, 2)
TDK Environmental Vision
2035
Halve the CO2 emissions intensity from a life-cycle perspective by 2035, compared with FY March 2015
(Scope 1, 2, 3)
Action Plan in TDK
Environment, Health and
Safety Action 2025
Improve CO2 emissions intensity by 30% by 2025, compared with FY March 2015 (Scope 1, 2, 3)
Achieve renewable energy target of 50% by 2025 (Scope 2)
FY March 2024 goals and achievements
Goals
Achievements
Reduction of CO2 emissions at manufacturing sites
Improve CO2 emission intensity from energy use by 1.8%
compared with the previous fiscal year
Improved by 38.0% compared with the previous fiscal year
Improve energy consumption intensity by 1.0% of the previous
fiscal year
Improved by 2.9% compared with the previous fiscal year
Implement efforts to achieve 50% renewable energy by 2025
(Scope 2)
55.2% introduced compared to target of 40% in FY March 2024
Reduction of CO2 emissions through Scope 3 category-based initiatives
Promote reduction of environmental load through activity of
Scope 3
Reduction of CO2 emissions in global logistics
Improved CO2 emission intensity in logistics by 12% compared
with the previous fiscal year
GHG emission (kt-CO2)
FY 3/24 result
Total emission
20,373
Scope1
134
Scope2
694
Scope3
19,546
Climate Change Initiatives
https://www.tdk.com/en/sustainability/
environmental_responsibility/climate-action
Please refer to the Sustainability Website for details:
TCFD/TNFD
https://www.tdk.com/en/sustainability/
environmental_responsibility/tcfd_tnfd
Response to the TNFD
Sustainability
Response to TCFD
Metrics and targets
Risk management
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Our approach
We at TDK consider the role we fulfill through our business
activities as being to achieve a sustainable future through, for
example, working to restore and protect the global
environment. The decline in biodiversity has become a
long-term global risk second only to climate change.
Throughout the entire value chain—from the procurement of
raw materials to the disposal of products—there is demand
for activities that avoid, mitigate, and restore adverse impacts
on biodiversity.
All TDK members 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 expressly
provides that employees are to consider contributions to
ecosystems and take proactive action at all times.
Our approach
Amid the need to shift to a circular society, from the
perspective of the effective use of limited resources, TDK
promotes initiatives to curb the generation of waste itself.
We also hope to contribute to the building of a circular
society by promoting a circular economy that maximizes
efficiency of resource usage throughout product life cycles
and minimizing dependencies and impacts on natural capital.
Our approach
Management of chemical substances in products
In 2004, TDK introduced the Environmental Product Quality
Management System (EPQMS) 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 are promoting management of chemical substances
globally by means of common guidelines 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. In addition,
we are moving forward on reducing the use and emissions of
hazardous or dangerous chemical substances in order to
reduce their impact on the environment as well as to mitigate
the health risks to employees and risks of fires or explosions.
Our approach
At TDK, water is an essential resource in manufacturing
activities. Since we are impacted by such events as the
exhaustion of water resources and flooding, the proper
understanding and management of water risks are important
issues for us. TDK stipulates the TDK Supplier Code of
Conduct and requests suppliers to address the management
of wastewater and efficient use of water. Together with local
communities and stakeholders, TDK will continue to promote
sustainable water use.
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 to “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 “Ensure sustainable
consumption and production patterns” In addition, we are
reducing water withdrawal in manufacturing processes.
Addressing biodiversity
Responsible management of chemical substances
Initiatives for the circular economy
Please refer to the Sustainability Website for details.
Addressing Biodiversity
https://www.tdk.com/en/sustainability/environmental_responsibility/
biodiversity
Please refer to the Sustainability Website for details.
Initiatives for the Circular Economy
https://www.tdk.com/en/sustainability/environmental_responsibility/
limited-resources
Please refer to the Sustainability Website for details.
Water Resources Conservation
https://www.tdk.com/en/sustainability/environmental_responsibility/
water-resources
Please refer to the Sustainability Website for details.
Responsible Management of Chemical Substances
https://www.tdk.com/en/sustainability/environmental_responsibility/
chemicals-management
Water resources conservation
Sustainability
Other Environmental Initiatives
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rights. Based on this information, the Board of Directors
conducts deliberations and adopts resolutions as necessary.
Strategies
The TDK periodically assesses the issues which could
present potential human rights risks and the groups of
people who might be vulnerable to such risks through
dialogues with external parties, reports from international
human rights organizations and conducting risk assessments
and CSR self-checks. (See the figure below)
In FY March 2024, TDK reviewed materiality when
formulating the new Medium-term Plan that started in FY
March 2025 and re-evaluated key human rights themes.
As a result, we identified the following three points as
priority issues:
• Responsible sourcing of minerals
The TDK Code of Conduct states that “The TDK Group will
continue to respect human rights, comply with relevant laws
and regulations and international rules, and discharge its
social responsibility with a strong sense of ethical values for
the purpose of creating a sustainable society.” Toward this
end, for example, the TDK Code of Conduct prohibits all
child labor, forced labor including human trafficking, and
unreasonable restrictions on movement that lead to
compulsory labor in supply chains. The TDK Code of
Conduct also requires compliance with all relevant human
rights laws and regulations including those prohibiting child
and forced labor in the supply chain and the other laws
identified above.
The TDK Group Policy on Human Rights was formulated
in 2016. We respect and support international norms on
human rights including the International Bill of Human Rights,
the ILO Declaration on Fundamental Principles and Rights at
Work, the OECD Guidelines for Multinational Enterprises, and
the Children’s Rights and Business Principles. Based on the
framework of the UN Guiding Principles on Business and
Human Rights, TDK promotes the correct understanding of
potential human rights issues and takes steps to address
them, not only within the business operations of the TDK
itself but also throughout the value chain. We expect our
business partners and suppliers to understand and support
the TDK Group Policy on Human Rights, and we also require
our business partners and suppliers to comply with TDK
Supplier Code of Conduct.
Governance
At TDK, the Sustainability Promotion HQ—with the Chief
People and Sustainability Officer (CPSO) in place as the
responsible party—promotes human rights responses while
coordinating with related functions. The Sustainability
Promotion HQ issues reports at Board of Directors at least
twice a year regarding the status of sustainability initiatives for
the entire Group including those with respect to human
• Respecting the human rights of employees at our
manufacturing sites
• Respecting the human rights of employees of
suppliers (including manufacturing sub-contractors
and labor agencies)
TDK is committed to implementing prevention and mitigation
measures and monitoring progress to address each major
human rights issue relating to those priority issues and will
continue to perform periodic re-evaluation.
Risk management (human rights due diligence)
TDK 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
Dialogue
Dialogue
Dialogue
• Identify potential human rights
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
• Implement measures for
each key theme and
undertake periodic review
• Training
• TDK Code of Conduct
• TDK Group Policy on
Human Rights
• TDK Supplier Code of
Conduct
• Sustainability Website
• Human Rights Statement
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Sustainability
Respect for Human Rights
In 2020, TDK joined the Responsible Business Alliance
(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 at
manufacturing sites. We conduct activities to prevent and
reduce human rights risks identified as major human rights
issues by making use of the RBA’s Code of Conduct,
assessment items, and audit frameworks.
Metrics and targets
Action items
FY 3/24 goals
Results
Responsible sourcing of
minerals
A ratio of at least 92% of suppliers recognized as procuring
the 3TG minerals from RMAP*-conformant refineries
90.9%
Respecting human rights of
employees at our
manufacturing sites
Achieve 100% implementation of CSR self-checks at
manufacturing sites (TDK Group manufacturing sites)
100% implementation
Achieve 100% implementation of labor, human rights, and
ethics risk assessments at manufacturing sites (TDK Group
manufacturing sites)
100% implementation
Conduct either an RBA-authorized audit (VAP, AMA, or CMA),
customer CSR audit, or a CSR assessment based on the RBA
VAP Operations Manual at all our manufacturing sites at least
once every three years
Implemented at 100% of sites over
the three years from FY March 2022
to FY March 2024
Conduct training for personnel involved with CSR in Japan
and overseas
Conducted CSR internal auditors
training in Japan, ASEAN, and China
Achieve 100% implementation of labor, human rights and ethics
internal audits at targeted manufacturing sites
100% implementation at subject sites
Respecting human rights of
employees at suppliers
(including manufacturing
sub-contractors and labor
agencies)
Achieve CSR compliant supplier rate of 99.5%
100%
Achieve 100% implementation of CSR self-checks at
sub-contractors (FY March 2023 to FY March 2024)
97%
Achieved 100% implementation of CSR self-checks at dispatch
companies used by manufacturing sites in the high-risk
countries in Asia
100%
* The Responsible Mineral Assurance Process (RMAP) is a program that verifies compliance with responsible sourcing of minerals. The program uses an independent third-party organization to
evaluate smelters’ and refiners’ management systems and procurement practices.
Respect for Human Rights
Sustainability
For information on specific measures, please see the Sustainability Website.
Respect for Human Rights
https://www.tdk.com/en/sustainability/social/human_rights
Initiatives for prevention and reduction of
human rights risks
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DX initiatives for the Long-term Vision
sustainability-conscience intentions and global diversity
in talent, market and culture, by default. To be specific,
TDK is intentionally evolving itself via business cycle
transformation, putting emphasis in data-driven market
trend insight, revolution of manufacturing through
proprietary data-driven process optimization, and future-
proofing our supply chain with environmentally-geared
focus. The established companywide DX initiatives will
undoubtedly contribute to further enhance our corporate
value, both as “Financial” and “Pre-financial”-enablers,
through operational efficiency and value creation,
respectively. To ensure execution, we put emphasis in
promoting upskilling and reskilling of our human assets
through agile deployment of digital technologies for DX-OJT,
formulating curricula for domain specific DX and
strategically hiring external top talents globally. Furthermore,
to accelerate TDK Transformation, we formed a dedicated
organization to develop cutting-edge AI technologies, that
ensures the integration and alignment of TDK’s proprietary
AI technologies with other advanced AI innovations into our
business processes worldwide.
