Stakeholder Engagement｜Materiality Analysis

Materiality Analysis Process

Winbond adopted the GRI 3: Material Topics 2021 of the Global Sustainability Standards Board (GSSB) to conduct its materiality analysis. The principles for identifying Winbond’s material topics were defined as: “high concern among stakeholders, significant impact on business operations, and alignment with Winbond’s sustainability management priorities.” To reflect the spirit of material topic management, Winbond consolidated topics with similar content and identified a total of nine material topics.
Winbond annually review material topics and related items to track long-term trends and changes. The company maintained transparent and open communication with stakeholders to stay informed of sustainability issues of concern.

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

Winbond followed the GRI Standards (2021) definition of materiality. Senior management assessed the impact through a questionnaire, considering the principle of Double Materiality to evaluate the positive and negative impacts of Winbond on 19 sustainability issues related to the economy, environment, and people (including human rights). Each issue was scored based on its likelihood (actual/potential impact) and the degree of impact.

Validation of Material Issues

Winbond identified material topics based on the importance among stakeholders, the impact on operations, and priority in sustainability.

	Sustainability Issues	Validation Principles			Material Topic
	Sustainability Issues	Importance among stakeholders	Impact on operations	Priority in sustainability	Material Topic
Governance	Business Integrity and Corporate Governance				Business Integrity and Corporate Governance
	Regulatory Compliance				Regulatory Compliance
	Risk Management				Risk Management
	Information Security and Personal Information Protection				Risk Management
	Research, Development and Innovation				Research, Development and Innovation
	Productivity and Business Performance				Productivity and Business Performance
	Supply Chain Management				Supply Chain Management
	Product and Services Quality				Green Product
Environment	Green Product				Green Product
	Energy and Greenhouse Gas Management				Energy and Greenhouse Gas Management
	Climate-related Risks and Opportunities				Energy and Greenhouse Gas Management
	Waste Management
	Water Resources Management
Social	Salary, Benefits, and Employee Care				Talent Management
	Talent Recruitment and Development
	Equality and Human Rights
	Employer-employee Relation
	Occupational Health and Safety
	Social Engagement

Materiality Analysis Results

Winbond identified issues with significant operational impact through materiality analysis and responded to stakeholder concerns and expectations regarding ESG topics. Priority was given to areas where Winbond could generate greater influence.
For details, please refer to the “Materiality Analysis Report” and the “Material Topics and Stakeholder Engagement Practices” section of the latest annual sustainability report.

2024 Sustainability Report - Leading a Sustainable Pathway 2022 Materiality Analysis Report

Potential Risks and Mitigation Measures for Material Topics

In a rapidly changing global environment, enterprises face diverse and complex challenges. To ensure sustainable development and operational stability, Winbond identifies risks and plans mitigation measures for material topics of concern to stakeholders. The company is committed to enhancing organizational resilience, strengthening compliance awareness, promoting technological innovation, and responding to customer and societal expectations for sustainability.

Material Issue	Potential Risks	Mitigation Measures
Integrity Management & Corporate Governance	Breach of integrity or governance leading to customer loss and reduced investment; Weak internal controls causing fraud or cybersecurity risks	Establish Code of Integrity; Regular training and internal audits; Three-line risk management framework; Whistleblower mechanism
Regulatory Compliance	Insufficient legal awareness among employees leading to violations	Ongoing compliance and integrity training to enhance awareness
Risk Management	Cyberattacks stealing confidential data; Environmental/climate risks disrupting customer service	Strengthen cybersecurity systems and training; Risk management policies and reporting to management and governance units
R&D Innovation	Lagging technology development or misalignment with market; Weak patent protection	Pursue sustainable innovation in green semiconductors; IP management system and patent committee
Productivity & Business Performance	Skills gap affecting efficiency and stability	Digital transformation training to enhance tool and process proficiency
Supply Chain Management	Disruptions due to raw material shortages, political interference, disasters, or transport issues	Increase inventory of critical materials; Diversify suppliers; Localize supply chains; Enhance digital systems for real-time monitoring
Green Products	Failure to meet customer demand for low-carbon products; Subpar product quality or environmental performance	Invest in R&D for product differentiation and customization; Adopt international standards for hazardous substances; Cross-functional teams for process control
Energy & GHG Management	Power supply disruptions due to outages or restrictions	Set RE50 green energy goal for 2030; Diversify power sources
Talent Management	Inability to attract or retain top talent	Provide competitive compensation and work environment; Global recruitment and diverse internal training

