Sansha Electric Manufacturing : Integrated report「SanRex REPORT2021」

SanRex REPORT

2021

2021 REPORT SanRex .LTD ,.CO .MFG ELECTRIC SANSHA

3-1-56, Nishiawaji, Higashiyodogawa-ku, Osaka, 533-0031, Japan

Phone: [phone] (main)

Fax: [phone]

https://www.sansha.co.jp/eng/

Who We are

Bringing a Brighter

Future Through

Power Electronics

Our Performance

Net sales trend

(in million yen)

	23,717	24,369	21,875 19,436
20,069
2016	2017	2018	2019	2020	(FY)

Operating profit &

ratio of operating profit to net sales

Operating profit				Profit ratio (%)
(in million yen)

		7.5%
	6.2%
1.1%	1,474	1,833	1.2%	2.1%
222			256	416
2016	2017	2018	2019	2020	(FY)

The Sansha Electric Manufacturing Group leads today's power

Return on equity (ROE)

Capital investment

electronics industry as a developer of power semiconductors for

	6.8%	(%)
5.7%

734 720

(in million yen)

power supply control and conversion and as a specialist in a broad array of industrial power supplies for various industries, from high to low electric power.

In a society that is being urged to massively increase energy efficiency and shift to low-carbon energy to reduce greenhouse gas emissions, the Group provides quality technologies as one as a unique partner helping resolve social issues.

0.7%				2.6%
			-3.5%
2016	2017	2018	2019	2020 (FY)

			641
463
				359
2016	2017	2018	2019	2020	(FY)

The Sansha Electric Manufacturing Group's Philosophy,

Mission and Vision

Corporate		Valuable Products for Society
	Profits and Prosperity for the
Philosophy
		Company

Basic Information

Established in		Share of sales by region
1933		(as of fiscal year ended March 31, 2021)
China	Asia (excl. China)

				Happiness and Stability for
	Corporate	Employees
Mission	Statement
			Leading the New
				Power Electronics
		What we
Vision		aspire to be	Global Power
				Solution Partner

Origin of the company name

Sansha is a combination of two Japanese words: "san" meaning three, and "sha," which is party. Our business was founded by three parties: the party who was to operate the business, the party who owned technologies and participated in the business, and the party

Developing a power supply for a movie projector that stabilizes the image on the movie theater screen

17.0%	9.0%
	North
	America
	3.3%
Japan	Other
69.3%	1.4%

Electricity supports the future of the Earth.

who offered capital. The business was named Sansha Denki Seisakusho, embodying our

Staff composition	Sales share by segment
(as of the end of March 2021)	(as of fiscal year ended March 31, 2021)

We will efficiently and freely change our sector to help create a clean energy society.

We will make a continuous effort to create products that are sought by society and contribute to the development of society by providing products of better quality. This is a part of the Sansha Electric Manufacturing Group's philosophy. Since before the adoption of the sustainable development goals (SDGs), we have worked to resolve social problems through our business. Commenced in April 2021, the CG23 Medium-

ambition to first develop into one of the top three companies in Japan and then into one of the top three companies in the world.

At that time, it was common to put founders' surnames into company names. However, our top priority was to express our strong determination through the term we coined, "Sansha."

SanRex is a registered trademark of Sansha Electric Manufacturing Co., Ltd.

women
455	1,381
	employees in the
	Sansha Electric
	Manufacturing
	Group

	Power
	semiconductor
	business
	5.7
	billion yen
	Power
men	supply
business
926	13.7

billion yen

Term Management Plan adopted selected eight SDGs from the 17 that are particularly closely linked with our business activities. We believe that the implementation of our philosophy, which is to seek to achieve the SDGs, will lead to the growth of our Group.

Related SDGs

The SanRex trademark is the combination of Sansha Electric Manufacturing's "San" and "Rec" from rectifier. The Sansha Electric Manufacturing Group will capitalize on the electric power conversion technologies cultivated through the development of rectifiers and endeavor to build a prosperous society.

