*Business Structure Reforms

The Shindengen Group has been implementing business structure reforms since November 2020. These reforms are aimed at building a revenue structure that is resilient to changes in the market environment and reinforcing competitiveness primarily in mobility and industrial machinery, which we have designated as key markets, in order to increase corporate value.

Business Structure Reform Measures

(1) Reorganizing the development framework

• We have transferred the development functions of the Hanno Factory to the Asaka Office, opened in April 2021, as well as to domestic Group companies.
• We have consolidated R&D, business operation and management functions at the Asaka Office.
• We decommissioned the clean room at the Hanno factory in March 2021, bringing an end to the R&D and business operation functions of the Hanno Factory.

(2) Revising production systems

Electronic Device:

• Some power module production lines of Akita Shindengen have been replaced by high-productivity lines that incorporate IoT at Lumphun Shindengen (Thailand).
• Akita Shindengen is building production lines for next-generation power modules.
• Higashine Shindengen has closed one of its clean rooms, improving the utilization of front-end processing facilities by approximately 20%.
• The closure of two clean rooms has reduced the number of clean rooms in Japan from five to three.
• A shift to larger semiconductor wafer sizes at Akita Shindengen and Higashine Shindengen have been improving front-end processing productivity by approximately 30%.

Car Electronics:

• We have moved production of some products from Japan to overseas factories.
• We revised the allocation of our production in Thailand, Vietnam, Indonesia, India and China, promoting optimization in each product category.
• In Japan we advanced automation and labor-saving measures, mainly for four-wheel vehicle products, such as DC/DC converters.

(3) Rationalizing unprofitable products

• We ceased production of power conditioners for photovoltaic generation.
• In semiconductors and other businesses, we are speeding up revisions of our product portfolio to rationalize low-profit products and improve overall profitability.

(4) Adjusting staffing levels

In fiscal 2020, we solicited voluntary retirement and took other measures that resulted in an 11% reduction in personnel at the domestic Group. By doing so, we adjusted staffing levels to better fit our business scale.