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Business Strategy and Sustainability

ROHM’s Vision : ROHM's CSV Inherited from the Time of Our Foundation

ROHM Group has been developing, producing, and selling new products to solve social issues such as energy problems, based on the concept of "CSV (Creation of Common Value)," which is to solve social issues while also creating corporate value. This concept of "CSV" is not new to ROHM, and has been a cornerstone of the company since its inception, as stated in the corporate objectives below.

Company Mission

Quality is our top priority at all times. Our objective is to contribute to the advancement and progress of culture through a consistent supply, under all circumstances, of high quality products in large volumes to the global market.

Basic Management Policy

Secure reasonable profit through a concerted company-wide effort for a comprehensive quality assurance program.
Develop globally leading products by improving upon technologies held by each department for continued advancement of the company.
Maintain healthy and vigorous lifestyles and refine intellect and humanitarianism, hence contributing to society.
Search extensively for capable human resources and cultivate them as cornerstones for building long-term prosperity.

In the more than 60 years since its establishment, the size of the company and the management environment have changed dramatically, but CSV has remained as the fundamental idea, and has become part of ROHM's DNA and has been passed down from generation to generation.
We believe that each and every employee should put into practice our Corporate Purpose and Basic Management Policies, and that the SDGs are the source of CSV, and that promoting activities such as innovative product development and high-quality manufacturing that lead to solutions to social issues will lead to greater satisfaction for our stakeholders and enable us to contribute to society at large. We believe that this will lead to increased satisfaction of our stakeholders and contribute to society at large. We also believe that this will boost the confidence and pride of our employees and become a driving force to create new challenges, enabling the company and society to grow together.

Towards the Future that ROHM Aims for

As mentioned above, ROHM's business activities have been based on its unchanging corporate objective since its founding in 1954: "Quality is our top priority at all times. Our objective is to contribute to the advancement and progress of culture through a consistent supply, under all circumstances, of high quality products in large volumes to the global market." The reason for not mentioning how to contribute to the advancement and progress of culture was the founder's belief that it would not necessarily continue to produce electronic components.

In formulating our medium-term management plan, we believe that it is necessary to clarify what we mean by what we do from a long-term perspective. To this end, we first presented a statement entitled "Electronics for the Future," and as we envisioned our vision for 2030, we expressed our thoughts more concretely in our management vision. That is, "We focus on power and analog solutions and solve social problems by contributing to our customers’ needs for "energy saving" and "downsizing" of their products."

What is the Global Major that ROHM is Aiming for?

ROHM's Mid-Term Management Plan calls for ROHM to become a "Global Major" by 2030, which has three major meanings. First, society and customers should trust and feel secure in ROHM for all products, including power and analog semiconductors for automobiles and industrial equipment, which ROHM is focusing on. We must also have brand power so that when our customers need semiconductors or electronic components, they will think of ROHM first. Most importantly, we want to be recognized as a company that is necessary to society. Our quantitative goals are to become one of the world's top 10 companies in the fields of power and analog semiconductors and to achieve sales of 1 trillion yen. Although social conditions are becoming increasingly uncertain, we will continue to steadily implement our medium-term management plan, build a solid management foundation that is unaffected by the external environment, and accelerate integrated group management to achieve true growth and increase corporate value with "ONE ROHM".

