toray’s strategy of r & d and activities for life innovation

0

Toray IR DayMedium-term Management Program “AP-G 2022”

June 4, 2020Koichi AbeExecutive Vice President & Representative Member of the Board, CTO , Toray Industries, Inc.

TORAY’s Strategy of R & Dand Activities for Life Innovation

1Copyright © 2020 Toray Industries, Inc.

Contents

1. Strategy of R&D(1) Basic policy

& Priority Measures(2) Recent R&D Topics(3) Summary

2. Activities for Life Innovation(1) Strategic Arrangement of Pharmaceutical

and Medical Business Expansion(2) Development to the field of Health Care

of Advanced Materials(3) Summary

R&D Innovation Center for the Future(Opened in Dec. 2019)

GRLI

IoT・5G etc.

2

1. Strategy of R&D

1950 '55 '60 '65 '70 '75 '80 '85 '90 '95 2000 '05 '10 '15

2

3

1

Integration oftechnologies

New Frontiers Research Laboratory(opened in May 2003)

Basic ResearchLaboratory

(opened in June 1962)

・P!CASUSⓇ

'20

R&D Innovation Center for the Future

(Opened in Dec. 2019)

History of Toray’s Business Expansion-Research and development provide the key to building the Toray of tomorrow-

・SIVERASⓇ・ROMEMBRAⓇ

・NYLONⓇ ・SILLOOKⓇ・TORAYLONⓇ

TORAYCAⓇ

・FILTRYZERⓇ

・TORELIEFⓇ

・PHOTONEECEⓇ・TORAY WATERLESS PLATEⓇ

・MICTRONⓇ

・Paste for PDP

・CFRP for Automobiles

・NANODESIGNⓇ

・New ROMEMBRAⓇ

・TETORONⓇ

・DORNERⓇ

・TORAYSULFONEⓇ・TORAYMYXINⓇ

・FERONⓇ

・3D-GeneⓇ・REMITCHⓇ

・RAYFASTⓇ

・NANOALLOYⓇ

・CFRP for Airplanes

Fibers & TextilesPlastics & Chemicals

IT-related Products Businesses

Water Treatment Business

Carbon Fiber Composite Materials

Life Science Business

・ultrasuedeⓇ

・TOPTICAL

0

・NEST

・HEATTECHⓇ ・hitoeⓇ

・ECODEARⓇ

・SETELAⓇ

・RAYBRIDⓇ・TORAYFILⓇ

・AXTARⓇ

・TORAYVINOⓇ・CFRP body for Note PC

Foundedin 1926

DNA Chip

Net Sales (Trillions of yen) ・TOYOLACⓇ

・LUMIRRORⓇ・TOYOFLONⓇ

・TORAYFANⓇ™ ・TORAYCONⓇ

・TORELINAⓇ

Development of polymer materials

Improvement of function & processing

Enforcement ofintegration & collaboration

Toray has created new value through advanced materials over 90 years.Toray continue innovation on the advanced materials by cutting edge technology with core technologies.

HEATTECHⓇ is a registered trademark of Fast Retailing Co., Ltd.REMITCHⓇ is a registered trademark of Torii Pharmaceutical Co., Ltd

3

～19th Natural Product 20th Creation and development of new material 21st Advanced

Material

IronInorganicM

aterialOrganic M

aterial

Iron・Steel・CopperAluminum

Glass

Wood、Natural FiberSynthetic Polymer

Semiconductor

Nano-ordered CarbonCarbon materials

Precise Polymer

Stainless steel High Strength steelDulalumin

CFRP

Optical materialsBiocompatible materials

Mobility AircraftNext Gen.

Aircraft

Electronics Transistor LSI LCD OLEDVacuum tube

Germanium Silicon Compound Semiconductor

Engineering Plastic

Life Science Contact lens

ArtificialKidney Catheter

Photo functional materials

Alkali Free Glass

Non-Petroleum-based Plastic

C60 CNTOrganic-inorganic hybrid materials

Organic Materials for Optical Imaging

Biotools

Advanced Material Creates New Industry

Energy

Automotive Synthetic RubberTire

IC

xEV FCVHigh-SpeedTrain

IoT/5G

Clothing・Food・Housing ReverseOsmosis

Next GenerationConstruction Materials

Nuclear Wind SolarHydraulic Thermal

ReinforcedConcrete

Large-scaleDrone

SmartTextile

Freeze-DryFoods

Hydrogen

1. Strategy of R&D

SyntheticFiber

Century Century Century

4

Organization of Technology Center

R & D D i v i s i o n

E n g i n e e r i n gD i v i s i o n

M a n u f a c t u r i n gD i v i s i o n

S a l e s D i v i s i o n

Technology Center

p l a n t s M a n u f a c t u r i n gD e p a r t m e n t

TechnologyCenter

(De

ve

lop

me

nt) New Project Development Division

Technology Center

T e c h n o l o g y C e n t e r P l a n n i n g D e p a r t m e n t

E n v i r o n m e n t & E n e r g y C e n t e r

T e c h n o l o g y D e v e l o p m e n tP r o m o t i n g D e p a r t m e n t

Automotive Center

Advanced CompositeDevelopment Center

First Engineering Department、Second Engineering DepartmentEngineering Development Center, Engineering Planning & Administration Dept.

