Disclosure Based on TCFD Recommendations

In April 2021, we expressed our support for the TCFD*1 recommendations.
This section discloses our governance, strategy, risk management, and metrics and targets in line with the TCFD recommendations.

  • *1The Task Force on Climate-related Financial Disclosures established by the Financial Stability Board (FSB)

1. Governance and Risk Management

SUMCO has appointed an “Executive Officer Responsible for Sustainability Promotion” who promotes our sustainability initiatives, and established the Sustainability Promotion Department, a dedicated organization under the direct supervision of top management. In addition, we convene the “Sustainability Promotion Council” twice a year as a company-wide meeting to oversee our sustainability initiatives, attended by executives at the managing executive officer level and above. An overview of the Sustainability Promotion Council is regularly reported to the Board of Directors, where active discussions are held with the participation of outside directors.
Furthermore, for risks assessed as potentially affecting our business continuity, including those related to sustainability, we implement risk management activities based on our Basic Rules on Risk Management to prevent risk events and minimize their impact.

2. Strategy

We recognize that the risks and opportunities associated with climate change are among the key business issues that will affect our future finance.

We therefore forecast and quantified the risks and opportunities that are likely to have a financial impact and carried out a scenario analysis in line with the TCFD recommendations.

(1) Major risks and opportunities related to climate change

  • Scope: SUMCO Group
  • Timing of embodiment: short term (1 year or less), medium term (1 to 3 years), medium to long term (3 to 10 years), long term (over 10 years)
  • Possibility: small, medium, large
  • Degree of impact: small (1 billion yen or less), medium (1 to 10 billion yen), large (over 10 billion yen)

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Classification Expected result Timing of embodiment Possibility Degree of impact
Risk Transition risk Increase in procurement costs due to enhancement of carbon neutrality initiatives at supliers and reflection of a carbon tax (carbon pricing) cost in a raw material unit price Medium to long term Large Medium
Increase in operating costs due to the introduction of a carbon tax (carbon pricing) Medium term to medium to long term Large Medium
Increase in waste disposal costs due to the formation of a recycling-oriented society Medium to long term Large Medium
Increase in business costs due to the increased burden of renewable energy levy Short term to medium to long term Large Medium
Decreased potential for capital acquisition due to the growing difficulty in meeting the demands of increasingly sophisticated ESG-oriented investors Medium term Large Small
Physical risk Suspension of business activities due to wind and flood disasters Short term Medium Small to large
Supply chain disruptions due to wind and flood disasters Short term Medium Small to large
Opportunity Expansion of demand for energy-saving-related equipment due to the advancement of energy conservation and renewable energy Long term Large Large
Expansion of demand for automotive products due to the spread of Evs Medium to long term Large Large
Expansion of demand for data centers due to the enhancements of communication traffic and data processing Medium to long term Large Large
Expansion of demand for infrastructure and automation equipment aimed at enhancing energy efficiency Medium to long term Large Large

(2) Scenario analysis

Although all the items identified as risks and opportunities are evaluated as having a significant impact on SUMCO, three items (blue items in the above list) have been selected for the scenario analysis in the current fiscal year.

1) Increase in operating costs due to the introduction of a carbon tax (carbon pricing) [Risk]

Since we emit large amounts of greenhouse gases and there will be a significant impact on our business if a carbon tax is introduced, we conducted a scenario analysis for the 2°C and 4°C scenarios.

(i) Assumptions of scenario analysis
(1) Total emissions for scopes 1 and 2

Emissions in 2030 are estimated, with emission factors calculated for each country's electric utilities based on the World Energy Outlook (WEO) 2019 of the International Energy Agency (IEA).

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2°C
Sustainable Development Scenario (SDS)
4°C
Stated Policies Scenario (STEPS)
Emissions in 2030 Approx. 430,000 t-CO2/yr Approx. 675,000 t-CO2/yr
(2) Carbon prices

Carbon prices of each country are set on the basis of the World Energy Outlook (WEO) 2019 of the International Energy Agency (IEA).

