Supporting Product Safety and Quality Supporting Product Safety and Quality

Response to Product Liability

• Approach to Sustainability Target for Customer Health and Safety
• Approach to Sustainability Target for Product Service Compliance
• Approach to Sustainability Target for Product Quality

Approach to Sustainability Target for Customer Health and Safety

Modern society views product safety with even greater importance. We recognize that it is vital to continue our work to more readily respond to this societal expectation.

Approach to Sustainability Target for Product Service Compliance

Adherence to laws related to products and services is a corporate social responsibility that we believe it important to a broad array of quality management.

Securing Product Safety and Quality

Aiming to meet the high product safety standards increasingly seen as important by modern society, we adopted the Advantest Product Safety Charter in May 1995.

To achieve the above, we formulated our Product Safety Promotion Regulations and established a company-wide committee as an organization to promote advances in product safety. From May 1995 to the present, this committee has been continually active in product safety improvements.

In fiscal 2019, we commissioned external specialists to undertake inspections of the safety and durability of Advantest's 12 major products.
The results indicated that there was no need for further revision of improvement of Advantest's safety specifications.
It should be noted that, in fiscal 2019 there were no violations of the standards specified in Advantest's Product Safety Promotion Regulations.

Advantest operates a 10 m Radio Anechoic Chamber (EMC Center) that complies with the EMC Act required for the sale of products worldwide.
Europe (CE Marking) and Korea (KC Marking) in particular have strict EMC laws and regulations.
Even in America, Advantest is complying with American EMC laws and regulations (FCC) due to a risk of litigation caused by noise in the surrounding environment when operating products as well as strict customer requirements.
The EMC Center is run by staff who have acquired the ISO17025 international standards regulating the operation of test facilities, in addition to EMC engineers who have been certified under the International Association for Radio, Telecommunications and Electromagnetics (iNARTE) and use genuine products in certified in-house testing.
The facilities of the EMC center also put in place an environment that is capable of testing large industrial machinery that is only available in a few places in Japan thanks to equipment that include a turntable with an 8 meter diameter to equip with products, a 3-phase power supply able to supply a total of 48 KVA power capacity that can withstand 10 t, and equipment that can provide water cooling.

Advantest collects information about EMC laws and regulations by participating in the KEC Electronic Industry Development Center (KEC) working group and providing EMC regulatory information to the semiconductor manufacturing industry through the Semiconductor Equipment Association of Japan (SEAJ) because the Company needs to collect information about each country of origin and monitor the latest legislative trends.

Approach to Sustainability Target for Product Quality

Advantest Group Quality Policy

"Customer Satisfaction" is the fundamental basis of all our activity.

(1) Provide technology, products and services that will satisfy our customers worldwide in a timely manner.
(2) Promote quality creation, from early in the design process, and overall optimization of the process.
(3) Compliance to applicable statutes and regulations.
(4) Properly administer and implement continual improvements of the quality management system.

Quality Management System

In keeping with our product quality plan where customer satisfaction is the fundamental basis of all our activity, we have designed our quality management system to comply with the international quality assurance standard ISO9001 throughout the Company.

We have established an organization to promote the system within the company-wide framework, led by the Quality Assurance Manager under the supervision of the executive management, which maintains and improves quality systems, with the goal of raising customer satisfaction. We have also constructed our own internal audit framework, and we maintain and improve our systems through regular internal audits.

Furthermore, the entire Group (eight countries and 21 sites) is advancing system integration and has acquired the ISO9001 Global Integration Certification as of April 25, 2018 to strengthen global quality management systems.
In the future, we aim to strengthen and expand quality control while maintaining this framework.

ISO9001 global system diagram

Design Review System Aimed at Improving Quality

Customers constantly demand functionality, performance and quality in Advantest products. In response, our circuitry has become increasingly bigger 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.

• Our design review system was amended to ensure that the project leader establishes a design review plan when product development begins, so that reviews are conducted regularly.
• We changed the system so that the relevant staff and the project leader, as well as the quality assurance division, carry out monitoring to prevent follow-up omissions, by enabling the visual identification of issues raised.
• We also adopted the Design Review Meister System, which involves forming groups of in-house experts for each technical area to participate in the related design reviews. This system increases the rate of problem detection in design reviews, encourages the succession of technologies, and facilitates in-house education. Many positive results have been achieved through these activities.

For instance, the rate of defect detection during the design phase has recently improved, leading to a decrease in setbacks and fewer defects finding their way into the post process, thereby 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.

SQE Activities

We are committed to the notion that individual components underpin overall product quality, and therefore the quality of each and every component has to be exceptional. Based on that assertion, 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.

• Careful selection of components: When given the choice of multiple components with similar performance specifications, we select the best item through a process involving in-house quality analysis and evaluation.
• Quality improvement through PDCA: We apply PDCA-cycle practices from the component design phase to manufacturing to achieve improvements prior to high-volume production and thereafter.
• Ensuring that tolerances are maintained in component design: We aim for component design benchmarks determined on the basis of tolerances rather than standard specifications.

