Q1Will the level of orders seen in the fourth quarter of the fiscal year ending March 2026 continue?

A1Given that the prolonged semiconductor delivery times are not temporary and demand is recovering, we expect orders to remain at a certain level.

Q2Please explain the basis for the earnings forecast for the CN Business.

A2As outlined in the assumptions of our business plan, the forecast is realistic, taking into account current lead times and customer conditions.

Q3What is your policy regarding workforce expansion?

A3We will expand our workforce across all business and administrative divisions. Specifically, we will focus on increasing technical support staff in the CN Business, development staff in the PB Business, and quality support staff in the EC Business and PB Business. We also plan to advance automation through IT and AI.

Q4How do you view concerns that software and security products may be replaced due to advancements in AI?

A4While we cannot rule out the possibility of AI-driven replacement, we have not observed such trends in the SaaS and security products we handle at this time. In Japan, we believe the impact will be limited, partly due to language barriers.

Q5Please provide an update on the supply constraints for servers, storage products, and other items.

A5Suppliers are currently adjusting their supply. Due to longer delivery times, customers are increasingly placing orders in advance.

Q6What are the reasons for the increase in orders in the EC Business?

A6Due to growing demand for products for AI data centers, not only GPUs and memory but also peripheral components such as analog, power, and logic semiconductors are seeing longer delivery times, leading to an increase in advance orders from customers.

Q7In which sectors have inventory optimization progressed?

A7Inventory optimization has progressed in the automotive and industrial equipment sectors, and inventory drawdown is proceeding steadily, particularly in the industrial equipment sector, such as factory automation (FA).

Q8How is the shortage of memory products affecting the EC Business?

A8Since we do not handle DRAM or NAND, we believe the direct impact on our EC Business is minimal. However, we may be affected if the memory shortage causes customers to change their production plans.

Q9Could you explain the factors behind the strong performance of storage-related products in the CN Business?

A9By customer segment, sales to telecommunications carriers performed well. By product, all-flash memory products performed well. Additionally, backup storage products also grew against the backdrop of rising demand for security.

Q10Please explain the impact of exchange rate fluctuations on your financial performance.

A10A weak yen has a positive effect on the EC Business and a negative effect on the CN Business.

Q11Please provide the projected net sales of PB Business for the fiscal year ending March 2027 and a breakdown by application.

A11The planned full-year net sales of PB Business is 13.28 billion yen. We do not disclose the breakdown.

Q12Regarding the lengthening delivery times for semiconductors, could you tell us which items are most affected and where the bottlenecks are in the supply chain?

A12Lead times are increasing in the packaging and testing process of semiconductor manufacturing. Additionally, some components required for packaging are also experiencing longer lead times, creating a situation similar to the semiconductor shortage around 2021–2023. Since semiconductor manufacturing processes and the components used are largely the same regardless of the product category, this trend is consistent across all product lines.

Q13Is there a risk that advances in AI-based software such as Claude Mythos will reduce the value of existing security products?

A13While we believe some cybersecurity products may be affected, we expect the market as a whole to continue growing as both attack and defense technologies evolve.

Q14Will the situation in the Middle East have an impact?

A14We do not believe there will be any direct impact on our business. However, there is a possibility of indirect impact depending on future supply and procurement regarding chemicals used in semiconductor manufacturing.

Q15The push for domestically produced semiconductors is gaining momentum. How do you view the impact on your management and business operations?

A15In the semiconductor manufacturing sector, we believe we can contribute by supplying components and modules for semiconductor production equipment.

Q16Please share your plans and approach regarding growth investments such as M&A.

A16Regarding M&A, we are considering several potential deals, but they are not yet at a stage where we can disclose details. Our M&A activities are aimed at acquiring technological elements and other assets. As we have stated previously, we are not considering M&A solely for the purpose of expanding sales volume.

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