Priority Markets and Strategic Products Senior Vice President (General Manager of Electronic Components Sales & Marketing Group) Noboru Saito Copyright© 2014 TDK Corporation. All rights reserved. FY March 2015 Business Strategy Meeting TDK Corporation December 8, 2014 - 1 - ICT market and TDK’s strategic products Progression of mobile phone production and RF components (billion pcs / year） (TDK’s estimation) The increasing amount of information transmitted via mobile communications necessitates the use of faster communication networks and accelerates the spread of LTE user equipment. Increasingly complex circuits used in LTE user equipment require components with reduced footprints, which is fuelling a growing demand for components for PAD, PAMiD and FEMiD modules. Copyright© 2014 TDK Corporation. All rights reserved. FY March 2015 Business Strategy Meeting TDK Corporation December 8, 2014 - 2 - ICT market and TDK’s strategic products Medium-term strategies targeting the ICT market Market drivers are LTE-4G・5G Spread of wearable devices *Based on estimates by TDK (million units / year) Change points: Additional increase in number of bands 150 Smart Watch Smart Glass Pedometer 活動量計 Projected sales (index) 販売見込（指数） 10 Efficient power management 100 5 Technology Strategic products 50 0 Thin-film technology Packaging technology SESUB Narrow pass band filters BAW / SAW Components for PAMiD, FEMiD BAW / SAW / Thin-film products Power management components Power inductors / Power management modules Copyright© 2014 TDK Corporation. All rights reserved. FY March 2015 Business Strategy Meeting 0 2013 2014 2015 2016 2017 Wearable device output and projected sales by TDK Deployment of strategic products involves providing components that meet the requirements for wearable devices TDK Corporation December 8, 2014 - 3 - Sales promotion for strategic products through IC collaborations Function IC makers (including PA) RF use and ＋ Sales promotion for existing products Power line use Company C Company T Company N Company P Company K Company V Company L Company X Strategic products (example) Thin film products Power inductors, Filters etc. BAW / SAW / Discrete PAD / PAMiD / FEMiD SESUB Module (RF, Power management) Products with notable features Lithium polymer battery Wireless charging unit (WLC) Low-consumption Bluetooth® module (BLE) Film photovoltaics Various sensors Copyright© 2014 TDK Corporation. All rights reserved. FY March 2015 Business Strategy Meeting TDK Corporation December 8, 2014 - 4 - TDK sales over time in the automobile market Spread of onboard networks ● xEV、CanBus ・Common-mode filters ・SMD components ・Magnets Emergence of electric vehicles ●xEVs and various motors ・DC/DC converters ・SMD coils ・MLCC ・NEO magnets Beginning of electronic control ●Power windows and ECUs ・Motor magnets ・Coils/capacitors ・Thermistors ‘90s (8%) Spread of smart cars ● Smart Assist ・Wireless network module ・TMR sensors ・Batteries Medium term (30%) Present ‘00s (9%) (20%) Growth of V2x ●ADAS ●Automatic driving ・Sensors ・Communications components ・Energy management ‘80s (5%) ‘70s (Accounted for 3% of sales) Start of use of in-vehicle electrical/electronic devices ●Onboard radio and meters ・Choke coils ・Ceramic disc capacitors ・Motor Magnets Copyright© 2014 TDK Corporation. All rights reserved. *2004 Company Guide (excerpts) FY March 2015 Business Strategy Meeting TDK Corporation ＊xEV : EV, HEV, PHEV December 8, 2014 - 5 - TDK’s strategic products targeting the automobile market Deployment of existing products Existing products Newly developed products Common Mode Filters ・Ethernet common-mode filters ・Suitable for location-free production Capacitors ・Guaranteed operation at high temp. (200ºC) ・Capacitor with resin electrodes Inductive Devices (Ferrite type, Metal type) Power Inductors ・Guaranteed operation at high temp. (150ºC) ・Smart keys ・Transponder inductors for TPMS Deployment of communications components for automobile applications ・SAW Devices ・Thin-film high frequency filters ・Bluetooth®Modules Copyright© 2014 TDK Corporation. All rights reserved. FY March 2015 Business Strategy Meeting TDK Corporation December 8, 2014 - 6 - TDK’s strategic products targeting the automobile market Customdesigned products Power Supply Units Sensors Various Motors DC-DC Converter Battery Charger IGBT Transformer Magnets ・Dysprosium (Dy)-free neodymium magnets ・Lanthanum (La)-free and cobalt (Co)-free ferrite magnets Wireless Charging Devices for Vehicles Lithium-Ion Battery Copyright© 2014 TDK Corporation. All rights reserved. FY March 2015 Business Strategy Meeting Gear Tooth/ Pressure / Current / Temperature TDK Corporation December 8, 2014 - 7 - TDK’s strategic products targeting the automobile market New products Magnetic Sensors (TMR/GMR) High-accuracy sensing by TMR/GMR sensors Others Others Angle Angle Rotation Rotation Position Position CY2014 90 billion yen CY2018 120 billion yen Demand breakdown for onboard Source: IHS’s materials magnetic sensors, by use (billion Yen /Year) Copyright© 2014 TDK Corporation. All rights reserved. FY March 2015 Business Strategy Meeting TDK Corporation December 8, 2014 - 8 - TDK’s strategic products targeting the industrial equipment market Wireless-charging and TMR/GMR sensors for industrial equipment Target equipment (example) Hybrid buses Catenary-free streetcars Cable-less elevators Target equipment (example) Linear motor encoders Industrial robots Electronic components for renewable energy applications CeraLink Magnets for wind power generator Film capacitors Aluminum capacitors Copyright© 2014 TDK Corporation. All rights reserved. High performance ferrite cores Filters・Varistors・Arresters FY March 2015 Business Strategy Meeting TDK Corporation Sensors December 8, 2014 - 9 - Framework of Electronic Components Sales & Marketing Group Building Customer Value Electronic Components Sales & Marketing Group Priority regions USA・China・ Korea Market sector-specific marketing ICT (including wearable devices) R&D department Copyright© 2014 TDK Corporation. All rights reserved. ・ Japan・ Europe・USA Europe・ Japan Automobiles Industrial Equiptment Production department FY March 2015 Business Strategy Meeting TDK Corporation December 8, 2014 - 10 - Cautionary Statements with Respect to Forward-Looking Statements Copyright© 2014 TDK Corporation. All rights reserved. FY March 2015 Business Strategy Meeting TDK Corporation December 8, 2014 - 11 -