The DX initiatives are intended to accelerate TDK
Transformation based on our Long-term Vision. The three
priority fields are: “Reinforcing sales and marketing
capabilities,” “Enhancing our manufacturing processes,”
and “Strengthening our commitment to sustainability.”
Reinforcing sales and marketing capabilities
By combining proprietary sales and marketing data with
emerging technologies such as generative AI, we will
reinforce our current market and find new opportunities for
growth. That will help us to become the No.1 partner for
our customers around the world.
Enhancing our manufacturing processes
Combining digital technologies and systems with our
globally diverse workforce, extensive knowledge and
manufacturing data, we improve overall equipment
effectiveness, quality of products and inventory turnover to
enhance our manufacturing productivity.
Strengthening our commitment to sustainability
Over the years, our commitment to sustainability has
consistently grown in significance. Here, we will reinforce
our activities on decarbonation with DX by employing
advanced digital technologies that will allow us to trace
carbon emissions and optimize entire supply chain to
provide sustainable business processes.
DX/IT Platform
Global DX Initiatives
Global
diversity in
culture &
talents
Broad
business
portfolio
Accelerate TDK Transformation
Strengthening
our
commitment to
sustainability
Enhancing our
manufacturing
processes
Reinforcing
sales and
marketing
capabilities
GenAI &
domain-specific
AI platform
Cutting-edge
cybersecurity &
privacy-enhancing
technologies
DX Promotion
Corporate Officer
Chief Digital Transformation Officer and
General Manager, Management System HQ
Roshan Thapliya
Digital transformation in TDK
Recent technological trends in cybersecurity, data platform,
AI and IoT have rapidly accelerated the transformation of
society. These trends undoubtedly bring challenges to the
status quo, but from our perspective, it provides us with
opportunities to serve society better in many new ways. I
see this as an example of creative disruption, where we
can certainly bring value through our broad business
portfolio, which we acquired from our history of innovation
and diversification.
It is with this in mind that in our digital transformation
(DX), we intentionally embrace these cutting-edge
technologies by design and complement it with our
DX initiatives to accelerate TDK Transformation
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Michael Pocsatko
Senior Vice President
Andreas Keller
Senior Vice President
Albert Ong
Corporate Officer
Ji Bin Geng
Corporate Officer
(As of the end of June 2024)
Werner Lohwasser
Corporate Officer
Roshan Thapliya
Corporate Officer
Ludger Trockel
Corporate Officer
Joe Kit Chu Lam
Corporate Officer
Jim Tran
Corporate Officer
Composition of corporate officers
Japanese
9
Non-Japanese
9
As of
the end of June
2024
One of TDK’s strengths is our diversity. To further demonstrate those strengths, we are
working to transform ourselves into an autonomous and decentralized organization based on
a fundamental policy of “Empowerment and Transparency” that will also serve to guarantee
transparency for our stakeholders, while also working to speed up decision-making by
trusting the people who share our goals and principles and empowerment. 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. We
are also setting up regional headquarters in Europe, the Americas, and China that, in
cooperation with the global headquarters, will implement support and monitoring of our
subsidiaries in each region. 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, 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.
Organization building to display diverse strengths
Appointment of non-Japanese corporate officers
TDK has been pursuing its businesses on a global scale. In 2004, we appointed our first
non-Japanese corporate officer, and since then have been increasing the number of such
officers while promoting the globalization of management. At present, both the ratio of
overseas sales and the overseas employee ratio stand at around 90%, while non-Japanese
account for 50% of our corporate officers.
Board of Directors
HQ functions
Global HQ
Regional HQs
Japan
Europe
Americas
China
BC
BC
BC
President
Executive Committee Meeting
Business
axis
Business
axis
Function axis
Subsidiaries
Subsidiary
group
Core
subsidiaries
Subsidiary
group
Core
subsidiaries
Subsidiary
group
Core
subsidiaries
Other
subsid-
iaries
Other
subsid-
iaries
Other
subsid-
iaries
Function-related direction and supervision
Business-related direction and supervision
Corporate
functions
(technological
development,
human resources,
legal affairs,
finance &
accounting,
quality
assurance, etc.)
Group management structure with the policy of Empowerment and Transparency
Advance Group Governance
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Contents
“Residual Risk” heatmap
Potential risks over the term of the Medium-term Plan
Category
Contents
Economic/
Market trends
Slowdown of global economy, changes in
social trends, soaring prices and personnel
costs, hikes in raw material purchase costs
and energy resource prices
Technological
trends
Delay in the use of digital technologies,
acceleration in technological transformation
Geopolitical
risks
Geopolitical tensions, tightening regulations
for technology export
Compliance
Deficiencies in compliance system,
deficiencies in contract signing, insufficient
legal due diligence, information leakage due
to misconduct
Supply chain
Quality deficiencies in supply chains, soaring
row material and logistic costs, inadequate
human rights efforts in value chains
Level 1
Level 5
Level 4
Level 3
Level 2
Level 1
Level 2
Level 3
Level 4
Magnitude of impact
Possibility to materialize
Risk Management Structure
Risk Management Infrastructure
Risk Management Process
Plan
Do
Check
Act
Identify
Assess
Draft
Measure
Execute
Monitor
Improve
Risk Management
Policies & Strategies
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
Risk assessment
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.
Risk management structure
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 (Value Creation) and prevent damage to
corporate value (Value Protection) 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 under the direct control of the Executive
Committee, which is 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 structure
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TDK Integrated Report 2024
About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
Growth Strategies
Contents
Risk Management
Changes in TDK’s Governance/
TDK’s Board Culture
A Talk by Outside Directors
Corporate Governance Structure
Strengthening of the Board of
Directors’ Monitoring Function
Operational Policy and Yearly Agenda
for Board of Directors Meetings
Activities of Advisory Committees and
Other Similar Meetings
Succession Plan
Skills Matrix
Remuneration for Executives
Effectiveness Evaluation of
the Board of Directors
Directors, Audit &
Supervisory Board Members,
and Corporate Officers
71
72
76
77
78
79
80
81
82
84
86
How Is TDK’s
Governance Evolving?
Chapter 3
TDK’s
Governance
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Contents
About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
Growth Strategies
Establishment of Compensation
Advisory Committee
(chaired by an outside director)
Number of directors reduced from 12 to 7
Appointment of first outside director
2002
Appointment of first non-Japanese
corporate officer
2004
2009
2015
Appointment of first female director
2020
Establishment of Nomination
Advisory Committee
(chaired by an outside director)
2008
Appointment of an outside
director as chair of
the Board of Directors
2012
Establishment of
the Corporate
Governance
Committee
2018
2024
Stipulation of
TDK’s Board Culture
2023
History of governance reforms
TDK’s Board Culture
Transformation
Continuation
TDK has established the culture that should be passed down across generations, even if composition of the Board of Directors changes, on the TDK Basic Policy on Corporate Governance.
TDK Basic Policy on Corporate Governance
Article 1-2 (6)
https://www.tdk.com/system/files/governance_pdf_basic_policy_2024_04_en.pdf
Decision reached on basic
policy that at least half of
directors should be
independent outside directors
Majority of the Board of
Directors became independent
outside directors
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
Appointment of two non-Japanese
corporate officers
Appointment of one more outside
director for a total of three
Board members consisting of Directors and Audit & Supervisory Board Members and the executive side such as Corporate Officers, based on their respective
responsibilities, endeavor toward the common purpose of achieving sustainable corporate growth and increasing the medium- to long-term corporate value of
the TDK Group. The philosophy and culture shared by the Board of Directors to achieve this purpose are as follows.
• Board members and the executive side build and maintain a relationship of deep mutual trust and a sound tension.
• Board members and the executive side achieve both the delegation of authority to encourage prompt and autonomous decision-making and the transparency
in business execution (Empowerment & Transparency).
• Based on the premise that discussions at the Board of Directors meetings should be essential discussions that contribute to corporate value, Board members
actively and diversely make remarks and engage in discussions from each member’s standpoint and from a broad point of view, regardless of whether they
are inside or outside members or whether they are Directors or Audit & Supervisory Board Members.
• The executive side takes the opinions of the Board of Directors sincerely as an opportunity to improve management and implements necessary measures.
Directors and Audit & Supervisory Board Members supervise and audit from an objective standpoint. Through these efforts, they aim to further improve the
TDK Group’s corporate value.
Governance
Changes in TDK’s Governance/TDK’s Board Culture
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About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
Growth Strategies
Contents
We will maintain the spirit of taking on challenges that has
existed since the company’s founding and further evolve
management as a global company while working to achieve
“TDK Transformation,” our Long-term Vision.
Iwai: During that process, the executive side expressed an
intention to start by clarifying the new Long-term Vision and
then backcasting from that to formulate a Medium-term
Plan. Discussions, which started with the Long-term Vision,
were conducted not only at the monthly Board of Directors
meetings, but on multiple other occasions such as during
off-site meetings. The Board’s time is limited, and as a result,
there is a tendency for the Board to be given explanations of
plans that have already been set, but this time we were able
to discuss the issues in a variety of forums, and the
executive side presented matters on the draft level indicating
their thought process. Since we were able to carefully
consider the specific details at an early stage, I believe that
the opinions of the outside directors were well reflected in
the plan.
Nakayama: As Mr. Iwai stated, there are still many
companies where plans are generally solidified internally and
the Board of Directors simply approves them, but once
details are set, it becomes more difficult to see the problems
in the background or the process leading up to formulation,
and there is little opportunity to make revisions. At TDK, if I
liken the process to cooking, the ingredients were presented
to the Board at a stage when they were still just raw
ingredients, and we were able to think together about how
they should be cooked.
