Risk from fluctuations in capital investment and price competition

「The business environment surrounding the Group saw expanding demand for capital investment, particularly in the AI and data-center-related fields, marking a phase of demand growth.」

「The business environment surrounding the Group saw expanding demand for capital investment, particularly in the AI and data-center-related fields, marking a phase of demand growth.」

「The group's orders and order prices are significantly affected by trade regulations, changes in tariffs, pandemics caused by contagious or infectious diseases, changes in economic conditions, trends in private-sector capital spending and infrastructure development. A global economic recession or contraction in demand could affect the group's orders and order prices.」

「During the consolidated accounting year, the global economy remained uncertain, with concerns over inflation caused by higher crude oil prices and impacts on supply chains, in addition to rising geopolitical risks, including those in the Middle East.」

「In Japan, real wages continued to decline due to rising prices and persistently high energy prices, while companies also showed a cautious stance toward private-sector capital spending, which supports growth in the company's business.」

「As a result, private-sector capital spending, which is closely related to the growth of the company's business, remained in difficult conditions as investment in production activity became increasingly cautious throughout the year.」

「Capital spending also showed no signs of activity, and the difficult business environment continued.」

「The group's products face competition from other companies in Japan and overseas. The group is investing continuously in development and working to further improve quality, including durability and reliability, while also increasing local procurement of raw materials, reducing production costs and strengthening maintenance service capabilities to differentiate itself from competitors. However, an unexpectedly sharp increase in price competition could lower selling prices and affect performance.」

「Although orders remained solid in both the semiconductor and power equipment businesses, procurement conditions for raw materials remained unimproved, while higher material and energy prices and transportation costs put pressure on earnings.」

「In recent years, the group's products have faced intense competition due to the rise of Chinese products.」

「The recovery in manufacturing-sector capital spending supported strong demand related to machine tools, while demand for automobiles, semiconductors and electronic components expanded significantly. However, raw material supply shortages emerged, and production delays became apparent.」

「The business environment surrounding the group's operations benefited from a recovery in manufacturing-sector capital spending, with demand related to machine tools remaining strong and demand for automobiles, semiconductors and electronic components expanding significantly. However, raw material prices rose and supply shortages emerged, and uncertainty about the outlook continued.」

「Although economic activity remained subject to restrictions due to COVID-19, manufacturing-sector capital spending had turned toward recovery compared with the same period of the previous year, with machine tool orders exceeding the previous year's level for 8 consecutive months. Improvement was particularly pronounced in power semiconductors, in both industrial and consumer applications.」

「Although demand recovered in some regions, industries and applications in the second half of the year, the postponement and suspension of capital spending by business partners, particularly in the first half of the year, had a significant impact.」

「Capital spending by the manufacturing sector, which affects the group's business, was postponed or suspended as corporate activity stagnated due to the effects of COVID-19. Although some industries remained firm, demand generally continued to slow.」

「Capital spending by the manufacturing sector, which affects the group's business, was being postponed or suspended due to the slowdown in overseas economies and uncertainty about the outlook resulting from the effects of COVID-19, and a broad-based slowdown in demand became pronounced.」

「Many business partners postponed or suspended capital spending, partly due to the spread of COVID-19, and the decline in revenue during the nine months ended the first quarter became even larger. As a result, revenue was ¥2,830 million, down 34.1% year on year.」

「Capital spending by the manufacturing sector, which affects the business of the group, remained on a downward trend throughout the year, with orders for machine tools continuing to decline.」

「Capital spending by the manufacturing sector, which affects the company's business, showed a clear downward trend, as orders for machine tools continued to decline.」

「In Japan, corporate performance showed signs of slowing, while a decline in capital spending by the manufacturing sector, which particularly affects the company's business, became apparent.」

「In this business, inventory adjustments by machine tool manufacturers became pronounced due to the effects of the US-China trade tensions. Modules for FA equipment, which had driven performance in the previous fiscal year, declined significantly, while modules for commercial air conditioners, which had performed well in the previous fiscal year, also declined as customers increasingly switched to lower-priced Chinese products.」

「During the nine months ended the third quarter, the effects of the US-China trade tensions became apparent, concerns emerged over weaker corporate performance in Japan and overseas and a slowdown in private-sector capital spending, and uncertainty about the outlook increased.」

「Power supplies for metal surface treatment declined in revenue due to restrained capital spending related to smartphones. However, power supplies for copper foil production, power supplies for etching aluminum foil for electrolytic capacitors, and various compact embedded power supplies remained firm. As a result, revenue was ¥4,160 million, up 12.4% year on year, while segment profit was ¥351 million, up 349.0% year on year, reflecting higher revenue and improved profitability, including increased productivity at the Chinese manufacturing subsidiary.」

「Overseas markets, including North America, Europe and Asia, generally remained on a stable growth track. In Japan, as corporate earnings improved, private-sector capital spending was driven not only by external demand but also by a marked increase in domestic demand.」

「Both Japan and overseas markets were generally on a gradual economic recovery track, and as corporate earnings improved, capital spending also showed a marked improvement.」

「However, this business area is significantly affected by trends in capital investment, and the Group's order intake and order prices may fluctuate considerably. Intensifying price competition may affect operating results and financial condition.」

「Sales were ¥9.322 billion, down 19.2% year on year, as the substantial decline in revenue from general-purpose industrial power supplies caused by restrained investment in solar power conditioners and large power supply facilities amid a market slowdown could not be offset.」

「General-purpose industrial power supplies saw a substantial decline in revenue, due to the restraint on new investment in large power supply facilities by domestic companies, in addition to the reaction to the previous year's period, when evaluation-use large power supplies and other products drove sales.」

「General-purpose industrial power supplies, consisting mainly of large power supply equipment, experienced a substantial decline in revenue as large-scale investment was held back.」

「However, this business area is significantly affected by trends in capital investment, and the Group's order intake and order prices may fluctuate considerably. Intensifying price competition may affect operating results and financial condition.」