Tokyo Electron Limited withdraws from the Photovoltaic Panel Production Equipment Business

President, Representative Director and CEO Tetsuro Higashi,Tokyo Electron Limited yesterday declared that Board of Directors, at its January 30, 2014 meeting, passed a resolution to withdraw from the photovoltaic panel production equipment ("PVE") business.

 Sequence of events leading up to and reasons for business withdrawal:

Tokyo Electron became the Asia-Oceania region sales representative for Oerlikon Solar from 2009 and commenced sales and marketing of an end-to-end manufacturing line for the production of thin film silicon photovoltaic panels. In 2012, Tokyo Electron acquired Oerlikon Solar thereby making a full-fledged entry into the thin-film silicon PV panel market. However, the business environment remains weak due to an oversupply of production equipment. Tokyo Electron, up until now, has maximized efforts to fortify develop to improve the efficiency of converting solar energy to electricity, and also reduce costs. Amid uncertainties of a recovery in the market environment, we have decided to scale down our business structure—halt development, production, and sales activities for PV panel production equipment and limit operations to support for equipment already delivered—given continually weak revenues and as we do not expect to recoup our investment further out in this business environment.

Overview of the business withdrawal:

1.PVE business profile:

(i)Business scope: Development, manufacturing and sales of PVE

(ii)Business sites: TEL Solar AG (Trübbach, St. Gallen, Switzerland)
                           Technology Center Tsukuba (Tsukuba-shi, Ibaraki, Japan)
(iii)Sales:

2. Handling of employees belonging to the PVE business:

We are considering reassigning the employees in this business to other positions within the Tokyo Electron Group. At our Swiss subsidiary, in response to the downsizing of this business, we plan to consider the implementation of streamlining via reductions in personnel.

Schedule:
Board of Directors resolution date: January 30, 2014
Business termination date: End of March 2014 (tentative)
*We plan to assign personnel within the Tokyo Electron Group to continue to provide support services, after the above termination date, for equipment that has already been delivered.

Impact to earnings:
As we announced on December 18, 2013, in line with the review of business plans, including those for the PVE business, we plan to post an extraordinary loss. The results for the third quarter ending March 31, 2014, we announced separately today, include a total extraordinary loss of 46.7 billion yen, of which 32.6 billion yen was to write off impairment loss to goodwill and fixed assets related to the PVE business. 
In light of this, at this stage we are not revising the consolidated financial forecast we released on December 18, 2013. However, as we make progress with this business withdrawal, we plan to quickly disclose expected major impacts to our future consolidated results as soon as the impacts are finalized.