New Development Areas/ Summary President and CEO Takehiro Kamigama Copyright© 2014 TDK Corporation. All rights reserved. FY March 2015 Business Strategy Meeting TDK Corporation December 8, 2014 - 1 - Global R&D system Development functions of Head Office in Japan focus principally on material development and other medium- to long-term themes Overseas group companies strengthen their development functions beginning with research projects China (Shanghai) ・EMC support ・Proposing optimal components Europe (Munich) R&D on products and technologies for automobiles Japan ・Development of new materials ・Development of innovative engineering methods ・Development of new products San Jose China (Xiamen) Material (product) development meeting the needs of local customers Copyright© 2014 TDK Corporation. All rights reserved. FY March 2015 Business Strategy Meeting USA (San Jose) R&D on products and technologies meeting the needs of the ICT market TDK Corporation December 8, 2014 - 2 - Energy device growth scenario / Automotive field z Strengthen power unit components for next-generation vehicles(BEV/HEV/PHV/FCV) z Promote the sales of power-related components drawing on magnetic technology, which is TDK’s core competence Automotive field 1 to 2 years 3 to 5 years Rare-earth-free/strongest magnetic materials for drive motors Lead-free piezoelectric materials (thin-film, bulk) Ferrite magnets HEV motor-generators High-performance neodymium magnets Dy-free magnets with Nd reduced by half for drive motors Lead-free piezoelectric material (Ceralink) Secondary batteries for xEVs (high-safety technology) Performance improvements by grain-boundary composition control technology High-efficiency small DC-DC converters & chargers High heat dissipation substrates TDK’s proprietary high heat dissipation substrate and high-performance ferrite material used to achieve size reduction and efficiency improvements Secondary batteries for xEVs (lithium ion) Wireless charging during driving Wireless charging systems for xEVs Copyright© 2014 TDK Corporation. All rights reserved. FY March 2015 Business Strategy Meeting Compliance with noise regulations set out in the Radio Law, using TDK’s proprietary coil noise reduction technology TDK Corporation December 8, 2014 - 3 - Energy device growth scenario / Industrial equipment & energy fields z Strengthen energy devices for renewable energy-related systems z Promote the sales of power components drawing on magnetic technology, which is TDK’s core competence Industrial equipment & energy fields 1 to 2 years 3 to 5 years Rare-earth-free/strongest magnetic materials for wind power generation Lead-free piezoelectric materials (thin-film, bulk) Free from the impact of instability in the supply of rare-earth elements Secondary batteries (Stationary type, high-safety battery technology) Dy-free magnets with Nd reduced by half for wind power generation Ceramic capacitors that reach the maximum capacitance under a high DC bias voltage Lead-free piezoelectric material (Ceralink) Battery material technology combined with processing technology to reduce electrode expansion High-capacity high-efficiency power supplies Secondary batteries (Storage battery systems) Deployment of wireless charging technology for xEVs in the area of industrial equipment Wireless charging systems (for industrial machinery) Copyright© 2014 TDK Corporation. All rights reserved. Chip component mounter FY March 2015 Business Strategy Meeting TDK Corporation December 8, 2014 - 4 - Deployment of wireless charging technology in the automotive and industrial equipment fields z Build wireless charging systems for use in the automotive and industrial equipment fields Automotive and industrial equipment fields Small power-receiving coil unit Downsized power-receiving coil with a built-in multilayer ceramic capacitor High-efficiency 3.3 kW transmission High transmission efficiency achieved by using low core loss material PC95 Vibration resistance rendered by TDK’s proprietary ferrite material Wireless charging systems for xEVs Outdoor cart Forklift/AGV※ Application of wireless charging technology to forklifts Application of wireless charging technology to outdoor carts ※Automatic Guided Vehicle Copyright© 2014 TDK Corporation. All rights reserved. FY March 2015 Business Strategy Meeting TDK Corporation December 8, 2014 - 5 - Goals for the thin-film device business TDK has developed thin-film technologies through its head business and materials technologies through its passive component business. By merging these technologies, we will provide high value-added products that positively respond to the needs of the information and communications fields that are expected diversify in the future. Advantages of thin-film technology Differences from semiconductor technology Reduced conductor shape variability Three-dimensional fine structure Features of thin-film materials Reduced variability in film thickness for (magnetic/dielectric/piezoelectric) used at dielectric materials and piezoelectric layers the core of TDK’s high-performance High aspect ratio (conductor) products Multilayer type Copyright© 2014 TDK Corporation. All rights reserved. Threedimensional structure Thin Film type FY March 2015 Business Strategy Meeting TDK Corporation December 8, 2014 -- 66 -- Product families in the thin-film device business and their features Product family Feature Common-mode filters Size reduction and performance improvements Reduced footprint enabled by size reduction and use of arrayed configuration Performance improvements in high-frequency High-frequency