Our Focuses｜Sustainable Supply Chain｜Sustainable Risk Assessment
Sustainable Supply Chain
Winbond anchored its sustainable supply chain program in "Practicing Responsible Procurement," and a "People-oriented", integrating ecosystem thinking into governance and day-to-day supply chain operations. Through the dual transformation pillars of digitalization and decarbonization, Winbond strengthened controls, data collection, and collaboration mechanisms to support measurable progress.
In a volatile operating environment, maintaining business continuity requires innovation and agile response. Winbond worked with suppliers through audits, training, and digital data systems to strengthen operational resilience and manage ESG risks across the supply base.
Winbond strengthened supplier engagement and expanded value-chain collaboration. In 2025, Winbond received an A rating in the CDP Supplier Engagement Assessment (SEA), achieving Leadership level recognition.
Through value-chain climate collaboration, Winbond supported partners’ low-carbon transition and co-developed a climate-resilient sustainable supply chain ecosystem.
CDP Supplier Engagement Assessment
A List
OSAT Suppliers have Established Production Capacity for Renewable Energy-Based Products
100
%
Co-learning Hours of Eco Supply Chain System
56842
Hours
Sustainable Supply Chain Risk Management
To manage global suppliers’ delivery capabilities effectively, Winbond established a rigorous screening and assessment mechanism. This mechanism comprehensively evaluates production-base and technical-service stability across three dimensions—country, sector, and commodity. After suppliers enter formal cooperation, Winbond conducts integrated assessments and management across business principles, significant supplier identification, and sustainability (ESG) criteria to build a resilient global supply chain.
Winbond supplier focus aspect:
- Country-specific: political and country stability, legal and regulatory rigor, frequency of social events (e.g., strikes and demonstrations), and robustness of national infrastructure.
- Sector-specific aspect: energy and resource intensity, uniqueness of natural resources (specific minerals), and specialization of technology and services.
- Commodity-specific aspect: supply–demand balance, price volatility, labor availability, and the fixed equipment and capital requirements.
- Business relevance: market share, industry competitiveness, supply performance and reputation within the industry, product/technology/service quality, and operating facilities and manufacturing equipment.
- Significant supplier identification criteria: annual procurement spend, diversification of supply sources, and critical spare parts.
- Sustainability (Environmental, Social, Governance) aspect: environmental protection and climate response, protection of human and labor rights, and governance capabilities and transparency.
Given that procurement behaviors at Winbond (Taiwan) connected diverse suppliers across different production bases to provide products and services, Winbond applied a systematic approach to supply chain risk management.
- First, Winbond used ISO 31000-based systematic thinking for monitoring and impact assessment:
- Second, Winbond categorized risk sources into Material risks, intra-partnership risks, and external risks.
- Third, Winbond established corresponding management methods based on differences in risk sources and types.
- Fourth, Winbond reviewed each management incident, corrected deficiencies, and implemented improvements to reduce future impacts on supply chain management.
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Supply Chain Risk Management Mechanism
Material Risk
Risk that directly related to the production and manufacturing
- Managed based on the Responsible Business Alliance (RBA) requirements for conflict-free minerals; conducted annual due diligence for significant suppliers using the RMI Conflict Minerals Reporting Template (CMRT) and issued a conflict minerals due diligence report.
- Ensured product quality by establishing Process/Product Change Notice (PCN) principles; triggered controls when raw materials, processes, or packaging materials changed.
Intra-partnership Risk
Supply chain partnership risks arising from integrity risks driven by comparative advantage among members
- Regularly updated the Winbond Supplier Code of Conduct and required signing for all new qualified suppliers.
- Conduct biannual communication on ethics and integrity policies for all suppliers.
- Declared Winbond information security policy in purchase orders, required suppliers to comply, and defined response measures and liability for cybersecurity incidents.
External Risk
Risks from climate change and natural disasters, and non-natural risks
(political, economic, and social)
- Natural disasters: used the Emergency Response System to reflect global earthquakes in real time and supported procurement in assessing supplier impacts.
- Climate change: analyzed disaster exposure for global supplier sites under warming scenarios.
- Political, economic, and social risks: for events such as war, major safety incidents, and strikes that could disrupt supply, Winbond established an emergency response taskforce to collect, consolidate, report, analyze, and assess impacts.
- Strictly complied with Authorized Economic Operator (AEO) regulations and required OSAT suppliers to comply with trade security management.
Mitigation and adaptation measures for supply chain climate risks
Winbond, as a semiconductor manufacturer, faces potential severe impacts on operational and financial fronts from natural disasters, accidents, human errors, changes in international political and economic situations, emergence of new technologies, and regulatory changes. Suppliers are critical partners in Winbond's operations, and their ability to adapt to climate risks is naturally a key success factor in advancing supply chain sustainability efforts. Through regular climate-related financial disclosures, Winbond identifies climate risks and opportunities. In 2023, a total of 14 climate risks and 12 climate opportunities were identified. Immediate impacts were identified on suppliers' operations, particularly in energy and water management. Currently, ongoing efforts include regular assessments to monitor Tier-one suppliers' actions in energy and water resource management, and encouraging waste reduction and management within their existing operational frameworks.
