Q1Looking back over the three years of the 15th Medium Term Business Plan as a whole (Fiscal 2019–2021), what do you see as the most important points?

A1We established a management base that can withstand changes in the external environment and realized a V-shaped recovery.

Our basic policy under the 15th Medium Term Business Plan was “Advancing product strategy for sustainable growth,” and we implemented three business policies aimed at building a foundation for new growth: Enhance the competitiveness of mainstay products, develop growth businesses and create next-generation products that are a decade ahead. However, our overall performance was impacted by trade friction between the United States and China and the COVID-19 pandemic. We were unable to fully compensate for changes in the external environment, namely, (1) decreases in the number of automobiles manufactured and semiconductor demand, (2) lockdowns in India and Indonesia that suspended operations at local Group factories, and (3) rising raw material prices and transportation costs. As a result, we recorded net losses in both fiscal 2019 and fiscal 2020, causing significant damage to shareholder value.

To make sure this never happens again, in November 2020 we announced and began business structure reforms aimed at building a robust management foundation that will be resilient to changes in the external environment. As a result of these reforms, we returned to profitability in fiscal 2021, with net sales of ¥92,168 million (¥22,832 million below the plan’s target), an operating income margin of 6.0% (1.6 percentage points lower than planned) and ROE of 11.3% (1.3 percentage points higher than planned).

In terms of investment over these three years, we made capital investment totaling ¥26.5 billion (¥11.5 billion less than planned), with R&D investment of ¥14.1 billion (¥4.4 billion less than planned), steadily investing in expanding our production and development capabilities even amid a harsh operating environment. In particular, we invested a total of approximately ¥13.0 billion in the Asaka Office, which opened in April 2021. Bringing together the Group’s core functions in one place, the new office is equipped with the latest in ICT and provides an employee-friendly environment that promotes open communication.

Considering overall management performance in light of these factors, I think we made good progress toward reinforcing the management foundation. We will build on this progress to push toward growth under the next medium term business plan.

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Q2Please tell us about the main achievements of the three business strategies under the 15th Medium Term Business Plan.

A2We achieved results in enhancing competitiveness and differentiating products at each product life cycle stage.

(1) Enhance the competitiveness of mainstay products

In the Electronic Device Business, consolidating our five domestic clean rooms into three was a major accomplishment during the period of the plan. This consolidation enabled us to significantly raise the facilities’ utilization rate and cut maintenance costs. In addition, by shifting to larger wafer sizes, we expect to continue to increase profitability.

In the Car Electronics Business, we gained a foothold in the 20 million unit-per-year Indian motorcycle market, securing two Indian manufacturers as customers and commencing business there. I think that this significant achievement came about due to the Group’s accumulated technological prowess and our comprehensive strength, including that in service, which gives us a competitive edge.

(2) Develop growth businesses

One of our growth businesses is quick chargers in the high-output domain of 90 kW and above. Shindengen was the first Japanese manufacturer to develop and produce a 150 kW quick charger for EVs. Compared with the ordinary 50 kW quick chargers now in widespread use, these chargers reduce charging time by about 6 hours, making them essential to the continued adoption of EVs going forward. We are implementing evaluation tests with Japanese and overseas automobile manufacturers to further develop and enhance these products.

Another growth business is power modules, which bring together several of Shindengen’s core technologies. Although sales volumes stagnated due to a decrease in the number of automobiles manufactured as a result of semiconductor shortages, we further reduced the size and weight of these products and also made progress toward expanding the product lineup and increasing sales.

In addition, we completed the development of a DC/DC converter for electrified vehicles and a power control unit (PCU) for electric motorcycles. We are making major progress with these, with plans for mass production.

(3) Create next-generation products that are a decade ahead

To develop next-generation devices, Shindengen invested in Novel Crystal Technology, Inc. and has been advancing research using gallium oxide in the substrates of power semiconductors. Gallium oxide is a power semiconductor material expected to offer significant energy savings, with high voltage and low loss performance equivalent or superior to SiC or GaN. As gallium oxide also offers lower manufacturing costs than SiC or GaN, on par with silicon, some have even predicted that it could overtake silicon as the most commonly used semiconductor material in the future.

