Market Conditions Risk in the Electronics Industry

「The outlook for the business environment remained uncertain in China, due to factors including the stagnation of the property market, delayed recovery in domestic demand and heightened geopolitical risks associated with tensions in the Middle East.」

「Competition is also intensifying in certain market segments and core products, which may lead to price competition and further deterioration in the order environment.」

「On the other hand, orders for connectors for the automotive equipment and communications equipment markets declined.」

「During the interim consolidated accounting period, Japan’s economy slowed as the external environment, including US tariff policy and the slowdown in the Chinese economy, put downward pressure on exports and corporate earnings, while companies remained cautious about capital investment. In the global economy, the timing of interest-rate cuts attracted attention as US inflation remained elevated, while geopolitical risks and uncertainty surrounding trade policy continued to weigh on growth.」

「Demand for production equipment and electronic components remained firm against a backdrop of recovering capital investment related to the advancement of generative AI and DX and vehicle electrification. Meanwhile, demand for products used in industrial equipment continued to decline due to the effects of inventory adjustments.」

「Economic conditions remained uncertain, owing to higher geopolitical risks resulting from the situation in Ukraine, sluggish exports and higher energy prices against the backdrop of a slowdown in the global economy, and sharp foreign-exchange fluctuations.」

「Reflecting the global downturn in semiconductor-related demand, orders in the industrial equipment market, led by semiconductor manufacturing equipment and other products, and in the automotive equipment market showed signs of softening.」

「During the cumulative third quarter of the fiscal year, Japan’s economy was moving toward normalization as various restrictions on activity to counter the novel coronavirus infection were gradually eased, and was on a moderate recovery path. However, the pace of the economic recovery slowed owing to the yen’s depreciation and higher energy prices.」

「During the cumulative second quarter of the fiscal year, Japan’s economy was moving toward normalization as vaccination against the novel coronavirus progressed worldwide, and the recovery trend continued, particularly in Europe and the United States. However, concerns about an economic slowdown emerged, including a growing sense of slowdown in the European economy, surging energy prices, and foreign-exchange conditions characterized by a rapid depreciation of the yen accompanying US interest-rate hikes, amid economic pressure resulting from Russia’s invasion of Ukraine and its use of resource supplies as an economic weapon. The outlook therefore remained uncertain.」

「During the cumulative first quarter of the fiscal year, Japan’s economy showed signs of bottoming out, as vaccination against the novel coronavirus progressed, restrictions on activity were eased, economic activity moved toward normalization, and exports increased. However, higher raw-material prices and supply-chain disruptions, driven by heightened geopolitical risks resulting from the situation in Ukraine and lockdowns in China amid the spread of the novel coronavirus, continued during the period.」

「The market remained sluggish, mainly because a sharp increase in semiconductor demand caused a global semiconductor shortage and difficulties in procuring components from Southeast Asia led to substantial automobile production cuts. However, a gradual recovery was seen as supply constraints eased. Demand for components in the automotive, ICT-related, and industrial sectors remained firm, owing in part to component users building up inventories as part of their business continuity planning.」

「No new business or other risks arose during the cumulative third quarter of the fiscal year. In addition, there were no material changes to the business and other risks described in the securities report for the previous fiscal year. The impact of the novel coronavirus infection during the cumulative third quarter of the fiscal year is described in “2. Analysis of Financial Position, Operating Results and Cash Flows by Management (1) Status of Operating Results and Other Matters ① Status of Operating Results”; depending on how the situation develops, it may affect the financial position, operating results, and other aspects of our group’s business.」

「No new business or other risks arose during the cumulative second quarter of the fiscal year. In addition, there were no material changes to the business and other risks described in the securities report for the previous fiscal year. The impact of the novel coronavirus infection during the cumulative second quarter of the fiscal year is described in “2. Analysis of Financial Position, Operating Results and Cash Flows by Management (1) Status of Operating Results and Other Matters ① Status of Operating Results”; depending on how the situation develops, it may affect the financial position, operating results, and other aspects of our group’s business.」

「No new business or other risks arose during the cumulative first quarter of the fiscal year. In addition, there were no material changes to the business and other risks described in the securities report for the previous fiscal year. The impact of the novel coronavirus infection during the cumulative first quarter of the fiscal year is described in “2. Analysis of Financial Position, Operating Results and Cash Flows by Management (1) Status of Operating Results and Other Matters ① Status of Operating Results”; depending on how the situation develops, it may affect the financial position, operating results, and other aspects of our group’s business.」

