Sustainability management｜Message from the Chairman and CEO

“Sustainability” is a multifaceted concept. It represents a spirit of enduring enterprise that transcends time; it requires companies to innovate and create value in a changing world; and it inspires us to wisely utilize resources and cherish our one and only Earth, becoming the pillar of sustainable development in human society. 

In 2023, several significant events propelled Winbond to make further progress on the path towards sustainability. At the beginning of the year, the drought in Taiwan led to the creation of our “Water Resource Efficiency Policy.” To achieve net-zero by 2050, we explored renewable energy investment and procurement; and led the way for our supply chain partners to accelerate our progress towards net-zero. The release of Open AI‘s GPT4.0 injected new vitality into creating value with AI. Geopolitical conflicts accelerated our adoption of localized layouts, implementing globalization strategies.  

To improve management quality and align with international standards, Winbond began ISO 46001 water efficiency management systems certification in the second half of 2023. Based on the vision of “being a hidden champion in providing sustainable semiconductors to enrich human life,” we established the following water resource efficiency policy:  

• Engage everyone in water conservation to enhance awareness of water resource management. 

• Prioritize water-saving designs and continuously strive to enhance water resource efficiency. 

• Recycle and reuse water resources to ensure the attainment of the water efficiency goals. 

• Comply with government regulations and conduct regular reviews of water resource management. 

From the initial construction of our CTSP Fab in 2005, the concept of recycling and circulation was incorporated into the design, utilizing dedicated piping systems, real-time water quality monitoring, and the establishment of recycling treatment systems. In addition, the Kaohsiung Fab enhanced water resource recovery through a newly designed process. Winbond also engaged in water-saving technologies exchange with Green Energy and Environment Research Laboratories of the Industrial Technology Research Institute(ITRI), organizing industry tours to share achievements with the industry. In 2023, a total of 6 water-saving projects were introduced, resulting in an annual water saving of up to 390,000 metric tons (approximately 2.4% of the plant's annual water usage), while the overall plant recovery rate increased by 1.7% (from 80.5% to 82.2%). 

Due to Taiwan‘s limited land and dense population, investing in renewable energy presents a great challenge. Therefore, the management team actively seeks and discusses every opportunity to acquire renewable energy. With over two years of experience, our confidence in transitioning to 100% renewable energy has increased. As electricity usage contributes significantly to Winbond's carbon emissions, adopting renewable energy can make an important contribution to Winbond's goal of achieving net-zero emissions. 

In 2024, we established a paid volunteer leave policy to encourage employees to participate in social and environmental improvement activities. According to this policy, employees can apply for volunteer leave during working hours to engage in volunteer work, support charitable organizations, and participate in community service or environmental protection activities. This not only helps employee to develop a sense of social engagement and well-being but also reflects our firm commitment to sustainability and community contribution. We will continue to promote this policy to support our employee in participating in meaningful volunteer work, while fostering a more sustainable future.  

Our Board of Directors leads Winbond's sustainable strategy to promote sustainable development. The board has established an ESG Committee, composed of the chairman and independent directors, to jointly formulate a sustainability vision, considering the carbon footprint as a key indicator, and to promote value creation in innovation. We strive to make every employee a sustainable ambassador and jointly cultivate a sustainable culture. In addition, the Risk Management Committee regularly assesses risks and opportunities. 

We actively promote for a diverse, equal, and inclusive work environment (DEI) to attract global talent. A Senior Executive Development Committee has been established strengthening talent development and succession planning, while expanding the board’s supervisory functions to establishes a more robust corporate governance framework.  

Looking forward, in the development of globalization and localization, the new chapter of corporate social responsibility will encompass activities that integrate and interact with different countries and cultures.  

I look forward to joining hands with many friends and colleagues to build a beautiful home and fulfill our responsibility to protect our beautiful Earth.

2023 was a year filled with challenges and opportunities for Winbond. Despite the ongoing global political and economic turmoil, the increasing severity of climate change, and a complex operating environment, Winbond is keenly aware that the transition to net-zero has become the core issue of sustainability for businesses worldwide. We rely on our expertise in semiconductor process technology and manufacturing services, strict quality management, and product innovation as the solid foundation for sustainability. By internalizing ESG as part of our competitiveness and through clear policies, goals, and concrete actions, we collaborate with stakeholders to implement the company's five main directions for ESG, supporting global sustainability actions. 

E：Combining core competencies, innovative technology, and sustainable energy-saving and carbon reduction goals, by implementing energy and carbon emission reduction measures, process efficiency improvements, green product design, and digitization of information systems, we build a long-term sustainable win-win relationships with our customers and supply chain.   

At the product design stage, Winbond focuses on incorporating green concepts such as “low-carbon materials,” “energy-saving and low-energy consumption,” and “smaller form factor and lower pin counts.” This approach aligns with international trends and the needs of stakeholders and customers, aiming to minimize environmental impact in product development. Leveraging DRAM and Flash memory process technology, we have been deep involved in in the KGD (Known Good Die) field and offer SiP (System in Package) multi-chip packaging solutions to reduce packaging materials and chip sizes. We introduced a new generation of low-capacity 3V Serial NOR RV series and 1.2V HyperRAM products, which reduced carbon emissions by over 30% compared to previous generations. We also developed flash memory products that support Low-Temperature Soldering (LTS) processes, enabling customers to achieve energy-saving innovations, thereby reducing greenhouse gas (GHG) emissions and creating energy-saving and carbon-reducing end products. 

