V Technology Co., Ltd.

The electronic device manufacturing equipment market is highly sensitive to changes in demand trends, technological evolution, industrial policy, and the global economy, and if capital expenditure plans are delayed or orders are canceled, this could have a significant impact on business performance. In addition, there is a risk that expansion into new business areas may take time to contribute to earnings due to delays in market emergence or intensified competition. As countermeasures, the Company is promoting the provision of high value-added products and product development that anticipates next-generation technologies.

Production is largely fabless, particularly for large-scale FPD equipment, and if a sudden change in the management of outsourcing partners or an unforeseen accident occurs, or if geopolitical factors cause disruption to the global logistics network, delays in parts supply, or a sharp rise in transportation costs, this could seriously impede stable product supply and profit margins. As countermeasures, the Company is promoting information sharing through a cooperative organization with production outsourcing partners, in-house production of key components at the YRP Innovation Center, and diversification of parts procurement.

Due to production outsourcing to partner companies, there is a risk that technology and know-how may leak outside the Company, and damage may occur if employee turnover or imitation occurs in regions where intellectual property protection is inadequate. In addition, if the Company infringes on third-party intellectual property rights, there is a risk of incurring substantial litigation costs and damages. As countermeasures, the Company is entering into intellectual property protection agreements, actively filing for patents and utility models, and establishing management systems.

The Company is promoting the development of advanced technologies and technology development through joint ventures and collaboration with customers, but if a competing technology emerges unexpectedly early or research and development is significantly delayed, there is a risk that development outcomes may not translate into earnings. Since research and development investment can have a significant impact on business performance, alignment between the direction of technology development and market trends is important.

Since the Company handles many products using advanced and new technologies, if unforeseeable product defects cause delays in acceptance inspections, this could have a significant impact on business performance. As countermeasures, the Company continuously shares specification information with partner companies and conducts shipping inspections of finished products, but risks specific to new technology products cannot be completely eliminated.

If a customer's financial condition deteriorates or acceptance work is prolonged due to defects in new technology products, this could have a significant impact on payment collection. As countermeasures, the Company implements strict credit management and aims for planned payment collection by sharing the status and issues of delivered equipment with customers.

The Company conducts business acquisitions aimed at entering new business areas, acquiring new technologies, and strengthening existing businesses, but if expected earnings or results are not achieved due to unexpected changes in the business environment, this could affect business performance. Although thorough market research and due diligence are conducted, integration risk after acquisition and responding to changes in the market environment remain challenges.

As the Company operates globally, it is subject to various laws and regulations such as import/export restrictions, environmental regulations, and transfer pricing taxation, and if it fails to respond appropriately to unexpected tightening or revision of laws and regulations, this could have a significant impact on business performance. The Company strives to comply with regulations in each country and region, but the risk of changes in import/export regulations is drawing particular attention amid heightened geopolitical risk.

At present, the Company is not involved in any litigation that could have a material impact on business performance, but if its future business activities become subject to significant litigation, the outcome could have a significant impact on business performance. The Company has established an investigation and internal check system by the Legal and Intellectual Property Department, and has built a system to report to and be managed by the Board of Directors and other bodies as necessary.

Business performance may fluctuate significantly due to various external factors such as abnormal weather, earthquakes and other natural disasters, war, terrorism, infectious diseases, climate-related regulations, fluctuations in financial and stock markets, difficulty securing personnel domestically and internationally, and loss of key personnel. The Company is working to create high-growth, high-profit businesses and improve its constitution to generate profit even when market size shrinks, but these external risks are by nature not something that can be fully controlled.