Yamana: If you don’t gather high-quality ingredients,
however, the result will not taste good no matter how it is
cooked. In that respect, I believe that excellent ingredients
were prepared this time. When formulating the Long-term
Vision, for example, President & CEO Noboru Saito
personally re-examined the purpose of TDK’s existence,
What discussions took place within the Board of
Directors during the process of formulating the new
Long-term Vision and Medium-term Plan?
Formulation of the New Medium-term Plan
Outside Director
Chair of the Board,
Member of Nomination Advisory Committee,
Member of Compensation Advisory Committee,
Member of Corporate Governance Committee
Mutsuo Iwai
Outside Director
Chair of Nomination Advisory Committee,
Member of Compensation Advisory Committee,
Member of Corporate Governance Committee
Kozue Nakayama
Outside Director
Chair of Compensation Advisory Committee,
Member of Nomination Advisory Committee,
Member of Corporate Governance Committee
Shoei Yamana
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About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
Growth Strategies
Contents
A Talk by Outside Directors
prepared a statement expressing his thoughts on what type
of company TDK should be in the future, and asked our
opinions before beginning the debate. In this way, top
management considered very carefully what type of company
TDK should be in the future based on its purpose, presented
a solid foundation for the vision, and also engaged in
repeated discussions that included external perspectives
from an early stage. I believe that as a result of that process,
the Long-term Vision, known as TDK Transformation, is
extremely convincing to a wide range of stakeholders.
Nakayama: TDK has adopted “Technology for the well-
being of all people” as its sustainability vision and formulated
the Seven Seas as its direction for the future in order to make
that vision a reality, and I think that it’s wonderful that the
company is looking even further into the future to create a
new vision, and I can sense the company’s strength.
Yamana: One additional aspect of the process that was
positive is that not only was the Medium-term Plan
formulated by backcasting from the Long-term Vision, a
review was also conducted of materiality. Also, I believe that
it was very meaningful that we were able to participate at an
early stage in the discussions that followed along with the
overall flow regarding where to set the targets of the three-
year Medium-term Plan.
Nakayama: From the perspective of an outside director, I
requested that the company strengthen its measures to
enhance team member (employee) motivation. Of course, the
executive side fully understands the importance of this, but
since the team members are the source of all power for a
corporate organization, I argued for this quite strongly in a
variety of forums including the Board of Directors,
Nomination Advisory Committee, and Compensation
Advisory Committee. Also, one thing that made a lasting
impression on me was when Mr. Yamana asserted that “in
order to pursue benefit for customers, we need to think
about applications that combine hardware and software,
rather than individual components.”
Yamana: Under a business model as a parts manufacturer
that has been adopted until now, the company has been able
to fully fulfill its role by listening to the requests of customers,
which are end-product manufacturers, and using technology
to provide components that meet those requests. For TDK to
become the No. 1 partner to its worldwide customers,
however, this alone will not be sufficient. We have to engage
in co-creation with customers at an early stage and create
new innovations from the perspective of end-product
manufacturers and a brand owner. To achieve this, we need
to think from the perspective of applications by asking, “what
do end-product manufacturers and end users want to do
with these devices?” Also, software technology will become
more and more important for achieving this. For example,
TDK has superior hardware technology in the sensor field,
and accordingly, we discussed whether we should combine
this technology with software, AI, and other technologies to
create new applications.
Iwai: I personally have had the opportunity to tour overseas
subsidiaries, factories, and other facilities over the past
several years. When I visited InvenSense, a sensor
manufacturer, the year before last, I was struck by the
comment of a local team member that in the future, they want
to combine sensors with software and sell products with
increased added value, rather than individual components.
The Medium-term Plan includes reinforcing software
technology as one measure, and it should be extremely
convincing, even to overseas Group team members.
Iwai: In order to achieve the reinforcement software
technology that I mentioned earlier, it will be necessary to
build development structures by recruiting specialized human
resources and taking other measures, but it will not be easy
to recruit adequate numbers of software engineers with skills
that can be applied immediately, and it also takes time to
develop human resources when starting from the ground up.
In the future, therefore, I believe that it will be important to
implement measures promptly while making use of various
means including M&A.
Yamana: We need to speed up the implementation of
measures, but at the same time, reinforcing risk management
even further is a major issue. The outlook for the global
economy is increasingly uncertain due to the war in Ukraine,
the situation in the Middle East, the slowdown of the Chinese
economy, and other factors. In order to enhance
competitiveness while responding to these geopolitical risks,
TDK will need to rebuild global supply chains and to rebuild
business processes, manufacturing processes, and so on
based on new ideas. Both of these are reforms that will
require expenditures, but if we start now and produce results
What do you believe are some issues that need to
be addressed in order to carry out the new
Medium-term Plan?
Were there any aspects of the discussions that you
placed particular emphasis on or that made a particular
impression on you?
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About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
Growth Strategies
Contents
A Talk by Outside Directors
in a few years, TDK will be able to grow into a company that
is unrivaled in terms of the reliability of its technology and its
cost competitiveness.
Nakayama: In order to carry out these reforms, I believe that
it will be important to raise the level of global management
even further while maintaining TDK’s unique culture. I believe
that one of the major sources of TDK’s competitiveness is its
culture of taking on challenges. For example, in the past,
TDK sold its SAW filter business, which had been performing
well, to raise funds and implemented M&A with the objective
of strengthening the sensor business as a seed for future
growth. There are very few companies in Japan that can take
on a challenge of extreme business transformation of this
type. TDK is now a global company with market capitalization
in excess of 3 trillion yen and more than 100,000 team
members worldwide. It is by no means easy to operate
global matrix management centered on both business and
functions without losing the culture of taking on challenges
that TDK has.
Iwai: Just as you say, fully maintaining this distinctive spirit of
taking on challenges like a venture company from the time of
its foundation, even though it has grown to such a scale, is
one of TDK key attributes. It is precisely for this reason that
TDK was able to achieve this tremendous transformation of
its business portfolio. Even as the company has grown larger,
I believe that its cohesiveness has remained strong. When
viewed on the level of operations, however, I feel that there is
some degree of inconsistency in current conditions, with
some subsidiaries maintaining their earlier methods of doing
business at the time of acquisition, and also, some have
financial functions handled by the parent company while
others have had authority delegated to them. For TDK to
become a much stronger corporate group, I believe that it is
important to achieve operational consistency from the
perspective of overall optimization, to the extent that this can
be done without losing the spirit of taking on challenges.
Nakayama: Reinforcing brand strategies will also be a major
issue in the future. If TDK is unable to substantially enhance
its name recognition and establish an appealing brand image,
it will become increasingly difficult to recruit outstanding
human resources. Raising team member motivation through
internal branding is also important. Reinforcing brand
strengths takes time. It will be important to thoroughly
analyze what measures produce what types of results,
including overseas, for raising TDK’s recognition and then to
implement effective brand strategies.
Iwai: Also, closely monitoring changes in the business
environment and technology trends, appropriately
reorganizing the business portfolio in the future will also be
a major issue. The company intends to discuss this
thoroughly at Board of Directors meetings as a high-priority
agenda item.
Iwai: Mr. Shigenao Ishiguro, who retired from president and
was appointed non-executive Chairman & Director in FY
March 2023, 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. Since then, all of the outside directors have participated
in these discussions. In FY March 2023, we discussed the
handing down of the Board culture, which was an issue that
had been pointed out in the effectiveness evaluation of the
Board of Directors, and we clarified the ideal state of TDK’s
Board. Starting in FY March 2024, we initiated full-scale
discussions on how we should change governance of TDK.
Nakayama: To give an example, the Nomination Advisory
Committee has discussed matters in response to debate at
the Corporate Governance Committee. Until now, TDK has
not used executive titles such as CEO, CFO, and CTO, but
there has been discussion that uniform executive titles that
can be understood globally should be used in order to
bolster global management. We also discussed the
introduction of the global grading to evaluate team
members at Group companies around the world using the
same criteria.
Yamana: As of the General Meeting of Shareholders in June
of this year, a majority of the Board is made up by outside
directors, and this reform was first discussed by the
Corporate Governance Committee.
Nakayama: TDK has an Audit & Supervisory Board, and the
Corporate Governance Committee, Compensation Advisory
Committee, and Nomination Advisory Committee are all
discretionary committees, and I believe that excellent
collaboration between the Board of Directors and these three
committees has facilitated steady progress in improving
governance. After the Corporate Governance Committee
discussed the introduction of the CxO positions mentioned
earlier as well as the composition of the Board of Directors,
What discussions are taking place concerning the
reinforcement of corporate governance?
The Evolution of TDK’s Governance
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About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
Growth Strategies
Contents
A Talk by Outside Directors
the skills matrix, succession plans, and other topics, the
Compensation Advisory Committee and Nomination Advisory
Committee have investigated these issues in greater detail.
Yamana: The Compensation Advisory Committee, for which
I serve as chair, conducted a major review of the remuneration
system for officers this fiscal year. Specifically, in addition to
substantially increasing the portion of short-term and medium-
term results-linked compensation included in remuneration for
officers, we also incorporated new pre-financial evaluation
items into the medium-term evaluation criteria, such as the
rate of reduction of CO2 emissions and Team Member
Engagement Survey scores. We have furthermore succeeded
in raising the ratios of evaluations of achievement both in
terms of TDK’s financial performance and our outcomes, and
of the missions of individual corporate officers.
Nakayama: The Nomination Advisory Committee clarified
selection policies and processes for outside directors and
outside Audit & Supervisory Board members in response to
indications made during the effectiveness evaluation.
