Stakeholder Engagement｜Material Issues and Management Approach

Material Issues and Management Approach

Matrix of Level of Potential Positive and Negative Impact and Likelihood of Occurrence

Definition of positive impact : Refers to positive or noticeable results generated by Winbond implementing measures in response to the topic, leading to a positive economic, environmental, or social (including human rights) impact on sustainable development. Definition of Negative impact: Refers to the negative economic, environmental, or social (including human rights) impact caused by Winbond’s overall business operations due to Winbond failing to implement or poorly implementing measures in response to the topic.

Matrix of Level of Potential Positive Impact and Likelihood of Occurrence

All

Environmental (E)

Social (S)

Governance (G)

Ranking of top 10 sustainability issues with positive or negative impact and likelihood of occurring

Matrix of Potential Negative Impact and Likelihood of Occurrence

All

Environmental (E)

Social (S)

Governance (G)

Note: Ranking of top 10 sustainability issues with positive or negative impact and likelihood of occurring

Material topics and their relationship with Winbond value chain

Environmental (E)

Social (S)

Governance (G)

Material Topic	Topics defined in GRI Standards/ Self-defined Topics	Implications of Material Topic to Winbond	Type of impact(positive/negative)	Description of impact(description of economy, environment, and people (including human rights) impact)	Scope of Impact to Value Chain			Corresponding Section
Material Topic	Topics defined in GRI Standards/ Self-defined Topics	Implications of Material Topic to Winbond	Type of impact(positive/negative)		Winbond	Customers	Supply Chain	Corresponding Section
Green Product	GRI 417 Marketing and Labeling	Creating value, reducing risks, and developing sustainable technologies and products in order to create secure, energy-saving, and smart lifestyles.	Improving product functions and reducing product energy consumption can create positive benefits for the environment. Product market competitiveness.	Consistent with sustainability trends, meet customer expectations, improve product positioning and revenues, while also benefiting the environment. Product value and revenues would fall if Winbond is unable to meet customer requirements.				Green Product
Energy and Carbon Emissions Management	GRI 302 Energy GRI 305 Emissions	Extreme climate conditions threaten to upset ecosystem balance. Winbond needs to do our part to save energy and reduce carbon emissions.	If energy consumptions and emissions go unmanaged, this may lead to severe environmental impacts and accelerate the negative impact of climate change. Carbon emissions management, calculating and managing carbon costs.	Reduce the likelihood of extreme climate conditions impacting business operations. Manage Winbond’s energy consumption and Carbon emissions, effectively reducing costs.				Environmental Sustainability

Material Topic	Topics defined in GRI Standards/ Self-defined Topics	Implications of Material Topic to Winbond	Type of impact(positive/negative)	Description of impact(description of economy, environment, and people (including human rights) impact)	Scope of Impact to Value Chain			Corresponding Section
Material Topic	Topics defined in GRI Standards/ Self-defined Topics	Implications of Material Topic to Winbond	Type of impact(positive/negative)		Winbond	Customers	Supply Chain	Corresponding Section
Human Resources Management	GRI 401 Employment GRI 403 Occupational Health and Safety GRI 404 Training and Education GRI 405 Diversity and Equal Opportunity GRI 406 Non-discrimination GRI 408 Child Labor	Talent is the key to Winbond’s success. Recruiting talent, using talent, cultivating talent, and retaining talent are all long-term operational tasks.	Two-way communications between employers and employees help promote smooth business operations. Workplace safety, and rules on diversity and equality can all affect whether talent is retained, or leaves the Winbond.	Through recruiting and retaining talent, as well as improving employee abilities and self-worth through cultivating employee growth, companies with high employee satisfaction can better achieve sustainable management and improve research, development, and innovation capabilities. Implement measures for occupational health and safety management, preventing serious injuries, and improving employee physical and mental health.				Human Rights and Social Inclusion