filters Inductors Low-profile power devices (low-profile modules) and embedded high Q-factor types (low profile) Composite components (capacitors and inductors) Reduced footprint and low profile achieved by composite design. MEMS Three-dimensional structure and material characteristics used at the core to achieve performance improvements. Filter Copyright© 2014 TDK Corporation. All rights reserved. Array Type FY March 2015 Business Strategy Meeting TDK Corporation December 8, 2014 -- 77 -- Future angle sensor accuracy requirements (for automobile applications) Accuracy of predecessor Future accuracy requirement Throttle valves ±2°to ±3° ±1° Wipers ±1.2° (20 to 130 mT) ±0.6° (20 to 130 mT) ±0.6° (20 to 80 mT) ±0.3° (20 to 80 mT) Redundancy ISO 26262 Application Steering (EPS motor) At least a two-fold angle sensing accuracy will be realized with this technology Copyright© 2014 TDK Corporation. All rights reserved. FY March 2015 Business Strategy Meeting TDK Corporation December 8, 2014 - 8 - Development of magnetic sensor technology Free layer GMR Free layer Shunt layer Pin layer TMR Temperature dependence MR Ratio [%] Output [mV] SNR @ 10 kHz [dB] AMR 3 90 72 -29 GMR 12 360 77 -23 TMR 100 3000 96 -13 AMR Current 25 °C to 125 °C [%] Current Free layer Barrier layer Pin layer Current Copyright© 2014 TDK Corporation. All rights reserved. TMR Output • 30 times better than AMR • 8 times better than GMR • Stable angle sensing accuracy across a broad range of temperature variations FY March 2015 Business Strategy Meeting TDK Corporation December 8, 2014 - 9 - TDK’s TMR angle sensors with excellent characteristics Angle sensing accuracy vs. magnetic field in a broad temperature range Output waveforms 1.6 AMR sin GMR sin TMR sin AMR cos GMR cos TMR cos 1.0 -40 °C GMR AMR 0.4 0 -0.4 Angle accuracy [°] TMR 0.8 Output [V] 25 °C 0.8 1.2 150 °C 0.6 0.4 0.2 -0.8 -1.2 -1.6 0 0 90 180 Angle [°] 270 360 20 40 60 Magnetic field [mT] 80 • High power 3.0Vpp @ 5 V (30x AMR, 8x GMR) • Excellent angle sensing accuracy Angle sensing error: within ±0.6° Conditions : Magnetic field range: 20 to 80 mT / Temperature range: −40ºC to 150ºC • Low power consumption 5 mW (under recommended conditions) Copyright© 2014 TDK Corporation. All rights reserved. FY March 2015 Business Strategy Meeting TDK Corporation December 8, 2014 - 10 - Use of TDK TMR angle sensors Steering systems: Largest angle sensor market EPS motors Two-pole magnet TMR angle sensor Steering angle sensor EPS system TMR sensor opposed to two-pole magnet Copyright© 2014 TDK Corporation. All rights reserved. FY March 2015 Business Strategy Meeting TDK Corporation December 8, 2014 - 11 - TDK TMR Sensors TDK TMR sensors : Enhanced product families for our customers •High-accuracy angle sensors •Rotation sensors •Linear encoders •Rotary encoders •Current sensors Angle sensors and other sensor products are geared to meet diverse application needs Copyright© 2014 TDK Corporation. All rights reserved. FY March 2015 Business Strategy Meeting TDK Corporation December 8, 2014 - 12 - Thin Film Devices･SESUB Target applications of thin-film devices/SESUB Target Applications Smartphones・Tablet Devices SESUB Thin Film Devices Power line use Power Module Low-profile inductors RF use PA/RF Module High Frequency Filters Capacitors downsized, arrayed and with narrow tolerance Hign Q inductors MEMS Sensor Asic Package Common mode filters Composite components Other Wearable devices (health care) Power line use Charger Module RF use PAN Module Sensor Asic Package Data Centers (servers) Copyright© 2014 TDK Corporation. All rights reserved. CPU FY March 2015 Business Strategy Meeting Low-profile inductors Embedded capacitors TDK Corporation December 8, 2014 - 13 - SESUB product features SESUB cross-sectional view Components can be mounted on SESUB as on plastic substrates 300um IC Embedded IC A high percentage of embedded components enables downsizing Size reduction Discrete Solution = 350mm2 IC2 TWL IC1 6030 packa ge 7ｘ Excellent heat dissipation Excellent heat dissipation capability To raise the degree of deign freedom SESUB Module = 121mm2 -65% Copyright© 2014 TDK Corporation. All rights reserved. PKG Surface: 54 ℃ Junction 63 ℃ -9℃ PKG Surface: 52 ℃ Junction 54 ℃ FY March 2015 Business Strategy Meeting TDK Corporation December 8, 2014 - 14 - Business model for SESUB products Market change Industry led by IC manufacturers rather than by telephone manufacturers z Uniformized specifications z Standardized OS (e.g., Android and iOS) z Shortened development period ↓ Smartphone manufacturers use IC manufacturers’ references SESUB business: IC manufacturers are our clients, while IC package manufacturers are our cooperation partners Business model IC Module Conventional model Wafer Passive component Package Substrate IC ( SiP：System in Package ) SESUB IC manufacturers are clients Copyright© 2014 TDK Corporation. All rights reserved. End product End product Module Wafer Passive component SESUB ( Package + Substrate ) Package manufacturers are cooperation partners FY March 2015 Business Strategy Meeting TDK Corporation December 8, 2014 - 15 - Corporate goals in mid-term ① Launch new businesses following the three key segments to hit ¥100 billion sales ② Pursue zero-defect quality drawing on the Company’s high level of technical expertise ③ Conduct speedy business operations to promote true globalization Copyright© 2014 TDK Corporation. All rights reserved. FY March 2015 Business Strategy Meeting TDK Corporation December 8, 2014 - 16 - 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 - 17 -