The color red used for SanRex logotype gives the logo an active look that viewers associate with energy. It represents the enthusiasm and energy of the individual employees that work to realize the philosophy of the Sansha Electric Manufacturing Group.

Index

Who we are										01	Power supply business		21
Long-term performance							03	Corporate governance				23
SanRex products								05	The environment					31
Our unique features							07	Society			34
Message from the President				09	Financial data					39
Value creation process						15	Non-financial data				43
Medium-term management plan			17	Company outline			44
Power semiconductor business			19

01SanRex REPORT 2021

SanRex REPORT 2021 02

Long-term performance

(%)

50 The Sansha Electric

Manufacturing Group's history of growth

Since its founding in 1933, the Sansha Electric Manufacturing Group has been contributing to the development of society through the creation of products that society needs.

1990			2000	2010			2020
Ratio of			Ratio of	Ratio of			Ratio of	(100 million yen)
				400
overseas sales		overseas sales	overseas sales		overseas sales
9.4%			%	32.8%		30.7%
		18
				2009	2016
				Slovenia	China	DONGGUAN EASTERN
				ELECTRONICS CO., LTD. established
				Representative office in
		1999	2001
SANREX ASIA PACIFIC PTE. LTD.	Slovenia opened (relocated		2017
Singapore	China	to Helsinki in FY2017)		Finland	Helsinki Branch established
	established
			SANSHA			South Korea	Seoul Branch established
SANSHA ELECTRIC MFG.	1994		ELECTRIC MFG.			Taiwan	Taipei Branch established
	(SHANGHAI) CO.,
(GUANGDONG) CO., LTD.
China		LTD. established
established

Nearly four decades have passed since we launched our first overseas bases in the United States and in Hong Kong in 1983.

The Group will continue to operate with an international mindset.

25

Kunio Shikata,

Honorary Chairman

Representative Director,		SANREX LIMITED established
President and Chairman		SANREX CORPORATION established
of the Board from 1986
to 2021
No matter the changes of the era, the most significant	Trends in consolidated net sales and
social responsibility that the Sansha Electric	in the ratio of overseas net sales
Manufacturing Group has as a manufacturer is to
conduct manufacturing that is valuable to society.		Consolidated net sales (right scale)
Based on the idea that continued corporate growth		Ratio of overseas net sales (left scale)
is achieved by ensuring, through manufacturing,
customer satisfaction and profit generation, the
Group will aim to develop and to build positive
relationships with all stakeholders.

1983

Hong Kong

USA

			200
1999	2007	2008	2020
Brisk capital
Internet bubble	investment and	Financial crisis	U.S.-China trade dispute &

0

19331948 19501955196019651970197519801985

1933	1970	1971	1990
Establishing the technological foundation that continues	Increasing bases and specialization
from the foundation of the Group to the present	in the development of power semiconductors

			record-high net sales			COVID-19		0
1990	1995	2000	2005	2010	2015	2020	2023	(FY)
	1991	2010			2011	2020

Developing a system for increased globalization

Towards a new age

	1933	Sansha Electric Manufacturing founded	1982	Shiga Plant completed in Shiga Prefecture
Business	1948	Sansha Electric Manufacturing Co., Ltd. established		for the production of power supplies
1985	Okayama Plant completed in
1953	Tokyo District Office (currently Tokyo Branch) established
	Okayama Prefecture for the
1960	Headquarters Plant
		production of power semiconductors
History	Yukio Shikata,
	completed in Osaka
1970	Fukuoka Representative	founding president
Representative Director		Masao Shikata, second president
	Office (currently Kyushu	and President from the		Representative Director and President
		Sales Office) established	Group's foundation to 1972		from 1972 to 1986

