Company: DSWL
Filing Date: 2025-07-29
Form Type: 20-F
Source: 0001174947-25-001096
Chunk: 59

Company: DESWELL INDUSTRIES INC
Filing Date: 2025-07-29
Form: 20-F
Item: Item 4
Chunk 59
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 the Company’s results of operations, there can be no assurance that any future shortages or allocations would not have such an effect.

For a discussion of various risks we face associated with obtaining needed components used in our manufacture of electronic products, please see “ Shortages of components and materials used in our production of electronics products may delay or reduce our sales and increase our costs” and “ We face inventory risks of obsolescence and impairment charges by providing turnkey manufacturing of electronic products” beginning on page 15 of the Risk Factor section of this Report.

Transportation

Transportation of components and finished products to customers in Shenzhen and to and from Hong Kong and Shenzhen and Dongguan is by truck. Some of our products are sold via F. O. B. China or F. O. B. Hong Kong. To date, the Company has not been materially affected by any transportation problems.

Customers and Marketing

The Company’s customers are OEMs and contract manufacturers. The Company sells its products principally in China, the United States, Hong Kong and Europe (the United Kingdom, Norway and Holland) and Canada. Net sales to customers by geographic area are determined by reference to shipping destinations as directed by the Company’s customers. For example, if the products are delivered to the customer in Hong Kong, the sales are recorded as generated in Hong Kong; if the customer directs the Company to ship its products to Europe, the sales are recorded as sold to Europe. See Note 16 of Notes to Consolidated Financial Statements for the dollar amounts of export sales by geographic area for each of the years ended March 31, 2023, 2024 and 2025. Net sales as a percentage of total sales to customers by geographic area consisted of the following for the years ended March 31, 2023, 2024 and 2025:

                         Year ended March 31                        
  Geographical Area                     2023       2024       2025  
 ────────────────────────────────────────────────────────────────────
  China                                 35.9       31.9       33.2  
  United States                         15.7       11.4        9.0  
  Europe                                17.2       14.4       18.6  
  Hong Kong                              8.4       11.9       10.2  
  United Kingdom                        11.8       17.3       16.2  
  Canada                                 6.1