Risks of Disruptions at Contract Manufacturers and in the Supply Chain under a Mobile Fabless Model

「In production, the Group secured multiple production bases, flexibly switched production locations in response to foreign-exchange movements and raw material price fluctuations, and optimized logistics routes, seeking to achieve a stable supply and strengthen price competitiveness amid a persistently challenging external environment.」

「The Group developed new overseas suppliers and domestic vendors, seeking to maintain and improve profit margins by further strengthening price competitiveness.」

「We worked to maintain and improve profit margins by further strengthening price competitiveness through the development of new overseas suppliers and domestic sources.」

「In production, the Group continued to secure multiple production bases and maintain the level of domestic inventories built up in the previous fiscal year in preparation for production stoppages and delivery delays caused by outbreaks in countries and regions where its production bases are located. It also flexibly switched production locations in response to foreign-exchange movements and higher raw material prices and optimized logistics routes, seeking to achieve a continued stable supply and strengthen price competitiveness.」

「The Group secured multiple production bases and maintained the level of domestic inventories built up in the previous fiscal year in preparation for production stoppages and delivery delays caused by outbreaks in countries and regions where its production bases are located. It also flexibly switched production locations in response to foreign-exchange movements and higher raw material prices and optimized logistics routes, seeking to achieve a continued stable supply and strengthen price competitiveness.」

「As product supply was disrupted by lockdowns in major Chinese cities, the Group was nevertheless able to continue supplying products.」

「As product supply was disrupted by lockdowns in major Chinese cities, the Group was nevertheless able to continue supplying products.」

「The Group secured multiple production bases in preparation for production stoppages and lockdowns caused by outbreaks in countries and regions where its production bases are located, flexibly switched production locations in response to foreign-exchange movements and higher raw material prices, and reviewed and optimized logistics routes and methods in response to delays in ocean transport and higher transport costs, seeking to achieve a continued stable supply and strengthen price competitiveness.」

「The Group flexibly switched production locations in response to foreign-exchange movements and higher raw material prices, and reviewed and optimized logistics routes and methods in response to delays in ocean transport and higher transport costs, seeking to achieve a continued stable supply and strengthen price competitiveness.」

「In addition to securing multiple production bases in preparation for production and supply stoppages caused by lockdowns in countries and regions where its production bases are located, the Group will review logistics routes from production bases and optimize logistics methods to address disruptions in ocean transport caused by container shortages, thereby achieving a continued stable supply of products.」

「Taking advantage of its “mobile fabless” model, the Group continued supplying products under various circumstances during the COVID-19 pandemic, including by outsourcing production of the same products to multiple suppliers in different regions.」

「To strengthen its structure for continuing an uninterrupted supply of products from China even if movement restrictions were imposed again within China while restrictions on travel from Japan remained in place, 上海多来多貿易有限公司 (a consolidated subsidiary) opened a new base in Qingdao, following Shanghai and Shenzhen.」

「To prevent unforeseen production and supply stoppages caused by lockdowns in individual countries during the COVID-19 pandemic, the Group will secure multiple production bases and achieve a continued stable supply.」

「Amid the spread of COVID-19, the Group responded to the impact of lockdowns in China and Southeast Asian countries on factory operations and logistics, rigorously implemented production in appropriate locations, and continued to secure a stable supply of products.」

「However, for custom-made general merchandise products, the spread of COVID-19 in China caused many local suppliers to suspend production after the Chinese New Year holiday, resulting in delivery delays and the deferral of some sales to the following quarter.」

「The Group uses a “mobile fabless” model for product manufacturing and outsources production to suppliers in China and other Asian countries. Accordingly, supplier bankruptcies and other events may result in delivery delays or the need for remanufacturing, which could affect the Group’s business performance. In addition, if problems arise in the procurement of materials, production or distribution due to political or social unrest, natural disasters, terrorism, armed conflict, disease, currency appreciation, infrastructure disruptions or other factors in the countries where its contract manufacturing suppliers are located, this could affect the Group’s business performance.」

「Supplier bankruptcies and other events may result in delivery delays or the need for remanufacturing, which could affect the Group’s business performance. In addition, if problems arise in the procurement of materials, production or distribution due to political or social unrest, natural disasters, terrorism, armed conflict, disease, currency appreciation, infrastructure disruptions or other factors in the countries where its contract manufacturing suppliers are located, this could affect the Group’s business performance.」