Iwai: Within the various discussions concerning optimal
governance by TDK, the issue of institutional design arose. It
is generally believed that a company with committees has a
more advanced governance format, but I believe that TDK’s
current governance format is quite excellent.
Yamana: I would also evaluate TDK’s governance highly.
Even though TDK is “a company with an Audit & Supervisory
Board,” the effectiveness has been refined from an early
stage, and the governance structure is extremely advanced.
A lot of effort is put into the annual effectiveness evaluations
in particular, and I feel that TDK is the most serious about
governance among all the companies that I have observed.
Nakayama: TDK truly is thorough about governance.
Iwai: Of course, we gather opinions from everyone using
surveys. After responses were submitted, former Chairman
Ishiguro, who was the chair of the Corporate Governance
Committee, conducts interviews with each team member
individually to ask the reasons for their evaluations in
specific areas and to obtain more detail about certain
issues, thereby acquiring detailed information and the true
thoughts of the respondents, which cannot be conveyed in
writing alone. Based on this, topics are identified and an
improvement cycle is carried out. The process itself has
been thoroughly considered and it is put together with the
utmost care.
Yamana: In the case of “a company with a nomination and
other committees,” the Board of Directors performs
supervisory and monitoring functions, and it is my
understanding that if some problem arises concerning the
executive team, the nomination committee functions to select
the next executive team. It is beneficial if there is some
degree of tension between the executive team and the
Board, but if it is excessive, there is a risk that the executive
team will atrophy. It is important to separate execution from
supervision, but it is necessary for each company to discuss
in detail what type of monitoring will enable the executive
team to demonstrate the greatest capabilities.
Nakayama: This is because it’s all meaningless if motivation
on the part of the executive team drops.
Yamana: Although TDK’s governance structure separates
execution and supervision, the two are not in a
confrontational relationship. For example, the Corporate
Governance Committee is able to transcend the differences
in positions and roles between the outside directors and the
executive side to share their wisdom regarding even better
management for TDK. TDK’s approach to governance is that
this is the inherent value of the Board.
Iwai: I think that’s right. I believe that under the current TDK
system, where in-depth discussions are held in the
discretionary committees followed by final discussion and
decision by the Board of Directors, highly effective governance
can be achieved if the systems are properly operated.
Nakayama: Of course, looking to the future, it is necessary
that the Corporate Governance Committee and the Board
continuously discuss the issue of what form of governance
systems will be optimal.
Iwai: Indeed. If we can identify examples of best practices by
other companies, we will of course gather information from
those companies and use that information for designing and
operating systems in the future, and if TDK’s governance is
going to be enhanced even more, we will need to conduct
substantial reviews of the system design itself. I hope to
evolve TDK’s governance even further in the future by all of
the outside directors working in collaboration with the Audit &
Supervisory Board members and the executive side.
A Talk by Outside Directors
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About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
Growth Strategies
Contents
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
Corporate governance structure chart
Roles and authorities of the Board of Directors, ECM,
and BCs/BGs
“Empowerment & Transparency”
Basic stance and structure
established as advisory bodies to the Board of 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.
Divisions and Group Companies
Corporate Officers
Board of Directors
(Directors and Audit &
Supervisory Board
Members attend
the meetings)
Reports
Reports
Reports
Reports
Reports
Reports
Instructs
Cooperates
Reports
Cooperates
Reports
Audits
Reports
Reports
Elects and dismisses
Elects and dismisses
Elects and dismisses
Reports and submits proposals
Reports
Board of Audit &
Supervisory Board Members
Audit & Supervisory
Board Members Office
Nomination Advisory
Committee
Compensation Advisory
Committee
Corporate Governance
Committee
President & CEO
Management Review &
Support Group
Executive Committee
Meeting
Enterprise
Risk Management
Committee
Help Lines
(Consultation services)
Accounting Auditors
Compliance Committee
Crisis Management
Committee
Information Security
Committee
Disclosure Committee
Ordinary General Meeting of Shareholders
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.
Empowerment
Empowerment
Transparency
and reporting
Transparency
and reporting
Diversity/Inclusion
The smartest
structure and culture
for arriving at
better wisdom
Accountability
Responsibility and
identity as team
members
Thorough
discussion
Board of
Directors
Review
Proposal
Review
Proposal
ECM
Business Company/Group
Shifted from consideration
of individual cases to
discussion of important
issues involving corporate
management
Thorough
discussion
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About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
Growth Strategies
Contents
Corporate Governance Structure
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.
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 a half or more of these directors should
be independent outside directors with no conflict of interests.
Currently four of the seven directors sitting on the board are
independent outside directors. Furthermore, in principle an
independent outside director serves as the chair of the Board
of Directors. The three inside directors are the CEO, CFO,
and CTO. Independent outside directors serve as the chairs
and a majority of the members of the Nomination Advisory
Committee and Compensation Advisory Committee, which
are advisory committees of the Board of Directors, and the
Corporate Governance Committee, which discusses the
broad framework of TDK’s governance, also includes
independent outside directors.
Appointment of outside directors
Emphasis on external and medium- to long-term
perspectives
Members of Advisory Committees (as of June 21, 2024)
Nomination
Advisory
Committee
Compensation
Advisory
Committee
Corporate
Governance
Committee*
Noboru Saito
Representative
Director
—
Tetsuji Yamanishi
Representative
Director
—
(Chair)
Shigeki Sato
Director
—
—
—
Kozue Nakayama
Outside
Director
(Chair)
Mutsuo Iwai
Outside
Director
Shoei Yamana
Outside
Director
(Chair)
Toru Katsumoto
Outside
Director
* One more person, the corporate officer serving as GM of the Corporate Strategy HQ
Composition of directors (as of June 21, 2024)
Inside Directors
3
Outside Directors
4
Chair:
Outside Director
Composition of the Nomination Advisory Committee
(as of June 21, 2024)
Composition of the Compensation Advisory Committee
(as of June 21, 2024)
Composition of the Corporate Governance Committee
(as of June 21, 2024)
Inside Director
1
Chair:
Outside Director
Outside Directors
4
Inside Director
1
Outside Directors
4
Chair:
Outside Director
Inside Directors
2
Corporate Officer
1
Outside Directors
4
Chair:
Inside Director
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Message from the President & CEO
Long-term Vision
Governance
Data Section
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Strengthening of the Board of Directors’ Monitoring Function
Taking note of the results of evaluation of the effectiveness of
the Board of Directors, the Corporate Governance Committee
compiles operational policy for the Board of Directors every
fiscal year and, on the basis of this policy, discusses and
decides the yearly agenda of the Board of Directors.
In the previous term (T128), the Corporate Governance
Committee stipulated the operational policy as follows and,
based on this policy, discussed and set the agenda of the
Board of Directors.
Operational policy for the T128 Board of Directors:
basic policy for board operations:
Directors and Audit & Supervisory Board Members and
the executive side endeavor toward the common
purpose of achieving sustainable corporate growth and
increasing the medium- to long-term corporate value of
the TDK Group. T128 represents the final year of the
current medium-term management plan and the year
for formulating a new Medium-term Plan starting from
T129. Therefore, the Board of Directors will provide
supervision and advice from various perspectives to
ensure the formulation of a plan that is highly feasible
and compelling to stakeholders.
Key items for discussion in the Board of Directors
in the T128
(1) Review of the long-term plan and discussion on the
new Medium-term Plan
(2) Discussion on the strengthening of stakeholder
engagement
(3) Discussion on the next management structure
Outline of the yearly agenda of the Board of Directors for T128 (April 2023–March 2024)
Financial accounts, human
resources, compensation
Businesses, functions
(cases of capex, M&A, etc. to be
added as they arise)
Governance
(lawsuits and other important
issues to be reported as they arise)
Discussions, study
meetings, etc. outside the
Board of Directors
April
Full-year results, financial results
Internal control system (resolution)
May
Account documents
(Companies Act)
Resolution on convening of
Ordinary General Meeting of
Shareholders
State of internal audit report
State of possession of cross-
shareholdings report
Group risk management report
Compliance management report
Business Ethics Supervisory
Committee report
Study meeting on geopolitics
June
Executive structure after the
General Meeting of Shareholders
Securities Report
IR activity report
Board of Directors’ operational policy
Auditing policy and auditing plan
Sustainability activity report
July
Quarterly results, financial results
1Q quarterly report
Global HR strategy
Branding and PR strategy
Review of standards for referral to
Board of Directors
Next management structure
August
HQ function reports (technology,
intellectual property, DX, marketing, etc.)
IR activity report
Business Ethics Supervisory
Committee report
Long-term strategy update
toward next Medium-term Plan
September
HQ function reports (production, quality
assurance)
Sustainability activity report
TDK’s Long-term Vision
Panel discussion in Akita area
October
Quarterly results, financial results
2Q quarterly report
Interim dividend resolution
Board of Directors evaluation (kickoff)
Group risk management report
Compliance management report
Business Ethics Supervisory
Committee report
CEATEC inspection tour
November
Global market report
Review of long-term plan and direction
of next Medium-term Plan
Progress report on main businesses
(Medium-term Plan)
LGBTQ+ study meeting
Inspection of internal
technology exhibition
Discussion in Narita area
December
Succession plan report
Progress report on main businesses
(Medium-term Plan)
IR activity report
Board of Directors evaluation (interim
report)
Important themes in next
Medium-term Plan (business
portfolio management)
January
Quarterly results, financial results
3Q quarterly report
Progress report on main businesses
(Medium-term Plan)
Sustainability activity report
February
Branding and PR strategy
IR activity report
Integrated Report policy
Business Ethics Supervisory
Committee report
Sustainability activity report
March
Decision on candidate directors
Compensation standards for
next-term directors and Audit &
Supervisory Board members
Next Group-wide Medium-term Plan
(resolution)
Next Group-wide business plan
(resolution)
(strategy, finance, investment,
management targets)
Board of Directors evaluation
(deliberation of evaluation results)
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About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
Growth Strategies
Contents
Operational Policy and Yearly Agenda for Board of Directors Meetings
Initiatives to enhance employee engagement
The effectiveness evaluation of the Board of Directors for the 127th term, identified
the issue that: “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 and
long term.”
