TCFD Response

The Tokyo Seimitsu Group considers climate change a major business threat. The Sustainability Committee discusses ways to control risks and opportunities related to climate change issues and reports results of the discussions to the board of directors on a regular basis.

The Sustainability Committee is chaired by the Chairman & CEO. Its activities are reported to the semiannual Sustainability Promotion Meetings, and the report is submitted to the Board of Directors if deemed necessary by the Chairman.

The board members collect information and deepen their knowledge through various opportunities and means to grasp the ever-shifting climate change situation. The Board of Directors share the issues of risks and opportunities related to climate change, discuss goal management and problem solving, and plan to set milestones for achieving the FY2030 targets through the Working Group for Climate Change Response.

The Sustainability Committee is responsible for arranging, formulating, planning, and implementing sustainability activities, promoting the following activities.

The Working Group for Climate Change Response has been established as a subcommittee of the Sustainability Committee. The members of the subcommittee research and investigate activities related to climate change response and submit reports to the Committee periodically.

The Working Group is attended by the related personnel of the technology, production, sales, and management departments and has constructed a system for promoting, throughout the organization, extraction of risks and opportunities, analysis of scenarios, and investigation of countermeasures.

The Tokyo Seimitsu Group has established the “Risk Management Regulations” and the Risk Compliance Committee, which is headed by the president and CEO, to identify and manage risks associated with business execution. Systems are in place to prevent potential risks from manifesting themselves and to prepare for crises.

The Working Group for Climate Change Response, which is a subcommittee of the Sustainability Committee, takes the lead in identifying, assessing, and investigating risks (transitional/physical) related to climate change and submits reports to the Sustainability Committee on a regular basis and whenever there is an urgent need to do so. Risks considered to affect business are relayed immediately from the committee to the board of directors for judgment.

Climate change risks have been added to the risks addressed by the Risk Management Committee. The Working Group conducts flexible discussions concerning items such as risk assessment and investigation of measures for risks that have become apparent, in order to enable response throughout the entire Group.

We conducted a Scope 1 and Scope 2 emissions analysis of Tokyo Seimitsu’s domestic businesses.

We will continue to monitor the GHG emissions of Group companies in Japan and overseas and plan to respond accordingly. Moreover, with regard to Scope 3, we have made progress in ascertaining Category 1 *¹and Category 11*², which are expected to have high emissions. Beginning in 2025, we are proceeding with the monitoring and collection of data of the other categories as well.

*1: CO2 emissions from products and services purchased by the Company

*2: CO2 emissions from use of products sold by the Company

Since future projections are highly uncertain and difficult to analyze, we examined GHG emissions based on multiple scenarios. International public opinion is moving toward the view that a 2°C scenario response is insufficient, so we conducted our analysis with a 1.5°C scenario. However, as a 1.5°C scenario response would dilute our awareness of physical risks, we also assumed a business environment under the 4°C scenario, the level to which temperatures would rise if current economic activity were to continue.

In addition, we conducted a reassessment of environmental risks and opportunities and revised the medium- and long-term actions as follows.

(Reference scenarios)

1.5°C scenario: [IEA] NZE, 1.5°C special report [IPCC] SSP1-1.9

4°C scenario: [IEA] STEPS [IPCC] SSP2-4.5, SSP3 - 7.0

We have started investigation of GHG emissions of Scope 1 and Scope 2 at the manufacturing sites of Group companies.

For the majority of our products, we procure the parts and materials as well as manufacture and sell the products, which are then used at the work sites of our customers.

Therefore, we believe it is important to ascertain the emissions of greenhouse gases throughout the value chain.

Since fiscal year 2024, we have launched a new Scope 3 response project and have been working to ascertain Categories 1 through 15.

In the process of achieving carbon neutrality across all industries, we predict demand for the following:

As a result, the scope of application of digital and telecommunications technologies will expand, leading to a sharp increase in the number of electronic devices and electronic components used in society as a whole. The demand for semiconductor devices is also expected to keep growing, with the need for our semiconductor manufacturing equipment increasing phenomenally.

In addition, as electronic devices and electronic components become more sophisticated in functionality, their designs become more complex, leading to a growing need to address new issues in manufacturing processes. Tokyo Seimitsu develops and provides products that meet these needs. For example, devices that enable high-precision temperature control and machining cater to the demand for logic memory for AI and HPC and the need for more sophisticated SAW filters and sensors, thus supporting the increasingly complex manufacturing processes.

On the other hand, the progress of digitization and electrification will also lead to:

Therefore, it is necessary to promote energy conservation by semiconductors themselves in a two-fold manner. With next-generation power semiconductors (GaN, SiC, etc.), which achieve high energy efficiency, expected to come into widespread use, we are accelerating the development of related technologies and products.