One other achievement was in wireless chargers. Shindengen boasts top-class technologies in this area and has now progressed to demonstration tests with automobile manufacturers. These are another next-generation product for which we look forward to market expansion going forward.

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Vision & Strategy

Q3Could you explain the basic outline of Long Term Vision 2030 (Fiscal 2022–2030) and the 16th Medium Term Business Plan (Fiscal 2022–2024)?

A3Under the 16th Medium Term Business Plan’s management policy, “Build a foundation aimed at the realization of Long Term Vision 2030,” we will work to effectively allocate management resources and transition the product portfolio.

Based on the results of the 15th Medium Term Business Plan, in May 2022 we announced Long Term Vision 2030 and, to achieve it, the 16th Medium Term Business Plan. In formulating Long Term Vision 2030, we discussed where we want Shindengen to be in 2030 and how Shindengen should work to help solve social issues. The vision we decided on is “A power electronics company which creates environmentally friendly cutting-edge solutions via innovative technologies, contributes to a sustainable society, and continues to be needed by all stakeholders.” Focusing on power devices and electronic parts, we will revise the product portfolio, growing DC/DC converters and wireless chargers into foundational businesses and reinforcing the development of environment- and energy-related products to contribute to decarbonization.

Under this overarching vision, we have designated “Build a foundation aimed at the realization of Long Term Vision 2030” as our management policy for the first phase of the vision, the 16th Medium Term Business Plan. As during the previous business plan, our business environment remains uncertain, but we are confident that there will be growing demand. With this in mind, we will effectively allocate management resources to three key themes: (1) Earnings structure construction, (2) Building a foundation for expansion of growth businesses, and (3) Focusing resources on product groups that can reduce greenhouse gas emissions. In this way, we will transition to a product portfolio that integrates business growth with environmental and social sustainability.

To implement the most important of these themes, “Earnings structure construction,” we will further advance the structural reforms implemented during the previous medium term business plan. Improvement is a never-ending process. We will start from scratch, considering, for example, ways of changing chip structure and increasing wafer size in order to yield more semiconductor chips from each wafer.

At the same time, by utilizing DX technologies in all business processes, we will promote the realization of the three key themes. We have put together a project framework led by executives to advance these efforts.

Based on the above policies, for fiscal 2024, the final year of the plan, we have set the targets of ¥118 billion in net sales, an operating income margin of 6.6%, ROE of 8.3% and ROA of 3.5%.

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Q4Please tell us about efforts to enhance governance and return profits to shareholders.

A4To secure greater diversity in governance, we established a Nomination and Compensation Committee and appointed a female outside Audit & Supervisory Board member and female outside director.

Shindengen has been working to develop a more sophisticated and effective governance structure appropriate to the Tokyo Stock Exchange’s Prime Market.

We established the Nomination and Compensation Committee in November 2021 in order to further enhance corporate governance. The committee comprises two outside directors (one of whom chairs the committee) and myself. We are advancing discussions aimed at formulating a highly objective and transparent succession plan and compensation system.

The Board of Directors lacked diversity in terms of gender, so in June 2021, we welcomed a new outside Audit & Supervisory Board member, Sachie Tsuji, with skills in the areas of finance and accounting and risk management. Furthermore, in June 2022, Akiko Shigemoto, who offers expertise in ESG and risk management, came onboard as an outside director. We also established the Compliance Office in June 2022. In addition to addressing challenges within the Group, the new office is working to prevent problems from arising.

As for returning profits to shareholders, although we have long positioned stable dividends to shareholders as the core of our policy, I regret to say that we decided not to pay dividends for fiscal 2020. For fiscal 2021, based on comprehensive considerations of the internal reserves necessary to maintain and strengthen industry competitiveness, shareholders’ ROE and our operating performance, we decided to pay an annual dividend of ¥100 per share.