In response to this issue, in the current fiscal year, the Board of Directors
initiated activities called “Open Board” to enhance engagement with employees.
This included holding board meetings in the Akita region with panel discussions
involving employees, discussions between outside directors and employees in the
Narita region, and messages from directors to employees, aiming to facilitate
interaction and information sharing between the Board of Directors and employees.
The Nomination Advisory Committee
Members
3 outside directors and 2 inside directors
Number of
times held
10 times
Theme
The Committee deliberates on the
nomination of directors, Audit &
Supervisory Board members and
corporate officers, as well as on
successor planning, and contributes to
ensuring the appropriateness of their
election and dismission as well as the
transparency of the decision-making
processes. In the current fiscal year, the
Committee deliberated on the selection
of candidates for the Board of Directors,
succession plans, and the clarification of
the policy and processes for the
selection of directors and Audit &
Supervisory Board members.
The Corporate Governance Committee
Members
3 outside directors, 2 inside directors,
and 1 corporate officer
Number of
times held
4 times
Theme
The Committee is an organization which
undertakes considerations on the ideal
configurations of TDK’s medium- to
long-term corporate governance. In the
current fiscal year, it held discussions on,
among other topics, the Board of
Directors’ operational policy, delegation
of authority, and management structure,
and made recommendations to the
Board of Directors. It also undertook the
formulation of a plan for the Board of
Directors evaluation as well as the
implemented the initial evaluation,
confirmed the operational status of the
internal control system, and verified the
status of compliance with the Corporate
Governance Code.
The Compensation Advisory Committee
Members
3 outside directors and 2 inside directors
Number of
times held
9 times
Theme
The Committee deliberates on the
framework and level of remuneration for
directors and corporate officers and
contributes to ensuring the transparency
and appropriateness of the remuneration
decision-making process. In the current
fiscal year, the Committee held
deliberations on the institution of a new
remuneration plan for executives, the
executive remuneration table, and the
corporate officer results-linked bonus
target values and payment amounts.
Meetings of outside directors only
Members
All outside directors and all outside Audit
& Supervisory Board members
Number of
times held
4 times (including 1 time with full-time
Audit & Supervisory Board members)
Theme
From the perspective of ensuring that
outside directors actively contribute to
discussions at the Board of Directors,
meetings exclusively attended by outside
directors and outside Audit &
Supervisory Board members are held on
a regular basis. These meetings are
intended to facilitate exchanges of
information and shared perceptions
based on the attendee’s independent
and objective positions.
Discussions outside the Board of Directors
Members
All directors and Audit & Supervisory
Board members
Number of
times held
4 times
Theme
Open discussions are regularly held with
the aim of deepening and improving the
effectiveness of discussions at meetings
of the Board of Directors. As the current
fiscal year constitutes the fiscal year in
which the new Medium-term Plan was
formulated, discussions were held on the
Long-term Vision and important themes
of the Medium-term Plan.
Column
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TDK Integrated Report 2024
About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
Growth Strategies
Contents
Activities of Advisory Committees and Other Similar Meetings (FY March 2024)
The Nomination Advisory Committee undertakes considerations on CEO succession planning.
The Committee agrees on the required criteria for CEOs in terms of their skills, experience, and
distinguishing characteristics, with the potential CEOs identified from among the pool of
candidates in succession planning for key positions as well as graded training conducted by the
Human Resources HQ. The training and experiences necessary to assume the role of CEO is
then provided and the appropriate candidate is selected.
Policy for election of Directors and Audit & Supervisory Board Members
The Company’s policy for election of Directors and Audit & Supervisory Board Members is
as follows.
(1) The candidate must be able to understand the Company’s board culture and share its values.
(2) The candidate must have excellent character and insight, as well as experience and abilities
to contribute to the sustainable growth of TDK and the enhancement of its corporate value
over the medium to long term.
(3) The candidate must have a high sense of legal compliance and ethics.
(4) The Company shall strive to balance diversity, including gender, internationality, and
professional experience, with appropriate size for the Board of Directors as a whole,
including Directors and Audit & Supervisory Board Members.
(5) Outside Directors and Outside Audit & Supervisory Board Members must satisfy the requirements
provided in the items to be verified regarding independence established by the Company.
(6) Independent Outside Directors must include those with management experience at other
companies.
(7) At least one (1) of the Audit & Supervisory Board Members must have sufficient knowledge
of finance and accounting.
Procedures for election of Directors and Audit & Supervisory Board Members
In selecting candidates for Directors and Audit & Supervisory Board Members, the Nomination
Advisory Committee, the Chair and more than half of the members of which are Independent
Outside Directors, shall thoroughly deliberate on the candidates and report to the Board of
Directors. The Board of Directors shall respect and deliberate the contents of the report, decide
on the candidates for Directors and Audit & Supervisory Board Members, and submit them to
the General Meeting of Shareholders. In selecting candidates for Audit & Supervisory Board
Members, the Audit & Supervisory Board shall review the candidates in advance, and with the
consent of the Audit & Supervisory Board, the Board of Directors shall select the candidates.
CEO Succession Planning
Policy and procedures for election of Directors and
Audit & Supervisory Board Members
Discussions by the
Nomination Advisory
Committee based
on TDK’s new
Medium-term Plan
and the Long-term
Vision
Discussions by the
Nomination Advisory
Committee based
on a longlist of
candidates
presented by the
executive side
Conducting of
assessments by
third parties to
confirm the
competence of
candidates and
submission of
training and
development topics
Formulation of
required coaching
and strategic
placement plans
1
Formulation of
requirements
for CEOs
2
Selection of
successor
candidates
3
Conducting of
assessments
and reviews
4
Review and
implementation
of required
training plans
Ongoing
reviews
Deliberates
Reports
Consent to candidates
for Audit & Supervisory
Board members
Deliberations on candidates
The Nomination
Advisory Committee
Audit & Supervisory Board
Deliberations on candidates
Board of Directors
Resolutions and elects
Ordinary General Meeting
of Shareholders
Consideration of
Audit & Supervisory
Board member
candidates
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About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
Growth Strategies
Contents
Succession Plan
In selecting candidates possessing the respective skills, consideration is given to the overall balance and diversity of the directors
and Audit & Supervisory Board members taken as an integrated whole as the constituent members of the Board of Directors.
Composition of directors and Audit & Supervisory Board
members (as of June 21, 2024)
Fields where the Company especially expects Directors and Audit & Supervisory Board Members to demonstrate their skills
Name
Position
Corporate
Management
Global
Business
Experience
Sales/
Marketing
ESG/
Sustainability
Technology/
Research &
Development
Manufacture/
Production
Technology
Finance/
Accounting
Legal/
Compliance/Risk
Management
Directors
Noboru Saito
Representative Director,
President & CEO
Tetsuji Yamanishi
Representative Director,
Senior Executive Vice President
Shigeki Sato
Director, Senior Vice President
Kozue Nakayama
Outside Director
Mutsuo Iwai
Outside Director
Shoei Yamana
Outside Director
Toru Katsumoto
Outside Director
Audit & Supervisory Board
Members
Masato Ishikawa
Full-time Audit & Supervisory
Board Member
Takakazu Momozuka
Full-time Audit & Supervisory
Board Member
Douglas K. Freeman
Outside Audit & Supervisory
Board Member
Chizuko Yamamoto
Outside Audit & Supervisory
Board Member
Takashi Fujino
Outside Audit & Supervisory
Board Member
Skills the Company expect
Reasons for selecting the skills in question
Corporate Management
To contribute to a sustainable society and enhance corporate value, the capability 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
Sales and marketing skills are necessary to understand market demands and create new business opportunities from the conception of
both technology-out and market-in.
ESG/Sustainability
An adequate understanding of ESG and sustainability, one of the most crucial issues in present-day society, is an important capability 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
contributes to the realization of a sustainable future by accelerating the advancements in technology and the transformation of society.
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 enhance corporate value in
a sound and sustainable manner.
Inside: 5
Outside: 7
Outside Directors
(including 1 female)
4
(including 1 female and
1 non-Japanese)
Outside Audit &
Supervisory Board Members
3
Inside Directors
3
Full-time Audit &
Supervisory
Board Members
2
Transportation
equipment
1
Foods
1
Glass & ceramics
products
1
Lawyers
1
Electric
appliances
2
Certified public
accountants
1
Outside directors: 4
Outside Audit &
Supervisory Board
members: 3
Backgrounds of outside directors and outside Audit &
Supervisory Board members
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About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
Growth Strategies
Contents
Skills Matrix
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 enhance
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.
Clawback and malus provision
TDK has adopted a clawback and malus provision that
allows the company to forfeit the right to be issued payment
or shares, or to demand a reduction or recoupment of
remunerated sums based on deliberations by the
Compensation Advisory Committee and a resolution passed
by the Board of Directors in the event of a sudden and
dramatic deterioration in performance, malfeasance, or
violations of the law.
Basic Policy
Governance for remuneration
Type of remuneration
Details of remuneration
Fixed/Fluctuating
Basic remuneration
Monetary compensation paid monthly
Fixed
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 the consolidated results for the fiscal year under review and
the targets set for each division.
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 factors including
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. Rates of payment will
vary depending on the degree of achievement of consolidated performance targets and
related matters as outlined in the Medium-term Plan.
