Product Procurement Capability and Risk of Changes in Supplier Terms

「(+) Spot sales for certain products facing tight supply and demand contributed」

「Tight supply and demand for memory products against a backdrop of expanding demand for AI servers led to higher procurement prices and procurement difficulties across a broad range of industries.」

「The component sales business recorded higher revenue and profit as signs of recovery emerged in supply-chain inventory adjustments, which had been feared to become prolonged, and the acquisition of 協栄産業 also contributed.」

「The Group has partnerships with more than 2,000 manufacturers and trading companies in Japan and overseas, enabling it to procure a wide variety of products, from electronic equipment such as electronic components and semiconductors to PCs and related equipment, consumer electronics, communications equipment and toys. However, its operating results may be affected if changes in suppliers' distribution policies or the consolidation or reorganisation of suppliers result in changes to its distribution rights, or if events such as prolonged factory shutdowns occur because of natural disasters in regions where suppliers' factories are located, pandemics or geopolitical risks.」

「While demand for automotive applications, where production recovery is progressing as the global semiconductor shortage improves, remains robust against a backdrop of vehicle electrification and increased use of electrical systems」

「The component sales business recorded a significant decline in sales because spot demand for certain products, which had arisen as supply shortages of semiconductors and electronic components that had continued for 2 consecutive years through the previous fiscal year eased, disappeared, while the impact of inventory adjustments among customers generally became evident in some areas.」

「The supply shortages and extended lead times that had continued for certain semiconductors and electronic components have largely been resolved」

「Although global supply shortages and extended lead times continued for certain semiconductors and electronic components, supply and demand was generally improving for products other than some products for automotive applications」

「Although global supply shortages and extended lead times for certain semiconductors and electronic components remained, signs of improving supply and demand were seen for some products, excluding automotive and industrial equipment-related products.」

「While certain semiconductors and electronic components continue to be affected by global supply shortages and extended lead times」

「Although various issues, including higher resource prices, component shortages and logistics disruptions, have persisted and become prolonged because of the resurgence of COVID-19 infections, capital investment and production activity remained generally steady.」

「Although tight supply and demand for semiconductors and electronic components in the electronics industry to which the Group belongs was broadly affecting the production plans of companies in fields including automotive products, air-conditioning equipment, communications and industrial products, robust demand continued, supported by recovery from the downturn caused by the COVID-19 pandemic.」

「In the electronics industry, overall demand recovery led to shortages of electronic materials such as semiconductors in some areas, and the production plans of electronics companies, including those in the automotive industry, were affected. Nevertheless, robust demand continued overall, supported by the recovery in production activity.」

「The component sales business benefited from higher revenue from making Excel a group company in April 2020, but the impact of the termination of Kaga FEI's distribution agreement with a major business partner remained, and sales for the year were below the previous year.」

「Net sales declined significantly, partly because Kaga FEI's distribution agreement with a major customer was terminated.」

「The component sales business benefited from higher revenue from making Excel a group company in April this year, but sales fell significantly after US-based Cypress, a major customer of Fujitsu Electronics, terminated its distribution agreement last October.」

「The component sales business recorded lower revenue, including as a result of the impact of the termination of the distribution agreement by US-based supplier Cypress last October at Fujitsu Electronics.」

「Fujitsu Electronics Co., Ltd., a consolidated subsidiary, had entered into a distribution agreement with its major supplier, US-based Cypress Semiconductor Corporation. However, after receiving notice that the agreement would terminate effective 10 October 2019, transactions were suspended.」

「Cypress notified the company that the agreement would terminate effective 10 October 2019.」

「In response to the tight supply and demand that has become evident since the second half of the previous fiscal year for certain electronic components, including power semiconductors and capacitors」

「Since the previous fiscal year, tight supply and demand has become evident for certain electronic components, including power semiconductors and capacitors.」

「The Group has partnerships with more than 2,000 manufacturers in Japan and overseas, enabling it to procure a wide variety of products, from electronic equipment such as electronic components and semiconductors to PCs and related equipment, consumer electronics, communications equipment and toys. However, if it is unable to procure products at the optimal time and price because of changes in market conditions or customer needs, its operating results and financial position may be affected.」