Fibers & Textiles 、Films & Film Products、Chemicals 、Composite Materials,、Electronic & Imaging Materials 、Global EnvironmentPharmaceutical、New Frontiers、Advanced Materials

：Division：Department

Section

CTO

（as of June 1, 2020)

1. Strategy of R&D

M a n u f a c t u r i n gS e c t i o n

M a n u f a c t u r i n gD e p a r t m e n t

M a n u f a c t u r i n gS e c t i o n

T e c h n i c a lD e p a r t m e n t

T e c h n i c a lS e c t i o n

p l a n t s

T e c h n i c a lD e p a r t m e n t

T e c h n i c a lS e c t i o n

T e c h n i c a lD e p a r t m e n tAdvanced Textiles Development Center

Automotive & Aircraft Center

5

Undivided R&D Organization1. Strategy of R&D

Organic synthetic chemistry


Polymer chemistry

Nanotechnology

Core Tech.

Biotechnology

Business fields

etc.･･･

Innovative polymer

Nano-structure design control

NANOALLOY®

Membrane

Functional powders

Various technologies and materials contribute to a wide range of business fields(including those originally created for a specific field)

Integrated strengths: Utilize a wide range of technologies and knowledge in different fields to solve problems in an individual business field

Technology Center

R&D Division

Development Center

New Projects Development Division

Engineering Div.

Manufacturing Div./Technical Dept.

Divisions/Technical Dept.

Advanced materials & technologies

Green InnovationLife Innovation

Production Process Innovation

Affiliated Companies

Water treatment, Environment

Pharma/Medical Products

Resins & Chemicals

Fibers/Textiles

Films

Electronic & Infor-mation Materials

Carbon fibercomposite materials

Experts in individual areas are gathered in Technology Center to create new technology by fusion & integration of existing technologies

6

Global R&D Network

Silicon ValleyUCSF

TFE

ALCANTARA

TTS

TREC

TPAAMRC

TAK

TARCTFRC

TSWRC

TPCH

TPM

GNTAMCEU

CMA

CBT TACTMUSTMOL

TAC

CFE

1. Strategy of R&D

Minneapolis

Japan: Basic research and cutting-edge developmentOverseas: Product development based on current needs

R&D technical bases (22)Technical information collection bases (3)

・Consolidated Net Sales (FY 2019)Japan：961.7 billion JPY, Overseas 1,252.9 billion JPY

7

1. Strategy of R&D

Basic Concepts of Toray R&D

Direction of Toray

Qualities of Japanese peopleCreating Japanese-style innovation

1. Management from a long-term viewpoint based on R&D・Foundation and history in creating innovative technology: Focus on basic research・Free discretion (discretionary research), weighting, and prioritizing specialists

2. "Super continuity": Persistent efforts over the long term to develop cutting-edge material Ultimate pursuit: On-site innovation

3. Highly integrated research & technology development organizationAll research & technological development functions concentrated in a technology center (enabling integration and technological fusion)

4. Strategic partnership with largest players in the industry5. Global intellectual property strategy6. Japanese-style innovation + global development

1. Tenacious perseverance ="Super continuity"

2. Creative improvement = R&D3. Tight-knit = Power of integration4. Cross-cultural integration(assimilation)= Technological Integration

Integration & Collaboration

8

Incremental Net Sales of the Major Initiatives1. Strategy of R&D

Major Initiatives (FY 2014)Incremental Net Sales

FY 2019 FY 2022(target)

FY 2030(target)

Fibers and Textiles ： Products for SPA, Life Innovation productsResins ： High functional resinFilms： LiB separator film, High functional filmsCarbon Fiber Composite Materials：Aircraft, Automotive, Fuel Cell related materials Electronic & Information Materials ：Electrocoat materials , Fuel Cell related materials Pharmaceuticals & Medical products : Innovative pharmaceutical and BiotoolsWater treatment ： Ultimate pursuit of membrane performanceOthers： Innovative membrane-integrated bioprocess etc.

Total rough estimation 1,400

Unit: 100 million JPY

SPA：Specialty store retailer of Private label Apparel

FY 2013 FY 2019 BalanceConsolidated

Net sales 18,378 22,146 3,768

Increment Net Sales（FY 2013 →FY 2019） Unit: 100 million JPY

37％

9

Basic Research as PriorityKeyword of TORAY“Super Continuity”leads to Innovation

The importance of Pipeline Management・Themes based on long-term viewpoints・Prioritize R&D themes at each of the 4 stages (Exploratory research→Full-fledged

research →Early stage development → Late stage development), so that themes do not concentrate in a certain period or stage

In Kamakura(35th anniversary)

Material developmentbases

Basic researchLaboratory

[Opened in 1962]

In Kamakura(75th anniversary)Fusion between

“Nano” and “Bio”New Frontiers

Research Laboratory[Opened in 2003]

In Shiga(90th anniversary)

for creating the futureR&D innovation center

for the future[Opened in 2019]


Central laboratory

[Opened in 1956]