For fiscal 2022, we plan to pay a dividend of ¥130 per share.

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  • Shindengen’s governance structure and the director skill matrix, please refer to Corporate Governance
  • The views of the independent outside directors, please refer to Interviews with the Independent Outside Directors


Q5Could you tell us about Shindengen’s policies and key initiatives related to the Sustainable Development Goals?

A5Aiming to become a global leader in environmental performance, we have established Environmental Vision 2050 and identified SDG-related material issues.

In December 2021, we established Environmental Vision 2050 with the aim of advancing Groupwide initiatives toward environmental and social sustainability from a long-term perspective. By constantly working to further contribute to the reduction of environmental burden, such as by supplying energy-saving and clean energy products and by developing new technologies, we aim to become a global leader in environmental performance.

At the same time, we established the Environmental Targets in 2030 as a guidepost on the path toward Environmental Vision 2050. By implementing initiatives to address the SDG-related material issues we have designated, we will accelerate our environmental contribution. We have designated four of the targets under the SDGs—targets 7.3, 13.2, 8.8 and 11.b—as material issues for the Shindengen Group. Our main initiatives to address these in fiscal 2021 were (1) Reducing greenhouse gas emissions from the products and business activities of each operating department, (2) Promoting the creation of flexible workplaces and (3) Strengthening business continuity management (BCM). In particular, the switch to approximately 30% renewable energy at the Asaka Office represents a major policy shift, and we plan to steadily roll out similar measures at Group companies going forward. In addition, our DC/DC converters were selected for use in the manufacture of electrified vehicles, and, in terms of community engagement, we donated one of our EV quick chargers to Asaka City, Saitama, where Shindengen is based.

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  • Environmental initiatives, please refer to Environment


Q6What is your approach to human capital?

A6Through the integrated advancement of flexible workplaces and talent management, we hope to foster a culture of open, dynamic discussion.

In April 2022, Shindengen Electric Manufacturing Co., Ltd. and Okabe Shindengen Co., Ltd. obtained certification under ISO 45001, an international standard for occupational health and safety management systems. The Shindengen Group works to constantly enhance occupational health and safety and improve work environments with respect to employee safety and health while enhancing productivity and securing business continuity.

In addition, we adopted a talent management system with the aims of centrally managing human resource data and improving the visibility of employees’ skills and motivations. Going forward, we will use this system to identify promising talent and develop and educate our people.

Through the integrated advancement of flexible workplaces and talent management, we hope to build a culture of open, dynamic discussion. One pioneering initiative in this regard was the April 2020 Future Strategy Committee, which brought together junior and mid-level employees from across the Group to discuss ideas for next-generation products. By promoting open discussion, regardless of rank, this initiative produced a number of interesting ideas. Building on these and other ideas, we then established the Future Product Development (FPD) Department. I intend to fully support this department’s proposals in order to continue to advance the development of next-generation products going forward.

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  • Human capital initiatives, please refer to Social

Purpose & Message

Q7Do you have any other message for shareholders and investors?

A7Through synergy between our core technologies and our new location and culture, we aim to carry out our corporate mission and provide an essential role in society.

Over the more than 70 years since its founding, the Shindengen Group’s combination of strengths in semiconductor technologies, circuit technologies and mounting technologies has made it extremely unique. At the new Asaka Office, we will further hone these technologies and foster a new development culture. We will continue to diligently work to create a new and improved Shindengen that will continue to produce unique and advanced products unrivaled by competitors. By doing so, I believe that Shindengen will become more useful and more essential to society, and better able to contribute to the achievement of the SDGs.

Corporate activities based on our mission, “maximizing energy conversion efficiency for the benefit of humanity and society,” align closely with the SDGs. I believe that by pursuing such activities, Shindengen will become even more useful and more essential to society.

I hope that our shareholders and investors will consider the Shindengen Group’s corporate value from a medium- to long-term perspective and ask for your continued understanding and support.

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