Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Reduced power consumption per PCs to less than 3.6 degrees; Reduced office power consumption by 0.04 degree/person annually; Reduced water use by 0.3% annually; Reduced paper use by 0.003g/pcs annually; Obtained ISO14000 certification.

Social Achievements

• Established employee welfare committee; Provided year-end bonuses, performance bonuses, and various subsidies; Offered annual leave, marriage leave, maternity leave, and other benefits; Implemented various training programs; Maintained harmonious labor relations with no major disputes.

Governance Achievements

• Established an audit committee; Implemented a Code of Practice for Corporate Governance; Conducted annual performance evaluations of the board of directors; Regularly assessed the independence of the external auditor; Established internal regulations to prevent insider trading; Implemented a Code of Good Faith Operation.

Climate Goals & Targets

Environmental Challenges

• Increased market price competition from new entrants; Exchange rate fluctuations affecting profitability; Potential risks from climate change; Risks related to customer concentration and supplier concentration.

Mitigation Strategies

• Developed high-tech, multi-functional products with excellent quality; Implemented foreign currency deposits or early repayments; Assessed potential risks and opportunities of climate change; Developed alternative sourcing strategies; Strengthened cooperation with key customers; Developed new products and technologies; Strengthened control over inventory and accounts receivable.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: IFRS

Certifications: ISO9001, TL9000, ISO14000

Third-party Assurance: Deloitte & Touche

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Obtained ISO14000 certification (DNV certificate: 2018/11/30 ~ 2021/11/30)
• Reduced domestic water consumption by 0.3% (0.02 tons) in 2020
• Reduced office paper consumption to 0.006g/pcs in 2020

Social Achievements

• Established employee welfare committee
• Provided annual physical examination service for employees
• Organized various activities (tourism, sports meeting, karaoke competition, year-end tail, etc.) to enrich employees' spare time
• Provided training for over 200 employees, totaling nearly 1000 hours/year, with no labor disputes (including industrial accidents) in recent years.

Governance Achievements

• Established an audit committee since December 9, 2010
• Established compliance with the “Guidelines for the Establishment of Internal Control Systems for Public Issuance Companies”
• Implemented “Internal Major Information Processing and Prevention of Internal Trading Management Operation Procedures”

Climate Goals & Targets

Environmental Challenges

• Market price competition
• Exchange rate changes affecting profitability
• Excessive customer concentration (largest customer sales share accounts for 87.04% and 84.52% in 2019 and 2020 respectively)

Mitigation Strategies

• Develop high-tech and multi-functional products with excellent quality functions
• Consider production yield and process cost at the beginning of the design
• Develop new business models such as “Optical Foundry”
• Collect exchange rate information, evaluate exchange rate movements, and reserve the quotation space
• Adopt foreign currency deposits or early repayments at appropriate times
• Pre-sales forward exchange foreign exchange to avoid exchange rate risk of foreign currency receivables
• Increase the number of core customers and actively develop new customers
• Develop new products and technologies, enhancing high-end product design capabilities and cost advantages
• Direct cooperation with international-level Netcom telecommunications system equipment vendors
• Strengthen the control over inventory and accounts receivable

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Obtained ISO14000 (DNV certificate: 2021/11/30 ~ 2024/11/30) and other international quality certifications
• Continuous improvement in power consumption, water consumption, and office paper usage.
• Waste is treated and recycled in accordance with local government regulations.

Social Achievements

• Established an employee welfare committee
• Provides year-end bonuses, performance bonuses, and various subsidy programs
• Provides annual physical examination service
• Organizes various activities (tourism, sports meeting, karaoke competition, year-end tail, etc.)
• No labor disputes (including industrial accidents) have occurred in recent years.

Governance Achievements

• Established an audit committee
• Established an Information Security Officer and one Information Security Officer
• Revised the code of practice for sustainable development
• Formulated the “code of good faith operation”

Climate Goals & Targets

Environmental Challenges

• Excessive internal inventory adjustment of large data centers
• Interference of many uncertain external political and economic factors
• Obvious downward trend in overall optical module market demand
• Market price is increasingly competitive
• Exchange rate changes will affect profitability
• Excessive customer concentration
• Excessive concentration of purchasing sources

Mitigation Strategies

• Actively arranged CPO with leading manufacturers of switch chip sets
• Completed cash capital increase
• Gradually invest in related technology research and development and procurement of trial production equipment
• Work with customers to develop a new version and launch a more competitive cost down specification
• Collect exchange rate information, evaluates exchange rate movements, and reserves the quotation space
• Adopt foreign currency deposits or early repayments at appropriate time
• Pre-sales forward exchange foreign exchange to avoid exchange rate risk of foreign currency receivables
• Increase the number of core customers and actively develop new customers
• Put continuous efforts into developing new products and technologies
• Strengthen the control over inventory and accounts receivable

Supply Chain Management

Climate-Related Risks & Opportunities