Material Topic	Topics defined in GRI Standards/ Self-defined Topics	Implications of Material Topic to Winbond	Type of impact(positive/negative)	Description of impact(description of economy, environment, and people (including human rights) impact)	Scope of Impact to Value Chain			Corresponding Section
Material Topic	Topics defined in GRI Standards/ Self-defined Topics	Implications of Material Topic to Winbond	Type of impact(positive/negative)		Winbond	Customers	Supply Chain	Corresponding Section
Business Integrity and Corporate Governance	GRI 205 Anti-corruption GRI 206 Anti-competitive behavior	The foundation of how high-tech companies are able to survive during the information economy age.	Improve positive brand image Corruption and anti-competitive behavior reduce the trust that stakeholders have in Winbond, negatively affecting our operating revenue	Good corporate governance and legal compliance leads to increased investment Avoids Winbond and other Winbond entities from losing assets or rights due to illegal behavior				Corporate Governance
Regulatory Compliance	Regulatory Compliance (Self-defined Topics)	Winbond is committed to a corporate philosophy of sustainable development, and to doing our part as a responsible corporation. Winbond has complied with all laws and regulations throughout our overall business operations.	Receiving legal or regulatory penalties may damage Winbond’s reputation, and negatively impact our financial situation and employees.	Complying with laws and regulations improves our reputation, leading to increased investment and revenues. Avoiding negative impacts to society and Winbond from violating social and environmental laws and regulations				Environmental Sustainability Human Rights and Social Inclusion Corporate Governance
Risk Management	Risk Management (Self-defined Topics)	A sound and well-implemented risk management system is the foundation of Winbond’s sustainable business operations.	Improve corporate resilience, reducing the impact of risk on the Winbond. Without a risk management system, potential risks that occur may damage Winbond’s reputation and lead to financial losses Information security leaks may lead to security or financial losses	Through effective corporate governance, human rights, and supply chain risk management systems, the impact and likelihood of risks from climate change and human factors can be reduced Encourage greater investment from Winbond’s stakeholders				Corporate Governance
Research, Development and Innovation	Research, Development and Innovation (Self-defined Topics)	Research, development and innovation into our products, technologies, and business model are the sources of our competitiveness and value. They are also one of the most effective ways to conserve energy and reduce carbon emissions.	Research and development into improving energy conservation and carbon reduction performance are able to provide both Winbond and our customers with benefits. If research, development, and innovation are unable to provide results that customers are satisfied with, Winbond’s competitiveness would decline.	The energy conservation and carbon reduction benefits provided through research and development are able to reduce environmental impact. Innovative technologies can satisfy customer requirements, leading to more competitive products and higher revenues for Winbond.				Green Product
Productivity and Business Performance	GRI 201 Economic Performance	Productivity and business performance are critical to Winbond’s continued development. Improving productivity can lead to lower costs and less waste while increasing income at the same time, further increasing corporate profits and improving business performance.	Increased productivity, positively impacting revenues. Insufficient productivity, reducing business performance.	Increased productivity can reduce costs and waste, improving business performance and capabilities. Insufficient productivity can lead to higher costs and waste, leading to revenue losses and increased environmental burden.				Corporate Governance
Supply Chain Management	GRI 308 Supplier Environmental Assessment GRI 414 Supplier Social Assessment	Building a sustainable and resilient supply chain system, coordinating and integrating logistics, production, procurement, and other sales-related activities, achieving high production and service efficiency and maximizing value.	Refine the supply chain management system, making the goods supply process more stable and smooth. Supply channels obstructed, leading to production and sales delays.	Build a comprehensive supply chain management system, ensuring that supply is stable, leading to increased business production efficiency and higher revenues. Poor management of the social and environmental aspects of the supply chain, leading to lower customer trust and sales orders.				Sustainable Supply Chain

Note:

Direct impact
Indirect impact through commercial relationship

Strategies and Goals for Material Topics

Business Integrity and Corporate Governance

Regulatory Compliance

Risk Management

Research, Development and Innovation

Productivity and Business Performance

Supply Chain Management

Green Product

Energy and Greenhouse Gas Management

Human Resources Management

Legal compliance is the minimum threshold to be achieved. The Winbond considers “ethical business management” to be the highest standard for business ethics, and by following these standards, the Company strives for mutual prosperity for both the Company and society.