1. Strategy of R&D

Focusing on only short-term R&D themes toboost the profit, long-term promising themeswill run out

10

Accelerate climate change measures

Realizing sustainable, recycling-baseduse of resources and production

Provide clean water and air

Contribute to better medical careand hygiene for people worldwide

DNA of Toray’s R&D

Ultimate Pursuit Basic research as priority“The Deeper, The Newer”

Toray Sustainability Vision

Foundation of R&D Innovation Center for the Future

■Realizing a better future society by collaborative innovation of advanced materials→ fuse fine polymer and nanofabrication→ strategic open innovation

■Promoting R&D by “Digital” manufacturing→ fuse computer and material science

Integration of Technologies

New technology creation in collaboration with partners

Super Continuity R&D strategy based on Long-term viewpoints・To reinforce advanced material research while looking ahead50 and 100 years

・Ultimate pursuit of high functional polymers

1. Strategy of R&D

11

Encouragement of “Underground” Research

Creatingnew

themesFuzzyFront

STARProjects

CRPlanning

Dept.

“Underground”research

ThemeStudy

meeting

Fundamental technologymeetings Fuzzy Front is the starting point to create new

themes where a lot of studies on the researchconcepts are considered and developed.

<Examples> 1) To clarify the possibility of business and technologyColor Filter for LCD (TOPTICAL®) , Cleaning cloth using microfibers（TORAYSEE®）

2) To breakthrough essential tasksHigh performance carbon fiber（TORAYCA®）, PET film for magnetic tapes (NEST)

3) To apply new discoveries in research to other uses and business fieldsWhite-colored PET film for LCD backlight application

4) To clarify product conceptUltra-microfiber non-woven fabric （ultrasuede®）

Engineering polymer PPS （TORELINA®, TORCON® ） [Films→resins→fibers]

1. Strategy of R&D

“Underground” ResearchBefore the setting of the official research themes, “underground” research as a preliminary step

have been emphasized to assess the concept of the themes. At Toray, allocation of 10%to 20% of the duties to "underground" research have been encouraged, in order to create future large-scale themes based on innovative basic and fundamental research..

12

by aligning NEST technology realizes high resolution of displays by aligning the surface protrusions of filmsInnovative technology expands the applications into the future

20201992 2010200520001995

NEST：New Surface Topography

2015

1. Strategy of R&D

Ultimate Pursuit of Surface Shape Technology

Started sales of films for video tapes using

NEST technology

Process film for polarized light plates

Film for data storage tape

Process film for ceramic condensers

Ultimate pursuit of film surface structure

・Awarded Okouchi Memorial Foundationmanufacturing special prize (1996)・Contributes to our company profits as a

standard type of our films

13

Guidelines on Setting R&D Themes 1 Value estimation of themes

・Quantitatively analyze cost performance as much as possible ex) light weight value in aircraft and automotive

・Eliminate short-term viewpoints conforming to the current of the times

2 Substantial competitive advantage of the product and technology・Assess the barriers for competitor to enter the market

3 Persistence of competitiveness ex) LCD panels originally developed by Japanese firms but lost their

competitiveness4 Compatibility with corporate characteristics

・Technical and sales platform cannot be developed in a short period

5 New business model ・Pursuit of higher profit models in exchange for the technologies・Assess where in the supply chain we should do business

1. Strategy of R&D

14

0

100

200

300

400

500

600

700

800

Toray’s R&D Expenditure

1990 2000 20101970 1980(FY)

The Rehman collapse

IT Bubble Burst

Bubble Burst

Plaza Accord

2nd Oil Crisis

1st Oil crisis

Toray to invest approx. 220 billion JPY in R&D for the next mid-term from 2020 to 2022

2020[PLAN]

1. Strategy of R&D

non-consolidated

consolidated

(Unit : 100 million JPY)

15

R&D Efficiency 1. Strategy of R&D

0%

100%

200%

300%

400%

500%

'06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18

20182014

20132009

Ｘ = 5

①÷②ＡＢ

Ｄ

Ｅ

500

400

300

200

100

02006 2010 2014 2018

(%)

2. Comparison to competitors

1. Internal assessment①Gross profit of new products

（launched over the last 5 years）②Cost reduction by new technologies

（Self-help efforts）

③Technology licensing income ④Project assessment（Gross profit / R&D investment）

Toray

(FY)

Ｘ = 5 years （same trend in case of Ｘ=3, 8 years)

①Accumulated income

②Accumulated R&D expenses

Better

R&D

Efficiency

Ｃ

The breakthrough is hard to happen only in pursuit of the efficiencyThe management that the efficiency of the innovation was conscious of

Japanese Synthetic fiber& Chemistry Companies(6 companies)

16

NANODESIGN®

Composite spinning technologyUnique flow controlTailor made cross-sectional shape

Circular structure

10μm 1μm 500nm 150nm100μm

Clothing use example（launched） Example of expansion to other applications（under development）

