Efforts to provide value through business

Customers constantly require functionality, performance, and quality in Advantest products. In response, our circuitry has become increasingly larger and complex. Meanwhile, we are also responding to demands for shorter development lead times, a challenge we feel is best addressed by instilling quality at the upstream design phase so that we can detect potential issues early on. Accordingly, we introduced a new design review system in 2008 as a framework for achieving these goals.

For instance, the rate of defect detection during the design phase has recently improved, leading to a decrease in setbacks and minimizing development delays. The new design review system has resulted in improvements in design quality and a reduction in development lead times. However, it has also revealed some cases in which problems that should have been detected by the designer ultimately found their way into the design review or the post process.

Advantest regularly collects analysis and feedback on issues that have gone undetected and makes improvements to the review framework as necessary. Moreover, going forward we will implement further improvements to the design process involving thorough checking prior to design reviews to achieve better design quality.

We are committed to the belief that individual components underpin overall product quality, and therefore the quality of each and every component has to be exceptional. Based on this belief, the Advantest Group engages in SQE (Supplier Quality Engineering) initiatives beginning at the component adoption phase, drawing on the support of our supplier network. SQE initiatives are undertaken with the aim of enlisting a team of experts to bring about improvements to component quality. Accordingly, it is critical that we engage in practices to ensure component quality, particularly given that the number of parts used in our products is roughly equivalent to the 200,000 to 3,000,000 parts that make up an aircraft.

Our SQE initiatives involve the following three practices.

In this way, by running SQE activities from the product development stage, we can reduce problems with components in the manufacturing process and the risk of component problems reaching the marketplace, which contributes to greatly reducing the risk of losses. The results of this approach can be seen in the smooth running of our end users' processes and in the increased security that our clients enjoy when using our products.
In addition, by decreasing the number of rejected parts, we decrease the need for their exchange and disposal, and thus contribute to reducing the environmental impact.

Advantest is committed to helping its customers achieve higher levels of productivity by offering them products that guarantee high availability – meaning that they are unlikely to malfunction, and will recover immediately should failure occur. More specifically, availability refers to the ratio of time that a system is operational over a given time, and as such constitutes one of the benchmarks of product integrity. The Advantest Group delivers high availability by working hard to improve MTBF*1 so that systems will operate without malfunction over longer duration of use, while also reducing MTTR*2 so that systems will be more readily serviceable when a malfunction does occur.

Advantest continues to implement initiatives aimed at improving software quality. Software for test systems, handlers and other such systems shipped by Advantest first goes through a process that involves quality verification by the Quality Assurance Group. The specification sheet, a parallel product of development, is examined by the Quality Assurance Group in real time and feedback is given, which helps to ensure quality at upstream stages of development. The examination is implemented before development is completed, and after it has been confirmed that quality standards have been met, products are shipped.

Advantest promotes the incorporation of Automotive SPICE*1 into the development process in order to ensure the quality of embedded automotive software. In 2021, we obtained Automotive SPICE Level 1 certification for the V93000 system software SmarTest. We are also working to obtain Automotive SPICE Level 2 certification for T2000 system software. These initiatives help to bring about the timely delivery of even better products.

To improve customer satisfaction, we strive to develop and manufacture products that satisfy customers’ needs, keeping abreast of market trends. In order to develop products that exceed customer expectation, we conduct appropriate design reviews in the process of product development including various departments; not only Manufacturing Division and Quality Assurance Division but also Sales Group, Field Service Group, Marketing Division, and other related departments who directly communicate with our customers. We will continue to serve our customers by quickly responding to customer needs as our customers deal with the ever-changing markets and the development of competitive next-generation technologies.

By sharing the above product quality policy throughout the Group, we strive to offer products that provide not only superior performance but also superior environmental friendliness and safety. We are committed to keeping our customers satisfied at every stage, from design and manufacturing to sales and service, by providing an ever higher level of guaranteed quality, top-notch service, and support on a global scale.

In the semiconductor market, where technology continues to evolve, our customers consistently take on the challenges of addressing environmental and social issues. Advantest believes that a proactive and speedy provision of comprehensive solutions is crucial in increasing customer value while our customers keep striving ahead for new challenges. As part of our efforts to increase customer value, we have been improving sales and marketing organizational structure. Advantest integrated marketing function of our business units, which was responsible for product strategy and new product planning, into our sales headquarters in December 2016 and we also integrated system solutions department, which provided semiconductor test system support, in June 2017. The integration of marketing department into the sales headquarters has enabled sales units to provide timely feedback to the marketing units on needs gathered through communication with customers, enabling more efficient development and delivery of products to customers. In addition, the integration of system solutions into the sales headquarters has also helped us to provide prompt technical support for our customers.

