Concentration Risk Involving Certain Semiconductor Manufacturers and the Taiwan and China Region

「In addition, our Group's sales are necessarily concentrated in Taiwan, where major OSATs are located, and China, which is promoting domestic semiconductor production. Accordingly, changes in the economic and political conditions in these regions and in the external economic policies of the governments concerned may affect our Group's orders and sales.」

「In the semiconductor manufacturing equipment business, sales to Taiwan and China increased against a backdrop of higher investment in general-purpose memory, while sales of singulation equipment rose substantially. As a result, net sales increased to ¥49.870 billion, up ¥911 million, or 1.9%, from the previous consolidated fiscal year.」

「In addition, our Group's sales are necessarily concentrated in Taiwan, where major OSATs are located, and China, which is promoting domestic semiconductor production.」

「Net sales increased year on year, supported by continued investment in China toward semiconductor in-house production and steady deliveries of equipment for generative AI-related applications in South Korea.」

「In addition, although orders and sales in China were showing signs of recovery as investment toward semiconductor in-house production reaccelerated, investment in consumer products remained sluggish, particularly in Taiwan. As a result, net sales were ¥28,651 million, a decrease of ¥8,283 million year on year, or 22.4%.」

「Operating results in the semiconductor manufacturing equipment business were strong in Southeast Asia, where capital investment in semiconductor-related equipment continued amid rising demand for automotive and power semiconductors and geopolitical risks, while sales in China and Taiwan were sluggish because of lower investment in consumer products,」

「Operating results in the semiconductor manufacturing equipment business were affected by requests from certain customers to postpone delivery of molding equipment in response to deteriorating semiconductor market conditions, delays in the completion of customer factories due to parts shortages caused by the COVID-19 pandemic, and delays in equipment installation caused by logistics disruptions. Although sales to China and Taiwan declined, sales of molding equipment and molds for automotive and power semiconductors in Southeast Asia remained strong, resulting in net sales of ¥36,935 million, an increase of ¥1,641 million year on year, or 4.7%.」

「Operating results in the semiconductor manufacturing equipment business benefited from continued strong sales of semiconductor molding equipment, molds and singulation equipment in China, as well as higher sales in Taiwan and other parts of Asia. Net sales were ¥35,293 million, an increase of ¥17,012 million year on year, or 93.1%.」

「Operating results in the semiconductor manufacturing equipment business were supported by increased investment in China toward semiconductor in-house production and investment in Taiwan and other regions to expand production capacity, resulting in higher sales of molding equipment and molds. Net sales were ¥10,946 million, an increase of ¥5,930 million year on year, or 2.2 times the prior-year level.」

「In the semiconductor manufacturing equipment business, sales of molding equipment and molds increased substantially in China, where investment in semiconductor in-house production continued, while sales of singulation equipment grew significantly, mainly for 5G-related products such as smartphones. As a result, net sales were ¥26.536 billion, up ¥4.632 billion, or 21.1%, from the previous consolidated fiscal year.」

「In the semiconductor manufacturing equipment business, sales increased to China, where investment continued as the country promoted semiconductor in-house production, and to Taiwan, where active investment continued on the back of growing demand for a broad range of products, including 5G-related products, notebook PCs, game consoles and home appliances.」

「Sales remained solid because Taiwan-based OSATs, which had been taking a wait-and-see approach to capital investment since the fourth quarter of the previous fiscal year, resumed investment as demand related to 5G expanded, while strong investment in China continued, driven in part by efforts to develop domestic semiconductor production.」

「The performance of the semiconductor manufacturing equipment business reflected caution toward capital investment, particularly among customers in Taiwan, against a backdrop of concerns about the spread of COVID-19 and increased uncertainty over the outlook due to the US-China trade war. Meanwhile, strong investment in China aimed at developing domestic semiconductor production continued, and capital investment in China remained solid.」

「In addition, our group has a high proportion of sales in Taiwan and China, and changes in economic conditions and political circumstances in those regions could affect our group’s financial results.」

「The market environment has deteriorated substantially as the smartphones, memory and Chinese market segments that had driven the market slowed simultaneously, with capital investment in China plunging partly because of the impact of the US-China trade war.」

「Although orders and sales to overseas customers, mainly in Asian regions such as China and Taiwan, showed signs of slowing, the company continued to actively pursue its sales strategy for overseas customer regions, resulting in longer collection periods for trade receivables from China.」

「Depending on the capital investment trends of individual semiconductor manufacturers, the value of transactions with a particular semiconductor manufacturer may become substantial, temporarily causing a significant increase in trade receivables and other amounts due from that manufacturer. In addition, our group has a high proportion of sales in Taiwan and China, and changes in economic conditions and political circumstances in those regions could have a significant impact on our group’s financial results.」