Market environment risks stemming from the declining birthrate, the shift to cloud-based systems, the downturn in manufacturing, and internet distribution

「While changes in the market environment have created demand opportunities from the construction of AI data centers, increased demand for optical fiber and power supplies, and higher defense spending due to changes in the global security environment, continued attention is required regarding intensifying competition caused by an oversupply of services and the risk of delivery delays due to supply constraints.」

「The outlook remains uncertain, with geopolitical risks arising from the increasingly tense situation in the Middle East and protracted international conflicts, as well as growing concerns about energy supplies.」

「However, the outlook remains uncertain due to unstable international conditions resulting from developments in U.S. trade policy and the prolonged situation between Russia and Ukraine, as well as continued increases in raw material prices.」

「During the interim consolidated accounting period, the Japanese economy was on a gradual recovery path, supported by improvements in employment and income conditions and increased inbound demand. However, the outlook remained uncertain due to the prolonged situation between Russia and Ukraine, heightened tensions in the Middle East, and the impact of domestic and overseas interest-rate developments.」

「However, the outlook for economic conditions remains uncertain as the Russia-Ukraine situation continues and energy resource and raw material prices rise in conjunction with the yen's depreciation.」

「With the reclassification of COVID-19 as a Class 5 infectious disease, restrictions on economic activity were eased and signs of a gradual economic recovery emerged. However, the outlook for the economy remains uncertain due to the prolonged Russia-Ukraine situation, soaring raw material and energy prices, and sharp fluctuations in foreign exchange rates.」

「However, the outlook remains uncertain due to the prolonged Russia-Ukraine situation, soaring raw material and energy prices, and sharp fluctuations in foreign exchange rates.」

「During the cumulative consolidated third quarter under review, Japan's economy showed signs of a gradual recovery as restrictions on economic activity were eased progressively despite the impact of COVID-19. However, the outlook remains uncertain due to fluctuations in foreign exchange rates caused by the rapid depreciation of the yen, surging resource prices resulting from the Russia-Ukraine situation, disruptions to logistics and semiconductor shortages.」

「The outlook remains uncertain due to fluctuations in foreign exchange rates caused by the rapid depreciation of the yen, surging resource prices resulting from the Russia-Ukraine situation, disruptions to logistics and semiconductor shortages.」

「Regarding future economic conditions, the outlook for the economy remains difficult to assess due to the prolonged COVID-19 pandemic, which has yet to be brought under control, as well as the impact of geopolitical risks, including the situation between Russia and Ukraine, and the resulting higher prices, including higher crude oil prices.」

「During the nine months ended the third quarter, Japan’s economy was expected to recover as COVID-19 vaccination progressed and the number of infections fell sharply from October onward. However, the emergence of a new variant led to renewed concerns over the spread of infections. The global semiconductor shortage also continued, and the IT industry experienced a tendency toward delays in product production as a result, leaving the economic outlook uncertain.」

「The global semiconductor shortage has continued, and the IT industry has also seen a tendency toward delays in product production as a result. The outlook for the economy therefore remains uncertain.」

「A global semiconductor shortage has occurred due to lifestyle changes during the COVID-19 pandemic, including the recovery in automobile sales, growth in smartphone shipments, and demand for PCs and data centers related to telework. The IT industry has also seen a tendency toward delays in product production as a result, and the outlook for the economy remains uncertain.」

「The Group expects challenging conditions to persist, including a decline in IT infrastructure construction due to the increasingly pronounced shift to cloud services, the emergence of new competitors as broadcasting moves increasingly online, and restrained investment by manufacturers amid the uncertainty caused by the COVID-19 pandemic.」

「During the cumulative third quarter of the fiscal year, the Japanese economy remained in a difficult situation as the spread of COVID-19 constrained many social and economic activities. Following a sharp increase in new cases, a state of emergency was declared again from January 2021 for the Tokyo metropolitan area and certain other regions, further increasing uncertainty about the outlook.」

「During the cumulative second quarter of the fiscal year, the Japanese economy remained in an extremely difficult situation as the global COVID-19 pandemic placed severe restrictions on social and economic activity, resulting in deteriorating corporate earnings and business sentiment, declining private consumption, and a sharp fall in inbound demand. Even after the government's state of emergency was lifted, progress toward an economic recovery remained slow, and the outlook continued to be uncertain.」

「The Group expects challenging conditions to persist, including the declining birth rate in the education market and the resulting decline in infrastructure investment due to the shift to cloud services, weakness in the small and medium-sized manufacturing market, and intensifying competition in the telecommunications and broadcasting markets due to the rise of internet streaming.」

「In the Electronic Components and Equipment segment, sales of sensor components for manufacturing equipment declined, and the same period of the previous year included a large defense-related repair project. Net sales were ¥3.370 billion, down 11.0% year on year, and the operating loss was ¥56 million, compared with operating income of ¥24 million in the same period of the previous year.」

「In the Electronic Components and Equipment segment, sales of sensor components for manufacturing equipment declined. Net sales were ¥2.335 billion, down 5.6% year on year, and the operating loss was ¥24 million, compared with operating income of ¥8 million in the same period of the previous year.」

「In the System Solutions segment, sales of three-dimensional mechanical CAD systems for the manufacturing industry were sluggish. Net sales were ¥703 million, down 4.4% year on year, and the operating loss was ¥82 million, compared with an operating loss of ¥40 million in the same period of the previous year.」

「The Company expects challenging conditions to persist, including the declining birth rate in the education market and the resulting decline in IT infrastructure investment due to the shift to cloud services, weakness in the small and medium-sized manufacturing market, and intensifying competition in the telecommunications and broadcasting markets due to the rise of internet streaming.」