COSEL Co., Ltd.

President’s Message

We sincerely thank our shareholders and investors for your continued support.

The global economy in the fiscal year ended May 2025 was expected to continue showing stable growth due to factors such as the improvement of real income thanks to a slowdown in inflation and a continued trend of policy rate cuts across countries, but concern of a recession resulting from US tariff policies is growing rapidly. Although there was a surge in imports in anticipation of the full implementation of tariff policy and then fell in reaction, the US economy remains steady on the whole. Europe has maintained gradual growth due in part to inflationary pressure decreasing and political instability in major countries settling down. China faces structural problems in the real estate market, but the expansion of last-minute exports over concern about US tariff policy and economic stimulation policy provided a tailwind that has driven economic growth. In Japan, capital investment by companies continued to expand, but private final consumption expenditure was flat, bringing economic recovery to a standstill.

In the electronics industry, demand for semiconductors for servers and data centers continues to grow driven by the further digitalization of society resulting from new investments aimed at leveraging AI, but the increase in geopolitical risks such as US and Chinese tariff policies has affected investment decisions, leading to sluggish capital investment in the industrial equipment market. In the automotive market, electric vehicle demand continues to be stagnant, resulting in sluggish demand for parts and capital investment.

In response, the COSEL Group is boosting sales activities through customer visits and focusing efforts on proposing new products to key customers through collaboration between the sales and development teams.

In addition, we started full collaboration with LITE-ON Technology Corporation (hereinafter “LITE-ON”) in all business activities including sales, development, and procurement. Since the third quarter of the consolidated fiscal year, our North American Sales Operations has been taking orders for and cross-selling LITE-ON products. Efforts are also underway to start cross-selling LITE-ON products in other regional segments. In development, we established a brand concept for COSELSYNC., a brand jointly developed with LITE-ON, and have been collaborating with the company on developing new products.

In the fiscal year ending May 2026, the global economy is expected to continue to grow gradually, but there is also concern of financial market confusion and economic slowdown due to the threat of geopolitical risks such as US tariff policy and US-China conflict, so circumstances are difficult to predict going forward and we must remain vigilant.

In terms of the environment surrounding the switched-mode power supply market which the COSEL Group serves, semiconductor manufacturing equipment demand is showing signs of recovery thanks to growth in the areas of IoT, AI, and 5G, and FA equipment demand is expected to gradually recover due to adjustment of in-market inventory.

In response, the COSEL Group will continue striving to live up to its corporate philosophy of “putting quality first” by strengthening its quality assurance system, building a manufacturing system that is resilient to fluctuations in orders, and enhancing capabilities to develop new products, and by focusing efforts on customers-centric sales activities and the promotion of new products to expand sales.

I look forward to the continued support and understanding of our shareholders and investors.