Fluctuating
(medium- to
long-term)
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
—
—
—
Structure of remuneration for directors and Audit & Supervisory Board members
Eligible for payment
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About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
Growth Strategies
Contents
Remuneration for Executives
Trends in total amount of remuneration for directors and Audit &
Supervisory Board members
Breakdown of remuneration
FY3/24
FY3/23
¥172.9 billion
7.9%
ROE
FY3/17
¥208.7 billion*1
19.8%*1
FY3/19
¥107.8 billion
9.7%
FY3/21
¥111.8 billion*2
8.5%*2
FY3/22
¥166.8 billion
11.6%
¥168.8 billion
8.3%
FY3/20
¥97.9 billion
6.7%
FY3/18
¥89.7 billion
7.8%
36
35
27
377
58
45
24
58
46
314
30
58
55
268
62
48
454
61
48
497
29
58
42
477
42
62
52
390
700
600
500
400
300
200
100
0
(Millions
of yen)
43
62
58
413
Outside Audit & Supervisory Board Members Inside Audit & Supervisory Board Members
Outside Directors Inside Directors
Operating
profit
In June 2020, TDK introduced a post-delivery type stock remuneration system with the aim of
sharing the benefits and risks of fluctuations in stock prices with shareholders and increasing
their motivation to contribute to improving medium-term business performance as well as
increasing corporate value. In June 2024, the system was revised to, for example, increase the
ratio of stock remuneration linked to business performance, while maintaining the current level
of basic remuneration (fixed compensation), to further increase such motivation and to ensure
a competitive remuneration level in the human capital market in a rapidly changing and difficult-
to-predict global business environment.
In addition, as evaluation indicators for PSUs, the Company proposes to introduce
environmental and social indicators in order to increase the willingness to contribute to the
realization of a sustainable society, and to introduce stock price indicators in order to further
motivate management practices that are conscious of the cost of capital and stock price.
Increasing the ratio of results-linked stock remuneration
Financial indicators
Pre-financial indicators
Stock price indicator
Basic remuneration
Basic remuneration
42%
Results-linked bonus
Results-linked bonus
25%
Post-delivery type stock
remuneration
Post-delivery type stock remuneration
33%
28%
28%
44%
Past
Changed
RSU
25%
PSU
(Operating
profit)
12.5%
PSU
(Relative TSR)
25%
PSU
(ROIC)
12.5%
PSU
(CO2 emission
reduction)
12.5%
PSU
(Employee
engagement)
12.5%
* As for the results-linked bonuses and post-delivery type stock remuneration for Directors, the amounts shown above are those recorded as
an expense for the fiscal year under review.
*1 Includes ¥144.4 billion in gains from business transfer to Qualcomm
*2 TDK has adopted the IFRS on its consolidated financial statements in the annual Securities Reports from the FY March 2022 in place of the
US-GAAP. The figures for the FY March 2021 are also presented in accordance with IFRS.
* In the case that the Representative Director, President & CEO achieves 100% of performance targets, etc.
Classification
Evaluation indicators
Percentage of
payment
Financial indicators
Operating profit targets in the Medium-term Plan
0–100%
ROIC targets in the Medium-term Plan
Pre-financial indicators
Targets for CO2 emission reduction in the Medium-term Plan
Targets for employee engagement in the Medium-term Plan
Stock price indicator
Relative TSR (vs. TOPIX)
0–200%
PSU evaluation indicators
2002
2005
2024
2015
2007
2020
Major initiatives to date
Establishment of
Compensation Advisory
Committee (chaired by an
outside director)
Remuneration for outside
directors and Audit &
Supervisory Board
members changed to
basic remuneration only
Stock options changed to
post-delivery type stock
remuneration
Introduction of
stock options for
a stock-linked
compensation plan
Addition of business
performance achievement
conditions to some stock
options
Increase in ratio of PSUs in
post-delivery type stock
remuneration (introduction of
stock price indicators and
pre-financial indicators)
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Message from the President & CEO
Long-term Vision
Governance
Data Section
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Contents
Remuneration for Executives
Questionnaire
Interviews
Discussions
Evaluation results
•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.
November–December
Questionnaire to all Directors
and Audit & Supervisory
Board members
December–January
Individual interviews with all
Directors and Audit &
Supervisory Board members
April
Resolution on evaluation
results by the Board of
Directors
Evaluation process
Improvement cycle
Evaluation process
Evaluation process
Improvement
Improvement
March–April
Analysis and summary reported
and discussed in the Corporate
Governance Committee and
Board of Directors
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 FY March 2023, in the Board of
Directors evaluation for FY March 2024, the Corporate
Governance Committee (Chair: Shigenao Ishiguro, Chairman
& Director who is not also a Corporate Officer *At the time)
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
Questionnaire Items (Major Items)
(1) Role and function of the Board of Directors
(questions and free answers)
(2) Size and composition of the Board of Directors
(questions and free answers)
(3) Operation of the Board of Directors (questions and
free answers)
(4) Composition and role of the Nomination Advisory
Committee (questions and free answers)
(5) Operation of the Nomination Advisory Committee
(questions and free answers)
(6) Composition and role of the Compensation
Advisory Committee (questions and free answers)
(7) Operation of the Compensation Advisory
Committee (questions and free answers)
(8) Composition and role of the Corporate Governance
Committee (questions and free answers)
(9) Operation of the Corporate Governance
Committee (questions and free answers)
(10) Support system for Outside Directors (questions
and free answers)
(11) Role of the Audit & Supervisory Board Members
and expectations of the Audit & Supervisory
Board Members (questions and free answers)
(12) Relationship with investors and shareholders
(questions and free answers)
(13) Governance structure of TDK and effectiveness
of the Board of Directors in general (free answers)
(14) Self-evaluation by Directors and Audit &
Supervisory Board Members (free answers)
* The survey is multifaceted, with detailed sub-items underneath the major items described
above. While certain question items are not changed in the effective 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.
Continuous improvement based on
effectiveness evaluation
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About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
Growth Strategies
Contents
Effectiveness Evaluation of the Board of Directors (Process)
Progress in addressing issues identified in the effectiveness evaluation of the previous fiscal year
The following issues reported in the previous fiscal year were addressed in the annual plan of the Board of
Directors, and efforts for improvement were recognized.
Future issues
As a result of the effective evaluation of the Board of Directors this time, the following three items are
recognized as the main issues that the Board of Directors should address in the future.
Operational policy of the Board of Directors
Taking note of the results of evaluation of the effectiveness of the Board of Directors, the Corporate
Governance Committee compiles the Board of Directors’ operational policy every fiscal year and, on the
basis of this policy, discusses and decides the yearly agenda of the Board of Directors. The operational
policy for the current term (T129) is as follows.
Final evaluation by the Board of Directors
Based on the primary evaluation by the Corporate Governance Committee, the Board of Directors, as a
result of conducting deliberations several times, confirmed that the effectiveness of the Board of Directors
and its Advisory Committees (Nomination Advisory Committee and Compensation Advisory Committee)
was sufficiently secured in terms of their size and composition, the content of the agenda items and
deliberations, the status of discussions, their reflection in management, etc. In addition, the Board of
Directors confirmed that it continues to enhance its effectiveness by making improvements based on the
results of the Board of Directors evaluation in the previous fiscal year.
Item
Progress
1
Further evolution of
board discussions
Based on the operational policy of the Board of Directors for the T128, discussions are being focused.
The Corporate Governance Committee has formulated the operational policy (key discussion items)
for the T128 Board of Directors, aiming to focus the discussions on more comprehensive and
medium- to long-term themes. The board operations are conducted based on this policy.
Furthermore, based on the discussions on delegation of authority in the Corporate Governance
Committee, the revision of the Regulations on Decision-Making Authority (Board Approval Criteria)
was carried out in the July 2023 Board of Directors meeting to promote delegation of authority to
the executive side. Additionally, the executive side ensured effective discussions in the Board of
Directors by providing appropriate information sharing to board members, including orientation
sessions for new directors, site visits, holding board meetings outside the headquarters, and
inviting them to technology exhibitions and internal events.
2
Strengthening
engagement with
stakeholders
In order to enhance the improvement of our group’s corporate value and deepen stakeholders’
understanding of our growth potential and competitive advantage, the Board of Directors provided
supervision and advice from various perspectives towards the development of a Medium-term Plan
that is highly feasible and appealing to stakeholders. Specifically, starting from August 2023, multiple
discussions were held in the Board of Directors and other venues (off-site meetings) regarding our
Long-term Vision and the Medium-term Plan derived from it through backcasting. Progress reports
and deliberations on the Medium-term Plan “Value Creation 2023” were received from the entire
company and each business division, leading to the decision on the new Medium-term Plan (T129 to
T131) in the March 2024 Board of Directors meeting.
Furthermore, the Board of Directors conducted multiple discussions on branding and PR
strategies to promote enhanced communication with stakeholders by the executive side. The
executive side made efforts to strengthen information dissemination through the integrated
report and planned and held new IR events, achieving certain results. Additionally, the Board of
Directors initiated activities called “Open Board” to enhance engagement with employees. This
included holding board meetings in the Akita region with panel discussions involving local employees,
discussions between outside directors and employees in the Narita region, and messages from
directors to employees, aiming to facilitate interaction and information sharing between the Board of
Directors and employees.
3
Responding to rapidly
changing market
trends
To enhance the ability to respond to market trends on a global scale, including marketing strategies and
geopolitical and geo-economic risks, the Board of Directors received reports on global market trends in
anticipation of formulating the new Medium-term Plan. Discussions on market changes were
conducted in the reports from the major business divisions in each Board of Directors meeting. Multiple
discussions were also held on group risk management, and external experts were invited to give
lectures on geopolitical and geoeconomic risks, targeting board members and the executive
management team.
Item
Progress
1
Decision-making for
achieving the Medium-
term Plan in the Board
of Directors
To monitor the execution of our Medium-term Plan (T129 to T131) and support its achievement,
the Board of Directors needs to deepen discussions on important elements of the plan, such as
“business portfolio strategy” and “risk management at the management level,” and make
necessary decisions accordingly.