“KINARI”： like silkuts - FIT®：Stretch & softvery small diameter・bimetal

10μm

Blood purificationActivated white blood cell and inflammatory related protein

Adsorption structure (irregularities) is formed by

the fiber surface

NANODESIGN®Island-in-a-sea type

Sea component solved

Unique functional groupOn the surface

Irregular structureBimetal structure

Ultimate split “Point ” cross-section

Original Technology＋

Know how

NANODESIGN®

“Nano-ordered slit”：Water repellency

Special shaped Fine slit

Primeflex®： Stretch & softcore & sheath structuresmall diameter・bimetal

Gｌoss・Bulky texture・slipping sound

CrossSectional

View image(above)View(below)

High shrinkage Low shrinkage

1. Strategy of R&D

Hair General-purpose fiber

-Start of research：Since 2008-

17

NANOALLOY®

Polymer A

Polymer B

Conventional alloy

NANOALLOY®

Highly functional clothing material

IT equipment chassis

Fabric

Resin

Film

Composite material

ナノアロイ®：ナノメートルオーダーで微分散させたポリマーアロイ１０μm １μm １００ｎｍ１０ｎｍ１ｎｍ

分散径

Polymer ChemistrySurface Chemistry

-Start of research：Since 1999-1. Strategy of R&D

NANOALLOY® structure

Nano-dispersion

Nano-micelle

Nano-co- continuous

Chemical resistanceHigh toughness

High toughnessImpact absorption

Heat resistanceGood flowability

ApplicationBusiness fields

Aircrafts & automobiles

Data Tape

Sports goodsetc.

Dispersion diameter ; minutely dispersing multiple polymers on a nano-metric scale

NANOALLOY®

18

High speed weight-drop test(equivalent to 32 km/h)

Conventional alloyCrash padsample

1. Strategy of R&D

NAOALLOY® Deployment Example

NANOALLOY®

Material system Material property Development examplePET/High-temperature polymer Thermal resistance Data tape

N6/Reactive elastomer Impact resistance Automotive parts, sports goodsPPS/Specialty polymer High toughness IT tools

Epoxy polymer

PBT/PC

High strengthHigh strength

/Impact resistanceAutomotive safety

components

Aircraft parts, sports goods

19

108

116125 123

100

150

200

250

300

2010 2013 2016 2019

Index with FY2010 as 100

Net sales of Toray Group Automotive Business is increasing at a pace surpassing the growth rate of automobile production

Automotive Business of Toray GroupNet Sales of the Toray Group Automotive Business (FY 2010 - FY 2019)

東レＧ売上高

自動車生産台数

275.9billion yen

Major Applications

Sales ratio by material(FY2019)

30%

36%15%

Carbon FiberComposite 11%

Others8%

100

150

200

250

300

2010 2013 2016 2019108

(Fiscal Year)

116 125 123113

167188

231 241

125

300

250

200

150

100

1. Strategy of R&D

Film

Fiber

Resin

Others

Carbon FiberComposite

Film

Fiber

Resin Interior, Exterior, Compound for safety material, [Nylon, ABS, PPS]Airbag, Interior, Seat belt, Binding thread, Fiber for tire cord [Nylon, PET etc.]Battery separator filmFilm for capacitors [PP]

Circuit material (Polyimide coating agent)

Sales amount of Toray group

Automobile production

Panel Structure, Trunk lid, Propeller shaft, Pressure vessel, Electrode substrate

20

Nano-multilayer Films

NEST material (2 layer/3 layer) Multilayer technology (up to 2,000 layers)

A AB B

A

（launched in 1992）

PETWindow

cover films

Protection from UV rays

UV light reflection

Vehicle emblems

Blue light reduction

1) Luminance and color uniformity improvement in LED display using Quantum dot technology.2) Augmented Reality (display digital information on a real picture)

QLED use1)

Front：transparentSlant： reflection

Solar heat-blocking

（under development）AR2)use

（under development）

Infrared rays reflection

100nm 10nm 1nm

1. Strategy of R&D

Dichroic reflection

1-layer thickness

2 layers 3 layers

Extrusion

Solidification (Casting)

Drawing

ＰＥＴModifiedPET

Multilayer process

Special Feedblock(Molten flow

converging device)

ModifiedPET

High transparencyTear resistance

Metallic lusterElectromagnetic wave transmission

Blue light reflection

-Start of research：Since 2000-

21

0

100

400 800 1200 1600

PICASUSⓇ IRReflection property Promising uses

Characteristics

① Heat insulation of Window

Building Automotive

②Heat insulation of electronic devices

Visible IR

Underdevelopment

Existing

*The performance that is required in cell-phones, GPS, ETC

1. Strategy of R&D

Reflection (%)

Improved

Developmentproduct

DevelopmentProduct＋ heat

insulation layer

Metal sputtering

Transparency (visible light) 90% 70% 65%Solar heat insulation rate 35% 55% 50%

Radio wave transparency* ○ ○ ×

Durability ○ ○ ×

Head-UpDisplay

Projector

PICASUSⓇ IR

PICASUSⓇ IR

PICASUSⓇ VTFilm for AR （Augmented Reality）

Display in automotive

CenterDisplay

Destination20km

020406080

100

400 800 1200 1600Wavelength (nm)

22

DiscontinuousCharacteristic Improvement

1. Strategy of R&D

From Nanotechnology to Super Nanotechnology

NANODESIGN®

Thinner

Finer

ResinNANOALLOY® PICASUS®

Thinner

Film

Fiber

Green Innovation (GR)

