US Inflation and 'Higher for Longer' Rates: As a manufacturer, Deswell Industries faces input cost pressures (materials, energy, labor). Higher US inflation at 3.3% and sustained 'Higher for Longer' interest rates by central banks would likely impact raw material costs, logistics, and potentially dampen consumer demand for the end products using DSWL's components, affecting sales and profitability. Higher rates also increase borrowing costs for DSWL or its customers.

Global Supply Chain Disruptions: The Strait of Hormuz closure and sustained oil price volatility directly impact shipping costs and the price of oil-derived plastics, which are key inputs for DSWL's plastic injection molding segment. This could lead to increased operational costs and supply chain delays, affecting production and delivery schedules for its global OEM customers.

Global Demand for Manufacturing Output: Deswell Industries operates manufacturing facilities in China and supplies components and electronic assemblies to original equipment manufacturers (OEMs) worldwide. The overall health of the global manufacturing sector, particularly in electronics and consumer goods, directly influences the demand for DSWL's products. Economic slowdowns or shifts in international trade policies could impact the company's export volumes and revenue.