Our Focuses｜Climate Change Management｜Mitigation and Adaptation Measures
Climate Change Management
The World Economic Forum (WEF) recently released “Global Risks Report 2023”, which indicates that the cost of living will dominate global risks in the short term. The energy crisis, food shortages, and inflation resulting from the war in Russia-Ukraine and the Covid-19 pandemic have become urgent global issues. Climate change continues to be the biggest long-term risk. Greenhouse gas emissions produced by humans since the dawn of the industrial revolution and capitalism have led to global warming. The high costs resulting from extreme weather events have increased the awareness of governments, international organizations, and civil society throughout the world. Industries are confronting pressure from economic stagnation, the challenges of energy transformation, and the risk of geopolitical instability at the same time they have to face up to the urgent and worsening climate issues that have been accumulating for over a century. This is not an easy task, but it is only through being more proactive in combating climate change and increasing the resilience of our Company that we can move towards sustainability.
As a provider of electronic technology, Winbond is deeply aware that our actions affect the global economy, and in fact function as a key factor in shaping the landscape of society. To comply with international standards and domestic policies related to environmental sustainability, we adopted the framework of the Financial Stability Board’s (FSB) Task Force on Climate-Related Financial Disclosures (TCFD) and published Winbond’s first TCFD report in 2022, which was the company’s 35th anniversary. Through this report, we hope to convey our social commitment to our stakeholders.
Chairman and CEO, Arthur Yu-Cheng Chiao
Publish the first independent TCFD report in 2023
Establish five Climate-Related Management Metrics
5
Mitigation and Adaptation Measures
Green Products
In addition to improving productivity, process advancements lead to a reduction in power consumption and carbon emissions during product usage. For instance, the power consumption of Winbond's 2Gb DDR3 series products decreased by 35% from the 25nm to the 25Snm. Similarly, the power consumption of flash memory products decreased by 24% from the 90nm to the F58Snm and then to the 45nm.
DDR3 series power consumption
Power consumption of F90, F58s, F45 products
Additionally, the HYPERRAM series products have introduced wafer-level chip select packaging (WLCSP), which offers advantages such as minimal inductance between the die and the circuit board, excellent thermal conductivity, compact package size, and minimal weight. These features make Winbond's HYPERRAM series products the optimal memory choice for mobile products like cellular phones, smart watches, and other wearable electronics.
Our LPDDR4/4X products adopt a space-saving 100-ball BGA package that can be applied to products with smaller PCB sizes as requested by customers. This enables more compact product layout designs and meets the emerging demand for higher data throughput in smaller packages in the IoT, consumer electronics, industrial, and automotive sectors.
Reducing power consumption and extending battery life have always been one of Winbond's goals. In addition to continuously designing flash memory with lower operating currents through process evolution, Winbond has developed new process and circuit architectures, resulting in the world's first NOR Flash that supports a working voltage of 1.2V. The power consumption of the 1.2V NOR Flash is only 55% of the commonly used 1.8V NOR Flash, yet it maintains a read speed of up to 104MHz. This allows its performance to be on par with the standard of 1.8V/3V Flash while significantly benefiting power-sensitive wearable devices such as wireless earphones, smartwatches, fitness trackers, and smart glasses in the consumer electronics market.
In addition, Winbond's flash memory has been verified as supporting the environmentally friendly and low-power consumption Low Temperature Soldering (LTS) process (~190°C). According to customer calculations, compared to the industry's current lead-free Surface Mount Technology (SMT) with temperatures ranging from 220 to 260°C, each production line that uses the low-temperature soldering process can reduce carbon dioxide emissions by 57 metric tons annually, effectively reducing carbon emissions during the manufacturing process. Winbond's flash memory has undergone reliability verification procedures, including drop, vibration, and temperature cycling tests, under JEDEC standards. This validation demonstrates that the product fully supports the LTS process without any quality concerns, contributing to environmental protection and sustainable development efforts to create a better future.
Sustainable Supply Chain
Supply Chain Management
Sustainable Procurement Strategies and Measures
To systematically drive Winbond’s supply chain towards low-carbonization, we plan measures such as carbon reduction initiatives for raw material suppliers and carbon emissions management for back-end testing and packaging processes using product carbon reduction as the basis for suppliers’ carbon reduction activities.
- Hold focused ESG exchanges with key carbon-emitting raw material suppliers and back-end testing suppliers.
- Conduct surveys on the electricity usage, water usage, waste management, resource recycling, greenhouse gas emissions, energy consumption, and carbon footprint management of key carbon-emitting raw material suppliers and back-end testing suppliers
Assessment and Management of Sustainability Risks
To gradually increase the internal resilience of Winbond’s supply chain, we engage suppliers in ESG self-assessment surveys to evaluate sustainability risks and impacts, organize corresponding follow-up audit activities, and regularly track progress and make improvements.