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Sustainable risk Due Diligence in the supply chain
In recent years, significant occurrences of extreme weather events, unpredictable fluctuations in global health crises, and geopolitical conflicts have led to rapid shifts in various industry landscapes. This has highlighted the importance of maintaining resilience within supply chains and strengthening adaptive capabilities to manage diverse disasters and changes. These capabilities have become a core focus in corporate management.
To effectively ensure and support suppliers in their sustainable journey, Winbond conducts regular due diligence investigations on sustainability risks among suppliers. This helps in identifying the types and impacts of risks across the supply chain, and in planning improvement strategies to ensure stability, quality, and reliability of supply.
Sustainability risk due diligence process
Supplier sustainability due diligence process
- First, suppliers are required to comply with Winbond Electronics’ Supplier Code of Conduct.
- Second, drawing on the Responsible Business Alliance (RBA) Code of Conduct, the ISO 20400 Sustainable Procurement Guidelines, and PAS 7000 Supply-Chain Risk Management, Winbond has established a due-diligence framework. The company regularly ranks and classifies suppliers with whom it transacts each year and proactively issues questionnaires.
- Third, issue surveys, track suppliers’ filling status, and provide explanations and assistance as needed.
- Fourth, after the investigation and recovery, the sustainability evaluation and audit work will be started. In the written audit, the documents attached by the supplier will be comprehensively reviewed based on the environmental aspect (E), social aspect (S), and governance aspect (G). The degree of compliance with the scoring content identifies suppliers with negative impacts. Among them, those whose average score does not reach 80 points are listed as key suppliers, and the suppliers are notified to conduct on-site audits, on-site visits and inspections, to understand the reasons for the negative impact.
- Fifth, concentrate coaching resources to require high-risk suppliers to improve their deficiencies; at the same time, observe the operational resource status of high-risk suppliers and match coaching resources to intervene to reduce their transformation burden.
- Sixth, Regularly track the implementation status of corrective actions by high-risk suppliers.
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Content of supplier ESG risk assessments
Winbond utilizes the Responsible Business Alliance (RBA) Code of Conduct, ISO 20400 Sustainable Procurement Guidelines, and PAS7000 Supply Chain Risk Management to establish due diligence frameworks. The approach includes:
- Environmental considerations and protection aligned with the Eco-Management and Audit Scheme (EMAS) within the core of the RBA framework.
- Human rights assessments referencing the 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.
- Governance aspects incorporating Social Accountability International (SAI, SA8000) standards and the UN Convention against Corruption.
These frameworks collectively form the basis for Winbond's Supplier Code of Conduct and Winbond Sustainability Assessment Questionnaire (SAQ), ensuring comprehensive evaluations and commitments to sustainability and responsible business practices throughout its supply chain.
E
Purpose
From a life-cycle and traceability perspective, encouraged and supported suppliers to operate on an environmentally friendly and economically sound basis.
Assessment items
- Environmental Management Systems
- Air Pollution Prevention
- Water Management
- Waste Management
- Greenhouse Gas Management
- Biodiversity Management
- Recycled Material Management
- Hazardous and Shared Substance Management
High-risk supplier identification criteria
- Penalty records within the last three years or still under penalty mitigation
- GHG emissions > 25,000 tCO₂e and no management measures
- Carbon management maturity < 3 points
S
Purpose
Required suppliers to sign a code of ethical conduct and provide safe and healthy workplaces while protecting rights and interests.
Assessment items
- Human Rights Protection
- Adjustment and Management for Human Rights Risk
- Employment and Labor Rights Protection
- Occupational Health and Safety, and General Health
- Chemical Safety
- Fire Safety
- Equipment Safety
High-risk supplier identification criteria
- Penalty records within the last three years or still under penalty mitigation
- No clear management rules prohibiting child labor or protecting pregnant workers’ rights
- Inadequate management of living environments for migrant workers
G
Purpose
Required suppliers to treat integrity management as the highest ethical standard for stakeholders and implement it across all operations.
Assessment items
- Degree to Which Corporate Sustainability has been Formally Incorporated
- Sustainability Impact and Degree of Disclosure
- Climate Change Adaptation
- Business Continuity and Management
- Supply Chain Management
- Service Quality Management
- Business Ethics and Philanthropy
- Corporate Governance
- Information security
High-risk supplier identification criteria
- Penalty records within the last three years or still under penalty mitigation
- Cybersecurity concerns and IP litigation within the last three years
- No business continuity and supply chain management plan
Supply chain sustainability risk due diligence results
In 2025, Winbond (Taiwan) established Supplier Sustainability Due Diligence content based on RBA 8.0, ISO 20400:2017 Sustainable Procurement, and the OECD Due Diligence Guidance for Responsible Business Conduct. For the first time, Winbond implemented due diligence across all Tier-1 suppliers. To strengthen implementation among Tier-1 significant suppliers—including raw materials, OSAT services, and critical spares (e.g., quartz, photomasks, PAD) with significant procurement spend and direct manufacturing relevance—the Sustainable Supply Chain Team conducted rigorous desk reviews for 133 suppliers. On average, OSAT suppliers, machinery and equipment suppliers, and raw material suppliers performed better. Results also showed strong performance in occupational safety and health and in human rights and labor protection. However, to strengthen overall supply chain resilience, suppliers required further improvements in corporate sustainability and environmental and climate response management. Following the 2025 assessment results, 11 High-risk Suppliers were identified; 100% were required to submit improvement plans and were included in coaching and follow-up management.
