Mitsubishi Materials : Explanation and Q&A on Manufacturing Excellence & DX Briefing

Event Summary

Presentation

Shibata: Thank you very much for your time. I would like to explain the current progress of manufacturing excellence, R&D, DX, and IT strategies that were just mentioned.

I will start with manufacturing excellence and R&D.

1

This slide shows how manufacturing excellence and the R&D strategy are positioned in the "Materiality" that is also shown in the Integrated Report.

Although various areas are involved, we mainly focus on the bottom part of the slide, "Initiatives to create new value." Specific priority themes are "Creation of innovation," "Exploration and creation of social value," and "Strengthening of manufacturing."

I would like to explain the targets of our efforts in the following slides.

2

First of all, I would like to talk about our promotion structure. We have been operating under the name of Monozukuri and R&D Strategy Division, which is an organization that handles not only the manufacturing excellence but also the entry point of new business ideas, research and development, intellectual property strategy, and manufacturing in a unified manner.

As you can see in the organizational chart, we have Strategic Division in the head office that oversee new business, intellectual property, R&D, and manufacturing excellence, respectively.

The Innovation Center is a unit that implements these activities, and it consists of the Monozukuri and R&D fields, the Fuji-Oyama plant, which mainly handles insulated heat spreader substrates, and the New Business Promotion Department, which handles other new businesses, as the Incubation Center for new businesses.

In addition, please note that some of the organization is expressed in anticipation of the April 1 reorganization, so there may be some differences from the current organization structure.

3

First, the manufacturing excellence strategy.

Under the Medium-term Management Strategy FY2031 ("FY2031 Strategy"), the goal is to formulate a vision for each plant based on the Medium-term Management Strategy, to pursue solutions after evaluating the plants' capabilities and confirming their issues, and to ultimately specialize manufacturing capabilities through bottom-up activities, enhancement of manufacturing foundations, development, and improvement of technologies in the course of these activities.

4

First, let me explain our efforts in the areas of technological development and improvement.

First of all, as you can see at the bottom of the page, we are aiming to acquire major technologies, such as those related to smart technology, automation, and human support.

We have been working on these acquisition activities since the previous Medium-term Management Strategy and even before that to utilize digital technology in manufacturing, and we would like to strengthen these activities further in the current Medium-term Management Strategy.

In this context, we would like to create a digital twin in both product- and process-oriented factories by the end of the FY2031 Strategy. By simulating processes and machines in a virtual space and incorporating them into production planning, we aim to achieve stable and efficient operations through the power of digital technology.

5

I would like to explain the part about strengthening the foundation.

Within the Group, we are implementing a three-year project, which we call the "Achievable Project," from FY March 2023 to FY March 2025, with the final year of FY March 2025 starting from April 2024.

We are proceeding with the project in accordance with the following phases, Phase 1 through 4, at each model site, mainly to strengthen production management and quality stabilization, to develop a system to promote autonomous improvement at each workplace, and the human resources to support such improvement.

The degree of progress varies slightly from site to site, but roughly speaking, as indicated in the diagram, we understand that we are moving from Phase 2 to Phase 3.

In FY March 2025, we will move from Phase 3 to Phase 4, where we hope to finally achieve and complete the improvements.

6

Here is the part about strengthening the Company's constitution. We would like to provide a place where all employees can learn and practice manufacturing or business improvement utilizing the power of digital technology. As a Company-wide activity, we would like to nurture people who can ultimately utilize such digital technology.

We are also promoting bottom-up activities, such as the DX Challenge Program, which includes not only those in the manufacturing area but also members of the DX team.

This activity is a challenge program to promote the use of digital technology in business operations by those who have ideas to use the power of digital technology to improve their own operations, not only at each site and manufacturing site, but also at sales offices and auxiliary administrative divisions, by lowering the hurdles and covering the initial stage costs.

In the first phase, from H2 of last year to H1 of this year, we received 19 applications, of which seven have already been implemented and have reached a certain level of success. In H2 of this fiscal year, we received eight applications, and we are currently discussing how to implement these themes.

In addition to the DX Challenge Program, we are also working on supporting the tasks, enhancing the education and training programs, and improving the tools, as shown on the right, so that each employee can promote DX and manufacturing improvement based on his or her own will.

7

Here are our strategies in the area of R&D.

The three basic policies are written at the top. Our policy is to develop materials with an eye on the future, to create new products and technologies to strengthen our business competitiveness through collaboration between corporate and business divisions and departments, and to achieve early commercialization of products and technologies through open collaboration among industry, government, and academia, rather than keeping all these to ourselves.

Among these, our priority policy, as described above, is to achieve both our major vision of creating new materials and resource recycling while reducing GHG emissions and, as I explained earlier in the organization, we would like to operate in a single integrated manner, from idea to commercialization. Our policy is to allocate resources and money flexibly to support these efforts and to move forward with commercialization in the shortest possible time.

We will focus on the following four areas in carrying out our activities in accordance with this policy. Our company's vision is to realize resource recycling and decarbonization, while our focus is on semiconductors and mobility as areas where we expect to grow as a customer, and where we will be able to make use of our strengths.

8

This slide illustrates what I have just told you. Ultimately, we would like to fulfill "Our Commitment" of "For people, society and the earth, circulating resources for a sustainable future" in our R&D and manufacturing.

To this end, we are considering what social challenges lie ahead by 2050 and how we can contribute to them, and in our Medium-term Management Strategy, we are promoting R&D by designing circulation and providing sustainable materials based on individual themes within the four focus areas I mentioned earlier.

9