- Use RBA7.1.1 as the core assessment framework
- Include eight major aspects: Corporate Sustainability Formalization, Continuous Operations Planning, Supply Chain Management, Service Quality Management, Environmental Management and Climate Change Response, Human Rights and Labor Protection, Occupational Safety and Health, Ethics and Governance
Winbond Supplier ESG Interactive Platform
To enhance the overall efficiency disseminating sustainability information throughout the supply chain and fostering the growth of related knowledge, both measures mentioned above are managed through digitization. The platform brings together suppliers for interactive engagement on a digital platform:
- Publish Winbond’s sustainable management policies and promote information about corporate sustainable development
- Digitally manage various sustainability surveys and information retrieval, share sustainability-related information with suppliers and foster mutual learning and growth
Physical Risk Assessment for Suppliers
To assess flooding, debris flows, and landslides resulting from climate change, Winbond commissioned consultants to conduct a hazard vulnerability analysis of over 1,400 domestic suppliers’ operation locations.
The results show that no suppliers are at high risk. Under the RCP 8.5 scenario, six suppliers are classified as moderate risk. These six suppliers fall under the categories of accessories and equipment, and they represent approximately 1.2% of Winbond's procurement amount in those categories for the year 2022. Additionally, all the supplied items have more than two sources of supply. Taking all of this into account, it is expected that Winbond will experience minimal indirect impacts in the event of natural disasters such as flooding.
| Level of Risk | RCP 2.6 Scenario | RCP 4.5 Scenario | RCP 6.0 Scenario | RCP 8.5 Scenario | |
|---|---|---|---|---|---|
| Mid-century (2041~2060) | Low risk | 99.7% | 99.7% | 99.8% | 99.6% |
| Moderate risk | 0.3% | 0.3% | 0.2% | 0.4% | |
| High risk | 0.0% | 0.0% | 0.0% | 0.0% | |
| End of Century (2081~2100) | Low risk | 99.9% | 99.8% | 99.7% | 99.6% |
| Moderate risk | 0.1% | 0.2% | 0.3% | 0.4% | |
| High risk | 0.0% | 0.0% | 0.0% | 0.0% |
Energy and Greenhouse Gas Management
Energy Management
In recent years, due to the expansion of fabs and the addition of new machinery and equipment, the Company’s usage of raw materials and fuel has been on the rise. Total energy consumption in 2022 amounted to approximately 689 million kWh. In response, Winbond has been implementing energy-saving measures, adding 21 new initiatives in 2022. In the same year, the CTSP Fab obtained ISO 50001 certification for energy management systems. Additionally, there are plans to introduce ISO 50001 at the Kaohsiung Fab to expand the scope and effectiveness of energy management. The energy-saving efforts have resulted in an increase of approximately 35.9 million kWh compared to the previous year. The energy consumption indicator per unit product in 2022 was 22.76 kWh per layer of photomask for 12-inch wafers. This represents a 3.4% increase compared to 22.01 kWh in 2021 and a 2.4% increase compared to the target value of 22.26 kWh for 2022. The increase in average electricity usage per unit product was influenced by global economic factors and decreased production capacity in the second half of 2022. Going forward, efforts will continue to be made to promote energy-saving initiatives and reduce environmental impacts.
2022 newly-added energy-saving measures
In 2022, CTSP Fab obtained certification for energy management systems
| Indicators and Goals | Goal for 2022 | 2022 Performance |
|---|---|---|
| Electricity consumption per unit product (kWh/layer - photomask) | ≦ 22.26 | 22.76 |
| Electricity consumption per unit product (MJ/layer - photomask) | ≦ 80.1 | 82 |
Energy Savings over the Years
Planning for the Use of Renewable Energy
In 2022, Winbond conducted comprehensive planning for the future use of renewable energy and delved into understanding the status of various types of renewable energy industries and their applicability to its electricity consumption. Through ongoing discussion with renewable energy project developers, Winbond aims to introduce the use of renewable energy as soon as possible.
In response to the government's renewable energy policy, Winbond installed a 499 kW rooftop renewable energy generation system in 2019. The generated renewable energy is currently sold to Taiwan Power Company. In 2022, electricity generation reached 660,000 kilowatt-hours, making a significant contribution to renewable energy in Taiwan.
In 2022, electricity generation reached
Green House Gas Management
ISO14064-1
Winbond actively participates in the government's greenhouse gas inventory program by implementing an internal greenhouse gas management mechanism. Through operational control, Winbond promotes inventory and verification of greenhouse gas emissions, sets reduction targets, and develops improvement plans.
ISO14067
In 2021, a carbon footprint inventory was conducted for selected wafer products, followed by a carbon footprint inventory for IC products in 2022.
Other
Since 2000, Winbond has been involved in the Taiwan Semiconductor Industry Association and World Semiconductor Council's Perfluorocarbon (PFC) Emissions Reduction Program, implementing process adjustments and alternative gas usage and installing Fluorocarbon (FC) reduction equipment. Winbond has obtained a preliminary project reduction quota of 285,771 tCO2e from the Environmental Protection Administration.
