Our Focuses｜Sustainable Supply Chain｜Supply Chain Composition and Management Framework

Declaration of Sustainable Supply Chain Management

Supply Chain Composition and Management Framework

Supply Chain Composition and Overview

Winbond is a key global memory manufacturer. Within the industry value chain, Winbond supports upstream IC/IP design needs, performs wafer manufacturing, and then—based on customer requirements across product lines—executes outsourced processing, packaging, and testing. Winbond delivers products to customers on time while considering economic and security requirements. In 2025, the Winbond Group operated primarily in Taiwan, with additional presence in Mainland China, Japan, South Korea, Israel, Germany, the United States, and India. Nuvoton’s major operating sites were primarily in Taiwan and Japan, while its business sites were located across Mainland China, Japan, South Korea, Israel, the United States, Germany, India, and Singapore to support customer service needs. To ensure on-time delivery, Winbond collaborates with diversified global suppliers across Taiwan, Japan, the United States, Mainland China, South Korea, Belgium, and Germany. Based on 2025 transaction activities, Winbond (Taiwan) worked with 1,100 suppliers, and Winbond (subsidiaries) worked with 698 suppliers. Please refer to the Nuvoton 2025 Sustainability Report.
Suppliers were categorized by procurement category and application, including raw materials, outsourcing, Outsourced semiconductor assembly and testing (OSAT), machinery and equipment, components and spare parts, maintenance and repair, facility engineering, and others (transportation and logistics, waste treatment vendors, waste hauling vendors, IT equipment and software, and general services).
 

Winbond Supplier Management Cycle

A robust supplier partnership served as the foundation of Winbond’s supply chain operating system. Winbond implemented a systematic Plan-Do-Check-Act (PDCA) management cycle—from early-stage sourcing and assess, to mid-stage regular supplier assessment, to late-stage deficiency follow-up and corrective actions—to secure stable supply relationships. Winbond not only maintained strict internal control over material technology but also emphasized external collaboration to advance SDG 17. Through close supplier interaction, audits, and continuous improvement, Winbond acted as both a supervisor and an enabler by providing resources and support to drive shared transformation.

Sourcing and Assessment of New Suppliers

Winbond’s new supplier selection mechanism included quality system assessments (covering quality, lead time, service, technology, and supplier’s quality system), the Responsible Business Alliance Code of Conduct, and corporate sustainability requirements. As a member of the Internal Compliance Program (ICP) of the International Trade Administration, Ministry of Economic Affairs, Winbond also screened UN Security Council and Taiwan Ministry of Justice sanctions lists at the traceability stage to safeguard supply chain security.
Suppliers that met compliance requirements were required to provide third-party quality system certificates, Process/Product Change Notice (PCN) management principles, and completed hazardous substances management questionnaires. For outsourced manufacturing suppliers for security products, additional third-party certificates and the “Security Product Outsourced Processing Safety Control Measures Checklist Questionnaire” were required. In 2025, the Winbond Group added 13 new suppliers (5 for Winbond Taiwan, 7 for Nuvoton Taiwan, and 1 for Nuvoton Japan), and 100% passed selection against economic, environmental, and social (including human rights) standards.

Winbond Supplier Code of Conduct Commitment Letter

To ensure a safe working environment in the supply chain, protect employees' dignity and respect, implement environmental responsibility, and adhere to ethical conduct, Winbond Electronics and its subsidiaries have developed the Winbond Electronics Supplier Code of Conduct in accordance with the Responsible Business Alliance (RBA, formerly EICC) Code of Conduct. Winbond requires suppliers to comply with this code and adhere to the laws and regulations of the countries and regions in which they operate. Suppliers are also encouraged to require their suppliers, contractors, and service providers to acknowledge and adopt this code.

The code consists of five sections：

• Sections A, B, and C outline standards for labor, health and safety, and the environment, respectively.
• Section D covers business ethics standards.
• Section E details the elements necessary for a proper management system to enforce the code.

The formulation of this code draws on several international guidelines and standards: Eco-Management and Audit Scheme (EMAS) for environmental management and audit systems. OECD Guidelines for Multinational Enterprises, UN Guiding Principles on Business and Human Rights, UN Universal Declaration of Human Rights, ILO Declaration of Fundamental Principles and Rights at Work, and ILO Fundamental Conventions for human rights assessments. Social Accountability International (SAI, SA8000) and the United Nations Convention against Corruption for governance. These references collectively inform the comprehensive "Winbond Electronics Supplier Code of Conduct."

Regular Evaluation of Qualified Suppliers

Winbond conducted an annual evaluation for qualified suppliers. Reflecting Winbond’s production specialization, suppliers were grouped into (1) suppliers and (2) OSAT suppliers. The assessment scope covered core indicators such as quality, cost, delivery, and service. Results were managed through a tiered system: suppliers were categorized as A (excellent), B (good), or C (under review), while OSAT suppliers were graded as Excellent, A, B, or C. To advance sustainable supply chain transformation, Winbond incorporated sustainability performance into regular assessments starting in 2024 and increased the weighting from 5% to 15% in 2025, covering participation in sustainability activities, target-setting, and energy-saving and carbon reduction outcomes. An ESG penalty mechanism was introduced to ensure fairness. Suppliers that failed to meet standards were required to submit improvement plans within one month; persistent underperformance triggered a supplier offboarding process to maintain compliance and resilience.
In 2025, no suppliers in Winbond (Taiwan) were terminated due to major sustainability deficiencies. One supplier received a C grade and implemented improvement measures within one month; all other suppliers and OSAT suppliers achieved B grade or higher and A grade or higher, respectively. Winbond will continue proactive communication, monitoring of government enforcement disclosures, and tracking of supplier operating dynamics to ensure stable supply on a compliance basis, while providing positive incentives for suppliers with strong sustainability performance.
 

Mechanism to Incentivize Suppliers with Strong ESG Performance:

1. Awards and public recognition are presented during supplier forums or contractor conferences.

2. The Sustainable Supply Chain Team conducts ESG performance evaluations, audits, and provides capacity-building support for suppliers/contractors. The results are integrated into procurement decision-making processes through positive procurement incentives (e.g., preferential selection, increased order volume).

Example: If a supplier can demonstrate that 100% of waste generated during production is recycled or treated through circular methods, Winbond will increase the procurement volume under equal quality and cost conditions.

Qualified Supplier Audit and Improvement

To manage qualified suppliers’ operations effectively, Winbond’s supplier audit team conducted annual key-sample audits for all qualified suppliers. Desk audits verified valid certificates such as quality management and green review certifications. On-site audits, centered on the RBA 8.0 audit manual, conducted systematic sustainability assessments. In 2025, Winbond conducted 72 audit sessions (24 raw material suppliers, 16 OSAT suppliers, and 32 waste disposal suppliers), identifying 287 improvement recommendations. Compared with 2024, improvement items increased due to expanded sustainability coaching and supplier management needs. Suppliers submitted corrective action plans within agreed timelines, and none were removed from the qualified supplier list due to non-compliance in environment, safety, and health; labor and ethics; product and technical quality; or sustainability management systems. Winbond will expand high-frequency sustainability coaching and training to embed sustainability awareness into supply chain culture and strengthen practical capabilities.

Results of Regular Desk Audits on Qualified Suppliers across Economic, Environmental, and Social (including Human Rights) Aspects

Supplier ESG improvement actions