Purpose
- Regularly survey, evaluate, and identify key risks and their impact levels in the supply chain.
- Conduct written audits based on ESG criteria to identify key focus suppliers.
- Perform on-site audits of key focus suppliers to identify high-risk categories and assess impact levels.
- Provide suppliers with improvement recommendations and appropriate resources.
- Mitigate concerns about the expansion of risk impacts.
- Signing rate of the Integrity and Ethics Policy among all suppliers: 100%
- 100% of Tier‑1 suppliers covered by sustainability due diligence
- 100% completion rate of sustainability guidance for high‑risk Tier‑1 suppliers: 100%
- Key risk categories:
- Corporate sustainability
- Climate-change response & environmental protection
| KPI For Supplier Assessment & Development | 2025 |
|---|---|
| Total number of unique suppliers | 1,105 |
| Number of unique significant suppliers | 45 |
| Number of unique significant suppliers supported with development measures | 45 |
| Percentage of suppliers supported in development measures | 100% |
| Number of unique significant suppliers assessed via desk assessments/on-site assessments | 45 |
| Percentage of unique significant suppliers assessed via desk assessments/on-site assessments | 100% |
| Number of unique significant suppliers assessed with substantial actual/potential negative impacts | 2 |
| Percentage of unique significant suppliers assessed with substantial actual/potential negative impacts | 100% |
| Number of unique significant suppliers with substantial actual/potential negative impacts with agreed corrective action/improvement plan | 2 |
| Number of unique significant suppliers with substantial actual/potential negative impacts that were terminated | 0 |
Note: Sustainable Supply Chain team developed an in-house supply chain risk assessment system. In 2025, Winbond conducted on-site sustainability audits for significant and high-risk suppliers in Taiwan. Therefore, the number of audits conducted was planned based on the previous year‘s assessment results.
Supplier Sustainability Risk Management Initiatives
To effectively and continuously manage the overall risk impact and sustainability of the supply chain, Winbond will implement three major measures regarding the enhanced resilience of the supply chain mentioned above.
| Measure Type | Key Action Items |
|---|---|
| Sustainability Audits | Based on desk audit results from annual Supplier Sustainability Due Diligence, prioritized suppliers with identified significant negative sustainability impact risks for follow-up management. In addition to existing second-party on-site audits aligned with industry standards, we expanded the number of third-party audits conducted annually. This initiative strengthens objectivity and improvement effectiveness for high-risk suppliers while supporting continuous follow-up tracking and management. |
| Introduce Industry– Government– Academia Coaching Resources | Connected industry–government–academia resources, matched suppliers with government coaching and capacity building programs, and supported suppliers with limited resources to improve sustainability management capabilities. |
| Supplier Sustainability Empowerment | Provided digital sustainability training and coaching resources through the Supplier ESG Interaction Platform and thematic forums. Topics included human rights due diligence, biodiversity, and climate and environmental management, supporting suppliers in understanding international sustainability requirements and domestic policy trends and improving independent improvement and long-term governance capabilities. |
Winbond Supply Chain Human Rights Risk Adaptation and Management
Internal Capability Building
In 2025, Winbond invited a benchmark supplier—Hewlett Packard Enterprise (HPE)—to share practical experience in supply chain human rights management, helping employees deepen understanding of human rights risks, management mechanisms, and international trends as a foundation for advancing supplier human rights management.
Communication of Supplier Management Principles
Through regular promotion, Winbond communicated that suppliers should respect labor human rights and ensure dignified work conditions, including prohibiting forced labor, child labor, and discrimination; safeguarding reasonable working hours and wages and benefits; and respecting freedom of association and an inclusive workplace culture as fundamental principles for supplier management and cooperation.
Survey Distribution and Assessment
In Supplier Sustainability Due Diligence, Winbond assessed the human rights and labor protection module and conducted preliminary human rights risk identification based on suppliers’ industry characteristics, operating models, and responses, serving as the basis for follow-up management and coaching.
Survey Results and Subsequent Response Plans
For suppliers identified with higher human rights risks, Winbond required the submission of corrective action plans (CAP) and verifies tracking progress through our subsequent follow-up and consultation mechanisms. When necessary, Winbond arranged for third-party professional organizations to conduct on-site audits or employee interviews, thereby reinforcing our understanding and management of the implementation of these corrective measures.