ROHM's Strength in Power Analog

The semiconductor market in 2022 is estimated to be approximately 78 trillion yen, of which the power/analog market, which ROHM is targeting, is only one-third, or 26 trillion yen. However, demand for power analogs is expected to continue to grow in the future due to the progress of electrification and electrification, particularly in the automotive and industrial equipment markets. In digital semiconductors such as microcontrollers and memory, investment in miniaturization and other areas is the source of competition, and the horizontal division of labor using foundries and other companies is the mainstream in the industry. In power and analog semiconductors, on the other hand, the source of competitiveness lies in optimizing designs to meet the needs while taking advantage of the features of the company's own manufacturing processes. At ROHM, "circuit design," "layout," and "manufacturing process" are all integrated, and we provide high value-added products that meet the needs of our customers and the market by matching each technology and know-how at a high level. The product development is supported by our vertically integrated production system (IDM), in which all production processes from the material stage to the finished product are completed within the group. This not only improves added value in design and ensures consistent quality assurance, but also contributes to the establishment of a stable supply system. This is the cornerstone of ROHM's "Corporate Objective," which has been in place since the company's founding. "Quality comes first, and no matter what the difficulties, we will supply good products and contribute to the advancement of culture," has been passed down from generation to generation as a part of ROHM's DNA. ROHM will continue to supply high value-added products to customers while adhering to its own integrated production system, and contribute to solving social issues, aiming to become a global major.ROHM is committed to becoming a global major by providing high value-added products to our customers and contributing to the solution of social issues,

Aggressive Investment in Growth Areas to Realize Global Majors

FY2022 was the second year of the "Moving Forward to 2025" medium-term management plan, which covers the period from FY2021 to FY2025. We ended the year on a high note, with net sales reaching a record high of 507.8 billion yen, up 12.3% from the previous year, thanks to growth in sales of automotive and industrial equipment, and operating income, ordinary income, and net income increasing by double-digit percentages over the previous year. However, a major factor behind this strong performance was the favorable conditions in the semiconductor market as a whole, as well as the impact of the yen's depreciation that exceeded our expectations, and we feel that we still have more work to do. We are aggressively pursuing capital investment for further growth, and have increased our growth investment from 500 billion yen to 600 billion yen through FY2025. The main investments are for production capacity improvement and acquisition of land and buildings, mainly for 8-inch SiC power devices and enhancement of 12-inch Bi-CDMOS production line for LSI. In the SiC power device business, the market is expanding rapidly due to the electrification of automobiles, and it is essential to quickly establish a stable supply system to meet the strong demand. For this reason, we have accelerated our SiC investment and plan to invest 510 billion yen over the next seven years until 2027. Meanwhile, in the LSI business, we are strengthening the development of general-purpose products for specific applications (ASSP) that meet a wide range of needs, and we are planning to expand our production lines in order to enhance our strategic product lineup with high added value. Especially from FY2021 onward, capital investment as a percentage of sales continues to be high. Although it is a heavy burden, we recognize that this is a necessary time for us to gain market share, and we are continuing to make large-scale capital investments. At the same time, our ability to generate cash has steadily increased over the past several years, and we expect our operating cash flow to expand to 650 billion yen over the five years of our medium-term management plan. While working to improve investment efficiency, we will also increase our cash-generating capacity at a level that will allow us to overcome aggressive capital investment, and steadily make the necessary milestones one by one toward achieving the goals of the medium-term management plan.We will steadily take the necessary milestones one by one to achieve the goals of our medium-term management plan,

Improving "Company Quality" through Further Advancement of Sustainability Management

In order to be a company trusted and chosen by our stakeholders, it is important to improve "company quality" in addition to "product quality". We are promoting the advancement of sustainability management. As part of this effort, we established the Sustainability Management Committee on the management side and the EHSS Supervisory Committee on the execution side in April 2022 to clearly separate the roles of management and execution, thereby speeding up decision-making and strengthening supervisory functions. The committee met once a month to discuss sustainability issues such as TCFD, governance enhancement measures, and indicators related to human capital. To strengthen governance, we brought in three new outside directors in FY2023. One of them is a practicing outside director with extensive insight on human capital management and global management, and we expect him to provide advice based on his experience. We have appointed them with the expectation that they will work together with us to consider the future of ROHM, rather than critique it from a critical standpoint. As part of governance reform, we expect the two Audit Committee members to use their knowledge to provide advice on the state of auditing and information management in the integrated management of the group. Among the various social issues, one of the most urgent and critical to be addressed is the environmental challenge. Power and analog semiconductors are becoming increasingly important as key devices for decarbonization and energy conservation, and we believe it is our mission to improve the efficiency of "motors" and "power supplies," which are said to account for the majority of the world's electricity consumption. Growing awareness of climate change and environmental concerns is accelerating the global trend toward electrification of automobiles, and with it, the need for energy saving and miniaturization of devices used is increasing. ROHM will contribute to solving social issues with its power and analog products.

