Strategic Principles for Our R&D

1. Endeavour to create the number-one products in the global market
Products with the leading share in the global market should have the following qualities:

The ability to generate maximum profits during favourable economic periods(Mini Max)
The ability to incur only minimal losses during periods of recession (Max Min)

2. Finance R & D exclusively from internal cash flows (Max Min)

3. Target specific fields that have strong technology barriers but where market needs are high and the potential size of the market is large(Mini Max)

4. Form alliances with competitors to share R & D costs in markets that are contracting, but where continued R & D investment is necessary to maintain good relationships with customers (Max Min)

5. Develop products in areas not affected by investment cycles (Max Min)

The above principle is based on "Game Theory". To win a game, there are two ways. When applying game theory to actual business, we think that good business model has two fundamental principles; one is to minimize the maximum loss (Max Min), another is to maximize minimum gain (Mini Max) The above principle is based on "Game Theory".

In 1997, we at Tokyo Seimitsu established our "Strategic Principles for Our R&D" as the basis for developing new World No.1 products in a climate of rapid technological change. Today Tokyo Seimitsu continues to work to this blueprint as stated in our Corporate Policies above. The following examples illustrate how these principles have been applied. (1) the world market share of wafer probers that had dropped to 8% in 1992 has recovered to over 60% by creating the World No.1 product machines A-PM-90A and UF series that have pushed the company up to the top manufacturer status. In line with (2), our substantial R&D costs for product development are financed solely through in house cash flows. Principle (3) was applied to the development of our Wafer Inspection Machines, CMP system, and PG, which will be introduced into the market this year. Principle (4) was the basis of our alliance with Carl Zeiss in Germany in the field of precision measuring systems in 1995 and that with HCT Corp. of Switzerland for the wire-saw in 1999. (It turned out that the cooperative relationship begun with Carl Zeiss has been extended to the expanding semiconductor business, and in line with Principle (3), is evolving to a joint development of the confocal microscope which is a core technology of the wafer inspection equipment.) Our company continues to explore and test products that fall in line with Principle (5) such as the development of a home delivery locker system that targets the particular needs of the local Japanese market.

Company Mission Statement

WIN-WIN RELATIONSHIPS CREATE THE WORLD'S NO.1 PRODUCTS
In 1998, it was necessary to reshape our corporate culture in order to achieve our "Strategic Principles for Our R&D". At that time we enunciated our corporate Mission Statement "WIN-WIN RELATIONSHIPS CREATE THE WORLD'S NO.1 PRODUCTS". This motto guides the actions of all our employees. This motto is fixed above the front entrance of our Mitaka Head Office and on neon-signs attached on the walls of our Hachioji and Tsuchiura Factories.

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