The 129th Ordinary General Meeting of Shareholders Q & A

Q1. I would like to ask what steps are being taken to increase the Company’s name recognition among young people.

A1. TDK’s name recognition among young people is lower now than when we used to sell cassette tapes. Among the specific measures we have taken to enhance our name recognition among the younger generations are placing the TDK logo on McLaren's Formula E cars and creating internships for students. In addition, some of our young engineers participated in the NHK TV program “Night of the Makaizo Society,” which received a great response from younger viewers. We will continue stepping up our efforts to improve our name recognition among the younger generations.

Q2. What was the financial impact of the leak of technical information by former employees?

A2. Our investigation into the leak of technical information confirmed that, although some information was taken off TDK premises, no information was leaked to third parties. Accordingly, there was no financial impact on the Company.

Q3. What measures are being taken to prevent a recurrence of technical information breaches?

A3. To prevent recurrences, we are reinforcing our system for managing technical information, and all divisions and laboratories are thoroughly classifying information and strictly controlling removal of information from Company premises. In addition, we are raising employee awareness through periodic training programs to help prevent recurrences.

Q4. What percentage of sales are made to the North America Region and what is your business management policy in this regard?

A4. Although there are cases in which products we manufacture outside the US ultimately make their way to the US through customers in other countries, only a small percentage—less than 5%—of our sales are direct sales to the US. With regard to the recent tariff issues, we are working closely with our regional headquarters in the US to gather information on US policies and positions toward China. This information is shared with the head office to address the risks of US-China trade friction. We are working to mitigate these risks by continuously considering “China plus strategy” production approaches while keeping a close eye on US-China relations because, although we have relatively few production sites in the US, China accounts for a large percentage of our output.

Q5. Please tell us about the impact of growing tensions in the Middle East.

A5. TDK-Lambda's plant in Israel has not been particularly affected at this time and continues to operate as usual. However, any future escalation could affect the plant, so we will continue to monitor the situation closely and make a decision on whether to continue operations.

Q6. I would like to ask about the methods used to manage products being shipped to China that can be converted to military use.

A6. We are dealing appropriately with dual-use products both by implementing in-house measures and utilizing advice from outside experts.

Q7. Please tell us about your cybersecurity measures.

A7. We have established a company-wide Information Security Committee as part of our efforts to strengthen governance, and we are addressing cybersecurity issues globally. We have also introduced a cybersecurity risk assessment system, and we thoroughly monitor risks on a day-to-day basis. We are actively developing a variety of measures based on a concept called “Zero Trust” that goes beyond simply installing anti-virus software, and we will continue to place importance on cybersecurity initiatives in pursuing a wide range of approaches.

Q8. What strategies and initiatives are you employing to enhance TDK’s competitive advantage?

A8. We are focused primarily on the automotive market in developing our electronic components business, and we are seeking to further grow in the xEV market covering electric cars, hybrid cars and other electric vehicles. Going forward, we will be actively developing and supplying electronic components for data centers and AI systems. To take on its competitors, TDK will provide the best products in terms of quality, performance, and cost for a wide range of applications in the AI ecosystem by leveraging the broad portfolio of electronic components that constitutes one of TDK's greatest strengths. We will also thoroughly advance our core material and process technologies to secure a competitive advantage in our battery and sensor businesses. Furthermore, we will emphasize marketing capabilities that quickly incorporate information from the market and customers into the development and mass production of products and, by combining these with our diverse human resources, we will transform technologies into value and contribute to society.

Q9. What is your growth strategy for the energy application products business?

A9. Our small rechargeable batteries are used in smartphones and notebook PCs, and we have secured the top share globally. The market rebounded in FY2024 for the first time in about three years and it is expected to continue growing moderately over the medium term, so we aim to further expand our market share by leveraging our technological capabilities. The key technological factor is how much energy can be stored in a limited space, and we will further develop technologies that combine safety and high performance to expand our business. As a new growth opportunity, we are also developing, manufacturing and selling medium-sized rechargeable batteries for electric motorcycles, power storage systems, drones, and cleaners, an area that we believe can make a significant contribution to bringing about decarbonized societies. We are looking to further grow our battery business as a whole while refining our competitive advantages.

Q10. What is the status of wage increases?

A10. Since group-wide wage increases are being implemented on a global level, they also cover group companies in Europe and the United States, and these wage increases are being implemented using labor distribution ratios and other indicators as benchmarks. In Japan, our policy is to raise basic wages with an emphasis on base salaries, taking into consideration rising living costs and other factors. In line with our previous wage increase of approximately 6%, we will endeavor to create an environment in which employees can work with a high level of motivation.

Q11. Please tell us about your plans to post restructuring expenses for the fiscal year ending March 31, 2026.

A11. We have already factored in one-time expenses of approximately five billion yen in our forecast for the fiscal year ending March 31, 2026 that we announced in April. We believe these expenses are necessary to carry out our plan for restructuring low-profit businesses in line with our business portfolio review. We will continue working to minimize the risk of incurring one-time expenses and other costs.

Q12. What is your stance on share repurchases?

A12. We will continue making strategic investments needed from a medium- to long-term perspective to pursue our growth strategy. In addition, we remain committed to enhancing shareholder returns based on our policy of conducting flexible share buybacks while taking into account the status of our strategic investments.

Q13. Please tell us what you are doing to comply with the Act on the Protection and Utilization of Critical Economic Security Information.

A13. Multilayer ceramic capacitors (MLCCs) and other advanced electronic components have been designated as specified critical goods, and we have a system in place that requires internal reviews to remove information and equipment from TDK premises or export these components. We are also taking measures in cooperation with the Ministry of Economy, Trade and Industry and other relevant government agencies. No special actions have been taken to obtain security clearance, as we are not an eligible contractor.

Q14. Please tell us what you are doing to ensure women play more active roles and what percentage of personnel transferred overseas are women.

A14. We believe that diversity, including gender diversity, is important for our company to achieve sustainable growth and to enhance our competitive advantage. The percentage of female managers in Japan was 5.3% as of April 2025. Women made up 3.4% of the employees seconded overseas in 2024, and this figure rose to 4.7% in 2025. We are supporting the advancement of women by setting a target for the number of women participating in our global human resources development program to foster the next generation of leaders, and we believe that we can achieve our goal of 15% women in management positions in Japan by FY2035. The percentage of female managers across the group as a whole now sits at 22.7%.