Company: FSTWF
Filing Date: 2025-05-15
Form Type: 20-F
Source: 0001213900-25-044386
Chunk: 51

Company: FST Corp.
Filing Date: 2025-05-15
Form: 20-F
Item: Item 4
Chunk 51
---
ility and relieve stress in order to allow the steel tubes to be further worked. Thereafter, the tubes are coated
with phosphate to improve corrosion resistance and lubrication, and then put through an automatic swaging machine to shape the dimensions
of the eventual shaft. A draw bench is then used to pull the shaft through a drawing die to shape its ends. Then, the shafts are cut for
the first time and polished, then tempered through stepping by heating them above a critical temperature then quenched in an oil bath
to improve toughness until the temperature becomes uniform throughout the entire length of the shafts, then cooled in air to room temperature.
Thereafter the shafts are straightened, polished at the edges to remove burrs, and cut to the final length, put through annealing again,
and polished for a final time. Shaft surfaces are then plated in an electroplating machine for the final finish. Finally, quality inspection
personnel will examine each manufactured shaft based on the Company’s quality criteria, and those that pass are warehoused pending
sales.

Supply Chain; Suppliers and Raw Materials

Procurement and Supply Chain

The Company prioritizes strategic purchasing and inventory management
to optimize its supply chain. Through regular production-sales meetings, the Company assesses order volumes, market demand, raw material
consumption, production schedules, and supplier lead times to determine timely procurement needs. This proactive approach fosters stable
supply sources and contracted processing, ensuring uninterrupted operations. No supply shortages or disruptions have occurred during the
Company’s history.

Main Raw Materials and Suppliers

The Company’s golf club shafts utilize a combination of iron,
carbon fiber, and various decorative materials (coatings, paints, inks, etc.). These raw materials are primarily sourced from established
third-party suppliers in Taiwan, as described further below.

While the Company relies on external suppliers for raw materials used
in shaft production, all steel shafts are manufactured in-house. The key materials utilized in the production of steel shafts include:

  Steel Coils  

  Nitrogen and Argon  

  Abrasive Cloth Wheels and Tape  

  Quenching Oil  

  Taper Molding Machine Molds  

  Packaging Cartons  

The Company engages the following types of suppliers for its business:

  Steel coil suppliers: Critical for iron shaft production.                                                   

  Material suppliers: Providing additional key materials  

  Contracted processing factories: Handling production                                                                   

The Company’s procurement policy primarily takes into consideration
the Company’s operating strategy and inventory levels.