GCS Holdings, Inc.

Climate Impact & Sustainability Data (2022, 2023)

The Company’s subsidiary in the United States has employee welfare measures handled in accordance with the US Social Security Program Rules and the US Labor Law; also, provided employees with Health Insurance, Workers’ Compensation Insurance, and Retirement Plan-401K to protect employees’ well-being. The employees of the subsidiaries in Taiwan are entitled to labor insurance, national health insurance, and group insurance for the protection of their well-being.

The Company has incorporated the spirit of corporate governance into the internal control system and various regulations, and substantially implemented the relevant norms of corporate governance.
The Company has three independent directors, an Audit Committee, and a Remuneration Committee in service.

intense competition in the pricing of the optoelectronic market, declined selling price, slowing decreasing demand for the installation of 5G base stations in China, inflationary spike affecting market demand, and customer’s inventory adjustment
limited capacity of the 4-inch wafer fabrication foundry located in California, U.S.A.
changes in international trade situations
delay in the certification schedule after product completion plus the impact of inflation, the demand for related consumer electronics products declined and hence the quantity of orders has not reached the proper economic scale that put the company still under a loss.
impact of COVID-19 delayed the progress of relevant equipment installation and the customer completion of certification before commitment to production
the fabrication foundries and equipment are under construction with relatively higher costs and expenditures, hence the orders have not reached the economic scale and the operation is still under loss.
inflation spike that affects consumer demand while China–United States trade relation continues to oppose

strategic investment projects over the past few years and expanded the 6inch wafer foundry capacity through the joint venture
investment distribution offers clients choices of production sites in different regions such as the U.S., China and Taiwan, in order to expand the business scale and strengthen corporate competitiveness
constantly develops new products and boosts processing technology to improve the quality, yield rate, and production efficiency in order to control proper costs, expand sources of customers and boost profits as the objectives
collaborates with strategic reinvested companies to receive more customer orders and speed up the customer certification for mass production, so that reinvested companies will diminish loss, and increase the operating profits of the Company and shareholder interests as the ultimate goals

Total Carbon Emissions:6271.4719 tCO2e/year

Waste Generated:108.6 tons/year

GCS USA generated 90.2 tons of hazardous waste and 18.4 tons of non-hazardous waste in 2023. Direct greenhouse gas emissions totaled 4,558.1542 tons and indirect greenhouse gas emissions totaled 1,713.3177 tons in 2023. GCS USA implemented energy-saving equipment to reduce electricity consumption.

The Company has formulated relevant management policies to actively shape a corporate environment that respects, cares, and protects human rights, and has promoted healthy and positive labor relations. The Company provides employees with Health Insurance, Workers’ Compensation Insurance, and Retirement Plan-401K (in the US) and labor insurance, national health insurance, and group insurance (in Taiwan).

The Company has established the “Ethical Corporate Management Best Practice Principle” to express the policy of ethical management and prevent unethical conducts. The Company has formulated a plan for preventing unethical conduct.

Overall market downturn resulting in a decrease of about 12% in revenue from RF wafer foundry services in 2023 compared to 2022. Reduced production by major customers with poor financial conditions led to an approximate 20% decrease in revenue from the optoelectronic wafer foundry segment in 2023 compared to 2022. Unikorn Semiconductor Corporation continued to experience losses due to market factors, reduced customer orders, and high expenses. ChangZhou ChemSemi Co., Ltd. continued to experience operational losses despite slight operating income growth due to order volumes not reaching an economic scale.

Strategic investment projects and expansion of 6-inch wafer foundry capacity through a joint venture. Investment distribution offers clients choices of production sites in different regions (U.S., China, and Taiwan). Developing next-generation GaN and BAW filter processes, targeting applications in base station infrastructure and the aerospace and defense industries. Research and development of related PIC (Photonic Integrated Circuits), VCSEL, GaAs LD, and InP laser projects. Implementing cost optimization solutions to increase profitability, expand the customer base, and improve market share. Appropriate cost control measures and collaboration with strategically invested companies to secure customer orders.

The Company will evaluate whether the supplier has a record of damaging the environment and society before initiating any business transaction, and will avoid doing businesses with those who violate the corporate social responsibility policy.