Greenhouse Gas Emission Strategies, Goals, and Performance
- The main greenhouse gas emissions of Winbond come from the use of FCs in the manufacturing process and purchased electricity. These account for over 94% of the Company’s total greenhouse gas emissions. Therefore, reducing direct FC emissions and achieving energy savings in electricity consumption are the primary goals for Winbond.
- In terms of production and manufacturing, Winbond works to optimize resource utilization, installs exhaust gas treatment equipment to reduce emissions, and continues to implement energy-saving programs to reduce electricity consumption. In addition to promoting video conferencing, Winbond provides shuttle buses between the fabs and high-speed rail/metro stations on workdays. The CTSP Fab and Kaohsiung Fab also provide commuting buses for engineering assistants to reduce fuel consumption and air pollution from personal vehicles.
- In 2022, Winbond reduced emissions by 250,230 tCO2e, which is equivalent to the carbon sequestration capacity of 648 Daan Forest Parks in a year.
| Goal for 2022 | 2022 Performance | |
|---|---|---|
| Unit Product Emissions(kg CO2e/layer - photomask) | ≦13.3 | 13.2 |
Note: According to data published by the Forestry Bureau of the Council of Agriculture, Executive Yuan, and the Department of Land Administration, Taipei City Government, Daan Forest Park absorbs 386 metric tons of carbon dioxide annually.
Greenhouse gas emissions are divided into three scopes. The inventory for scopes one and two has already been completed. The inventory for Scope three emissions in 2022, which include emissions from sources not owned or controlled by the company, will be completed in 2023.
Due to the expansion of the fabs and the addition of new equipment, the usage of raw materials and fuels has increased. Coupled with the establishment of the Kaohsiung Fab in 2022, this has resulted in a noticeable increase in overall emissions. Additionally, the decline in the global economy in the second half of 2022 led to a decrease in production capacity, resulting in an increase in average emissions per unit of product.
| Unit: tCO2e | 2020 | 2021 | 2022 |
|---|---|---|---|
| Direct greenhouse gas emissions reduction(Scope 1) | 173,089 | 192,106 | 194,302 |
| Indirect greenhouse gas emissions reduction (Scope 2) | 34,386 | 37,139 | 55,928 |
Notes:
- In 2020, the machine process gas (PFC) monitoring system was implemented to differentiate the usage of PFCs in each machine process. The quantification method for greenhouse gas emissions was adjusted from Tier 2a to Tier 2b. Therefore, the base year for the greenhouse gas inventory is tentatively set as 2020, with emissions totaling 331,317 tCO2e.
- The global warming potentials (GWPs) used in this table are sourced from the IPCC Fourth Assessment Report (2007).
- The greenhouse gas types included are nitrous oxide (N2O), methane (CH4), carbon dioxide (CO2), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulfur hexafluoride (SF6), and nitrogen trifluoride (NF3).
- The standards, methodologies, assumptions, and/or calculation tools used: Energy consumption data are obtained from measured values on billing statements, natural gas monthly consumption settlement reports, and material requisition forms and AS400/material inventory variation checklists without any estimations.
- For emission factors, we primarily referenced the latest version of the Environmental Protection Administration's greenhouse gas emission factor recommendations, taking into account the uncertainty data associated with emission factors. The uncertainty assessment for the activity data is based on the calibration and testing technical specifications of the measurement instruments.
- The electricity emission factor for 2022 is not available, so the emission factor from 2021 is used for calculations.
- Data for the Taiwan Office and the newly constructed Kaohsiung Fab have been added for 2022.
Water Resource Management
To understand the risks related to water resources, Winbond implemented the water risk evaluation tools of the World Resource Institution (WRI). By adopting the Aqueduct Water Risk Atlas through the AQUEDUCT website, we were able to include the distribution of water resources in Taiwan into the analysis, and found that all our operation sites in Taiwan are in low-risk areas.
Winbond’s major water source is the tap water supplied by the Taiwan Water Corporation. The CTSP Fab uses water from Liyutan Dam and Techi Dam. The Kaohsiung Fab uses water from the A Gong Dian Reservoir, with a small portion coming from rainwater and air conditioning condensate.
| Metrics and Goals | Goal for 2022 | 2022 Performance |
|---|---|---|
| Water usage per unit product (kWh/layer - photomask) | ≦145 | 134 |
| Overall water recycling rate | ≧80% | 80.5% |
| Unit: Million liters | 2022 | 2022 | 2022 | |
|---|---|---|---|---|
| Water intake divided by source | Third-party tap water (Total) | 3,633 | 3,293 | 4,131 |
| Total intake | 3,633 | 3,293 | 4,131 | |
| Water consumption | 1,216 | 975 | 960 | |