Medium and long-term goals (refers to goals planned to be achieved in 2030 or later)

The corporate culture of ethical business management is deeply rooted in our sales operations, where Winbond aims to win the trust of long-term customers.

Short-term goals (refers to goals planned to be achieved before 2030)

Fulfill our responsibilities as Winbond management, protecting the legitimate rights and interests of shareholders, and the rights of other stakeholders.

Outcome of Management Approach Assessment

Winbond was ranked in the top 6-20% by the 2022 Corporate Governance Evaluation.
No violations of laws and regulations on corporate governance and business integrity.

Winbond shall fully complies with all laws and regulations on corporate governance, financial operations, trade, environmental protection, occupational safety and health, information security, intellectual property, worker rights, internal controls, and risk management relevant to our business operations.

Medium and long-term goals (refers to goals planned to be achieved in 2030 or later)

Held 15 courses each year on legal compliance.
Assessed the adoption of the ISO 37301 Compliance Management Systems standard
Completed 2 legal compliance review meetings for each year.
Complied with international and domestic laws, no major legal violations reported

Short-term goals (refers to goals planned to be achieved before 2030)

Improved legal compliance management systems
Held 12 courses each year on legal compliance.
Complied with international and domestic laws, no major legal violations reported

Outcome of Management Approach Assessment

Held courses each year on legal compliance (including courses on: corporate law, securities and exchange laws, insider trading, business secrets, labor standards laws, labor laws, information security, occupational safety and environmental protection, and environmental safety and protection for new hires), 10 courses held in total.
No legal violations occurred in 2022.

Adhering to the goal of sustainable business operations, establishing a risk management mechanism, integrating and managing various potential risks that may affect operations and profitability, including but not limited to financial, environmental, cybersecurity, operational, and climate risks.

Medium and long-term goals (refers to goals planned to be achieved in 2030 or later)

Establish long-term identification, analysis, evaluation, response, monitoring, and review systems.

Short-term goals (refers to goals planned to be achieved before 2030)

Regularly convene risk management committee meetings, continuing to track and implement risk management measures.

Outcome of Management Approach Assessment

Any lapses discovered shall be reviewed by the responsible employees or department, and an action plan shall be proposed to address the issue.

Winbond promises to provide the most competitive products and services in our targeted markets. Winbond promises to deliver most energy efficient and power saving, as well as low carbon emission, products through our innovative technologies from R&D.

Medium and long-term goals (refers to goals planned to be achieved in 2030 or later)

Winbond strives to exceed our customers’ expectations for product energy efficiency and performance through our technologies, designs, and manufacturing.
Together with our strategic partners, Winbond is developing new technologies and products capable to sustain long term business operations and enrich human beings’ lifestyles.

Short-term goals (refers to goals planned to be achieved before 2030)

Winbond will reduce the carbon emissions from each new generation by 20% per bit(memory unit).
Winbond will target at over 80% satisfaction ratings for both internal and external customers.
To achieve technical leadership, Winbond will have over 350 patent approvals globally by 2023.

Outcome of Management Approach Assessment

Granted nearly 380 patents, and the accumulated granted patents have exceeded 4,500 as of 2022.
Completed ISO 14067 carbon footprint inventory for our IC products.
Our pioneering 1.2V NOR Flash uses 45% less power than the current 1.8V NOR Flash in mainstream today.
Winbond completed JEDEC reliability test procedures for low temperature soldering, reducing carbon dioxide in the manufacturing process by approximately 57 tons a year.

Winbond is committed to improving productivity and business performance, with sustainable development and the enhancement of corporate value as our guiding goals. We are actively promoting digital transformation, introducing advanced technology, and popularizing the application of data and AI. We continuously optimize our business strategy and management models to improve corporate competitiveness and market share, while also strengthening employee training and motivation.

