Soaring Steel Prices and Inability to Procure Raw Materials

「Particular attention is required for procurement risks because the cemented carbide used to manufacture mold components contains rare metals such as tungsten.」

「The crude oil issue arising from the conflict between the United States and Israel and Iran could lead not only to higher energy prices but also to supply problems, raising concerns about its impact on the component procurement environment.」

「In the electronic components industry in which our Group operates, it remains necessary to monitor the effects of surging resource prices, including energy and metals, and sharp foreign exchange fluctuations on production activities and operating results.」

「Some processes involved in manufacturing the products made by our Group and processing mold components are outsourced to external partner companies. If the supply capacity of these partner companies or raw material suppliers becomes insufficient for any reason, or if normal logistics are disrupted by geopolitical risks or other factors and supplies to the Group are delayed, production activities may be insufficient, adversely affecting operating results.」

「Geopolitical risks, represented by the situations in Russia and Ukraine and in the Middle East, have increased further, raising concerns about supply chain disruptions, additional increases in resource prices, and effects on foreign exchange rates.」

「Demand for automotive components remains high, reflecting an increase in the number of components resulting from the progress of autonomous driving technology and vehicle electrification, as well as the sharp recovery in automobile sales from the summer onward. However, supply concerns over semiconductors and resin materials are currently a risk factor that could disrupt the entire supply chain.」

「The markets for the Group's lead frames and connector components remain on a medium- to long-term growth trend. However, supply chain disruptions, mainly in the automotive industry, caused by infectious disease and geopolitical risks have not fully normalized, while smartphones have entered a temporary adjustment phase because sales of new models have been sluggish.」

「In the electronic components industry in which our Group operates, demand for automobiles and industrial equipment remains strong, but supply concerns over semiconductors and materials have made production unstable, and cases of insufficient supply are occurring.」

「In the electronic components industry in which our Group operates, global demand for automobiles and industrial equipment remains high. However, supply chain disruptions caused by lockdowns in China and Russia's invasion of Ukraine have led to periods of unstable production, particularly in the automotive industry.」

「Demand for lead frames for ICs and transistors has remained strong since the second half of the previous fiscal year, despite the effects of semiconductor shortages and supply concerns over raw materials, particularly metals. In the automotive sector, demand has benefited from the shift to EVs and the development and spread of ADAS technology, while other fields have benefited from social innovations such as DX and GX.」

「The Group's order environment has generally remained favorable for lead frames, despite the impact of supply concerns over semiconductors and raw materials.」

「Despite unstable conditions, including production adjustments mainly in the automotive sector due to component shortages caused by the spread of the infectious disease in Southeast Asia, efforts to secure inventory quickly led to orders being placed earlier than usual, and overall performance remained strong.」

「The order environment for the Group's lead frames and connector components has generally remained favorable and is expected to continue growing. However, semiconductor shortages caused by the sharp recovery in demand in the second half of last year and disruptions across the supply chain caused by excess demand for raw materials are current risk factors.」

「Demand for automotive components remains high, reflecting an increase in the number of components resulting from the progress of autonomous driving technology and vehicle electrification, as well as the sharp recovery in automobile sales from the summer onward. However, supply concerns over semiconductors and resin materials are currently a risk factor that could disrupt the entire supply chain.」

「Our Group has built good relationships with raw material manufacturers and outsourced processing companies, including by sharing important information at the management level, and is working to identify and address risks at an early stage.」

「Although the long-term growth outlook for the electronic components industry in which our Group operates remains unchanged, inventory adjustments for certain products and rising raw material prices have exerted downward pressure, resulting in a temporarily stagnant market.」

「Our Group purchases steel materials, including copper and nickel, which are major raw materials, from external suppliers. Depending on market conditions, suppliers' production capacity, and the re-examination of quality inspection data, an inability to secure the quantities required for production or sharp price increases could adversely affect the Group's operating results and financial position through lower product margins and lost business opportunities.」

「Our Group purchases steel materials, including copper and nickel, which are major raw materials, from external suppliers. Depending on market conditions and suppliers' production capacity, sharp price increases or an inability to secure the quantities required for production could adversely affect the Group's operating results and financial position through lower product margins and lost business opportunities.」

「Our Group purchases steel materials, including copper and nickel, which are major raw materials, from external suppliers. Depending on market conditions and suppliers' production capacity, sharp price increases or an inability to secure the quantities required for production could adversely affect the Group's operating results and financial position through lower product margins and lost business opportunities.」