1994 Shiga Plant obtains ISO 9001 certification

1996 Okayama Plant obtains ISO 9001 certification

1997 Achieves listing on the second section of the Osaka Stock Exchange

2001 Power Supply System Manufacturing Division obtains ISO 14001 certification

2002 Semiconductor Manufacturing Division obtains ISO 14001 certification

2016 SANSHA SOLUTION SERVICE CO., LTD. established in Osaka

2016 SANSHA ELECTRIC EASTERN CO., LTD. (currently SUWA SANSHA ELECTRIC CO., LTD.) established in Nagano Prefecture to commence small power supply business

2018 Chubu Sales Office established in Nagoya

2018 Hokuriku Office established in Ishikawa Prefecture

	1933	Develops a choke coil auto transformer, a predecessor to	1971	Develops an insulated triac that is the first in Japan
		projector power supplies	1980 Develops a thyristor module and a power transistor for high
	1937	Develops a tungar rectifier for		speed switching
	1982	Develops a power transistor module
Product		light projectors
		1988	Develops a power MOSFET module
Development		Tungar rectifiers for light projectors
1963	Develops and announces our first power semiconductor and thyristor
1964	Develops an inverter uninterruptible power supply and an
		electric power regulator for electric furnaces
	1968	Develops a diffusion type of triac and thyristor
	1970	Develops a rectifier for plating

1991 Develops a planner type transistor module

1993 Develops a solar power conditioner

2002 Develops a lamp power supply for digital cinema projector 2007 Develops an IGBT chip for inverter for industrial use

2014 Develops a photovoltaic power generation evaluation system for the National Institute of Advanced Industrial Science and Technology's Fukushima Renewable Energy Institute

2015 Jointly develops a compact SiC power module with Panasonic Corporation

2016 Participates in the virtual power plant (VPP) construction demonstration project

2017 Develops a fuel cell power conditioner (20 kW)

2019 Develops a 1500 V string compatible diode module for photovoltaic power generation

2020 Develops a power supply for storage battery tests

Insulated triac

Thyristor module

	Lamp power supply for		1500 V string
Solar power conditioner	digital cinema projector		Power supply for
SiC power module	compatible diode module for
			photovoltaic power generation	storage battery tests

03SanRex REPORT 2021

SanRex REPORT 2021 04

SanRex products

Products of the Sansha Electric

Manufacturing Group That

Support Society

Our Group handles electricity that is higher amperage and higher voltage than

the electricity used for everyday home electric appliances.

This is the electricity essential to the industrial sector.

Our Group's products incorporate technologies for freely transforming and

efficiently converting electricity.

Below, we showcase some of our products used across broad areas.

Power	What does "freely transforming electricity" mean?
semiconductors
The electricity generated by power plants and other facilities cannot be used as
Are devices that strictly control the electric current flow and	it is. It must be transformed.
the voltage level, including transformation from an alternating	There are roughly four different ways of transforming electricity.
current into a direct current. They are indispensable to increasing	1	Converting direct current electricity to alternating current.
efficiency of electric power and to energy conservation.	2	Converting alternating current electricity to direct current.
	3	Changing the frequency of alternative current electricity.
	4	Changing the voltage of direct current or alternating current electricity.
	The Sansha Electric Manufacturing Group uses technologies based on the
	methods for these conversions to transform and control electricity in the manner
	that is best suited to the purpose of use of the power supply to support society in
Power	many different areas.
supplies

Refer to systems for supplying the electric power necessary	What does "efficiently converting electricity" mean?
for the operation of machinery and equipment for industrial	There is always a loss of electricity every time a power conversion occurs in the
purposes. Using power semiconductors, they efficiently	process from power generation at a power plant, through transmission lines and
supply stable electric power for a wide variety of applications,	power supply circuits to the final operation of electric appliances by consumers.
including everything from high to low electric power.	To reduce this power loss, we are working to develop high performance power devices.

