Management Policies

Management Policies, Business Environment, and Issues to Address, etc.

Forward-looking statements herein are based on the Group’s judgement as of the end of fiscal year 2023 under review.

1. Basic Management Policies

Based on the management philosophy of “always aiming to become the world’s No. 1 silicon wafer manufacturer by exceeding the expectations of our customers and stockholders, by promoting the welfare of our employees, and by contributing to society,” the Group has developed advanced technological capabilities that lead the world and the ability to roll out a wide range of products in manufacturing high-quality large- to small-diameter silicon wafers used in semiconductor devices. By taking full advantage of these strengths to create a stable supply capability, the Group seeks to contribute to the advancement of society. In particular, the Group focuses on improving its technological capabilities to meet its customers’ stringent requirements for quality and cost, promoting higher precision silicon wafers to support the evolution of various types of semiconductors. Through these efforts, the Group will try to maintain and improve its position in the silicon wafer industry and carry out CSR and sustainability promotion activities based on the SUMCO CSR Policy, considering it our corporate social responsibility to value all stakeholders, including customers, stockholders, business partners, employees, and the global environment and society as a whole.

Under these basic policies, the Group is committed to further strengthening its business foundations and meeting its mandate from stakeholders, aiming for sustainable growth of its business.

2. Targeted Management Indicators and Medium- to Long-Term Management Strategies

Despite factors that could cause short-term fluctuations, the semiconductor silicon wafer market is expected to grow in the medium to long term with the semiconductor market’s growth on the back of technological innovation, such as an increase in data communication volume, development of generative AI technology, the spread of HEVs and EVs, progress in driverless driving, and digital transformation (DX). In particular, demand for 300 mm leading-edge semiconductor silicon wafers, one of the Group’s strengths, is expected to continue to grow, although they are currently in an adjustment phase. Demand for 200 mm silicon wafers is also projected to recover in the medium to long term, mainly for automotive and power semiconductors.

In this business environment, the Group will promote further differentiation of its mainstay 300 mm wafers through technology development and investments designed to meet the increasingly tough requirements its customers have for higher precision and better quality products along with advances in scaling technology. To respond to the demand that exceeds production capacity, the Group will use its capital expenditures in a disciplined manner, giving all due consideration to their economic rationality.

As for wafers of 200 mm or below, the Group will continue ensuring that its production capability is commensurate with the market environment. In addition, the Group will enhance cost competitiveness and seek differentiation by concentrating management resources in areas where demand is projected to grow.

Given that semiconductor silicon wafers are part of business areas with a volatile market environment, the Group will continue making efforts to improve profitability and work on building business foundations that can promptly and effectively respond to changes in the demand environment.

3. Business Environment and Issues to Address

The market for 300 mm semiconductor silicon wafers is currently facing an adjustment phase, especially for wafers used in memories and MPU semiconductors, due to our customer’s production adjustment. Weak demand also continues for 200 mm silicon wafers, although inventory adjustment continues for products other than some product types, such as those for automotive applications. Meanwhile, the semiconductor silicon wafer market is projected to expand in the medium to long term as the semiconductor market grows.

Under these circumstances, the SUMCO Group will continue to strengthen its activities to secure revenue, improve its productivity using AI, and build a production structure that can swiftly respond to market fluctuations to realize the SUMCO Vision. Furthermore, the Group will develop technology for cutting-edge products, which are expected to grow significantly, and address sophisticated customer requirements to meet the increasing demand for silicon wafers in the medium to long term. Amid concerns over the increasing impacts in recent years, such as geopolitical risks and the policies of various countries, the Group will closely monitor the market environment and endeavor to minimize risks.

As for capital expenditures, the Group will fulfill its responsibility as a supplier and use its capital expenditures in a disciplined and appropriate manner, considering matters such as the supply and demand forecast of the silicon wafer market at different times and the time required to install or increase production facilities.

On March 31, 2023, the Company acquired the semiconductor polycrystalline silicon business from Mitsubishi Materials Corporation. This business acquisition enabled the stable procurement of semiconductor polycrystalline silicon and trichlorosilane, essential materials for the Company’s silicon wafer business. The Company’s seamless development and manufacturing from materials to end products will promote higher-quality production.

The Group identifies as materiality the issues it should address as a matter of priority for solving social problems and raising its corporate value and works on sustainability initiatives. Furthermore, the Group will further accelerate its activities to achieve its medium- to long-term goals, such as carbon neutrality, human resources development, and women’s empowerment in the workplace.