Medium-Term Management Plan artience 2027|Integrated Report 2025 Technology and Intellectual Property Strategy: Maximize the use of resources within and outside the Group to open up new markets

The Group's strength lies in the fact that it has developed a variety of businesses by refining numerous applied technologies based on its core technologies such as small molecule and colorant design, polymer design, dispersion, and coatings that it has cultivated over many years. Even though each of them is small, we are building a technology platform that flexibly combines multiple technologies and products to provide optimal solutions to our customers.

In the short to medium term, we will develop themes that are just outside of existing technologies as "seeping areas" and deliver products that capture market needs with a high degree of accuracy. On the other hand, it is also extremely important to explore new areas from a longer-term perspective and take on the challenge of the next innovation. Through these actions, we aim to evolve our platform and create new value.

The semiconductor field is an area that we are focusing on as one of our strategic priority businesses. Especially now, the demand for data centers is increasing rapidly with the spread of generative AI. Our semiconductor polymers are beginning to be used as low-dielectric base resins, and we aim to further expand in this growing market. There is also an increasing adoption of insulating materials for electronic devices. While deepening the relationship of trust with our customers, we will strengthen horizontal expansion into smartphones and other products that are expected to increase in volume in the future.

In the battery field, we continue to focus on CNT dispersions for lithium-ion batteries and accelerate our support for solid-state batteries, which are expected to be in the future. We have already received inquiries from the pilot stage, and we believe that it is important to establish a position in the market by entering the market as soon as possible before the practical application of solid-state batteries.

In addition, we will focus on the field of HAI (Human-Agent Interaction) as a next-generation market. AI is not only a tool for calculation and reasoning, but also a technology that deepens relationships with humans and understands emotions and intentions. In this area Japan we are conducting joint research with the Faculty of Humanities and Sciences of the University of Japan, and in FY2024, we announced the HAI experiential content "Tomonigo ™". Humans and AI agents complement each other and explore the possibility of a future where they can spend time together.

Compliance with environmental regulations is also essential. In addition to using single, biomass materials that are easy to recycle and developing solvent-free products, we are also working on the development of new curing systems for LED-UV-curable inks. LED-UV-curable inks is particularly regulated in Europe because of the substances produced during curing that can have an impact on the environment and health. We aim to create safe and secure LED-UV-curable inks that satisfies this problem from a different mechanism and bring it to market.

We are also strengthening the use of generative AI. The "Generative AI Utilization Promotion Task Force," which was newly established in FY2025, is trying to train generative AI to learn experimental research data from the past 30 years and use it in conjunction with published papers and patent information. We will build a system that can present the best ideas and solutions in response to questions, and enable the person in charge to solve problems that he or she has previously faced alone by using all kinds of internal and external knowledge.

In addition, in our intellectual property activities, we have been automating patent searches and application document preparation using generative AI. In the past, we have applied for a large number of detailed patents to protect our technology, but in the future, we will identify patent blank zones based on the movements of our competitors and strategically acquire patents that will serve as a sales weapon.

Based on the basic premise that the development of new technologies is based on many failures, the Group R&D Division has adopted a system called "20% free exploration activities." Members are free to devote 20% of their time to topics based on their interests. Failure is not a problem in this activity, and if results are achieved, they will be evaluated appropriately. In fiscal 2025, we will also establish the R&D Challenge Award, which rewards employees and teams for their spirit of challenge.

In addition, as there are many employees in technical development who want to pursue expertise throughout their long careers, we have introduced a new "specialist system." By providing the same treatment as managerial positions, we aim to develop excellent engineers who will be widely recognized in the industry.

As we continue to increase our competitiveness in the market, the importance of "value that resonates with the senses" continues to increase. Can you provide a product that moves the hearts of end users and creates surprise and excitement? Is it possible to make technical proposals that exceed the expectations of customers with whom we interact on a daily basis and make them feel excited? And can the employees who are in charge of technology development themselves be excited about their work? It is only when you devote yourself to what you want to do, not just as a job, that you will be able to achieve results beyond your imagination. We want engineers to spread the technology they have developed to the world and experience a sense of accomplishment that changes their lives. As a result, we will continue to aim to create a virtuous cycle of further business expansion and corporate growth.

Structure of technology development that will lead to next-generation business development