Risk of supply disruptions from outsourced production under a fabless model
First written in FY2020. 8 of 15 entries say "Materialised", first in FY2023. Latest entry: 2026-10-20.
The whole theme swung hardest in 2024: 10 of 32 companies on the "Worse" side.
16 other companies' latest entry also says "Mitigated".
- FY2027-H1MitigatedAnnual report
「During the first quarter of the current consolidated fiscal year (1 March 2026 to 31 May 2026), production could not keep pace with increased demand for certain products as new-customer acquisition expanded rapidly, resulting in approximately ¥286 million of “back orders,” meaning orders received but not yet shipped. By the end of the current interim consolidated accounting period, the back-order balance had been substantially cleared to approximately ¥31 million, and it was fully cleared in September 2026.」
Insufficient supply capacity, including outsourced production, materialised as approximately ¥286 million in back orders, but the balance had fallen to approximately ¥31 million by the end of the interim period and was fully cleared in September 2026. - FY2025-Q1MaterialisedAnnual report
「In response to a surge in orders caused by strong promotional activity for some products and the resulting inability of production to keep pace, the company is accepting advance orders.」
The supply-capacity risk associated with outsourced production resurfaced as advance orders were accepted because production could not keep pace with the surge in orders. - FY2024-Q2MitigatedAnnual report
「Although delivery and shipment of the renewed device described above took place in the second quarter of the current fiscal year, the company accepted orders as advance sales during the first quarter to avoid lost sales opportunities.」
The renewed SPADE device was delivered and shipped during the second quarter, and the company made progress in addressing the delivery delays that occurred in the previous quarter. - FY2024-Q1MaterialisedAnnual report
「Delivery of the device and shipment to customers were initially scheduled for May 2023, but were postponed until June 2023 or later.」
Delivery and shipment of SPADE's new device were postponed from the original schedule, newly highlighting the supply and shipping risk of advertising expenses being recognized ahead of revenue. - FY2023MaterialisedAnnual report
「Orders surged following strong promotional activity for some products, and manufacturing could not keep pace. Although the orders had already been accepted, customers were facing waits of several months before shipment.」
The supply-capacity risk associated with outsourced production resurfaced as a delay in shipments because production could not keep pace with the surge in orders. - FY2021MitigatedAnnual report
「As measures to address these risks, the company selects the optimal outsourcing partner for each product and works to reduce risk through preliminary investigations of partners' production capacity and production-control systems, ongoing information exchange, factory audits and securing a second factory for each partner, among other measures.」
The company specified measures to address the risks of outsourced production under its fabless model, including preliminary investigations of outsourcing partners, factory audits and securing second factories. - FY2020First statedAnnual report
「To focus on product planning, development and sales, the company has adopted a fabless business model under which all production is outsourced. Accordingly, if production lines at an outsourced factory are disrupted by technical or regulatory issues, deteriorating business conditions, a serious accident, a natural disaster or domestic conditions, the company may be unable to secure sufficient production capacity, which could affect its business performance.」
The company explicitly disclosed its fabless structure, under which all production is outsourced, as well as the new risk of insufficient production capacity at outsourced factories due to technical, regulatory, management, accident, disaster and other factors.