Life Innovation (LI)

Approx. 50 Billion JPYas Net Sales in FY 2025

Approx. 9 Billion JPYas Net Sales in FY 2019

23

LIB Separator (SETELAⓇ)

Engineering

Chemical Process

Integrate diversified technologies of Technology Center

Unique technology of LIB フィルム

High performance Separator

Core Technology

NanotechnologyBiotechnology

Organic syntheticchemistry

Organic syntheticchemistry Polymer chemistry

Reinforce the competitiveness of separator by the diversified technologies

＋

1. Strategy of R&D

Analysis & Analytics

LIB： Lithium-ion Batteries

24

1. Strategy of R&D

100

150

200

250

300

350High Safety in high temperature

Melt Down (MD)Shut Down (SD)

Temperature

（℃

）

： Safety margin

Existing DevelopmentItem 1

Development Item 2

Development

Item 3

300

137 137 Temp.＜ SD

Li+

Temp.： SD-MD

LIB Separator

Temp.＞ MD

Contact of anode and cathode

Key Points ：High Safety , High Energy, High Power Density

Safety device operation

Shutdownto close

the pores

180

LIB Separator

LIB Separator (SETELAⓇ) (2)

Li+

Li+

Li+

LIB： Lithium-ion Batteries

25

104

0

106

>-102

10 1001

Prospects for Carbon Fibers -Applications as core material for a safe, secure, & comfortable Society-

1. Strategy of R&D

Electrodes

RobotsPressurevessels

Bicycles &Motorcycles

Automobiles

Environmentally-Friendly vehicles

Unmannedaerial vehicle

Helicopters

Undersea cablesSubmarines

Coastal and port facilitiesShips

RailwaysRepairsReinforcement

Railway and roadway ancillariesPower transmissioncablesHigh-rise buildings

Airships

Small and

mediumaircraft

Large aircraft

RocketsSpacecraftSatellitesTransport equipment

Infrastructure, etc.Energy

Altitude(m)

Size(m)

Wind Power Generation

26

History of Fibers Business Expansion1. Strategy of R&D

Toray

Dyeing company

Filament, staple Textile～Dyeing Sewing

Toray

Toray Wholesale Retailer

Overseas trading, sewing companies Overseas trading, sewing companies

Apparel

SPA

WholeSale

Apparel

1960s-70sExpansion

period↓

Sales to Brand apparel

customers

1990s-2000Supply chain

revolution↓

Sales To SPA

Dawn period↓

Introduction of synthetic

fibers Brand Marketing （‘Nylon’‘Tetron’）

Retailer

Including ntegratedbusiness from fibers

to textiles to garments

Synthetic fiber“cluster”

Global Supply chain

Spinning distributor

FilamentFilamentdistributor

FabricFabricdistributor

PT(Production Teams)

Business modelincluding textile process(outsourcing textile and dyeing process)

SPA：Specialty store retailer ofPrivate label Apparel

Textile companyTextile company

Dyeing companyTextile companyTextile company

27

Carbon fiber

Supply chain of automobile industry

Carbon fiber Parts AutomobileIntermediate

material

TCMTCMEACCEACC

TorayToray ZoltekZoltek

DeltaDelta CITCIT TACTAC

Deployment Strategy of CFRP for Automobiles

Automobilemanufacturer

Prepreg CF-SMC Hood Trunk lid

Feedback

ToraySupply chain of carbon fiber

1. Strategy of R&D

Materialmanufacturer

Automobilemanufacturer

Intermediatematerial manufacturer

Parts manufacturer : Tier1…(Molding, Processing, Painting, Assembling)

Parts manufacturer : Tier1…(Molding, Processing, Painting, Assembling)

28

TORAY

BOEING

1980’s

7777872000’s

BOEING

Combined strengthsTORAY

７７７Ｘ

New Stage (2014-)

1. Strategy of R&D

New Collaborative Development with Boeing (fusion & working together)

Strengthen collaboration

Materials scienceNanotech, fibers, films,engineering, etc.

Aircraft technologyManufacturing technologyMaterial evaluation technology,

etc.

Next-generation aircraft

Design

Molding process

Material approval

Prepreg

Composite materialsrelated technology

Prepreg


Material approval

Design

Molding processDesign

Molding process

Material approval

Prepreg


29

Deepening and Evolution of Carbon Fiber Composite Materials

Molecular designof resin

Hybrid molding

ET40

High Strength

andHigh

Elasticity

Workability

Ultralightweight

CFRF(3D mesh structure)

2

(cm3/g)3

1

Water

CFRF

Foaming resin

Resin

CFRP

1 10 1000Elasticity（GPa)

Water surface

CFRFSample

Floating on waterImproved shapeability

1. Strategy of R&D

Pursuit of the Ultimate Limits

of CFRF

Spec

ific v

olum

e

High modulus CF(Molecular orientation)

High Strength CF(Nanostructure control)

30

R&D History of Polymer-based Electronic Material

Functional coatingKapton® SemiconductorLSI assembly

Display

Imaging

IoTSensing

Creating advanced materials by deepening & integratingCreating advanced materials by deepening & integratingof our original polymer & functionalization technologies