While new challenges will emerge as society seeks to achieve carbon neutrality, customer needs will also keep changing. We will continue to provide new value by meeting the constantly changing needs comprehensively with a wide range of products covering inspection systems and processing equipment.

The Company accurately grasps business opportunities related to climate change and carries out the following strategies in order to achieve sustainable growth of the semiconductor manufacturing equipment business.

Based on the policies (1, 2, and 3) above, we aim to increase sales in the semiconductor manufacturing equipment business to 140 billion yen by fiscal 2027 (fiscal 2025 results: 127.9 billion yen).

In addition, the Tokyo Seimitsu Group is the industry’s only manufacturer of semiconductor manufacturing equipment that also has measurement technologies. By incorporating measuring instruments into semiconductor manufacturing equipment, it is possible to carry out more accurate inspection and processing, providing unique value.

Achieving carbon neutrality by 2050 requires not only decarbonizing electric power sectors that produce massive greenhouse gas emissions but also taking energy conservation, electrification, and various other measures in non-electric power sectors (consumer, industrial, and transportation). Industrial products, which play a key role in meeting this challenge, are becoming more precise, more advanced, and more complex day by day. What is indispensable to ensure efficient manufacturing of these products and their stable and streamlined supply is the precision measuring instruments business where shapes and contours are managed and lengths and surface textures are measured. Tokyo Seimitsu's measurement technology is at the core of carbon neutrality measures in a vast range of areas both in electric and non-electric power sectors.

For example, making renewable energy a primary power source involves the use of solar power, wind power, water power, geothermal power, biomass, etc. To meet this goal requires providing a stable and efficient supply of power by combining multiple power sources. Most power sources other than solar power need a large, high-precision, highly efficient rotating body such as a turbine, propeller, or power generator to extract energy. Offshore wind power generation in particular attracts a high level of interest due to its growth potential and expected economic ripple effects. The key components that determine its power generation efficiency include bearings, housing, and propellers that are all several meters in size. The ability to precisely measure roundness, cylindricity, surface texture, and internal distortion and inclination directly leads to increased power generation efficiency and greater reliability. Leveraging its unique high-precision measurement technology, Tokyo Seimitsu evaluates the quality of these components, helping to maximize the benefits of introducing wind power generation. We offer measurement solutions that contribute to extending the service life of equipment and increasing power generation efficiency in other renewable energy sectors as well.

The use of storage batteries is increasing in various applications such as power sources in electric vehicles and aerospace industries, stationary batteries used to adjust output fluctuations in solar power, wind power, and other renewable energy sources, and backup power supplies for 5G base stations and data centers. The market growth rate is projected to slow down in the short term due to the sluggish demand for EVs. With demand forecasts of PHEVs and HEVs on an upward trend, however, this market is certain to grow steadily.
Tokyo Seimitsu develops and sells "charge/discharge testing systems" used to measure the performance and reliability of the rechargeable batteries mentioned above. Our charge/discharge testing systems feature high-speed control and high precision to enable the accurate measurement of the energy performance of rechargeable batteries.
In addition to the function to regenerate discharged energy back to the primary power supply, the systems have the power conversion function that allows energy to be shared among channels. Compared to our previous models, up to 30% of energy can be saved in an entire system.
We also provide a contract evaluation service for charge/discharge tests. To meet the growing demand for performance evaluation tests of rechargeable batteries - electric vehicle batteries in particular - we have Battery Testing Centers in Fukushima Prefecture and Aichi Prefecture.

"Transition to decarbonized energy through electrification" and "increase in efficiency through digitalization" play a major role in the decarbonization of non-electric power sectors.

Leveraging the measurement technologies used in its coordinate measuring machines and X-ray CT systems, Tokyo Seimitsu supports the high-precision measurement of drive motor units, inverters, batteries, and other dedicated components of electric vehicles, which are expected to see rapid market growth going forward. This way, we contribute to the spread of new energy vehicles.

Tokyo Seimitsu also provides precision measuring instruments that are indispensable for development and production activities of companies involved in "digitalization" - semiconductor device manufacturers, electronic component manufacturers, semiconductor and electronic component manufacturing equipment manufacturers, and manufacturers of inspection systems for such equipment. By doing so, we help make semiconductor devices more advanced and increase the demand for those devices.