Winbond Star Awards – Recognizing Excellence in Core Cultural Values

Winbond established the “Winbond Star” award to recognize individuals and teams who exemplify core cultural values: integrity, accountability, passionate learning, proactive innovation, and sustainable contribution.
Approved by the Chairman, the award includes financial and non-financial incentives and is linked to leadership performance.
2024 award-winning teams demonstrated excellence in risk management, green product innovation, talent management, and productivity:

SAP S/4 Migration (ERP/ESR/DPR) Digital Transformation Team
D25 Silicon Capacitor Development Team
F24 NAND Flash Memory Technology Development Team
Carbon Intelligence Leadership Team

Stakeholder Engagement

Winbond adopted the five core principles of the AA1000 Stakeholder Engagement Standard 2015 (AA1000 SES), including Dependency, Responsibility, Influence, Tension, and Diverse Perspectives, to identify and prioritize the degree of relationship with stakeholders.
In 2022, 22 senior executives conducted stakeholder identification to assess the level of relevance between stakeholders and Winbond. Seven major stakeholder groups were identified: employees, customers, suppliers/contractors, government agencies, shareholders/investors, communities/society, and media.
Through stakeholder engagement, Winbond proactively responded to stakeholder concerns to achieve business objectives. A dedicated stakeholder section was established on the official website to provide contact information for stakeholder communication. Stakeholders with questions or suggestions regarding relevant issues could reach out to designated contacts based on their stakeholder identity, ensuring the effectiveness of engagement and communication.
The 2024 report continued to adopt the stakeholder identification results mentioned above.

The communication status with stakeholders was reported at the 13th meeting of the 13th Board of Directors on December 20, 2024.

Government

Customer

Employee

Stakeholder

/Investor

Media

Suppliers

/Contractors

Community /Social

Focused on Winbond's compliance with various environmental, social, and governance (ESG) regulations, as an important stakeholder influencing industry development and policy promotion.

Material Topic

Business Integrity and Corporate Governance
Talent Management
Energy and Greenhouse Gas Management
Regulatory Compliance
Risk Management

Channel and Frequency of Communication

Regular:

ESG Questionnaire (annual)

Ad hoc:

Official documents correspondence
Regulatory and conferences
Public hearings
Policy information sessions
Participation in relevant organizations
Inspections by competent authority

Customers are the primary source of economic value creation for Winbond. They are key stakeholders concerned with Winbond's ESG performance.

Material Topic

Business Integrity and Corporate Governance
Energy and Greenhouse Gas Management
Green Product
Regulatory Compliance
Productivity and Business Performance
Research, Development and Innovation
Risk Management
Supply Chain Management

Channel and Frequency of Communication

Immediate:

Winbond official website, telephone, and e-mail

Ad hoc:

Customer audits
Customer interaction

Regular:

Sales meetings (regular)
ESG questionnaire (annual)
Technical seminars (annual)
Internal Audit (annual)

Employees are one of the most important assets, serving as key stakeholders in our continued breakthroughs and innovations.

Material Topic

Business Integrity and Corporate Governance
Talent Management
Regulatory Compliance
Productivity and Business Performance

Channel and Frequency of Communication

Immediate:

Internal Hotline 75234 Employee Complaints Hotline "Care"
Employee Suggestions Box
Illegal Employment Infringement Appeals and Arbitration Committee
Health Consultation

Ad hoc:

Health Promotion Activities
Employee Welfare Committee
Internal Bulletin Board

Regular:

Published articles on corporate philosophy on the employee homepage (weekly)
Surveys on Health, Stress, and Physical Aches (annual)
Employer-Employee Meetings and
Supervisor Communication Meetings (quarterly)
Functional Communications Meetings (regular)
Articles on Winbond Philosophy Published on the Employee Homepage (weekly)
Monthly Labor Safety Meetings (monthly)
Environmental Safety and Health Committee (quarterly)
ESG questionnaire (annual)

Shareholders/Investors are Winbond's main source of capital. They are mainly concerned with Winbond's operating performance and sustainable development.

Material Topic

Business Integrity and Corporate Governance
Green Product
Regulatory Compliance
Productivity and Business Performance
Research, Development and Innovation
Risk Management

Channel and Frequency of Communication

Immediate:

Telephone and e-mail

Regular:

Investor conference (biannual, or whenever necessary due to special circumstances)
One-on-one meetings with institutional investors (8–10 times/quarter)
Shareholders' Meeting (annual)
ESG questionnaire (annual)

Ad hoc:

Winbond official website
The Taiwan Stock Exchange Market Observation Post System

The media serves as a bridge between Winbond and stakeholders. With immediate access to information released by Winbond, they can assist Winbond with the disclosure of positive sustainability information.