Polyimide siloxane

LSI assemblymaterial

Polyimide

ScintillatorPDPLCD color filter RAYBRIDⓇ

Torelief® WaterlessPlates

TSPmaterialsImage sensor material

Materials forwater soluble ink

Polysiloxane

Materials for 5GOrganic photovoltaicsNano carbon Nano carbon

CompositeFine-particle

dispersion

1. Strategy of R&D

Polymer technology

Functionalizationtechnology

Acrylic polymer

Photosensitivematerialdesign

OLEDmaterial

Spectrum conversion material by organic

phosphor

Printed RFID

WaterlessCTP Plates

Light functionalmolecular design

Temporarybondingmaterial

31

RFID* - Radio Frequency Identifier -1. Strategy of R&D

*Tags that send & receive information wirelessly

Product image

② ①

(cm2/Vs)200

150

100

500

2012 2014 2016 2018 2020 2022（Year）

182155

TorayAcademia

Organic semiconductor

CompanyCNT

World Highest

Complete printingprocess

(cost effective)

Photo-definableconductive paste

① Electrode wiringLines/space=20/20μm

Printed thin film transistorCNT dispersion

Good

CNT: Carbon nanotube

Response

CNT composite

Semi-conductivepolymer

Inkjet

Electrodes

Substrate

Insulating layer

② Antenna wiring

mobility

World’s first demonstration of UHF band wireless communication with printed RFIDs(glass substrate, 20cm)

Schedule：Sample promotion (2021), Release (end of 2022)

32

1. Strategy of R&D

Development of Separation Membrane Technology

Expansion to growth fields based on Toray’s strong separation membrane technology

Collection of valuable materials

Advanced water treatment

Dialyzer

Market

Production of Ultra-pure water Desalination

Blood purifier

Personal Protective Clothing

Separators for LIB

Fuel cells

Bioprocesses using membranes

Hydrolysis

Valuable chemicals

Sugar

H2 separation membranes

Sewage reuse

[image]

Blood purifier Ⅱ

1970 1980 1990 2000 2010 2020 2030

Electrolyte membranes

Creation of valuable materials from non-edible

biomass

・Edible→Non-edible biomass・Current biodegradable polymers arenot a solution to the marine plastic problem

DialyzerⅡ ZLD

LIB: Lithium Ion Battery

New energy

Chemicals

Water treatment

Healthcare

ZLD：Zero Liquid Discharge

Oil water separation

33

Now 5 years later 10 years later

Domestic

Overseas(Global operation)

CommoditizationProfit

Advanced materials

Domestic : Production and export of advanced materials created by R&D activityOverseas : Production in global manufacturing bases to re-invest the profit into next R&D

R&D

R&D Cycle to Enable Sustainable Growth1. Strategy of R&D

R&D

R&D

Profit

Profit

Advanced materials

Advanced materials

Commoditization

Commoditization

34

1. Strategy of R&D

New technologyUltimate pursuit

Unique characteristicsTechnology fusion

Demands of the eraMarket needs

Quantification of value

Business modelGlobal intellectual property strategy

Supply chain

Creation of AdvancedMaterials

Without innovation in materials, there can be no true solutions or exciting new products

Japanese-style innovation

Global development

Continuous Creation of Advanced Materials throughTechnological Innovation

35

35

1. Strategy of R&D

Major Initiatives (FY 2020) Incremental Net SalesFY 2019 FY 2022 FY 2030

Fibers and Textiles ： Products for SPA, Life Innovation products, NANODESIGN®Resins ： High functional resinFilms： LiB separator film, High functional filmsCarbon Fiber Composite Materials：Aircraft, Automotive, Fuel Cell related materials Electronic & Information Materials ：Electrocoat materials ,Fuel Cell related materials, Environmentally-friendly printing solutions Pharmaceuticals & Medical products : Innovative pharmaceutical and BiotoolsWater treatment ： Ultimate Pursuit of membrane performanceOthers： Innovative membrane-integrated bioprocess etc.

Total rough estimation 1,400 3,200 21,000

42 %

Incremental Net Sales of the Major Initiatives (plan)Unit: 100 million JPY

SPA：Specialty store retailer of Private label Apparel

FY 2013 FY 2022 BalanceConsolidated 18,378 26,000 7,600

“AP-G 2022”

* GR：4 times as in FY 2013LI：6 times as in FY 2013

FY 2013 FY 2030* BalanceGR 4,631 18,500 13,900LI 1,196 7,200 6,000

GR+LI 5,827 25,700 19,900

Sustainability Vision


Invest 30% of R & D Investment

1. Strategy of R&D(1) Basic policy

& Priority Measures(2) Recent R&D Topics(3) Summary

2. Activities for Life Innovation(1) Strategic Arrangement of Pharmaceutical

and Medical Business Expansion(2) Development to the field of Health Care

of Advanced Materials(3) Summary

R&D Innovation Center for the Future(Opened in Dec. 2019)

2. Activities for Life Innovation

Contents

GRLI

IoT・5G etc.

