Shareholder Communication: FY2025/26 Q2

Organizational strategy for future growth
Objective of establishing two divisions

There are two main objectives to this organizational restructuring.
The first is to prepare the organization for the future transition to a divisional structure.
Now in our 49th year of business, we have expanded three businesses: Semiconductor-related, Measuring and Weighing Equipment, and Medical and Healthcare Equipment, and we have secured market share in niche markets by leveraging the “measuring” technologies we have cultivated.
However, the markets for all three businesses differ greatly in size, characteristics, and future growth potential. In order to be able to realize more optimal and efficient management, we have decided it is necessary to transition to a divisional structure and establish a system where each business unit can make its own decisions.
The second objective is to improve market responsiveness by strengthening marketing capabilities.
Initially, we expanded our market share by developing a product-out approach, in which products are developed first. In the domestic market, there was high demand for products developed based on our technologies with the product-out approach.
However, as the market matured, we began to realize the limitations to business expansion of this type of approach. What was needed was for us to incorporate a market-in approach into this. With the establishment of the Semiconductor Business Division and Global Marketing Division, the intention is also to explicitly convey these objectives and background to work sites.

Tackling the changing semiconductor market
Aim of combining both companies’ strengths into a new structure

The primary reason for establishing the Semiconductor Business Division ahead of other businesses is that Semiconductor-related Business is our growth driver. Although A&D was founded in May 1977 as an electronic measuring instrument manufacturer, since then it has provided units for semiconductor manufacturing equipment manufacturers. Similarly, since its establishment in May 1985 as a manufacturer of electron beam micro-dimension measurement equipment, the operating company HOLON Co., Ltd. (“HOLON”) has specialized consistently in Semiconductor-related Business.
Considering the backgrounds of both companies, we began preparations to transition to a business division structure starting with the Semiconductor-related Business, where mutual understanding is deepest in terms of market characteristics and technology. Our decision to appoint Vice President Koh Cho, who is both the President and CEO of HOLON and an engineer and marketer with deep knowledge of the semiconductor market, as Head of the Business Division stems from this background.

The semiconductor-related business has been performing well for the past two years, benefiting from strong demand in China. However, demand from China is currently showing signs of slowing. This is due to fluctuations in demand for semiconductors, which have occurred repeatedly in the past. In order to counter these fluctuations, we need to release new products.
The current challenge is addressing the need for further miniaturization and energy efficiency. By leveraging the resources of both A&D and HOLON, we believe it is possible to develop products that address these issues.
Amidst trends toward miniaturization and energy efficiency, releasing products that solve these issues can lead to sales to new customers.
Both operating companies have the same customers: semiconductor-related companies. By expanding our product lineup and customer base, we can expect further growth for the business as a whole. In particular, HOLON has a wide knowledge of the global semiconductor market. By collaborating on sales, we believe both companies can meet the needs of countries and regions experiencing rapidly growing semiconductor demand.
Through product development and market expansion leveraging the synergies between the two companies, we aim to expand our Semiconductor-related Business.

Acceleration of global expansion and investment in human resources

The reason we added the word “Global” to the name of the Global Marketing Division, established to strengthen our marketing efforts, stems from our company’s global business operations. Since we have a high proportion of overseas customers and numerous local subsidiaries, we can now focus on how to leverage these assets.
For example, in planning new products, we previously relied on wish lists collected from individual countries or regions. However, this approach often resulted in product planning that was too individualistic, lacking sufficient verification of whether these requests were truly marketing-driven or what future results could be expected.
As we advance our global expansion, it is crucial to “visualize” and centralize these issues, ensuring everyone shares the same understanding, and then plan and allocate resources where they are expected to produce results. By deepening our mutual understanding globally, we aim to make work sites able to understand and implement the policies and requirements of the head office with conviction, enabling more efficient planning.
However, the organization of the Semiconductor Business Division and Global Marketing Division will not function without human resources who can actually act and implement. These organizations do not just develop on their own. To ensure they function properly, fostering a culture where people feel energized to take on challenges is the most critical and difficult task.
For this reason, from now on, “investment in human resources” will be vital.
The biggest problem in leveraging our human resources is that we lack a system to grasp information across the entire group.
Until now, only a few managers and others have had information on the Group’s human resources in Japan and overseas. Our first step in leveraging human resources globally will be to establish a system that allows us to recruit strategically and to assign the right employees to the right positions.

In addition to this organization restructuring, we have implemented personnel changes, appointing Steven Plunkett from the U.S. as the head of the Sales Division.
As president of a group company in the U.S., he has a proven track record of integrating another subsidiary in April 2025, creating a structure encompassing all business operations. We also envision him overseeing global expansion as a sales leader, which is why we determined him to be the right person for the role of Sales Division Head.

While the Semiconductor Business Division and the Global Marketing Division have just started their operations, we will continue to make steady progress toward realizing our Long-Term Vision 2034 and Medium-Term Business Plan.