ROHM has also formulated "Environmental Vision 2050" as a measure to promote decarbonization in its own business activities. Based on this vision, ROHM is actively pursuing carbon zero (virtually zero CO2 emissions) and zero emissions, as well as various environmental conservation activities and environmental investments, under the three themes of "climate change," "resource recycling," and "coexistence with nature. As part of these efforts, in April 2022, we joined RE100 (100% Renewable Electricity), an international corporate initiative that aims to use 100% renewable energy for electricity used in business operations. The goal is to have 100% of the electricity used in all of our business activities in Japan and overseas be derived from renewable energy sources by 2050, and we are gradually increasing the amount of renewable energy we introduce into our operations.

To a system that allows each individual to create a career path that makes the most of their individuality and allows them to have a dream

ROHM cannot be considered a global major unless its products enrich people's lives and are recognized as indispensable to their vision of the future. When formulating our medium-term management plan, our base was to have our feet firmly planted on the ground by 2025. The foundation of the medium-term management plan is to formulate and implement measures necessary to strengthen the management foundation of the entire group, including affiliated companies. Specifically, this means that each individual in every department, including the manufacturing and administrative departments, must think about what it means to be a global major and what they must do to achieve this goal, and then act accordingly. In all aspects of our organization and finances, we want to build a system in which each and every employee in the group has an image of what it would be like to be a global major, and is working with a dream in mind.To this end, we recognize that "human capital management" is one of our major challenges. We have taken various human resource measures to win the global competition for human resources, but we are aware that our human capital strategy linked to our management strategy is still insufficient: from the image of ROHM that we aim for in 2030, what kind of human resources we need to develop in the back cast, how the ratio of female managers will be affected for this purpose, etc. In order to achieve this, it is necessary to create an overall picture and set forth a plan for the future, including how the ratio of female managers will be affected. What is important is to create an environment in which each employee can envision his or her future, saying, "If I stay at ROHM, I can achieve this career path. To this end, we have established a system to promote autonomous career and skills development, and the "Specialist Position System" established in FY2019 is based on this concept.

In order to make the most of individuality, we also need to promote diversity. We would like to place importance on listening to diverse opinions, first of all, of course, foreign nationals and women. Especially in decision-making situations, we recognize that incorporating diverse ideas, rather than relying on homogeneity, is necessary for superior decision-making.In order to convey these ideas to our employees, we usually communicate these thoughts to them through online and other means, and we also provide opportunities to talk directly with them at roundtable discussions. We will continue to do so in the future, as direct discussions at roundtable meetings allow us to deepen our mutual understanding.

We want to be a company that contributes to "affluent lifestyles" 50 to 100 years into the future

It is impossible to predict exactly what kind of society will arrive in the future. It may be that we will return to our original way of living in harmony with nature, or it may be that we will live in a society where flying cars come and go. As the world changes, the issues to be solved will naturally change as well. The phrase "Electronics for the Future" in the statement is based on the idea of using electronics as a solution to social issues until around 2050. In 100 years from now, "for the Future" may not change, but "Electronics" may well change. However, ROHM's company mission since its foundation to "Become a global major trusted and needed by society" will remain unchanged no matter what society becomes like, and we will continue to exist as a company that can contribute to society through manufacturing. To this end, ROHM will always stay ahead of the times while developing new technologies and striving to provide a stable supply of high-quality products. I feel that the structural reforms that ROHM has been undertaking since the 2000s are bearing fruit and that we are now on a growth trajectory. In order to remain a company that continues to be needed in a changing world, we will continue to strive to contribute to the realization of a sustainable society through our technologies and products.