Ease burdens on medical professionals

Improve quality of Medical care

Support personal safetySupport health and longevity


0

200

400

600

800

2016 2017 2018 2019

542(21)

538((19)

537(13)

Current status of Pharmaceutical and Medical Devices BusinessNet Sales and operating income trends

(FY)

: Net Sales( ): Operating

income


(¥M)

533(16)

Pharmaceutical Business・Antipruritic Remitch® 1)

* (Patients for blood, peritoneal dialysis and liver disease pruritus)

(Application patent)Peritoneal dialysis patients: Extended registrationHemodialysis and liver disease patients: extension of registration pending・Launched Remitch® orally disintegrating tablets (June 2017)

1) Remitch® is a registered trademark of Torii Pharmaceutical Co., Ltd.

・ Inoue Balloon for Aortic Valve: New type launched (September 2018)・ Toraymyxin®: US FDA approved the registration for sepsis caused by COVID-19 in the North American

clinical trial (Spectral) (April 2020). Health Canada approved the temporary use for treatment (Toray)(April 2020)

Medical devices business

・ TRK-820 2) license agreement in Thailand and Indonesia with Meiji Seika Pharma Co. (January 2019)

・ Started clinical trial of TRK-950 (US and France) (March 2017)

Received the "Kanto Region Invention Award Invention Incentive Award" in 2018

Drug Polymer coating

Can be taken without water with our unique formulation technology

Orally disintegrating tablet (cross section)OD related patent group is registered for extension (expiration of rights: 2022-2033)

“AP-G 2019”


0100200300400500600700

2019 2022

530(5)

550(0)

2022[Target]

2019[Rough estimation]

“AP-G 2022”・ Expanding earnings from the overseas expansion of Remitch®・ Introducing new drugs with unique features (TRK-750)

Strengthening translational research・Strengthening and expanding biopharmaceuticals (TRK-950)

・Continuous introduction of new products with original technology such as SATAKE・HotBalloon®

・Dialyzer sales expansion of high value-added products in Japan and overseas

・Launch and expand sales of new dialysis machine products in Japan

・Strengthening of Toraymyxin® / respiratory disease treatment column

New business・ Launch and expand DNA chip (fusion of nano and bio)

Launch of early diagnosis of pancreatic / biliary tract cancer, and expanding to other carcinomas

Revenue and Core Operating Income Targets

Points for Pharmaceutical and Medical Devices BusinessPharmaceutical Business

Medical devices business

(¥M) :Revenue ( ) : Core Operating

income


(FY)

*RemitchⓇ is a registered trademark of Torii Pharmaceutical Co. ,Ltd.

39

Reinforcement of BioresearchKeyword of TORAY“Super Continuity” leads to Innovation

・Themes based on long-term viewpoints as the sense of the times ・Eliminate themes based on short-terms viewpoints as the current of the times

In Kamakura(35th anniversary)

Material developmentbases

Basic researchLaboratory

[Opened in 1962]

In Kamakura(75th anniversary)Fusion between

“Nano” and “Bio”New Frontiers

Research Laboratory[Opened in 2003]


Fusion basefor creating the future

R&D innovation center for the future

[Opened in 2019]


Central laboratory

[Opened in 1956]


Focusing on only short-term R&D themes toboost the profit, long-term promising themesshould be missed

→ Pipeline Management

40

Founding concept: Reinforcement of biotechnology research and fusion of biotechnology and nanotechnology

(1) Creation of new business domains(2) Pursuit of innovative elemental technology

cancer

TRK-950

non-edible biomass

Continuous saccharification

<Bio-production(biomass conversion processes)>

<Early detection of cancer> <Innovative cancer immunotherapeutics>

Achievements of New Frontiers Research Laboratories

Bioprocesses using membranesBioprocesses using membranes DNA chipsDNA chips Antibody drugAntibody drug

GR LI

Surplus Bagasse（Demonstrating

in Thailand）

Toray Group Sustainability Vision

membranes


41

Existing antibodyEffects are expected

Cancer cell A Cancer cell B

Target C(marker)

Target C

No effectPositive effects

Cancer cell A Cancer cell B

XTarget A(marker)

Antibody against Target AAntibody against Target AMarker is not found Marker is found Marker is found

TRK-950

Antibody against Target CAntibody against Target C

TRK-950 is an antibody drug against novel target which is expressed at high levels onvarious human cancer cells (First-in-class)

TRK-950 shows strong anti-tumor effects in animal models

Possibility of both positive and negative expression of target A in the same type of cancer

Detected an target C expressing in many types of tumors


Development of Antibody drug (TRK-950: Anti-cancer Drug)

42

New Frontiers Research Laboratories (Kamakura)New Projects Development Division (Kamakura)

Investigational drug

Clinical development of TRK-950

Pioneering new pharmaceutical business in Toray


Started Phase I study in the US (2 sites) and France (1 site) from March 2017.Received the report indicating that TRK-950 has no concern about safety (not final result).Started Expanded Phase I study in the US (5 sites) and France (1 site) from April 2019 to confirm additional safety and efficacy of TRK-950 for treating colon cancer,cholangiocarcinoma, bladder cancer, ovarian cancer, gastric cancer, kidney cancer and malignant melanoma etc.

