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Response to the TCFD

We have established the" Sustainability Policy" at the Board of Directors meeting held on October 25, 2021, based on the recognition that addressing issues related to sustainability is an important element of its management strategy. In line with policy, the Company has revised its CSR promotion system and launched the Sustainability Execution Conference in order to strengthen its response to climate change. This conference, which is under the direct control of the President and chaired by the Director and Executive Officer in charge, is responsible for functions such as the determination of sustainability-related policies, progress management of targets, and deliberation of measures. In addition, it works with related departments to incorporate measures. The Company will enhance the effectiveness of the supervision of the Board of Directors by providing the Board of Directors with evaluation reports on specific achievements as appropriate. Through this conference, the Company will collect and analyze necessary data on the impact of climate change-related risks and revenue opportunities on the Company's business activities and revenue, and aim for disclosure based on the internationally established TCFD or an equivalent framework. In May 2023, we announced our endorsement of the TCFD to encourage disclosure.

Analysis of risks and opportunities

The TCFD Recommendations require companies to explain the possibility of business continuity in a decarbonized society based on financial information. In the 1.5°C scenario, where we are moving toward a decarbonized society, the main question is transition risk, while in the 4°C scenario, where warming continues and temperatures rise, the question is more about physical risk. However, even if progress is made toward a decarbonized society as in the 1.5°C scenario, the physical risk at the 4 °C scenario level may occur. Therefore, in the business environment aiming for a decarbonized society at the 1.5°C scenario level, we also considered measures to prepare for the physical risk at the 4°C scenario level.

* The impact on the Company's financial position is assessed on a scale of Large, Medium, and Small in light of the magnitude of the impact on related financial indicators. Risks and opportunities that materialize over a certain period are presented on a scale of Short-term (less than three years), Medium-term (three to less than six years), and Long-term (six years or more).

Risks and opportunities associated with the "transition" to a low-carbon economy
RISK Impact on the business Time to
Assessment Opportunities and Responses
Policies, laws and regulations 1) Risk of incurring costs associated with CO2 offsets.Medium-term/
Large 1) Promote energy-saving measures and waste reduction.
2) Procure renewable energy to the extent possible through in-house power generation projects to reduce costs.
3) Reduce CO2 emissions to the target level by purchasing off-site PPA and CO2-free electricity to make up for any shortfall in in-house power generation.
* Promote CO2 reduction in a systematic manner.
4) Monitor laws and regulations, and measures in each country.
2) Regulations on waste are introduced in each country, incurring the corresponding costShort-term Large
3) Cost increase due to conversion to fossil fuels.Medium-term/
4) Sudden increase of laws and regulations by socialist countries due to high overseas ratio.Medium-term/
Technology 1) The need for energy-saving measures has increased, and competition in energy-saving performance has intensified. As a result, the burden of investment costs such as R&D has increased, and existing products have been replaced with low-carbon technologies.Medium-term/
Large 5) Increased demand for low-carbon technologies and expanded business opportunities (establishment of new construction method technologies to reduce environmental impact) due to increased development of energy-saving measures and energy-saving products .
6) Reduction of loss by yield improvement.
2) Intensified competition to acquire knowledge, technology, engineers, manufacturing facilities, etc. related to decarbonization and low-emission technologies and products.Short-term Medium
Market 1) Insufficient supply of substrates for semiconductors due to the progress of electrification and digitalization of automobiles and all other products.Medium-term/
Large 7) Systematically promote CO2 reduction.
8) Develop and supply products with low environmental impact.
9) Expand EV-compatible products and respond to growing markets .
10) Expansion of business opportunities by high-speed communication with the increase of data communication volume and responding to growing demand for semiconductor packages .
11) Establish a global procurement network .
12) Reduction of distribution energy by improving loading rate.
2) Decrease in orders from existing customers due to the entry of manufacturers from other industries into the market.Medium-term/
3) Increased costs due to the rising prices of materials with high environmental impact.Medium-term Large
4) Decrease in orders (decrease in demand) due to lack of environmental responsiveness.Short-term Large
Reputation 1) Low carbon and environment-friendly business will become a requirement for investment.Medium-term/
Large 13) Appropriately disclose the progress of the CO2 reduction plans.
2) In case of inferior climate change measures, the impact on corporate value, orders received, and management and recruitment will become serious.Medium-term/
"Physical" risks and opportunities from climate change
RISK Impact on the business Time to materialization Assessment Opportunities and Responses
Acute 1) An increase in risks such as the suspension of factory operations, damage to assets, and difficulty for employees to commute due to an increase in the severity of disasters (increase in wind and flood damage).Medium-term/
Small 1) Business continuity by strengthening BCP in response to increasingly severe disasters(supply chain maintenance, stable energy supply, etc.).
2) Promote energy conservation plans.
3) Strengthen response to markets related to disaster prevention systems.
2) Supply chain disruption due to increased wind and flood damage.Medium-term/
Chronic 3) Increase in energy cost and material management cost due to temperature rise.Medium-term/

<Targets and Indicators>

We have disclosed our CO2 reduction targets in our medium-term business plan.
• Reduce domestic CO2 emissions per basic unit by 50% in 2030 (compared to 2013)
• Promotion of energy conservation (basic unit: electric power - 1.5% / year, fuel - 2.0% / year)
• Introduction of in-house solar power generation

In fiscal 2021, Scope3 was added to the environmental performance data.
This gives us an overview of the CO2 emissions associated with our activities In the future,
measures will be implemented in the areas with the greatest impact.

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