atect corporation

In the Semiconductor Materials Business, demand for the Company's products is strongly affected by economic trends in the Japanese and global economies, particularly production levels and consumption trends for liquid crystal televisions, smartphones, and other products. Since sales destinations are companies located in Japan and mainly overseas companies located in Asia, a global economic downturn or slowdown in demand for electronic devices could directly affect the Company's financial position and operating results. The securities report does not describe specific countermeasures.

In the Semiconductor Materials Business, the number of customers is small, and sales tend to be concentrated among specific customers both domestically and overseas. Since there is limited room to expand the customer base, if orders from major customers deteriorate, it may be difficult to secure alternative customers, which could have a material impact on the Company's financial position and operating results. The securities report does not describe specific countermeasures for customer diversification.

In the Semiconductor Materials Business and PIM Business, if customers revise their business strategies, such as outsourcing production to competitors, bringing production in-house, or relocating production facilities overseas, the Company's order volume may decrease. In addition, a decline in customers' business performance leading to production cutbacks could also result in reduced orders. These factors could affect the Company's financial position and operating results.

Spacer Tape (Embossed, Molded, Flat Type), the flagship product of the Semiconductor Materials Business, is used in the manufacturing and transport processes of TAB tape and COF tape. If technological innovation establishes semiconductor component manufacturing methods that do not use these tapes, there is a risk that demand for the product could disappear. Because the Company's business foundation depends on specific manufacturing processes, the emergence of alternative technologies could have a material impact on its financial position and operating results. The securities report does not describe technological countermeasures.

In the Sanitary Testing Equipment Business, products are manufactured under strict quality control in accordance with laws and regulations related to the Food Sanitation Act, but there is no guarantee that quality issues will not occur in all products. If a significant quality issue arises, it could result in decreased sales and increased costs due to recall response and other measures, potentially affecting the Company's financial position and operating results. While a strict quality control system is maintained in response to legal regulations, the risk cannot be completely eliminated.

In the Sanitary Testing Equipment Business, if customers revise their internal inspection methods or other practices, demand for the business's products and merchandise may decrease. If the Company is then unable to develop new customers or expand sales to existing customers, this could affect its financial position and operating results. The securities report does not describe specific customer development measures.

In both the Semiconductor Materials Business and the Sanitary Testing Equipment Business, since much of the raw material for products consists of petrochemical products such as various plastics, fluctuations in crude oil and naphtha prices and petrochemical product market conditions directly affect manufacturing costs. If increases in raw material prices cannot be passed on to selling prices, profitability may decline, potentially affecting the Company's financial position and operating results. The securities report does not describe specific countermeasures such as hedging.

The production and logistics facilities of the Sanitary Testing Equipment Business and PIM Business are concentrated in Higashiomi City, the location of the head office. If an earthquake or other natural disaster or incident reduces or halts the production capacity of the plants, there is a risk of significant disruption to business continuity. The geographic concentration of facilities represents a vulnerability from a BCP perspective and could affect the Company's financial position and operating results. The securities report does not describe specific BCP measures.

If unexpected bad debts occur due to credit concerns among business partners, additional losses or increases in the allowance for doubtful accounts may be required, potentially affecting the Company's financial position and operating results. In the Semiconductor Materials Business, where the number of customers is small and dependence on specific customers is high, deterioration in the creditworthiness of major customers could pose a particularly significant risk. The securities report does not describe specific countermeasures related to credit management.

The Company may grant stock acquisition rights as an incentive plan aimed at improving the morale of officers and employees and securing talented personnel. If these stock acquisition rights are exercised in the future, the value of shares per unit may be diluted, which could affect stock price formation. The securities report does not provide specific details regarding the scale or upper limit of dilution.