FranceUSA

Ph I study

Mayo Clinic HospitalHonorHealth Research Institute など

★

Centre Léon Bérard

①Los Angeles②Phoenix②Scottsdale③New Orleans④Milwaukee⑤Morristown

①②

③

④⑤

★★

★

★★

Lyon

43

20202000 20102005

2000.10Res. start（EIM Res

Labs）

2014.8Start National PJ

* Prof. Lötvall Univ. Gothenburg, Sweden

2008.2DNA chip for miRNA research launched

2000 Start of research in Toray2005 Confirmation of 100 times

higher sensitivity than others2007 Discovery of circulating miRNA*2014 Start of the national project

2015

2019.4Designated as one of objects in “SAKIGAKE Designation System”

End of national PJ (2014～2018FY：total research budget：about 8 billion yen)Toray aims to carry out the application as diagnostic tools for prioritizing 13 tumors(pancreas, biliary tract, breast, prostate, liver, colon, stomach, lung, ovary, etc.)

Diagnostic tool for pancreas and biliary tract cancer has been designated as an item in “SAKIGAKE Designation System” by the Ministry of Health, Labor, and Welfare

Micro RNA amount (10-18mol)

10６

10４

10.01 0.1 1 10 100

(index)

Needs will catch up in future

－Research started in 2000－

miRNA in serum

Strong collaboration with National Cancer Center

2003.5New

Frontiers Res Labs open

2003

Sign

al in

tens

ity

10２ 100 times more sensitive

History of DNA chip development2. Activities for Life Innovation

44


Life Science Segment pipelinePharmaceuticals

Priority areas Preclinical Ph I Ph II Ph III Application

Nerve

Cancer

Oｔｈｅｒｓ

Medical Devices and BiotoolsPriority areas Preclinical Clinical trial / application preparation Commercialization

DNA chip

TRK-950(US/EU)TRK-880

TRK-750 (EU)

TRK-820（China）

TRK-250 (US)

TRK-820(ASEAN)

TRK-820 (EU)

Scheduled to apply for other cancer types

Dialysis Complication Treatment Column

Respiratory disease treatment column

Ph-I completedPh-III in preparation

Pilot Ph-II

TORAYMYXIN®(Idiopathic pulmonary fibrosis)

Emergency artificial kidney

SHB2)

Research use

SHB2)(Improved operability, etc.)

Pancreatic / biliary tract cancer

TORAYMYXIN®１）

（Interim order approval in Canada）TORAYMYXIN®１）

（Ｃlinical trial in ＵＳ）

１）Medical Devices for COVID-19, 2) SATAKE・HotBalloon® Catheter （Balloon catheter for recurrent symptomatic paroxysmal atrial fibrillation）

Idiopathic pulmonary fibrosis

Dialysis

Intensive care

Heart / blood vessel

45


Examples of RD themes

ｈｉｔｏｅ®

Hygiene products

X-ray cassette

Toray-style Life Innovation (LI)Expansion of pharmaceutical and medical devices business＋ Development to the field of Health Care of Advanced Materials

Protective clothing

Advanced materials（Basic chemicals）

Carbon fiber composite materials

Films

Resins/Chemicals

Water treatment/Environment

Fibers/Textiles

Electronic/Informat-ion Materials

Scintillator panel



Polymer chemistry

Nanotechnology

Core Tech.

Biotechnology

Technology Center

R&D Division

Development Center

New Projects Development Division

Engineering Div.

Manufacturing Div./Technical Dept.

Sales Divisions/Technical Dept.

46

Utilization example of hitoe Personal Protective Clothing


Other’s LIVMOATM

Barrier to virus１） Class 6 Class 6Barrier to blood１） Class 6 Class 6

Permeability（g/m2/hr）２） 0 328

Development of personal protective clothing that balances safety, durability, and comfort at a high level

1)EN14216 standard : Class 6 is highest 2)Toray estimation

Purpose

Technology

Current status & future plan

Integration of microporous film and nonwoven fabric → Successfully balanced the contradictory properties of barrier to virus and blood with permeability

・Donated 10,000 pieces of clothing to Guinea Government in 2017

・Produce and supply adequate clothing to meet increased demand due to COVID-19

LIVMOATM

Development to the field of Health Care of Advanced Materials

Purpose

Technology

Current status & future plan

・To realize long-term continuous electrocardiogram measurement just by wearing

・To improve detection efficiency of arrhythmia (this product is a medical device).

Notification #：13B1X0001500003513B1X00015000034

・Launch (2018)・Completed data acquisition in a clinical study

"Wearable 2-week ECG to detect atrial fibrillation” at Tsukuba Univ. (67 cases: Apr., 2020)

・Validation of clinical effectiveness (planned in Jul., 2020)

hitoe® technical pointsCreation of “conductive textiles" through by combining nanofiber and conductive polymer technologies→High adhesion and less rash on the skin→Enables long-term ECG measurement


Descriptions of predicted business results, projections, and business plans contained in this material are based on predictive forecasts of the future business environment made at the present time.

The material in this presentation is not a guarantee of the Company’s future business performance.

toray’s strategy of r & d and activities for life innovation

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