「During the fiscal year, Japan’s economy experienced a sharp decline in economic activity and rapidly deteriorating conditions owing to the spread of the novel coronavirus. Although signs of a recovery emerged in Japan as economic activity resumed following the lifting of the state of emergency, the global economy remained uncertain, as the prolonged US-China trade friction and severe restrictions on activity resulting from the renewed spread of the novel coronavirus continued to weigh on it.」

「In Japan, signs of a recovery emerged as economic activity resumed following the lifting of the state of emergency. However, the global economy remained uncertain, as the growing impact of the prolonged US-China trade friction and the renewed spread of the novel coronavirus led to renewed severe restrictions on activity.」

「The global spread of the novel coronavirus dealt a major blow to society and the economy in Japan and overseas. In Japan, however, economic activity gradually resumed following the lifting of the state of emergency. The outlook for the global economy nevertheless remained uncertain, owing to the stagnation of economic activity accompanying movement restrictions in the United States and Europe, where infections continued to spread.」

「In the electronics industry, to which our group belongs, the automotive-related and industrial equipment markets remained challenging overall, as production stagnated amid the global spread of the novel coronavirus and companies became more cautious about capital investment.」

「The outlook for overseas economies became uncertain in the second half of the fiscal year, owing to the US-China trade issue, the slowdown in the Chinese economy, the UK’s withdrawal from the EU, and the spread of the novel coronavirus infection in Japan and overseas. The electronics industry, to which our group belongs, remained sluggish, as demand declined in the automotive equipment, semiconductor manufacturing equipment, industrial equipment, and smartphone markets owing to lower automobile sales, restrained capital investment, and the maturation of the mobile-device market.」

「During the cumulative third quarter of the fiscal year, Japan’s economy showed signs of a moderate expansion, supported by improvements in corporate earnings and employment conditions. However, the global economy remained uncertain, amid the growing impact of the prolonged US-China trade friction, the turmoil surrounding the UK’s withdrawal from the EU, and heightened tensions in the Middle East.」

「During the cumulative second quarter of the fiscal year, Japan’s economy showed signs of a moderate expansion, supported by improvements in corporate earnings and employment conditions. However, the global economy remained uncertain, amid the growing impact of the prolonged US-China trade friction and the turmoil surrounding the UK’s withdrawal from the EU.」

「During the first quarter of the current consolidated cumulative period, Japan's economy continued to recover moderately, with improvements in corporate earnings and the employment environment. However, the outlook for the global economy as a whole became uncertain due to the expanding impact of prolonged US-China trade friction and growing concerns over a slowdown in China's economy.」

「The electronics industry in which our group operates saw increased demand for automotive applications as sales of hybrid and electric vehicles remained firm, and corporate capital investment to promote the use of AI and IoT, mainly in industrial equipment and other areas, increased. However, inventory adjustments for semiconductors used in mobile devices such as smartphones and in consumer products caused the slowdown across the industry to become more pronounced toward the second half of the fiscal year.」

「During the third quarter of the current consolidated cumulative period, Japan's economy continued to recover moderately, with improvements in corporate earnings and the employment environment. However, the outlook became uncertain due to concerns over the impact of US protectionist trade policies and the resulting US-China trade friction.」

「Meanwhile, although the global economy was driven by robust economic expansion in the US, US-China trade friction intensified, making the outlook for the global economy as a whole uncertain.」

「Meanwhile, although the global economy was affected by the US shift toward protectionist trade policies, the outlook remained uncertain amid the growing risk of escalating trade friction stemming from that shift.」

「The electronics industry in which our group operates is said to be highly susceptible to market conditions. If a situation such as the semiconductor recession or IT recession of the past were to recur, orders could decline, adversely affecting business performance.」

「Meanwhile, although the global economy was affected by policies of the new US administration, geopolitical risks in Europe and economic developments in China, the outlook remained uncertain.」

「Although emerging-market economies such as China continued to experience slower growth, the global economy as a whole continued to grow moderately.」

「During the third quarter of the current consolidated cumulative period, Japan's economy saw a recovery in personal consumption accompanying improvements in corporate earnings and the employment and income environment. However, the outlook remained uncertain due to a slowdown in emerging-market economies, including China, the UK's withdrawal from the EU, volatility in financial and foreign exchange markets resulting from factors including the US presidential election, and uncertainty over policy content.」

「Although China's economy showed signs of recovery in some areas, including industrial production and consumption, the risk of a global economic downturn remained, and the outlook continued to be uncertain.」

「During the first quarter of the current consolidated cumulative period, Japan's economy remained uncertain, with corporate earnings and personal consumption showing signs of stagnation due to the rapid appreciation of the yen, unstable share prices and other factors.」

「The electronics industry in which our group operates is said to be highly susceptible to market conditions. If a situation such as the semiconductor recession or IT recession of the past were to recur, orders could decline, adversely affecting business performance.」