Our Focuses｜Sustainable Supply Chain｜Toward Net-Zero Supply Chain

Low-carbon Supply Chain Strategy and Management

Addressing significant concerns about extreme climate events and reducing carbon emissions has become a primary focus for international brand manufacturers. Achieving net-zero emissions by 2050 has garnered consensus among numerous countries and enterprises worldwide. Winbond advocates leading by example and believes that effective propagation of carbon reduction efforts starts internally.

Internally, Winbond has established sustainable procurement practices (including local, circular, and green procurement), implemented an internal green logistics management system, and supported outsourced partners in developing low-carbon technologies. Externally, Winbond encourages and promotes carbon reduction initiatives among suppliers, regularly collects data to monitor progress towards carbon reduction goals, organizes various supplier engagement activities to build consensus on carbon reduction, and collaborates with government subsidy projects to reduce carbon management costs for suppliers and lower entry barriers. Together with suppliers, Winbond aims to become a responsible corporate citizen committed to sustainable practices.
 

Low Carbon Supply Chain Strategy - Comprehensive Carbon Reduction Management

Leading by Example - Carbon Reduction Initiatives at the Supply Chain Source

• Sustainable Procurement

In response to stakeholders' expectations regarding Winbond's sustainability performance, our procurement efforts strive to achieve the optimal balance between economic and environmental costs. Winbond's Sustainable Procurement Efforts include local procurement, which effectively reduces GHG emissions generated by international transportation distances, circular procurement to promote material recycling and reuse, and green procurement to encourage domestic suppliers to provide green products/services. These initiatives are integrated into Winbond' sustainable procurement promotion efforts.

Local Procurement	Circular Procurement	Green Procurement
In 2023, Winbond actively adjusted the procurement ratios of various raw material suppliers, due to the external impacts such as climate change, inflation control, and conflicts in Ukraine, Israel, etc., and internal demands for green products and process improvements. The proportion of local procurement increased from 37.6% in 2022 to 37.8%, marking a 0.2% annual increase.	Winbond applies the concept of closing the loop in the circular economy to identify products or services that can generate economic benefits through circularity in the operations of CTSP and Kaohsiung fabs. By leveraging its bargaining power and negotiating with suppliers, Winbond achieved over NT$2.3 million in sales performance from the recycling and sale of various waste products in 2023, including Scrap Targets, O-rings, FOSBs, mixed metals, laptops, screens, iron, and tray pallets.	Since 2022, CTSP and Kaohsiung Fabs have initiated ESG energy-saving projects. Procurement teams actively utilize their purchasing capabilities, vendor selection strategies, and allocation percentages to enhance greenhouse gas reduction efforts. They trace and select appropriate suppliers to provide suitable resources and processes for the plants. In response to Taiwan's 2050 net-zero emissions pathway and the "12 Key Strategic Action Plans," starting from procurement, our teams mandate the collection of sustainably certified products in daily and general supplies (such as energy-saving labels, water-saving labels, and ENERGY STAR certification). This involves tracing and listing suppliers who comply with these standards.
Performance in 2023	Performance in 2023	Performance in 2023 ESG Energy-saving Procurement Project Procurement of domestic equipment exceeding NT$160 million Green Procurement  Over NT$50 million

• Green Logistics

In 2023, Winbond actively responded to this demand by incorporating plans for low-carbon production into its internal logistics system, based on considerations within the company's value chain. This included optimizing transportation frequency and logistics operations, reducing packaging materials through recycling and minimizing waste, and promoting resource utilization from waste materials.

• Capability of OSAT Research and Development 

In 2023, Winbond leveraged government subsidies and carbon reduction guidance resources from the Institute for Information Industry to motivate outsourcer to eliminate high-energy-consuming or inefficient machinery and equipment. They were also encouraged to identify carbon emission hotspots and significant energy uses through GHG emission verification and by implementing the ISO 50001 energy management system.
In summary, the low-carbon technology development among outsourcers in 2023 focused on three aspects: Firstly, monitoring the input of energy and resources in each stage of testing and packaging processes, and actively communicating with outsourcers to reduce energy usage; secondly, evaluating the development of green materials and prioritizing the use of raw materials that meet environmental and regulatory standards; collaborating with outsourcers to brainstorm ideas for low-carbon processes. Third, by optimizing upstream material inputs, waste generation during the outsourcing phase is minimized, effectively lowering overall waste disposal across Winbond's supply chain.

• Product carbon footprint assessment (ISO 14067:2018): Obtained 100% declaration statements for major packaging types (BGA, SOP, SON, WLCSP, RDL).

• Sustainable process development: Optimization of baking times, evaluation of low-carbon packaging materials.

• Optimization of raw material inputs: Carbon reduction project for packaging materials.

Dissemination and Influences Governance Power in Winbond Supply Chain

As global brands increasingly emphasize the carbon reduction capabilities of their supply chain members, the trend towards supply chain-based carbon reduction units is becoming clearer worldwide. To ensure each supplier gradually becomes a participant in Winbond's supply chain carbon reduction efforts, Winbond has established a Carbon Management Portfolio strategy. This strategy integrates four key approaches: Data Governance, Sustainable Learning from Large to Small, Management Transformation, and Joint Identification of Development Opportunities, forming the core of Winbond's low-carbon governance across its supply chain.