FUJI CORPORATION

Core products such as electronic component mounting robots and machine tools are heavily influenced by capital expenditure trends in the smartphone, telecommunications equipment, and automotive fields, as well as by economic fluctuations. The Robot Solutions business depends on trends in electronic equipment sales, while the Machine Tools business depends on capital expenditure trends in the automotive industry, and sudden demand changes exceeding expectations could affect business performance. The Group is addressing this by expanding FUJI-brand products, expanding markets, and strengthening its profit structure.

In addition to the risk of surging market prices, key materials such as steel, castings, and electrical materials may experience procurement delays or supply disruptions due to natural disasters, supplier accidents, logistics disruptions, geopolitical tensions, and other factors. If supply constraints persist over the long term, production activities could be disrupted, affecting business performance. The Group strives for stable procurement by establishing a purchasing framework with multiple suppliers, examining alternative materials, and securing safety stock.

Competition in terms of price and functionality is intensifying in the electronic component mounting robot and machine tool markets, and the Group may find itself unable to set favorable prices due to customer demands for lower equipment procurement costs and price competition with competitors. If declines in unit sales or selling prices significantly exceed expectations and persist over the long term, this could materially affect business performance. The Group strives to maintain competitiveness by developing products utilizing IoT and AI technologies, strengthening its service structure and sales network, and pursuing cost reductions.

Rapid technological innovation in the market poses a risk that the Group's development technologies could become obsolete, preventing planned sales of developed products. In addition, because the Group adopts many advanced technologies and technologies in new fields, unforeseen product defects may occur. The Group is addressing this by expanding into new fields such as smart locker systems, transfer support robots, and waste sorting robots, driving innovation through FUJI Innovation Lab., and strengthening its quality assurance system based on ISO9001.

In global business operations where overseas sales account for more than 90% of total sales, changes in tariff policies, import/export regulations, technology transfer regulations, environmental regulations, labor laws, and other regulations in the countries and regions where products are sold could affect business activities. If changes in laws and regulations occur at a scale or speed exceeding expectations, this could affect business operations and performance. The Group continuously gathers and analyzes information on relevant laws and policy trends in each country and region, striving to minimize impact through prompt and appropriate responses.

Aichi Prefecture, where the Group's main production facilities are concentrated, is designated as an area requiring disaster prevention measures for the Nankai Trough earthquake, and in the event of a large-scale earthquake, damage to production equipment or disruption of logistics functions could halt production and delivery activities, affecting business performance. There is also a risk that global manufacturing, sales, and service sites could be affected by a global pandemic or similar event. The Group strives to minimize such risks by formulating business continuity plans, implementing earthquake-resistance measures, and conducting disaster prevention drills.

If unexpected disruptions occur due to computer viruses, unauthorized access, or cyberattacks, this could halt business activities including production, damage the Group's reputation due to information leaks, and result in liability for damages to customers, affecting business performance. The Group addresses this by establishing an information systems management framework and implementing thorough security measures and employee training.

The Group may not be able to completely prevent unauthorized use of its intellectual property rights or the manufacture and sale of similar products by third parties. In addition, the Group could face lawsuits alleging infringement of third-party intellectual property rights during product development, which could affect business activities. The Group strives to obtain and protect patents, trademarks, and other intellectual property rights, while paying close attention to preventing infringement of third-party intellectual property rights during product development.