TAMURA CORPORATION

The Group has positioned the decarbonization and clean energy-related markets as focus markets and is proceeding with development and capital investment. However, if demand fails to expand due to economic conditions and policy trends in various countries or changes in end customers' sales strategies and competitiveness, this may adversely affect business performance and financial condition, including delays in recovering capital investment. In response, the Group continuously monitors market needs and concentrates management resources on focus markets through business portfolio reviews.

There is a risk that fluctuations in material prices—such as copper and iron in the Electronic Components Business, and tin and petrochemical products in the Electronic Chemicals & Mounting Business—may affect profits. In the event of rapid price changes, periodic price revisions linked to market conditions may not keep pace, potentially squeezing corporate earnings. The Group addresses this through a combination of design changes to reduce material ratios, development of alternative materials, and hedging through forward purchasing.

The Group has many production and sales sites in China, but the progression of global economic bloc fragmentation may adversely affect business activities, including difficulties in exporting and importing products from specific countries and loss of competitiveness due to high tariffs. In response, in parallel with reviewing its China operations, the Group is promoting the development of sites in Europe, the U.S., and Asia, and strengthening its regional response capabilities through flexible reviews of production and sales locations.

If a major earthquake or similar disaster occurs at manufacturing sites in Japan (Saitama Prefecture and the Tohoku region), in addition to damage to buildings, machinery, equipment, and inventory, production activities at overseas sites that use materials manufactured in Japan may also be affected. There is also a risk of business suspension or delay due to natural disasters, infectious diseases, war, riots, and other events occurring in various regions worldwide, including China, other parts of Asia, and Europe and the U.S. The Group addresses this by developing emergency response guidelines and formulating business continuity plans (BCP).

There is a risk that employees assigned or traveling abroad may face serious danger, including injury or death, in the event of natural disasters, political instability, war, or terrorism. Depending on the situation, evacuation to safe locations or repatriation may be necessary. The Group addresses this by establishing a safety management system divided into three stages: normal-time support, alert-time support, and emergency response support.

Defects in products or services that lead to large-scale product compensation or product liability claims could significantly damage the company's reputation and adversely affect business performance and financial condition. Although the Group carries product liability insurance, there is no guarantee that it will sufficiently cover potential damages. The Group is working to strengthen its quality assurance system through thorough dissemination of quality policies, enhanced measures to prevent recurrence of defects, standardization of quality indicators, and utilization of international quality management standards.

It is difficult to fully protect the intellectual property rights, such as patents, held by the TAMURA Group, and there is a risk of claims for damages or injunction lawsuits if the Group is found to infringe upon third parties' intellectual property rights. If infringement is recognized, the Group may be forced to pay substantial damages or halt the manufacture and sale of products or services. The Group continues to conduct prior investigations and engage in efforts to protect its rights.

If cyberattacks or computer virus intrusions result in the leakage of confidential information or data encryption (ransomware), this may increase response costs and reduce sales due to loss of trust, adversely affecting business performance and financial condition. In addition, failure to meet customer requests for enhanced information security levels may result in lost business opportunities. The Group addresses this through a combination of network security measures, access control, physical safety management measures, employee training, and third-party assessments.