Climate Change Data

Leadtek Research Inc.

Climate Impact & Sustainability Data (2022, 2023)

Reporting Period: 2022

Environmental Metrics

ESG Focus Areas

  • Environmental protection
  • Employee welfare
  • Ethical corporate management
  • Corporate governance

Environmental Achievements

  • Passed the certification of the ISO 14001 environmental management system and implemented periodic audit and evaluation.
  • Progressively replaced lighting fixtures with LED lamps to achieve energy consumption and carbon reduction.
  • Reclaimed wastewater for reuse to reduce water consumption.

Social Achievements

  • Established employee benefit and training systems.
  • Established a staff welfare committee to take good care of employees.
  • Harmonious labor-management relations, no loss on labor-management disputes.

Governance Achievements

  • Established the “Corporate Governance Best-Practice Principles”.
  • Established the “Ethical Corporate Management Best Practice Principles”.
  • Established the “Procedures for Ethical Management and Guidelines for Conduct”.

Climate Goals & Targets

Long-term Goals:
  • Establish own automated production plants to build high-quality and automated production bases as demonstration production examples in the production strategy.
  • Expand cooperation with leading suppliers of electronics manufacturing service (EMS) and develop high-efficiency production processes and management to reduce production costs.
Medium-term Goals:
  • Increase own-brand market share, set up sales locations worldwide, and conclude strategic alliance with local dealers to build global sales and service system.
  • Promote strategic cooperation to develop ODM service through cooperation with leading manufacturers with technology and production as the niche to provide customers with multifunctional products and technology integrated services.
Short-term Goals:
  • Expand the marketing and service network to develop a strong brand in mainland China, Japan, and Southeast Asia markets.
  • Introduce enhanced distribution channels for new products and actively enter and seize emerging markets to increase market share.
  • Enhance supplier cooperation and production process management in production to improve materials management, procurement capability, and product yield rate.

Environmental Challenges

  • Consolidated revenue for 2022 was NT$5.311 billion, NT$8.823 billion or 40% less than in 2021 due to the Russo-Ukrainian War, COVID-19, and the sharp revenue decline of China.
  • Overall gross profit was NT$607 million, the gross margin fell to 11%, and the annual net operating loss was NT$152 million.
  • Dependence of important chip technology on suppliers.
  • Launch of integrated chips.
  • Entry of leading system manufacturers with upward integration.
Mitigation Strategies
  • Actively expand software sales and subscriptions.
  • Strengthen the sales of vGPU and Omniverse and the promotion of system integration and system.
  • Become the agent of the NVIDIA Omniverse software platform in the Asia Pacific and the China market.
  • Seek diversified fund-raising channels to cope with future growth needs.
  • Demonstrate the function of the internal control system, lower stock, and enhance receivable collection to enhance the capital turnover rate.
  • Closely coordinate production and sales and enhance the accuracy of sales forecast to shorten product turnover, lower stock pressure, and increase the sales proportion of high-profit products.
  • Engage with technological cooperation or technological transfer to reduce new product development costs.
  • Maintain close cooperation with major suppliers.
  • Flexible procurement strategy and stock management.
  • High-efficiency production-sales model.
  • Differentiation and cost-saving strategy.
  • Active development of software service.

Supply Chain Management

Responsible Procurement
  • Purchase key materials and key components from at least two suppliers to ensure flexible procurement and disperse the risk of over-centralization of materials supply.

Climate-Related Risks & Opportunities

Awards & Recognition

  • 28th Taiwan Excellence Award
  • 29th Taiwan Excellence Award

Reporting Period: 2023

Environmental Metrics

ESG Focus Areas

  • Environmental Protection
  • Corporate Governance
  • Human Rights
  • Social Responsibility
  • Supply Chain Management

Environmental Achievements

  • Reduced GHG emissions (details not quantified in the report)
  • Implemented GHG inventory and verification schedule plan

Social Achievements

  • Established Elite Employee Stock Ownership Trust Account
  • Revised Employee Stock Option Certificate Issuance and Stock Subscription Measures
  • Initiatives for employee wellbeing (details not quantified in the report)

Governance Achievements

  • Established corporate governance officer
  • Established information security manager
  • Amended Ethical Corporate Governance Best Practice Principles
  • Amended Sustainable Corporate Development Best Practice Principles
  • Amended GHG inventory and verification schedule plan
  • Amended organizational rules of the Company’s Audit Committee
  • Amended Board meeting procedures

Climate Goals & Targets

Environmental Challenges

  • Supply chain disruptions due to global economic downturn and reduced demand for graphics card-related products
  • Inventory management challenges due to product obsolescence
Mitigation Strategies
  • Maintained partnerships with multiple suppliers for key materials
  • Implemented strategies to improve inventory turnover
  • Developed alternative sourcing strategies

Supply Chain Management

Responsible Procurement
  • Sourcing key materials from at least two suppliers

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: Regulations Governing the Preparation of Financial Reports by Securities Issuers, International Financial Reporting Standards (IFRS)

Third-party Assurance: KPMG