Furthermore, the sales and marketing units within the sales headquarters were integrated in March 2020 to create a system that can more speedily and accurately reflect customer needs in product development. We aim to further improve customer satisfaction by taking measures in response to changing market and customer needs.

Not only do we provide test solutions, but also keep our customers up-to-date on the latest technology and product information related to the market so as to stay committed in supporting our customers' technical innovations. Due to the impact of COVID-19, we held our conventional face-to-face exhibitions and customer events online; however, beginning in 2022, we are resuming in-person events while taking vigilant measures to prevent the spread of infection. In May 2023, we successfully held the VOICE - Advantest Developer Conference in Santa Clara, California, USA. VOICE is run by a committee made up of Advantest and voluntary customers, serving as an international community where users and strategic partners related to our product portfolio gather and grow together, and celebrated its 15th anniversary this year. The conference is also a place for participants to deepen their insights and build lasting relationships by discussing the efficiency and productivity of semiconductor testing and learning about the latest technology trends and applications.

The Advantest Group has established its basic policy for customer support with the aim of realizing the globally-oriented restructuring of the Group's service businesses.
Our basic policy is outlined as follows.

Advantest is building a global support framework capable of responding effectively to a variety of customer support requests and inquiries from customers. While responding to routine inquires through customer contact centers in each country, as well as by telephone and e-mail, we are also implementing primary support consisting of technical service and onsite repairs by field service engineers.

We place expert global support teams in product development bases to carry out secondary support, allowing us to respond appropriately based on the content and degrees of difficulty of customer support. This way, we are working to improve customer satisfaction while building relationships of trust with customers through a system that can provide high-quality services.

We have developed a global supply-chain network covering customer operations ranging from their development bases to mass production facilities. Moreover, we also operate a supply-chain control mechanism through which replacement equipment and parts at service centers in each country are monitored to determine inventory needs at respective locations worldwide.

We continue to run an engineer exchange program between overseas subsidiaries and our secondary support division, which helps field service engineers improve their professional skills and raises the quality of our support. This two- to three-year human resource development program aims to sharpen engineers' technical skills, develop cross-cultural competencies, and raise foreign language and communication proficiencies.

In the mass production facilities of customers, we offer on-request expert engineering consulting and solutions regarding productivity issues and issues related to apparent expectations. We aim to increase customer value through collaborative creation with our customers for issues related to latent expectations that customers themselves are unaware of, by incorporating methods such as ethnography and service science to explore the issues.

Advantest is actively involved in 3R initiatives for our product through Advantest Pre-Owned Solutions Corporation, our subsidiary.

When customers no longer use our products, we purchase them instead of simply disposing them, ultimately contributing to "reduce". We promote the "reuse" of our products by reselling the equipment we purchase to other customers who have been using them for a long time, or by providing them with parts.

If there is no demand for the equipment or parts, we sort the equipment we take back to the resource levels and "recycle" them.

We have defined our approach to the used products as “remarketing" and are committed to working together with our customers to solve their issues by providing a single point of contact and integrated services.

Advantest aims to grasp customer needs accurately and strives to provide customers with high-performance, high-quality total test solutions in a timely manner.

We make efforts to gain a better understanding of our customers' needs through information that we acquire from our daily business activities, and also through yearly participation in the customer satisfaction survey conducted by TechInsights, a company renowned for its semiconductor market research.

In the 2024 Customer Satisfaction Survey, Advantest captured the No.1 spot of global semiconductor companies for the fifth consecutive year. The company has also been named on the 10 BEST Suppliers list of large suppliers of test equipment for the 36th consecutive year. Advantest achieved high customer ratings in the areas of Partnering, Recommended Supplier, Trust in Supplier, Technical Leadership, Commitment, Support After Sales, and Product Performance and was the only ATE supplier to receive a five-star rating again this year.

With the aim of "enabling leading-edge technologies," Advantest conducts research and development of fundamental technologies and products that will lead to greater value creation in the area of measurement technologies that support the semiconductor industry, the electronics industry, and the information and telecommunications industry. The results of these R&D activities contribute to the evolution of the semiconductor value chain on which our business is based on. In addition, we contribute to the realization of a safe, secure, and comfortable society by promoting the widespread use and social implementation of semiconductors with high performance and economic efficiency. Since R&D activities are a direct source of not only our own growth, but also of expanding our contribution to society, we have positioned R&D as an area of investment of utmost importance, and have invested a large amount of capital over the long term.

