Compensation and Reputational Damage Caused by Product Defects and Quality Issues

「Across the Group, an internal investigation into improper quality compliance practices was conducted from January 2024 and completed in August 2025. … No cases subject to administrative action or involving certification revocation were identified among the matters uncovered.」

「Across the Group, a thorough internal investigation into improper quality compliance practices was conducted from January 2024 and completed in August 2025. … No cases subject to administrative action or involving certification revocation, such as those identified at Panasonic Industry Co., Ltd. (hereinafter, “PID”), were identified among the matters uncovered. … The ISO 9001 and IATF 16949 certifications temporarily suspended in connection with the matters investigated were both reinstated during the current fiscal year.」

「At PID, it was discovered in the previous fiscal year that multiple improper acts had been committed in connection with UL Solutions certification registration and other procedures for electronic materials products manufactured and sold by PID. … The investigation report and PID’s measures to prevent recurrence were published. In connection with the matters covered by the investigation, additional UL certifications for certain products were revoked effective 31 December 2024.」

「The report identified multiple issues, including quality-related misconduct in divisions other than the Electronic Materials Division, and made recommendations for preventing recurrence based on an analysis of the causes. PID will continue company-wide inspection activities and will take appropriate action if any problems are identified.」

「Meanwhile, it was discovered that the Electronic Materials Division of Panasonic Industry Co., Ltd., a subsidiary of the company, had engaged in multiple improper acts in connection with the certification registration and other procedures of UL Solutions, a US-based independent safety science organization, for 153 product numbers of molding compounds, encapsulants, and electronic circuit board materials manufactured and sold by the division. … UL certifications for certain products were revoked effective 31 May 2024.」

「It was discovered that the Electronic Materials Division of Panasonic Industry Co., Ltd., a subsidiary of the company (hereinafter, “PID”), had engaged in multiple improper acts in connection with the certification registration and other procedures of UL Solutions (hereinafter, “UL”), a US-based independent safety science organization, for 52 product numbers of molding compounds, encapsulants, and electronic circuit board materials manufactured and sold by the division. In response, PID established an external investigation committee comprising outside experts on 12 January 2024 to investigate the UL violations and whether other quality-related misconduct had occurred, analyze the causes based on the investigation findings, and recommend measures to prevent recurrence. PID also received notice from LRQA Limited, a registered certification body for ISO (the International Organization for Standardization) and IATF 16949, that the ISO 9001 and IATF 16949 certifications of the Koriyama, Koriyama West, Yokkaichi, and Minami-Yokkaichi factories would be temporarily suspended effective 2 February 2024.」

「Although rationalization and pricing initiatives were progressing, operating profit declined year on year to ¥60.6 billion, down 18% from the same period of the previous year, due to higher fixed costs for increased production and strategic expenses, as well as additional quality-related costs.」

「“Other income (expenses)” for the current consolidated fiscal year included ¥28,304 million in quality-related response costs and market-response costs …」

「“Other income (expenses)” for the current consolidated fiscal year included ¥18,127 million in quality-related response costs and market-response costs, ¥6,566 million in losses on the disposal and sale of property, plant and equipment, ¥5,694 million in restructuring costs, ¥13,401 million in gains on the sale of property, plant and equipment, and ¥11,377 million in gains resulting from the settlement of defined-benefit pension plans at certain subsidiaries.」

「“Other income (expenses)” for the cumulative third quarter and the third quarter of the current consolidated fiscal year included ¥16,501 million and ¥11,267 million, respectively, in quality-related response costs and market-response costs.」

「If a quality problem, such as an unsafe incident, arises from a product defect, the Group may incur liability for damages attributable to the defect, including consequential damages, that is not fully covered by product liability insurance, as well as substantial costs for remedial measures.」