Medium and long-term goals (refers to goals planned to be achieved in 2030 or later)

Through world-class technology and innovation, optimization of internal management optimization, promotion of digital transformation and cultivation of a forward-thinking culture, we are committed to continuously improving Winbond’s productivity and business performance.

Short-term goals (refers to goals planned to be achieved before 2030)

Between 2023 and 2025, we aim to complete more than 72 promotion activities and training courses related to digital transformation across the entire company.
We plan to deploy a productivity tracking system by 2025.

Outcome of Management Approach Assessment

We have achieved a consolidated total revenue of NTD 94.53 billion.

Winbond is committed to ensuring the stability of our supply chains, improving supply chain transparency, and establishing and implementing polices on environmental protection and corporate social responsibility through close collaborations with our suppliers. These efforts aim to promote the overall legal compliance and continued development of the overall supply chain.

Medium and long-term goals (refers to goals planned to be achieved in 2030 or later)

Establish a global supply chain by 2030 able to effectively diversify operating risks, providing the overall supply chain with more potential for continued development. Further promote our values to indirect suppliers, continuously expanding the scope of our influence in promoting environmental protection and corporate social responsibility.
Reduce carbon emissions from our supply chain by 10% by 2030.

Short-term goals (refers to goals planned to be achieved before 2030)

Improve the reliability of our supply chain, optimize inventory management, and improve supply chain risk management by 2024.
Establish a high-quality supply chain management team by 2026, and gradually begin building up a sustainable green supply chain, improving the environmental-friendliness and corporate social responsibility of our products.

Outcome of Management Approach Assessment

100% of suppliers have signed Winbond’s sustainable supply chain declarations and documents.
100% of audited suppliers have no major environmental, social responsibility, and corporate governance issues, and no audited suppliers have consequently been disqualified.

Winbond’s vision is to become a “hidden champion in providing sustainable semiconductors to enrich human life”, and Winbond has devoted ourselves to developing a high-efficiency, small-size, low energy-consumption, and high-quality green memory products and green manufacturing processes.

Medium and long-term goals (refers to goals planned to be achieved in 2030 or later)

Reduce carbon emissions from flash memory by 110,000 tons by 2030 (using the total number of products shipped in 2021 as the baseline).
By using the 16nm advanced technology process by 2030, the new developing DRAM memory is able to reduce carbon emissions by 20% across its product life cycle.

Short-term goals (refers to goals planned to be achieved before 2030)

Reduce carbon emissions from flash memory by 35,000 tons by 2024 (using the total number of products shipped in 2021 as the baseline).
Develop new flash memory products apply to new energy and healthcare applications to reduce carbon emissions by 34% and electricity consumption by 27% per chip.

Outcome of Management Approach Assessment

According to the total sales volume of 1.2V NOR Flash in 2022, compared with the power consumption of 1.8V NOR flash, it will save up-to 493,727 kWh of power consumption, which is equivalent to a reduction of 251.3 tons of carbon dioxide equivalent.

Combine data science and professional knowledge, and together with our plant facility systems suppliers, continue to improve energy usage efficiency, gradually increase the proportion of renewable energy used, and reduce greenhouse gas emissions.

Medium and long-term goals (refers to goals planned to be achieved in 2030 or later)

Have our Central Taiwan Science Park (CTSP) Facility use 90% renewable energy by 2030.
Reduce carbon emissions from our CTSP Fab by 60% by 2030.
Achieve net-zero emissions across the whole Company by 2050.

Short-term goals (refers to goals planned to be achieved before 2030)

Reduce energy consumption by 2-3% each year from 2023 to 2030.
Reduce greenhouse gas emissions intensity by at least 5% per unit year-on-year from 2023 to 2030.
Reduce product energy consumption by at least 1% per product unit year-on-year from 2023 to 2030.
Recycle at least 80% of all water used by our plant facilities each year from 2023 to 2030.
Recycle at least 90% of all total waste produced each year from 2023 to 2030.