Material Topic

Business Integrity and Corporate Governance
Talent Management
Green Product
Productivity and Business Performance
Research, Development and Innovation

Channel and Frequency of Communication

Immediate:

Telephone and e-mail

Regular:

Press release (regular)
Media interviews (annual)
ESG questionnaire (annual)

Suppliers/Contractors provide supplies and services required for Winbond's production operations. They help maintain Winbond's continuous and sustainable operations, making them also important stakeholders and partners of Winbond's sustainable development.

Material Topic

Business Integrity and Corporate Governance
Green Product
Regulatory Compliance
Research, Development and Innovation
Supply Chain Management

Channel and Frequency of Communication

Immediate:

External complaints channels
Supplier ESG Interaction Platform

Regular:

Winbond Ethics and Integrity Policy and complaint channel (Semi-annual)
Evaluations of major suppliers (Semi-annual)
Supplier audits (annual)
Sustainability Due Diligence SAQ for Suppliers (annual)
Conducted face-to-face communication with contractors through safety protocol organizations (monthly)

Their proximity to Winbond's operating locations means they bear the brunt of the impact from our operations. Their welfare is therefore of high importance to Winbond.

Material Topic

Business Integrity and Corporate Governance
Talent Management
Regulatory Compliance

Channel and Frequency of Communication

Ad hoc:

Volunteer activities
Collaborative projects and visits

Performance Indicators Related to Material Topics and Stakeholders

Material Issues	Output Metric	Impact Valuation	Impact Metric
Integrity Management and Corporate Governance	Number of incidents violating integrity management and corporate governance	Incidents violating integrity management and corporate governance, leading to customer loss and reduced investment	Incidents violating integrity management and corporate governance, leading to customer loss and reduced investment amounts
Regulatory Compliance	Number of illegal cases Number of legal litigation cases	Financial damage to the company Loss of goodwill	Lawyer consultation fees Litigation costs Amount of damages
Risk Management	Risk event occurrence rate	Risk occurrence leading to financial loss	Financial losses caused by risk occurrence
Research and Development Innovation	Number of new products and new technologies launched annually Revenue and profit of new products (products launched in the last three years) annually Customer satisfaction	Increase the competitiveness of the company's products and services Improve customer satisfaction	Product characteristics and technology gaps with competitors in various fields (widening the lead, narrowing the lag) Increase in customer product share
Productivity and Operational Performance	Unit product energy consumption Amount of waste generated Employee training hours Customer complaint rate	Reduce energy consumption during the production process, decrease carbon emissions Promote circular economy, reduce waste generation Enhance employee skills and knowledge, promote talent development Provide high-quality products and services, improve customer satisfaction	Percentage reduction in carbon emissions Waste recycling rate Percentage increase in average employee skill level Customer satisfaction score
Supply Chain Management	Promotion of low-carbon management among suppliers Promotion of sustainable due diligence and guidance among suppliers Promotion of local production among suppliers	Suppliers reduce electricity, water, and waste usage to mitigate environmental impact Suppliers reduce greenhouse gas emissions to mitigate environmental impact Suppliers' governance performance associated with operations Procurement demand drives local industry development Procurement demand drives local employment opportunities	Supplier electricity, water, and waste savings Supplier greenhouse gas emission reductions Number of cases where suppliers were penalized by the government Supply chain output value Number of supply chain employment opportunities/salary income
Green Products	Greenhouse gas emissions causing environmental impact during the product production cycle	Product production - Carbon emissions	Product production - Carbon emissions (kg-CO2e)
Energy & GHG Management	Greenhouse gas emissions (carbon dioxide, tetrafluoromethane, natural gas, hydrochlorofluorocarbons, volatile organic compounds, etc.)	Economic losses, agricultural losses, ecological imbalance caused by human health and global warming	Economic losses, agricultural losses, ecological imbalance caused by human health and global warming
Talent Management	AI promotion training hours AI tool usage prevalence Proportion of foreign managers and female employee	Degree of integration of colleagues' work with AI Growth rate of the proportion of foreign managers and female employee	Employee compensation AI tool usage prevalence Relative ratio of domestic/foreign and male/female by ethnicity