We wish to continue to be a company that provides high-value, world-class, state-of-the-art semiconductor test technology to all of our semiconductor customers. Our customers include many of the world's technology leaders, including the world's leading semiconductor manufacturers and IT companies, and their future success leads to the success of Advantest. On the other hand, in order to continue to create products and solutions that meet the high expectations of these customers, we must overcome a number of technological hurdles, which requires long-term, sustained, large-scale R&D management with a timeframe of 5 to 10 years. Our R&D management is based on a medium- to long-term roadmap, which is formulated based on the future technology needs and investment forecasts gathered through close communication with our customers, as well as market research on future technology trends and demand forecasts in the semiconductor-related market.

We are also engaged in developing new measurement solutions for medical devices and other applications outside the semiconductor value chain that leverage our electronic and optical measurement technologies.

At Advantest, all products undergo a product environmental assessment. In addition, we are committed to incorporating the improvement of environmental performance, such as power consumption efficiency, into our R&D process for new products, in view of contributing to a decarbonized society. Our contribution to the realization of a sustainable society is therefore integrated with our business activities.

Advantest aims to contribute not only to semiconductor testing but also to the entire semiconductor value chain by promoting innovation through industry-academia collaborations and other external collaborations, as well as through human capital development initiatives.

In addition to the above, we have established "The Advantest D2T Research Division" at the Tokyo University Systems Design Lab (d.lab), with the aim of developing specialist in test design and supporting research activities for SoC (System on Chip) design.

Together with the University of Tokyo, Advantest has begun working on research and development of new, advanced system technologies from April 1, 2023 in the Research Association for Advanced System (abbreviated as RaaS, hereafter referred to as RaaS*1)" (Chairperson: Professor Tadahiro Kuroda, Director of the System Design Lab (d.lab) of the Graduate School of Engineering, the University of Tokyo). The six members of the cooperative, the University of Tokyo, Advantest, Toppan Inc., Hitachi Ltd., Mirise Technologies Corporation, and Japan’s RIKEN Scientific Research Institute, will work together to do R&D on a next-generation leading-edge semiconductor development platform that can be shared among the members.

The basic principles of Advantest's intellectual property management are compliance with intellectual property laws and regulations and respect for the intellectual property of third parties.

Advantest has established the following intellectual property management systems, and carries out appropriate intellectual property management in cooperation with business units in Japan, Germany and the U.S., which are our main development bases, Advantest Laboratory, and affiliates in each country.

The Intellectual Property Department conducts online meetings as necessary with intellectual property managers in Germany, the U.S., Singapore and China, and holds IP Strategic meetings twice a year with the IP Strategic Committee members to promote intellectual property activities in accordance with business unit, research and management plans.

The Patent Remuneration Committee consists of members in Japan, Germany and the U.S., and the members meet together to determine the Business Contribution Awards and the Prizes for Excellent Invention Awards every year.

The IP Strategic Committee is selected from among the various business units, laboratories and subsidiaries in Japan, Germany and the U.S., and formulates IP strategies linked to the business strategies.

The strength of Advantest is our state-of-the-art technological capabilities. Therefore, we believe protecting our intellectual property as the source of our competitiveness vital to persist as an enterprise. In recent years, Advantest has been working to protect and manage our intellectual property, as well as to leverage our and other companies' intellectual properties. For instance, Advantest promotes an IP landscape and provides information on intellectual property to the management and each business unit.

Advantest conducts education on intellectual property every year and strives to raise each employees' awareness of intellectual property.
In fiscal 2023, we conducted a two-day training, including a series of hands-on training, for new technical employees and mid-career employees to acquire knowledge on intellectual property necessary for engineers. In addition, as part of the Global Compliance Education Program launched in fiscal 2023, we provided intellectual property training on our ethical standards, stipulated under "14. Protection of Assets and Confidentiality" of The Advantest Way, for all employees of the Advantest Group via e-Learning.
As part of our Efforts Toward Social Contribution, we held classes and workshops for elementary school students to promote IP creation education. Please refer to "Community Activities" for details.

With over 30 years of experience, Advantest has held annual technical conferences (in-house presentations and commemorative lectures).
In fiscal 2023, in addition to the conventional in-house presentations, we established an "Empathy Day" as a one-day pilot event to promote active interaction between engineers and non-engineers. The event imparted to us a viewpoint of Inclusion and Diversity where the audience participants and speakers were able to feel involved with technology.
These means of interaction faced many challenges in achieving its success, however, they contributed to the understanding of diverse perceptions. We hope to establish this event as a formal event in addition to the technical conferences in the future.

As of March 31, 2024 there were no such disputes.

Cooperative relations with our business partners are the foundation of all our businesses. We value communication with our business partners, and maintain fair business dealings with them based on related laws and regulations.