The 125th Ordinary General Meeting of Shareholders Q & A

Q1. I would like to ask about your intellectual property strategy and R&D policy.

A1. TDK’s basic policy on intellectual property is to "respect the patents of third parties while asking third parties to respect TDK's patents." In addition, our management policy is focused on "(i) ensuring business safety, (ii) ensuring technological advantages in our businesses, and (iii) utilizing them in light of cost effectiveness." Our business, research and development (R&D), and intellectual property departments form a so-called “trinity” in working closely to strengthen the utilization system for intellectual property. In R&D, we are working with our customers and other stakeholders to solve social issues in the fields of the environment and telecommunications, among others. It is our aim to utilize TDK's unique technologies, such as materials technology, process technology, design technology, and production technology, to solve social issues.
We believe that basic technologies are important as a source of medium- to long-term competitiveness. We have established a global R&D system not only in Japan but also in the United States, Europe and China, engaging in activities including the development of basic technologies. While securing the intellectual property created through these activities as our rights and respecting the rights of other companies, we will continue our activities.

Q2. What are the management risks that you consider to be particularly important and how do you respond to them?

A2. We promote company-wide risk management by identifying and classifying risks that need to be addressed, formulating a response policy, and implementing countermeasures. For example, we assume that geopolitical risks such as U.S.-China friction and sustainability risks such as climate change could have a significant impact on the TDK Group's management in the future. However, it is difficult to uniformly respond to these various risks by applying generalized methods. It is the “people” that can flexibly respond to these risks. In this sense, we recognize that the development of human resources, especially those involved in management, is an extremely important issue from the perspective of risk management, and we are promoting the development of human resources.

Q3. How will you develop your businesses in the Indian market?

A3. In developing business bases, we place emphasis on the economic perspective of whether there is a promising market as well as the perspective of whether we will be able to secure technology, manufacturing and marketing elements, including human resources. Based on these perspectives, we have been actively developing our business in China. Following China, we focus on India from the perspective of population size and market growth potential, and entered the passive components business ahead of our industry peers. With respect to the battery business, we also consider India to be an important region for both the market and manufacturing bases, and we are currently developing the business in India.
EPCOS AG (currently TDK Electronics AG), a German company engaged in the passive components business, had established a manufacturing base in India prior to our acquisition in 2008, achieving smooth business operations. Based on this experience, we will actively and steadily develop our battery business in India going forward.