Energy & the environment

High efficiency power semiconductors and power supplies for the domain of renewable energy and new energy, including solar photovoltaic power generation and hydrogen energy/Power supplies for testing storage batteries, fuel cells and other technology/ Development of power supplies for plasma ash melting, seawater electrolysis and other tasks from the perspective of environmental conservation

Solar (PV) power generation	Commercial air	TV studios, halls and	Elevators
conditioners	stadiums	Diode modules
	Diode modules	Power supplies for dimmers
Power conditioner
Diode modules	Medical	Auxiliary power supplies
	for electric rolling stock
	equipment
	Diode modules
	Small embedded
Data centers
power supplies

Mobile phone base stations

Power supplies for aluminum foil processing

Infrastructure

Power semiconductors and power supplies ensuring the long-term, stable operation of social infrastructure supporting people's lives, including electric, gas and water utilities, rail transportation and physical distribution/Development of uninterruptible power supplies and other tools indispensable to business continuity plans (BCP) in the event of a disaster

Information & communication

Power supplies for surface treatments such as plating play significant roles in creating the cases, connectors and printed circuit boards for smartphones, power semiconductors for the manufacturing robots in smartphone assembly plants and uninterruptible power supplies in data centers which are equipped with and operate internet servers and data communication devices.

Uninterruptible power	ATMs
supplies	Small embedded
	power supplies
Expressways and	Railwaystations
electronic toll	Control power supplies
collection (ETC)
Uninterruptible power
supplies
Smartphones
Power supplies for
surface treatment

Movie theaters

Power supplies for lighting equipment

Welding machines

Diode modules

General industries

Power supplies for the manufacturing of copper foil used as materials for the anodes of lithium ion batteries, power supplies for surface treatments necessary in the automobile coating process and power supplies for welding, which is a leading process in metal processing, are examples of how our products have been adopted in extensive industrial domains.

Lifestyles, medical care and entertainment

Power semiconductors incorporated into home electric appliances and elevators for commercial use/Small embedded power supplies for medical equipment,

Lithium ion batteries
Power supplies for
copper foil
Automobiles
Power supplies for
surface treatment
Hydrogen
Power supplies	Home electric appliances
for hydrogen
Discrete semiconductors
generation

Robots for manufacturing

Thyristor modules

Inverters for industrial use

Diode modules

Power plants

Power supplies for seawater electrolysis

automatic teller machines (ATMs) and other devices/ Power supplies for lighting equipment are actively used in movie theaters while power supplies for dimmers tailored to the specifications of individual facilities are used in TV studios, halls, stadiums and other facilities.

New energy	Fuel cells and			Water supply and		Waste disposal plants and contaminated
storage batteries		Electric bidet toilet seats	sewage facilities
Power supplies for fuel cells	Power supplies for evaluation and		Power supplies for		substance disposal plants
	Discrete semiconductors
and storage batteries	charge-discharge products		ozone sterilizers		Power supplies for plasma ash melting

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2030:

4,472.4

billion yen

Our unique features
Four unique features of the	Sansha Electric MFG
1	Business operation in domains that	3	A large market share because of our
contribute to a sustainable society	advanced technologies and services

Since its foundation in 1933, the Sansha Electric Manufacturing Group has been conducting

its corporate activities in accordance with its management principle, "Valuable Products for Society." Today, the international community faces climate change and many other social and environmental issues and businesses are urged to take actions toward the creation of a sustainable society. We provide power

semiconductors, power supplies for storage batteries and fuel cells and other products and services to help resolve these issues.

Examples of products that help to realize a sustainable society

Fuel cell power conditioner

Feature		It includes a silicon carbide (SiC) module we developed to
		achieve conversion efficiency of 97.5% or better, one of the
		highest in the industry.

Power loss comparison with a 20-kWthree-phase

power conditioner semiconductor

	400	IGBT
Powerloss with the semiconductor(W)	300	Our SiC power
module
200
100
0

In the semiconductor thyristor and diode module market that we target, our Group has the third largest share of the global market.1 The power device market is expected to grow to a size that is 1.46 times the 2019 level by 2030.2 In the Japanese market of plating rectifier and other power supplies for surface treatment, we hold the largest market share.3

Our power supplies for surface treatment continue to be chosen by customers.