Outcome of Management Approach Assessment

Conducted ISO 14067 carbon footprint inventory of a portion of our IC products in 2022.
Fully adopted ISO 14064-1 greenhouse gas emissions inventory standards and audits across the entire Company.
Our Central Taiwan Science Park (CTSP) Facility achieved ISO 50001 Energy Management Systems certification.

Winbond is committed to providing a high-quality working environment, competitive compensation and benefits to attract, develop, and retain our talents, aiming to enhance employee engagement and dedication.

Medium and long-term goals (refers to goals planned to be achieved in 2030 or later)

Implement human rights management by promoting human rights concepts and due diligence checks, to manage and continuously improve human rights risks.
Provide competitive compensation, salary, and benefits, as well as diverse training resources to enhance employee engagement, creating a stable and attractive workplace.
To increase our impact in social welfare activities, we actively participate in various social welfare initiatives.

Short-term goals (refers to goals planned to be achieved before 2030)

Conduct human rights training continuously, with the goal of achieving a 100% global training rate.
Maintain overall compensation within the top 25% level in the industry.
Aim to have more than 95% of employees willing to contribute their expertise in Winbond for the next five years.
Continue donating to promote social inclusion each year.
Achieve an average of 48 hours of learning per employee per year.

Outcome of Management Approach Assessment

Completed human rights due diligence investigation in 2022.
Performance evaluations were conducted for both direct and indirect employees, with a 100% participation rate
Winbond achieved the highest Platinum level certification in the Responsible Business Alliance (RBA) Validated Assessment Program (VAP)
Average annual learning hours per employee were 42 hours.
No significant deficiencies were found in audits or labor inspections

Systems for Managing Material Topics

Environmental (E)

Social (S)

Governance (G)

Material Topic	Tracking Systems	Reporting/Communication Mechanism
Green Product	Established goals to reduce energy consumption during production and product energy consumption in our new product development plans, tracking how effectively Winbond can conserve energy and reduce carbon emissions during the actual production process.	Innovation R&D teams regularly meet for discussions and brainstorming sessions, while carrying out product development innovative new ideas are implemented with the goal of reducing carbon emissions and energy consumption throughout the product development processes of raw materials, innovative design, testing, packaging and production,
Energy and Carbon Emissions Management	ISO 14067 Verifying carbon footprint of products ISO 14064-1 Greenhouse gas emissions verification ISO 50001 Energy management systems verification Regular reports made by ESG committee	ESG committee regularly reports on how Winbond is managing and reducing its energy consumption and greenhouse gas emissions, and continues to review, analyze, and plan improvement measures. ESG Committee is also responsible for monitoring domestic and international trends, laws, and regulations.

Material Topic	Tracking Systems	Reporting/Communication Mechanism
Human Resources Management	Regularly review human rights due diligence investigation. Regularly review the Employee Core Values and Engagement Survey. Conduct salary surveys on the labor market. Regularly review Responsible Business Alliance certification audits. ISO 45001 Occupational safety and health management systems verification Safety performance indicators	Diverse, open, and transparent channels for effective communication: Physical suggestion boxes 75234 Employee Complaints Hotline Care Complaints Mailbox Sexual Harassment Complaints Committee, etc. Functional regular communications meetings: Employer-employee Meetings Management Discussion Meetings Employees Welfare Committee etc.

Material Topic

Tracking Systems

Reporting/Communication Mechanism

Human Resources Management

Regularly review human rights due diligence investigation.
Regularly review the Employee Core Values and Engagement Survey.
Conduct salary surveys on the labor market.
Regularly review Responsible Business Alliance certification audits.
ISO 45001 Occupational safety and health management systems verification
Safety performance indicators

Diverse, open, and transparent channels for effective communication:

Physical suggestion boxes
75234 Employee Complaints Hotline
Care Complaints Mailbox
Sexual Harassment Complaints Committee, etc.

