Climate Change Data

Environmental Metrics

Environmental Achievements

• Promotes electronic signatures to reduce paper consumption, thus saving energy and reducing greenhouse gas emissions.

Social Achievements

• Established harmonious labor-management relationship.
• Provides benefit programs including: Annual health checkups for employees, irregular employee gathering parties, employee trips, annual bonuses, employee bonuses, parking subsidies, on-the-job training subsidies, special souvenirs, various refreshments, etc.
• Offers maternity subsidy for all employees and better maternity leave for advanced maternal age employees.
• Offers well-facilitated breastfeeding room for female employees.
• Establishes multiple communication channels, like “say no to sexual harassment” or “speak up” email for employees to voice their feedback.

Governance Achievements

• Elected a new independent director in 2022 General Shareholders Meeting, Dr. Elizabeth Sun.
• The new board, with four independent directors out of seven seats, is taking our company to a new level of corporate governance.
• Established the Compensation committee on April 20, 2015 and appointed independent directors, and established the audit committee at the annual shareholders’ meeting in 2017 to strengthen the Board of Directors in carrying out its duties.

Climate Goals & Targets

Environmental Challenges

• The semiconductor industry macro environment took a sharp turn from supply shortage to inventory overhang and weak demand.
• High inventory level at key customers at the end of the third quarter.
• Weak demand, especially for consumer wearables.
• The cryptocurrency Ethereum underwent a consensus mechanism change from Proof-of-Work to Proof-of-Stake, effectively reducing the size of the market.
• The general cryptocurrency market is also experiencing a downturn.
• Wild swings in USD/NTD exchange rate.

Mitigation Strategies

• Took proactive steps to control inventory level.
• Control cost while expanding revenue opportunities.
• Continue to invest in our future.

Supply Chain Management

Climate-Related Risks & Opportunities

Sustainable Products & Innovation

• Silicon Capacitor; Integrated Passive Device (IPD)
• Very High-Bandwidth Memory (VHM™)
• Ultra-High-Speed OPI Pseudo-SRAM
• Ultra-Low-Swing OPI Pseudo-SRAM

Environmental Metrics

ESG Focus Areas

• Corporate Sustainability
• Innovative Sustainability
• Talent Sustainability
• Environmental Sustainability

Environmental Achievements

• Completed GHG Inventories for Taiwan and China operating sites in 2023
• Reduced CP electrical false alarm rate by 75% compared to 2022

Social Achievements

• Average Salary for Non-managerial Full-time Employees: NT$2,008K, 1.15 Times Industry Average
• 48-Hour ESG Training for Directors
• Average Training Hours by Job Category Up More Than 2x from Previous Year
• Charitable Donations up 4% from Previous Year
• Established AP Memory Academy

Governance Achievements

• Independent Directors Hold 50% of Board Seats
• Board Attendance: 98%
• Audit Committee Attendance: 96%
• Compensation Committee Attendance: 100%
• Established Cybersecurity Governance Committee

Climate Goals & Targets

Environmental Challenges

• Ongoing operational adjustments in the AI BU leading to a 17% year-on-year revenue decrease and 43% decrease in net operating profit.
• Supply chain risks
• Competitive risks
• Difficulty in recruiting key IC design professionals
• Increased electricity consumption due to office space and staff expansion
• Rising electricity prices and potential carbon taxes
• Evolving cybersecurity threats

Mitigation Strategies

• Actively expanding customers and product applications outside the China market
• Choosing globally renowned semiconductor foundries as primary wafer sources
• Developing new product specifications with competitive advantages
• Establishing guidelines for managing confidential information
• Enhancing awareness about trade secrets and confidentiality
• Implementing energy conservation measures (managing workplace temperatures, controlling lighting)
• Investing in capital expenditures for equipment and operational expenses for cybersecurity consultancy services
• Strengthening firewall protection, establishing an endpoint management system, implementing a network activity monitoring system, and auditing data transmission management

Supply Chain Management

Supplier Audits: Annual audits

Responsible Procurement

• Supplier Code of Conduct based on the RBA Code of Conduct
• Commitment to sourcing all 3TG and cobalt materials from RMI compliant smelters
• Due diligence on supply chain to meet conflict minerals requirements

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events
• Drought and water scarcity

Transition Risks

• Mandatory use of renewable energy
• Carbon taxes or fees

Opportunities

• Development of energy-efficient products
• Increased demand for low-carbon products and services
• Sustainability-linked loans

Reporting Standards

Frameworks Used: GRI Sustainability Reporting Standards 2021 Edition, AA1000 AccountAbility Principles (AA1000AP-2018), SASB Standards for the Semiconductor industry, TCFD

Sustainable Products & Innovation

• Low-power, high-performance memory solutions
• Energy-efficient 3D heterogeneous packaging memory