Company: FSTWF
Filing Date: 2025-05-15
Form Type: 20-F
Source: 0001213900-25-044386
Chunk: 52

Company: FST Corp.
Filing Date: 2025-05-15
Form: 20-F
Item: Item 4
Chunk 52
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 Subject to purchase orders and market demand, the Company typically considers
the purchase and consumption of raw materials, production schedule and suppliers’ delivery time in order to judge procurement demand
and timing. In order to maintain the stability of supply sources and contracted processing, the Company maintains cooperatives relationship
with multiple suppliers and processing factories. The Company generally relies on Taiwanese suppliers for the raw materials and service
providers for certain specialized aspects of the manufacture, such as electroplating, physical vapor deposition and metal coating.

Certain materials and components may have limited supplier options.
However, the Company strategically chooses not to enter into long-term contracts with any supplier, opting for a flexible order-by-order approach.
This allows the Company to adapt to market fluctuations and access the best available options at any given time. While this flexibility
offers advantages, it also exposes the Company to competitive pressure for raw materials and production capacity. Additionally, the Company
has a limited number of manufacturing partners, primarily located in Taiwan and Southeast Asia, who produce specific components for its
shafts. The Company recognizes that relying on limited sources for materials or suppliers faces inherent risks. If the Company were to
encounter difficulties acquiring essential materials, such as abrasive cloth tape or quenching oil, finding and educating a new supplier
on the Company’s specific requirements could be a lengthy process. This could potentially disrupt production, impacting the Company’s
business, financial condition, and operational results.

To mitigate these risks, the Company is actively diversifying its sourcing
and manufacturing capabilities. This involves exploring alternative suppliers for critical materials, building relationships with new
manufacturing partners, and continuously evaluating the efficiency and reliability of the Company’s existing supply chain.

Overall, the Company is committed to proactively managing its supply
chain risks through diversification, strategic partnerships, and continuous improvement. The Company believes this approach balances flexibility
with resilience, ensuring reliable access to the materials and production capacity needed for continued growth and success.

Supplier for Graphite Shafts

Manufacturing graphite shafts requires sophisticated machinery and
manufacturing process to manipulate carbon fiber in accordance with the product design. The Company engages a third-party manufacturer
located in Taiwan, who specializes in carbon fiber sport products, to manufacture all graphite shafts for the Company on a purchase order
basis. The Company has selected this graphite shaft supplier after considering its industry experience, manufacturing capacity, and per
unit production cost. To date, the Company has not experienced any delivery delay or production disruption with this supplier. The Company
has not entered into any exclusive arrangement