In addressing supply chain sustainability issues, Winbond collaborates with its supply chain partners to established a green semiconductor supply, jointly exploring carbon reduction opportunities. In 2023, Winbond joined Industrial Development Administration of MOEA's post-pandemic low-carbon transformation subsidy program, collaborating with 13 suppliers and outsourcers to formulate carbon reduction plans, to benefit the secondary industry supply chain with carbon reduction progress. As international regulations on net-zero carbon reduction become stricter, we connect internal systems and data through digital tools, applying them to office collaboration and production operations, gradually improving the Company and suppliers' carbon inventory, carbon footprint information, and internal carbon accounting systems. We also utilize AI applications to increase corporate resilience in response to the dynamic semiconductor industry.  

In green technology production, Winbond also focuses on renewable energy, water management, water and waste recycling, and GHG emissions reduction as key performance indicators and global actions, dedicated to minimizing environmental externalities. We replaced energy-saving equipment and installed exhaust gas treatment equipment, carried out energy-saving projects, and consumed renewable energy, continuing to implement electricity-saving measures across 7 categories with 108 items in 2023. Production sites will gradually obtain certification of ISO 46001 Water Efficiency Management Systems and ISO 14046 Water Footprint, to effectively manage water supply-related risks and improve water resource efficiency. 

S：We strive to create a work environment that upholds human rights, is dignified, and embraces diversity, equality, and inclusion (DEI), fostering global talent integration.   

Winbond places great importance on the development of human rights issues. After completing a human rights due diligence in 2022, the Company continued to optimize and reduce risks in 2023, conducting an Employee Core Values and Engagement Survey in 2023. The survey indicated that over 97% of colleagues are willing to utilize their strengths at Winbond for the next five years. 

In addition, we have strengthened the concept of Diversity, Equity, and Inclusion (DEI) and continue to build a more friendly workplace for sustainable talent development. In 2023, a Senior Executive Development Committee was established under the Board of Directors, with staff receiving an average of 50 hours of training per year, continually and systematically cultivating talents. Foreign executives accounted for 17% at the Winbond center, demonstrating the diversity of nationalities in the decision-making circle. We connect the energy of talent cultivation from various colleges, promote the empowerment of the youth, collaborate with National Cheng Kung University to advance the "Semiconductor Course," and sponsored the "Lecture Professor Research Fund" at National Yang Ming Chiao Tung University, leveraging the industry's core capabilities, with concrete actions to construct a technology innovation exchange domain, facilitating the development of the semiconductor industry. 

We also continue to lead our employees in contributing to social welfare, creating value, and expanding Winbond's positive social impact. On Family Day, we continue the spirit of public welfare care, providing opportunities for 6,065 colleagues, their families, and 55 students from invited institutions to cultivate an appreciation for arts and culture, rooting cultural experiences. Winbond is concerned about environmental conservation and ecological preservation. Colleagues actively participate in beach and river cleaning activities, safeguarding the cleanliness of our coastal environment. In 2023, a total of 264 participants joined, collecting 993 kilograms of garbage. Since 2021, Winbond has initiated a tree planting program, planting native tree species in the Kaohsiung Fab area, actively participating in government-led afforestation programs, and supporting the Forestry and Nature Conservation Agency's donations, adoption and tree protection initiatives. Through tripartite cooperation between industry, government, and academia, the Company demonstrates environmental care actions, jointly creating a quality mountain and forest environment. 

G：We aim to strengthen the functions of the Board of Directors to enhance the sustainable value of the corporation; and improve and quantify non-financial data and reporting capabilities for better compliance, transparency, and strategic insight.  

Winbond strengthens the function of the Board of Directors, elevating the level of sustainable governance. The “ESG Committee" was promoted from an internal management organization to a functional committee under the Board of Directors. The Board of Directors supervises ESG and risk management execution results, demonstrating Winbond's emphasis on sustainable development.  

Winbond is keenly aware that research and development are the main driving forces for maintaining competitiveness in the industry. In 2023, Winbond's R&D investments accounted for 23% of its revenue, and the Company was awarded as one of Clarivate's Top 100 Global Innovators for two consecutive years, showcasing Winbond as a semiconductor company committed to pursuing innovation-driven growth and environmental sustainability. In 2023, Winbond formally adopted the "Taiwan Intellectual Property Management System (TIPS)" and obtained A-level certification, nurturing its innovative culture, strengthening awareness of intellectual property protection, and enhancing its sustainable competitive advantage. Facing the post-pandemic digital era, where diverse data ecosystems flourish, Winbond also took the opportunity to upgraded its cybersecurity protection by introducing SEMI-E187 Specification for Cybersecurity of Fab Equipment , establishing a data security management system.  

In terms of climate change management, in addition to continuously improving energy use and management through the ISO 50001 Energy Management System, Winbond also set its own goals for the use of renewable energy and net-zero emissions. This includes expanding self-built renewable energy generation facilities, procuring renewable energy through power purchase agreements, and purchasing renewable energy certificates (RECs), all of which are crucial components of achieving net-zero. In response to carbon neutrality requirements from international supply chains and initiatives, we, by purchasing voluntary carbon credits to offset carbon emissions, held a zero-carbon family day for two consecutive years, demonstrating our commitment to sustainable development.  

Moreover, we actively follow global sustainability trends by publishing our sustainability report annually and disclosing “Climate-Related Financial Disclosure Report,” “UN Sustainable Development Goals Action” and “Materiality Analysis Reports.” With an open and transparent approach, we share our progress and achievements with stakeholders, enhancing the transparency of sustainability information disclosure.