First, they have superior output stability from startup. Second, we are always ready to provide wide-ranging support to customers, including delivery, after-sales services and equipment replacement.

1 Source: Omdia, Annual Power Semiconductor Reports - 2019

2 Source: Fuji Keizai Co., Ltd., 2020 Current State and Future Outlook of Next-GenerationPower Devices & Power Electronics-RelatedMarkets

3 Estimated by Sansha Electric Manufacturing Co., Ltd. on the basis of the Japan Surface Finishing Suppliers Association: FY2019 Dynamic Statistics of Power Supply Sales

Our target markets, thyristor

and diode modules

Approx.

40

billion yen

Power module

market

570

billion yen

Outlook of global fuel	2025
cell system market	1,148.4
	2020	billion yen
2015	324.2
billion yen
106.4
billion yen

5

15

25

35

45

Inverter output power supply (A)	The 1,200V 150A
	model
	Vcc 500V
	fsw 7kHz

SiC power module

Feature • Employing a transfer mold1 package that is small and has excellent long-term reliability

• Providing enhanced long-term reliability,2 lower loss and greater compactness

1 A method of molding thermosetting resins in which materials are heated and softened

Power supplies for	Thyristor and diode module
surface treatment	semiconductors

2019

Power semiconductor

market

4,700

billion yen

MOSFET, IGBT

and IPM

569.3

billion yen

(92.9%)

Power modules

13%

Discrete semiconductors 33% ICs for power supplies 54%

Source: Fuji Keizai Co., Ltd.: 2019 Future Outlook of Fuel Cell- Related Technologies and Markets

before being pressed into a metal mold

2 Power cycle resistance that is around three times greater than our conventional models

Largest share	Third largest share
of the Japanese market	of the global market	Source: Omdia, Annual Power Semiconductor Reports - 2019

2 Integrated production and one-stop services including after-sales services

4 Growth potential in overseas markets

Our power semiconductors supporting high voltage and current are manufactured in an integrated production system including wafer processing and package assembly. Power supply devices, circuit boards and other components are manufactured in an integrated production system that includes development, design and manufacturing.

The Sansha Electric Manufacturing Group develops, designs and manufactures both power semiconductors and power

supplies. This has made us very familiar with how power semiconductors are used in power supplies. That allows us to create proposals that are highly efficient, safe, and best suited to the specific environment the customer will use them in, including peripheral circuits.

We believe that maintenance is a vital part of ensuring the safety of power supplies. We are ready to provide one-stop support including efficient installation, operation, maintenance and replacement.

Trend in share of sales of customized power supplies that can only realized with one-stop services

	Customized
	products
FY2020	Standard
products
66.3%
	FY2016
	49.5%

In 1983, we established a subsidiary, SANREX CORPORATION, in the U.S. state of New York. We then opened sales bases in Singapore in 1999 and in Shanghai, China in 2001 to expand our overseas sales operations. In 1994, we opened a base manufacturing power supplies in Guangdong Province in China to push ahead with local production for local consumption in China. To continue our overseas expansion, we set up branches in Helsinki, Finland, Seoul, South Korea and Taipei, Taiwan in 2017.

		Target ratio of
Ratio of overseas sales	overseas sales
50%
SUWA SANSHA ELECTRIC CO., LTD. is excluded because
all of its sales are in Japan.
	40.9%
	36.5%
	32.4%	39.5% 38.8%
	39.4%
28.2%	30.6%

Process flow of customized products		Proposals and after-sales
			services to customers
Receipt	Development	Production	Delivery	Inspection	Replacement
and trial	and
of order	Design	work
	operation	overhaul

We are planning to expand our business globally with the medium- to long-term target of increasing the ratio of overseas sales from around 40% to 50% or more.

2013

2014

2015

2016

2017

2018

2019

2020

(FY)

Sansha Electric Manufacturing Co., Ltd.	Collaboration	Sansha Solution Service Co., Ltd.

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