Production and Logistics Disruptions and Impact on Results Due to the Spread of COVID-19

「Under the current business environment, the spread of COVID-19 has subsided and the global economy is generally on a recovery trend,」

「During the first 9 months of the fiscal year under review, economic expansion was expected as the environment shifted toward economic measures designed to coexist with COVID-19. However, shortages of semiconductors and other industrial materials and higher energy resource prices resulting from the prolonged crisis in Ukraine had a negative impact on supply chains.」

「Although global automotive production was gradually recovering, this business was affected by the semiconductor shortage, lockdowns in major Chinese cities and the impact of COVID-19 in Southeast Asia, among other factors.」

「The spread of COVID-19, which had appeared to be subsiding, resumed due to the Omicron variant. Together with shortages of semiconductors and other industrial materials and China's zero-COVID policy, this disrupted supply chains and had a negative impact on production activities at our Group and our customers.」

「Depending on future infection trends, restrictions on operations at sites in various regions and logistics disruptions could affect the performance of our Group.」

「During the first 9 months of the fiscal year under review, the global economy began on a recovery trend due to the easing of infection-control measures and monetary and fiscal support, particularly in major countries, following the wider rollout of vaccinations. However, the negative impact on industries gradually became apparent due to the global semiconductor shortage and supply chain disruptions caused by the renewed spread of COVID-19.」

「During the first half of the fiscal year under review, the economy entered a recovery trend as economic activity was supported by the easing of infection-control measures and monetary and fiscal support, particularly in major countries, following the wider rollout of vaccinations. Meanwhile, the pace of recovery slowed due to the global semiconductor shortage and disruptions to parts supplies from Southeast Asia resulting from a renewed spread of COVID-19.」

「During the first quarter of the fiscal year under review, the outlook for containing COVID-19 remained uncertain, but the global economy entered a gradual recovery trend as vaccination became more widespread. Although uncertainty about the outlook remains due to concerns about a renewed spread of infection, the global semiconductor shortage and higher raw material prices,」

「During the first 9 months of the fiscal year under review, economic activity was restricted by the global spread of COVID-19, and the economic downturn continued. Although signs of recovery have emerged as countries implemented measures to prevent the spread of infection while maintaining economic activity, the outlook is expected to remain uncertain.」

「During the first half of the fiscal year under review, economic activity was restricted by the global spread of COVID-19, resulting in a rapid economic downturn. In these circumstances, countries adopted policies to prevent the spread of infection while maintaining economic activity, and signs of a gradual recovery in economic activity began to emerge. However, amid continued concerns about the spread of infection and the prolonged US-China trade friction, the outlook is expected to remain uncertain.」

「During the first quarter of the fiscal year under review, the global economy entered a period of rapid deterioration as economic activity was restricted after countries implemented infection-prevention measures in response to the global spread of COVID-19.」

「Regarding COVID-19, which has been spreading globally, the safety and health of employees and their families were prioritized, and indirect functions at all of our sites shifted to working from home. Operations in functions related to production continued after thorough infection-prevention measures were implemented. Some overseas affiliates temporarily suspended operations due to lockdowns, stay-at-home orders and other measures. Depending on how the situation develops, concerns remain that a global economic downturn resulting from production and logistics disruptions in various countries could affect the performance of our Group if market conditions deteriorate significantly.」