Supply Chain Supply-Stoppage and ESG Response Risks

「In addition, the business environment is undergoing significant changes, including environmental changes such as the large-scale natural disasters caused by climate change that have occurred frequently in recent years, rising personnel and logistics costs against a backdrop of worsening labor shortages, the need to respond to technological innovation including generative AI, and initiatives to achieve a decarbonized society.」

「In particular, tight supplies and rising prices for materials against the backdrop of recently growing AI demand could affect product costs and supply stability.」

「With regard to procuring parts, our Group is working closely with suppliers to secure a stable supply, while continuously checking the production status of materials during the design stage and implementing measures appropriate to the level of risk, including a policy of responding through design changes. In parallel, we are increasing parts inventories in preparation for emergencies and working to secure substitutes, including considering procurement from products available on the market.」

「The domestic economy remained uncertain, owing to factors including the emergence of new variants and continuing supply chain disruptions caused by supply constraints affecting semiconductors and electronic components.」

「Amid a global semiconductor shortage, we focused on procuring materials and achieved stable supply, resulting in a further increase in sales as customers shifted from other manufacturers.」

「If a deterioration in a supplier’s management condition due to deficiencies in its management practices causes the supply of parts or other items to be suspended, and this leads to a suspension of product supplies, it could affect the Group’s operating results and financial condition. In addition, society is demanding a higher level of response across the supply chain from an ESG perspective, including consideration for the environment.」