Company: DSWL
Filing Date: 2025-07-29
Form Type: 20-F
Source: 0001174947-25-001096
Chunk: 54

Company: DESWELL INDUSTRIES INC
Filing Date: 2025-07-29
Form: 20-F
Item: Item 4
Chunk 54
---
 requires specialized machines and is capital intensive. At March 31, 2025, the Company used 10 EDMs (electrical discharge machines), 14 CNC (computer numerical control) milling machines and 10 NC (numerical control) milling machines in the mold-makingprocess.

The customer generally bears the cost of producing the molds and, as is customary in the industry, the customer owns them. However, the Company maintains and stores the molds at its factory for use in production and it is Deswell’s policy generally not to make molds for customers unless the customer undertakes to store its molds at the Company’s factory and uses Deswell to manufacture the related parts. In that way, the Company seeks to use its mold-makingexpertise to create dependence on it for the customer’s parts requirements. Through its Export Tooling Department, Deswell produces molds for export to customers and thus does not use those molds to manufacture related parts.

During the year ended March 31, 2025, the Company made an average of approximately 5 molds each month. The average weight of the molds produced by the Company is about 250 pounds costing an average of $9,200 per set. Management believes that the Company’s skills and expertise in mold-making, coupled with having its facilities and operations in China, allow the Company to produce molds at costs substantially less than molds of comparable quality made in Japan, Korea and Taiwan.

Table of Contents

Plastic Injection

During the mold-makingprocess, suitable plastic resin for the particular product is selected and purchased. See “ Raw Materials, Component Parts and Suppliers,” below. The completed mold is mounted onto injection machines, which are classified according to the clamping force (the pressure per square inch required to hold a mold in place during the injection molding process). At March 31, 2025, the Company had approximately 130 injection molding machines, ranging from 86 to 380 tons of clamping force, with most machines in the range of from 50 to 1,600 tons. Each of the Company’s machines is capable of servicing a variety of applications and product configurations and the Company has machines which permit the Company to fabricate plastic parts as small as a button and as large as a 3 ft. x 2 ft. case for a copy machine.

Using separate shifts, injection molding can be conducted 24 hours a day, five to seven days per week, other than during normal down time for maintenance and changing of product molds. Molding of products requiring extra concerns for appearance, such