Fujipream Corporation

Demand for LCD Display Components and Touch Panel Sensor Substrate, the Company's core products, fluctuates according to trends in the display market. If demand increases or decreases sharply beyond expectations, this may affect operating results. The Company strives for flexible operation of its production system by building production lines capable of withstanding sharp fluctuations and by closely monitoring market trends.

Display-related products account for a large proportion of net sales, and a significant decline in sales of such products may affect operating results. In particular, automotive-related products carry the risk of being affected by changes in the supply chain environment resulting from semiconductor supply conditions, trade policy, geopolitical risk, etc., in addition to demand fluctuations in the automotive market. Going forward, the Company plans to focus on research and development aimed at diversifying its sales.

Cross-border procurement of raw materials is increasing, creating a risk of being affected by global economic trends and fluctuations in energy prices such as crude oil prices. If procurement difficulties arise beyond expectations, this may affect operating results. The Company is working to reduce this risk by promoting diversification of procurement routes.

If a product accident related to product liability occurs, the resulting compensation costs may have a significant impact on operating results. Although the Group as a whole is working to maintain and manage quality, it is difficult to reduce the risk of accidents to zero. The Company prepares for unforeseen circumstances by establishing a Quality Management Committee, scrutinizing contract terms, and taking out insurance.

Production sites for core products are concentrated in the Seiban region of Hyogo Prefecture, including Himeji City and Tatsuno City, and if an earthquake, power outage, or other disaster occurs, this may affect operating results. The geographic concentration of production sites increases the risk that a single disaster event could spread to affect the entire business. The Company continuously advances its disaster preparedness by obtaining the latest disaster information and hazard maps.

If a global outbreak of infectious disease occurs, along with associated restrictions on activity and logistics disruptions, this may affect production and sales activities, personnel recruitment, the supply chain, research and development, and fund procurement. If constraints on social and economic activity become prolonged or recur, there is a risk of adverse effects on business performance and financial condition. The Company takes sufficient preventive measures and strives to balance employee safety with corporate productivity.

Since the Company utilizes transactions with overseas companies and international logistics in raw material procurement, production activities, and product sales, if changes in the international situation, heightened geopolitical tension, changes in trade policy by various countries, conflicts, sanctions, etc. occur, this may lead to rising raw material prices, increased logistics costs, and procurement delays, which may affect operating results and financial condition. The Company strives to stabilize its supply chain through diversification of suppliers and logistics routes and by securing appropriate inventory levels.

Much of the Company's in-house production technology, such as precision bonding technology, is not well suited to patent acquisition, and there is a risk that obtaining a patent could allow the production method to be inferred and imitated; accordingly, the Company has adopted a policy of deliberately not seeking patents. Under this policy, if technology leaks externally, there is a risk that it will be difficult to legally prevent imitation by competitors. The Company seeks to prevent external leakage by treating its technology as a whole as a black box, including through confidentiality agreements with employees and blocking external access to production processes.