Specifically, in the “business portfolio strategy,” continuous evaluation and optimization of the
business portfolio (with a focus on core businesses, creation of next-generation pillar businesses,
and addressing challenging businesses) are important. In terms of “risk management at the
management level,” the Board of Directors has been discussing group risk management, and
there is a need to continue improving the risk heat map and engage in in-depth discussions from
the perspective of major risk response policies, identified risks, and necessary countermeasures.
2
Strengthening
engagement activities
with stakeholders
To contribute to the improvement of corporate value through the Board of Directors, it is important
to further strengthen stakeholder engagement activities. In the previous term, efforts were focused
on engagement activities between the Board of Directors and internal stakeholders (employees)
through initiatives such as the “Open Board” activities. In the current term, while continuing the
“Open Board,” the scope will be expanded to include external stakeholders (investors, shareholders,
etc.) and communicate our pre-financial capital (sources of future cashflow: human capital,
organizational capabilities, technological capabilities, customer base, etc.) and potential. Additionally,
discussions on enhancing our PR and brand strength will be conducted in the Board of Directors to
promote stronger communication with stakeholders by the executive side.
3
Pursuing an optimal
governance structure in
the Medium-Term Plan
period
In formulating our Medium-term Plan (T129 to T131), we conducted planning based on the
backcasting from our Long-term Vision, “TDK Transformation—Accelerating transformation for a
sustainable future.” In order to further enhance effectiveness, the Board of Directors itself needs
to transform into an optimal form. This includes verifying the skill matrix, formalizing the
nomination process, and inviting directors with the necessary skills. Additionally, in pursuit of
further improvement in governance functions, transitioning to a majority of independent outside
directors and seeking an optimal governance structure will be important.
Basic policy for operation of the Board of Directors for the T129
Directors, members of the Audit & Supervisory Board, and the executive side will make efforts
toward the common objectives of TDK’s sustained growth and the medium- to long-term
enhancement of corporate value. In the T129, which represents the first fiscal year of the new
Medium-term Plan, the Board of Directors will discuss the business portfolio strategy and risk
management, both of which are important elements in achieving the Medium-term Plan and pursue
an optimal governance structure with a view to the period of the Medium-term Plan.
Key items for discussion in the Board of Directors in the T129
1. Discussion of the business portfolio strategy
2. Discussion of risk management at meetings of the Board of Directors
3. Pursuit of an optimal governance structure
85
TDK Integrated Report 2024
About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
Growth Strategies
Contents
Effectiveness Evaluation of the Board of Directors (Results)
Directors
Audit & Supervisory Board Members
President & CEO
Noboru Saito
Senior 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
Corporate Officers
Apr. 2022 Representative Director of
the Company
Apr. 2024 President & CEO of the
Company General
Manager of Humidifier
Countermeasures HQ of
the Company
Noboru Saito
Representative Director
Jun. 2018 Representative Director of
the Company
Apr. 2024 Senior Executive Vice
President of the Company
Chief Financial Officer of
the Company
Tetsuji Yamanishi
Representative Director
Apr. 2021 Senior Vice President of the
Company
General Manager of
Technology and Intellectual
Property HQ of the
Company
Jun. 2021 Director of the Company
Apr. 2024 Chief Technology Officer of
the Company
Shigeki Sato
Director
Jun. 2022 Outside Director of the
Company
Jun. 2023 Senior Advisor of Konica
Minolta, Inc.
Outside Director of Zensho
Holdings Co., Ltd.
Jun. 2024 Outside Director of JAPAN
POST INSURANCE Co., Ltd.
Outside Director of SCSK
Corporation
Shoei Yamana
Outside Director
Apr. 2022 Senior Executive Vice
President of Sony Group
Corporation (resigned in
Jun. 2022)
Jun. 2024 Outside Director of the
Company
Toru Katsumoto
Outside Director
Jun. 2019 Outside Audit &
Supervisory Board
Member of Imperial Hotel,
Ltd.
Jun. 2020 Outside Director of the
Company
Jun. 2022 Outside Director of Nanto
Bank, Ltd.
Kozue Nakayama
Outside Director
Jun. 2021 Outside Director of the
Company
Mar. 2022 Member and Chairperson
of the Board of JT
Mutsuo Iwai
Outside Director
Jun. 2019 Full-time Audit &
Supervisory Board
Member of the Company
Takakazu Momozuka
Full-time Audit &
Supervisory Board Member
Jun. 2023 Full-time Audit &
Supervisory Board
Member of the Company
Masato Ishikawa
Full-time Audit &
Supervisory Board Member
Sep. 2007 Principal of Law Offices of
Douglas K. Freeman
(current Freeman & Partners)
Apr. 2019 Professor of Keio
University Law School
Jun. 2019 Outside Audit &
Supervisory Board
Member of the Company
Douglas K. Freeman
Outside Audit &
Supervisory Board Member
Jun. 2020 Principal of Chizuko
Yamamoto CPA Office
Aug. 2020 Outside Audit &
Supervisory Board Member
of Ozu Corporation
Jun. 2021 Outside Director of Tokyo
Rope Mfg. CO., Ltd.
Jun. 2023 Outside Audit &
Supervisory Board
Member of the Company
Chizuko Yamamoto
Outside Audit &
Supervisory Board Member
Jun. 2021 Outside Director of
Kyokuto Boeki Kaisya, Ltd.
Jun. 2023 Outside Audit &
Supervisory Board
Member of the Company
Takashi Fujino
Outside Audit &
Supervisory Board Member
* Only present post are listed in the career summary.
86
TDK Integrated Report 2024
About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
Growth Strategies
Contents
Directors, Audit & Supervisory Board Members, and Corporate Officers (As of the end of June 2024)
Consolidated business highlights
Net sales
(Overseas sales)
Cost of sales
Selling, general and administrative expenses
Operating profit
Profit before tax
Net profit attributable to owners of parent
Purchase of tangible and intangible assets
Depreciation and amortization
Research and development expenses
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Free cash flow
Cash and cash equivalents at end of period
Total assets
Total equity attributable to owners of parent
Interest-bearing debt
Working capital
Number of shares issued (thousands)
Per-share data*
Net profit attributable to owners of parent (basic)
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) (%)
Return on invested capital (ROIC) (%)
Equity ratio (non-consolidated) (%)
D/E ratio (times)
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)
15,538
265,104
1,404,253
738,861
268,332
352,364
129,591
¥392.78
5,865
90.00
22.9
91.4
6.5
6.7
7.2
4.0
5.4
43.0
0.36
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
10,978
285,468
1,450,564
675,361
335,737
289,760
129,591
¥514.23
5,355
120.00
23.3
92.1
7.4
8.1
9.2
4.7
6.7
37.7
0.50
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)
89,025
330,388
1,664,333
793,614
334,132
388,542
129,591
¥1,150.16
6,289
120.00
10.4
91.1
7.7
17.7
19.8
9.3
13.4
44.0
0.42
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
(154,789)
279,624
1,905,209
824,634
483,019
296,899
129,591
¥502.80
6,532
130.00
25.9
91.1
8.1
7.1
7.8
3.6
5.2
34.6
0.59
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
95
289,175
1,992,480
877,290
520,268
208,165
129,591
¥651.02
6,947
160.00
24.6
91.8
8.3
7.8
9.7
4.2
5.7
29.0
0.59
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)
180,426
332,717
1,943,379
843,957
424,690
247,577
129,591
¥457.47
6,681
180.00
39.3
91.9
8.6
7.2
6.7
2.9
4.3
24.9
0.50
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
(633)
380,387
2,359,663
958,929
521,822
202,547
388,772*
¥197.06
2,530
60.00
30.4
92.1
8.6
7.6
8.5
3.5
5.2
29.2
0.54
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
(102,559)
439,339
3,041,653
1,300,317
679,813
470,814
388,772
¥346.44
3,431
78.33
22.6
92.2
8.7
8.8
11.6
4.9
7.4
32.0
0.52
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
28,370
506,185
3,147,027
1,458,446
752,158
603,000
388,772
¥301.19
3,845
106.00
35.2
91.9
8.2
7.7
8.3
3.7
5.5
34.8
0.52
2,103,876
1,919,245
1,500,858
452,520
172,893
179,241
124,687
218,589
190,546
188,860
447,007
(216,592)
(146,368)
230,415
649,998
3,415,304
1,707,332
685,736
711,085
388,772
¥328.70
4,500
116.00
35.3
91.2
9.0
8.2
7.9
3.8
5.3
35.0
0.40
FY3/15
FY3/16
FY3/17
FY3/18
FY3/19
FY3/20
FY3/21 (IFRS)
FY3/22 (IFRS)
FY3/23 (IFRS)
FY3/24 (IFRS)
Millions of yen
Yen
* 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 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 FY March 2021.
TDK has adopted the IFRS on its consolidated financial statements in the annual Securities Reports from the FY March 2022 in place of the US-GAAP.
The figures for the FY March 2021 are also presented in accordance with IFRS. Account titles are presented in accordance with the IFRS.
Key Financial Data for the Past 10 Years
87
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About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
Growth Strategies
Contents
1,500
1,000
500
0
FY3/20
FY3/22
FY3/23
FY3/24
FY3/21
91.2
2,103.9
2,500
2,000
1,500
1,000
500
0
(Billions of yen)
100
80
60
40
20
0
ROIC ROE ROA
Cash flows from operating activities Cash flows from investing activities
Free cash flow
(Billions of yen)
(%)
0.80
0.60
0.40
0.20
0
(times)
80
60
40
20
0
(%)
Net sales / Overseas sales ratio
Operating profit / OP margin
ROIC / ROE / ROA
Cash flows
In FY March 2024, net sales decreased 3.5% from the previous year to ¥2,103.9
billion. Final demand remained stagnant in the ICT market, and the market was
sluggish. In the automotive market, although the xEV production volume increased
from the previous year, parts inventory adjustments continued in some regions, and
demand was below initial expectations. In the industrial equipment market, demand
for capital expenditures overall was sluggish. Overseas sales ratio decreased 0.7
percentage points to 91.2%.