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2°C
Sustainable Development Scenario (SDS)
4°C
Stated Policies Scenario (STEPS)
Japan, USA, Taiwan $100/t-CO2 *2 $33/t-CO2 *4
Indonesia $75/t-CO2 *3 $12/t-CO2 *5
  • *2The value for advanced economies is adopted.
  • *3The value for selected advancing economies is adopted.
  • *4The value for EU is adopted.
  • *5The lowest value among the values given for different countries in the WEO 2019 is adopted.
(ii) Scenario analysis

The cost burden will increase by about 2.4 billion yen/yr under the 4°C scenario and about 4.7 billion yen/yr under the 2°C scenario.

(iii) Proposed cost reduction initiatives

Since the scenario analysis has indicated that the total cost decreases when the unit cost of procuring renewable energy is lower than the unit carbon price, we continue to discuss the introduction of renewable energy in addition to our current efforts toward energy conservation.

Image of costs associated with carbon tax

Image of costs associated with carbon tax

3) Expansion of demand for automotive products due to the spread of EVs [Opportunity]

In forecasting the demand for automotive wafers, we estimated the ratios of future EV/HEV production as shown in the figure below.

Regarding the right-side graph (New scenario) as the 2°C scenario and the left-side graph as the 4°C scenario (business as usual), we analyzed the trend of silicon wafer demand until 2030 by multiplying the projected area of silicon wafers for automotive semiconductors by the production ratio of each vehicle type.

The results indicate that the demand for silicon wafers in 2030 will be more than doubled compared to 2020 in both the 2°C and 4°C scenarios. When both scenarios are compared, the demand as of 2030 under the 2°C scenario is estimated to be about 1.1 times higher than that under the 4°C scenario.

In the automotive and electronics sector, we expect, as a baseline, increasing demand for automotive semiconductors due to such trends as automated driving and computerization of display devices. In addition, we expect that the spread of EVs and PHEVs for decarbonization will have the effect of further boosting demand, with a positive impact on demand for our products.

We will therefore continue to develop high reliability and durability of our products and increase our capacity.

Expansion of demand for automotive products due to the spread of EVs

  • *The scenario analysis was conducted with the help of an external research company in collecting and analyzing external information.

3. Metrics and Targets

Tackling climate change is one of the goals in SDGs, and delinking of economic growth and environmental degradation is strongly required. The SUMCO Group, which supports the growing semiconductor industry, set goals for carbon neutral covering Scope 1+2 of SUMCO Group (Japan) , in September 2021 toward the realization of a sustainable society, and in February 2024, changed the goal to comply with the SBT(*1)'s 1.5°C scenario from SBT's 2.0°C scenario. In addition, in February 2025, we changed the goal that covers domestic and overseas sites, and set the new goal covering Scope3. As a result, we obtained SBT certification for its Near-Term goals on June 12, 2025.

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Target Year 2030
(Near-term Goal)
2050
(Long-term Goal)
Scope1+2 Goals 42% reduction from 2023 (6.0% reduction per year)
[in conformity to 1.5℃ scenario of SBT(*7)]
100% reduction (Carbon Neutral)
[in conformity to the declaration aiming at carbon neutral by 2050 by the Government of Japan]
Scope3 Goals 25% reduction from 2023 (3.6% reduction per year)
[in conformity to WB2℃ scenario of SBT(*7)]
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Initiatives Continuous energy-conservation activities
Further introduction of more renewable energy (such as Solar power generation, Wind PPA, etc.)
Procurement of environmental value (such as Non-Fossil Certificates and J-Credit, etc.)
Promotion of initiatives for carbon neutral by our suppliers, etc.
  • *7Science Based Targets
    Reduction targets of greenhouse gas emissions set by companies that comply with the standards of the Paris Agreement