Even if the nations around the world meet the goal of achieving carbon neutrality by 2050, the global average temperature is forecast to rise by 0.5 to 1°C. If little progress is made in climate action, it is expected that the possibility will increase for us to see the average temperature rise by more than 4°C and extreme weather events occur more frequently.
In response to these risks, we provide measurement products that are resistant to temperature changes in measurement environments. In measurement environments where temperature is difficult to control, our products endure a constant rise in temperature exceeding the conventional accuracy-guaranteed ambient temperature to some degree. Since the measurement and inspection processes in the plant can be designed flexibly, measurements and inspections can be done in earlier stages of the production flow, which contributes to improving productivity.
In measurement environments where temperature can be controlled, the temperature setting of air conditioning can be relaxed by expanding the accuracy-guaranteed ambient temperature range. This helps save energy and cut costs while maintaining the level of measurement accuracy. Our products are also resistant to temperature changes per unit time. They enable highly precise measurements with a general air conditioner, instead of an expensive precision air conditioning system. Expanding the accuracy-guaranteed ambient temperature range can put a greater physical burden on workers. We propose our automation technologies to solve this problem.
What's more, the products feature the function that automatically stops the supply of compressed air when in standby mode (Air Saver function). This helps save energy without worker intervention. This function can also be added to our existing equipment.

One key development theme in the aircraft sector is to make airframe structures and engine designs more sophisticated in order to make aircraft more lightweight and improve energy efficiency. A major example is a "blisk," which integrates a rotor disk and engine blades into a single component. While blisks contribute to reducing the number of parts, making aircrafts lighter, and enhancing aerodynamic performance, their complex three-dimensional shapes make it difficult to ensure manufacturing precision. Therefore, precise quality evaluation is essential for blisks.
The "PRISMO fortis Aero," Carl Zeiss' coordinate measuring machine marketed by Tokyo Seimitsu, features a high-rigidity structure designed for the aerospace industry and a high-precision scanning technique. The machine enables fast detailed contour measurements of blisks and other components having complex shapes. Since this machine allows contact and non-contact sensors to be combined flexibly, it ensures stable measurement precision even for difficult-to-measure objects such as thin blades and edges.

To address the constantly changing social environment and customer needs and achieve carbon neutrality, Tokyo Seimitsu provides diverse measurement technologies and products, supporting the efforts toward a decarbonized society in a continuous manner.

Tokyo Seimitsu sees the global trend toward carbon neutrality as a business opportunity and carries out the following strategies in order to achieve sustainable growth of the precision measuring instruments business.

Based on the policies (1, 2, and 3) above, we aim to increase sales in the precision measuring instruments business to 45 billion yen by fiscal 2027 (fiscal 2025 results: 39 billion yen).
As the only semiconductor manufacturing equipment manufacturer in the industry that has "measurement technology," we will also create synergy by integrating the two technologies.

Calculating Scope 3 emissions (Categories 1 to 15) based on Life Cycle Assessment (LCA) has revealed that the emissions of Categories 1 and 11 related to semiconductor manufacturing equipment have the greatest impact, accounting for more than 70% of the total emissions, and that emission reduction efforts are highly important.

In the semiconductor manufacturing process, in addition to the power consumption of our products, energy is also consumed in the production of ultrapure water, which is necessary for clean room maintenance, temperature control, and semiconductor cleaning.

We are also working to reduce the footprint of our products to reduce the energy required for air conditioning, and to develop products that enable semiconductor cutting and processing using smaller amounts of water (ultrapure water).

Our design principles for new product development include compactness, design that achieves energy conservation throughout the product life cycle, and resource-saving design, and we evaluate LCA and set targets for indirect emissions, including CO2 emissions, during product development.

The Tokyo Seimitsu Group aims to achieve carbon neutrality by 2050.

We have established CO2 (Scope 1 and Scope 2) emission reduction targets that we aim to achieve on a non-consolidated basis by fiscal 2030.

Since the majority of greenhouse gases (GHG) emitted by the Company is from the CO2 equivalent of electricity purchased to operate its plants, we are focusing on activities for conserving electricity.

Since fiscal 2018 (base year), we have been making efforts to cut CO2 emissions by replacing equipment, introducing solar power generation systems, adopting low-carbon electricity, etc. However, the increase in production due to the growing semiconductor demand, the construction of a new plant, and the launch of a new business, among other factors, have brought up our fiscal 2025 emissions to 12,796 t-CO2 (an increase of 3.9% from the fiscal 2018 level).
Going forward, we intend to promote energy conservation activities, install more solar power generation systems, use non-fossil certificates, etc. in order to achieve the fiscal 2030 target of 50% reduction.

Organizations covered: Tokyo Seimitsu Co., Ltd. (non-consolidated basis)

＊3：Direct GHG emissions by the Company (emissions from fuel combustion, on-site power generation, and industrial processes)

＊4：Indirect emissions resulting from the use of electricity and heat supplied by other companies (e.g. emissions associated with electricity purchased from electric power companies)

Organizations covered: Tokyo Seimitsu Co., Ltd. (non-consolidated basis)

Until FY2022    : Hachioji Plant, Tsuchiura Plant
FY2023 and later: Hachioji Plant, Tsuchiura Plant, Hanno Plant (from completion in July), Battery Testing Center, Fukushima Site [former Furudono Plant] (from transfer of business operations in October)