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.

Availability

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.

*1 To improve MTBF: MTBF: Mean Time Between Failure

*2 To reduce MTTR: MTTR: Mean Time To Repair

Initiatives Aimed at Improving Software Quality

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 Division. The specification sheet, a parallel product of development, is examined by the Quality Assurance Division 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.

Beginning in 2012, process improvement activity using the "Toyota development process"^*1 has been implemented with the cooperation of the R&D Division. This activity improves the level of the design review process, and high-quality design enables high-quality and high-throughput product development. These initiatives help to bring about the timely delivery of even better products.

*1 Source: The Toyota Product Development System, James M. Morgan, Jeffrey K. Liker

Basic Policy for Improving Customer Satisfaction

Customer satisfaction is the most fundamental principle underpinning Advantest's business.

(1) Provide technology, products and services that will satisfy our customers worldwide in a timely manner.
(2) Promote quality creation, from early in the design process, and overall optimization of the process.
(3) Compliance to applicable statutes and regulations.
(4) Properly administer and implement continual improvements of the quality management system.

With the above product quality policy shared throughout the Group, we strive to offer products that offer 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, via guaranteed quality, top-notch service, and support on a global scale.

Sales and Marketing Practices that Support Customer Satisfaction Gains

Markets related to semiconductors in recent years are developing semiconductor technologies to support digital innovation represented primarily by IoT, cutting-edge driver assistance system and artificial intelligence, in addition to rapid capital investment amidst circumstances that include smartphones with higher functionality and a growth in the number of units sold, evolution of electric vehicles, and an increase in investments related to data centers. Advantest also faces the important challenge of actively providing products and services quickly to respond to fluctuations in the market and the evolution of technology. In line with this, we integrated the marketing of our business units into the sales headquarters in December 2016 before integrating system solutions in June 2017. Moreover, in March 2020, we integrated the marketing and sales divisions in the sales headquarters.

By integrating the sales and marketing divisions, we are able to fully grasp market or customer demands that are directly collected by the sales divisions in a timely and accurate manner and share them with the marketing division, as well as to feed these demands back to the business units to allow for more efficient product development and provision to our customers. The integration of system solutions also establishes more robust technical support for customers.
We aim to further improve customer satisfaction through this measure.

Sales and Marketing Activities to Improve Customer Satisfaction

Scene of presentation

The semiconductor industry, which Advantest supports through its products, is an industry characterized by intense competition to develop next-generation technologies. Besides providing our customers with test solutions, Advantest also holds the annual VOICE Advantest Developer Conference, at which we share the latest technology and product information with our partner companies. The 13th VOICE Developer Conference was held in fiscal 2019 in two venues on both sides of the Pacific Ocean in May, one in Scottsdale, Arizona and the other in Singapore. In Scottsdale, we welcomed 274 participants with the cooperation of 32 sponsors, 12 of which were new companies. In the technological program, 66 papers covering topics in six different fields, including test methods and IoT, were presented.
In Singapore, we welcomed 242 participants. Papers related to technologies were presented, and the program was divided into 25 subcommittees, etc., and it was the largest international event held by Advantest.

Advantest also held technical seminars in Tokyo and Penang, Malaysia, in November 2019 and in Hsinchu, Taiwan, in January 2020, with the aim of presenting the latest information about our products and enhancing communication with customers. The seminar has been held in Tokyo for seven consecutive years. They were attended by many visitors in each country. In the future, Advantest will continue to hold events worldwide aimed at helping us to better understand customer needs and strengthen communication with customers, which in turn can help us to enhance our customer service provision.

Promoting Customer Support

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.

Basic policy for customer support

• We will propose total solutions in the form of support packages designed to deliver maximum efficiency to our customers in their device measurement operations.
• We will propose unified service support matching the customer's business model from development to the mass production environment.
• We will respond to customer demands by proposing service support packages that encompass total solutions.
• We will always take the customer's point of view and draw on our global organization in offering solutions.
• Our premium services and customer support will not only be efficient, but will also take the environment and safety into consideration.
• We will offer high-value-added professional services.
• We will strive to maintain our zero-accident record by thoroughly observing safety standards in field service provision and elsewhere.

Better Customer Support with a Global Focus

Advantest is building a global support framework capable of responding effectively to service support requests and other inquiries from customers. While responding to everyday service support requests through 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 engineers.

We place expert support teams in product development bases to carry out secondary support, allowing us to respond appropriately based on the content and difficulty of service requests.

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 engineers improve their professional skills and raises the quality of our support. This two- to three-year 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 consulting and solutions regarding productivity issues. We also offer device measurement training to our customers, and provide professional advice in that regard.

Global Support Center System

Achieved first place in the VLSIresearch Customer Satisfaction Survey

VLSIResearch: 10 BEST

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

At Advantest, we 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 VLSI Research, a company renowned for its semiconductor market research. Our company has received a score of 9.5 out of 10, which is the highest score ever granted to a test systems manufacturer, and ranked first in customer satisfaction among semiconductor production equipment manufacturers.