Functional regular communications meetings:

Employer-employee Meetings
Management Discussion Meetings
Employees Welfare Committee etc.

Material Topic	Tracking Systems	Reporting/Communication Mechanism
Business Integrity and Corporate Governance	Through systematic audits and internal controls implemented by functional committees. Established whistleblowing systems, acting together with the monitoring system implemented by the audit committee under the Board of Directors. Externally, Winbond is subject to regular accountant audits, who also communicate appropriately with the Audit Committee.	Established whistleblowing system: Whistleblowing channels for stakeholders on Winbond’s website. (Anonymous/Non-anonymous) reporting hotline and mailbox.
Regulatory Compliance	Notification system: Disciplinary actions and penalties are managed and regular progress reports made until the case is resolved. Review system: Annual legal compliance review meetings are convened, where each responsible department reports on any issues that have occurred, and the preventive measures taken. Reporting system: Winbond’s Chief Corporate Governance Officer shall report on the year’s legal compliance operations to the President in the annual Management Audit Meeting, and report on the summarized results in the first meeting of ESG committee the following year. Possesses ability to learn about new global laws and regulations.	Legal Department assist with the legal questions or provide legal advice.
Risk Management	Risk identification shall be carried out using the risk identification results of other companies in the industry as a benchmark for comparison. Risk analysis indicators and calculations shall be based on methods accepted by the industry or academic community, and adjusted when appropriate, in order to maintain objective and correct results. The approved risk appetite and the results of regular assessments shall be combined with information systems in order to produce management reports, ensuring that risk assessments have been conducted. Risk management operations and other related documents will be included in Winbond’s internal controls, and disclosed when necessary pursuant to law.	Established whistleblowing system: Whistleblowing channels for stakeholders on Winbond’s website. (Anonymous/Non-anonymous) reporting hotline and mailbox.
Research, Development and Innovation	Conduct internal and external satisfaction surveys each year. Conduct product competitiveness analyses each year, ensuring that our products possess competitive advantages. Conduct product competitiveness analyses each year, ensuring that our products meet energy consumption and carbon footprint reduction goals. Upper management personally communicate with customers each quarter, directly learning what expectations customers have towards our service and products. Review business performance of each business group year, as an indicator of each group’s competitiveness.	Innovation R&D teams regularly meet for discussions and brainstorming sessions, incorporating various internal opinions and suggestions. Intellectual Property Department provides R&D departments with training related to intellectual property protection and invention proposals, as well as consultation on patent strategies.
Productivity and Business Performance	Digital Transformation Committee: Responsible for promoting an overall digital transition, further improving productivity and business performance. Also reviews digital transformation plans and results, while also monitoring employee abilities and training. Benchmark comparisons: Understand the role of Winbond in the industry, and our strengths and weaknesses. Discover problems and opportunities, and establish refined plans in response. Stakeholder feedback: Collect suggestions on Winbond’s productivity and business performance to improve Winbond’s fulfillment of corporate social responsibilities and brand image.	Established whistleblowing system: Whistleblowing channels for stakeholders on Winbond’s website. (Anonymous/Non-anonymous) reporting hotline and mailbox.
Supply Chain Management	Winbond has continued to conduct internal and external audits, alongside other measures for verifying product quality. At the same time, Winbond has also conducted regular evaluations of our suppliers, detecting, preventing, and resolving issues, and helping our suppliers propose methods for improvement. From 2022 onwards, due to climate change and sustainable development trends, Winbond has engaged in ESG exchanges and conducted ESG investigations into our suppliers, creating a low carbon emissions supply chain management investigation report, and continuing to track how our suppliers are progressing in reducing carbon emissions. Held a supplier conference and ESG workshop for material (key) suppliers, engaging in two-way communication.	Held a supplier conference and the Sustainable Supply Chain Upgrading forum, engaging in two-way communication at the venue.