Risk of Concentrating Production at the Head Office Plant

「However, rapid fluctuations in semiconductor demand and geopolitical tensions may expose us to constrained production capacity at partner companies and the impact of export controls. In addition to natural disasters such as earthquakes and accidents such as fires and explosions, if a partner company becomes subject to regulation, it may become difficult to continue the contract, creating a risk of production delays or stoppages.」

「To diversify production sites, we are strengthening outsourced production by partner companies in the Kyushu region for certain product models and have also begun production at our Korean subsidiary to mitigate these effects.」

「Our group concentrates production at its head-office plant in Satosho, Asakuchi District, Okayama Prefecture. Government disaster maps do not identify the site as an area expected to suffer disaster damage. We also actively participate in local disaster prevention through donations to local authorities and work to minimize the impact of disasters. However, if a natural disaster such as an earthquake or an unforeseen accident such as a fire or explosion occurs, production may be temporarily suspended and costs may be incurred to repair the site or arrange alternative production facilities, which may affect our group’s operating results and financial position.」