685.7
0.40
times
50.0%
1,707.3
As of the end of FY March 2024, equity attributable to owners of the parent
company amounted to ¥1,707.3 billion, an increase of 17.1% over the previous fiscal
year end. Other capital components increased by ¥164.7 billion, primarily as a result
of an increase in exchange differences on translation of foreign operations, and the
ratio of equity attributable to owners of the parent increased by 3.7 percentage
points to 50.0%. Interest-bearing debt decreased by 8.8% to ¥685.7 billion due to
progress in repaying borrowings. As a result, the D/E ratio decreased by 0.12
percentage points to 0.40 times.
In FY March 2024 operating profit reached ¥172.9 billion, up 2.4% year on year,
which, excluding the business transfer gains recorded in FY March 2017, was the
highest ever. The OP margin was 8.2%. In addition to positive effects from yen
depreciation, an increase in the sales volume of small capacity batteries, cost
reductions from rationalization, benefits from restructuring conducted in the previous
fiscal year, and streamlining of SG&A expenses contributed to operating profit.
Purchase of tangible and intangible assets /
Depreciation and amortization /
Research and development expenses
8.2
172.9
250
200
150
100
50
0
(Billions of yen)
25
20
15
10
5
0
(%)
FY3/20
FY3/22
FY3/23
FY3/24
FY3/21
Capital expenditures amounted to ¥218.6 billion in FY March 2024, down 20.7%
year on year, depreciation and amortization expenses reached ¥190.5 billion, down
7.6%, and research and development expenses reached ¥188.9 billion, up 5.2%.
During the period of the previous Medium-term Plan, which began in FY March
2022, TDK initially planned for total capital expenditures of ¥750.0 billion over three
years but total capital expenditures were ¥785.6 billion over the three years, due to
an increase of about ¥100.0 billion as a result of foreign exchange fluctuations, and
upfront investment in businesses which are expected to grow in the future.
As a result of a decline in the net profit attributable to owners of parent, in FY March
2024 ROE decreased by 0.4 percentage points over the previous fiscal year to
7.9%, ROA increased by 0.1 percentage points to 3.8%, and ROIC decreased by
0.2 percentage points to 5.3%. We have set an ROIC target of at least 8% in FY
March 2027 and at least 12% over the medium to long term.
3.8
20
15
10
5
0
(%)
5.3
7.9
Total equity attributable to owners of parent (ratio) /
Interest-bearing debt / D/E ratio
Total equity attributable to owners of parent (left) Interest-bearing debt (left)
Ratio of equity attributable to owners of parent (right, %) D/E ratio (right, times)
500
250
0
-250
-500
(Billions of yen)
-216.6
230.4
447.0
In FY March 2024 free cash flow registered a surplus of ¥230.4 billion. Operating
activities improved significantly due to the decrease in working capital resulting from
ongoing inventory optimization, and capital expenditures was conducted while
making careful determinations concerning changes in demand, resulting in a
decrease of approximately ¥40.0 billion from the initial forecast of ¥260.0 billion. As a
result, free cash flow increased substantially from FY March 2023.
300
240
180
120
60
0
(Billions of yen)
190.5
188.9
218.6
IFRS
US-GAAP
FY3/20
FY3/22
FY3/23
FY3/24
FY3/21
IFRS
US-GAAP
IFRS
US-GAAP
FY3/20
FY3/22
FY3/23
FY3/24
FY3/21
IFRS
US-GAAP
FY3/20
FY3/22
FY3/23
FY3/24
FY3/21
IFRS
US-GAAP
FY3/20
FY3/22
FY3/23
FY3/24
FY3/21
IFRS
US-GAAP
Net sales (left) Overseas sales ratio (right)
Operating profit (left) OP margin (right)
Purchase of tangible and intangible assets Depreciation and amortization
Research and development expenses
TDK has adopted the IFRS on its consolidated financial statements in the annual Securities Reports from the FY March 2022 in place of the US-GAAP.
The figures for the FY March 2021 are also presented in accordance with IFRS. Account titles are presented in accordance with the IFRS.
Consolidated Business Results Highlights
88
TDK Integrated Report 2024
About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
Growth Strategies
Contents
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.
Disclosures of information
Objectives of investor relations activities
Number of annual discussions
State of implementation of dialogue with shareholders
External evaluation of TDK’s IR activities
FY3/23
FY3/24
Financial statement briefings for analysts and
institutional investors
4
4
IR Tech Conference
—
1
Number of Management meetings
50
61
Number of individual meetings (include
conferences)
347
435
Conferences hosted by securities companies
7
7
Overseas roadshow
2
4
Item
Content
Main respondents in dialogue with shareholders
Mainly the President & CEO, Senior Executive Vice President CFO; executives; and the
IR & SR Group, a dedicated team handling shareholder and investor response.
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 pre-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 FY March 2024: 4
Matters introduced as a result of feedback
Decision to link pre-financial capitals to remuneration for executives
Issues currently under consideration as a result of
feedback
Create opportunities for dialogue between investors and Outside Directors
Disclosure on progress of business portfolio management
IR website
BroadBand Security, Inc.
Gomez IR Site Ranking 2023
Silver Prize
Daiwa Investor Relations Co. Ltd.
Internet IR 2023, Commendation Award
Nikko Investor Relations Co., Ltd.
All Japanese Listed Companies’
Website Ranking 2023
All Markets Ranking, AAA Website
Japan Investor Relations
Association (JIRA)
Greatest IR Improvement
Premium Company
Best Continual IR Efforts
Premium Company
Integrated report
NIKKEI Integrated Report Award 2023
Award for Excellence
Government Pension Investment Fund (GPIF)
the Excellent Integrated Reports
(receiving 1 vote)
the Most-improved Integrated Reports
(receiving 2 vote)
by the GPIF’s Domestic Equity Managers
89
TDK Integrated Report 2024
About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
Growth Strategies
Contents
IR Activities
Corporate name
Corporate
headquarters
Date of
establishment
Authorized
number of shares
Number of
shares issued
Number of
shareholders
TDK Corporation
Nihonbashi Takashimaya Mitsui
Building, 2-5-1, Nihonbashi,
Chuo-ku, Tokyo 103-6128
December 7, 1935
1,440,000,000 shares
388,771,977 shares
27,031
Status of ownership
Principal shareholders (10 largest shareholders)
Stock price and volume
Total shareholder return (TSR)*2
Common stock
Securities traded
Securities code
Number of
employees
(consolidated)
Transfer agent
Independent
registered public
accounting firm
¥32,641,976,312
Tokyo Stock Exchange
6762
101,453
Sumitomo Mitsui Trust Bank, Limited 1-4-1,
Marunouchi, Chiyoda-ku, Tokyo 100-8233
KPMG AZSA LLC
(the Japan member firm of
KPMG International)
The Master Trust Bank of Japan, Ltd.
(Trust account)
102,039
52,147
16,314
8,111
7,517
6,855
5,607
4,090
3,660
4,994
26.90
13.74
4.30
2.14
1.98
1.81
1.48
1.32
1.08
0.96
Custody Bank of Japan, Ltd.
(Trust account)
JP MORGAN CHASE BANK 385632
STATE STREET BANK WEST
CLIENT - TREATY 505234
SSBTC CLIENT OMNIBUS ACCOUNT
JP MORGAN CHASE BANK 385781
GOVERNMENT OF NORWAY
STATE STREET BANK AND TRUST
COMPANY 505103
HSBC HONGKONG-TREASURY
SERVICES A/C ASIAN EQUITIES
DERIVATIVE
CITIBANK, N.A. -NY, AS DEPOSITARY
BANK FOR DEPOSITARY SHARE
HOLDERS
Name of shareholder
*1 The stock price data on the last day of March 2019 is set as 100.
*2 The formula for calculating total shareholder return for each fiscal year is as follows.
(Stock price at the end of each fiscal year + accumulated amount of dividends per share from 4 fiscal years prior to the current fiscal year to each fiscal year) / Stock price at the end of 5
fiscal years prior to the current fiscal year.
(Index)*1
(Millions of shares)
98.7
90.5
FY3/20
181.0
128.6
FY3/21
161.2
131.2
FY3/22
174.0
138.8
FY3/23
273.4
196.2
FY3/24
700
600
500
400
300
200
100
0
300
250
200
150
100
50
0 Mar.
Mar.
Mar.
Mar.
Mar.
Mar.
TDK TOPIX TOPIX Electric Appliances
Japanese securities firms
3.28%
* Other than the above, the Company holds 9,381 thousand shares of treasury stock.
2019
2020
2021
2022
2023
2024
Total shareholder return (%)
(Benchmark: TOPIX index)
Volume in a month
Japanese financial
institutions
44.83%
Japanese corporations
0.57%
Treasury stock
2.41%
Foreign institutions
and individuals
43.81%
Japanese individuals, etc.
5.10%
Percentage of
number of shares
held in the total
number of issued
shares* (%)
Number of
shares held
(thousands of
shares)
Corporate Information
(As of March 31, 2024)
90
TDK Integrated Report 2024
About TDK
Message from the President & CEO
Long-term Vision
Governance
Data Section
Growth Strategies
Contents
TDK Corporation
Nihonbashi Takashimaya Mitsui Building,
2-5-1, Nihonbashi, Chuo-ku, Tokyo 103-6128
https://www.tdk.com/en/index.html