Risk name

Materiality to company

 Risk management and control results

Supply chain management

1. Early warning to prevent the risk of material shortage.
2. Make early warnings for long lead time materials to reduce inventory costs.

1. Implement emergency investigation and short-,medium-, and long-term risk assessment:
   Short-term risk assessment assesses the risks associated with the inventory level of suppliers, the ability of agents to allocate and mobilize products, replacement with substitute materials, rush purchase on the spot market, product origin investigation, and capacity investigation. Medium- and long-term assessment assesses the potential risks that suppliers determine the abnormalities will have on their company by inferring from the abnormalities' extent of worsening and impact presumed by them.
2. An emergency response meeting may be convened by the head of the procurement staff whenever needed; the extent of impact as indicated in the emergency investigation results may serve as a reference for response to be made by the relevant units.
3. Inventory management: Have the RD/PM confirm whether the materials not in use for long can be changed to other commonly used materials to increase commonality or resell.
4. Lead time management:
   Negotiate on long lead time materials, communicate to bring the lead time back to a normal length of time, and identify NCNR, LTA, Cancellation Day, and forecast supplies, to effectively shorten the lead time.

Information Security

Cyber-attacks and information outflow will affect the protection of internal and external intellectual information, causing serious problems such as interruption of company operations, financial damage, or illegal breach of contract. In the long run, it will cause major damage to goodwill and customer relationships, and affect the foundation of sustainable development of the company.

1. Important information system obtains ISO 27001 certification.
2. Manage mobile storage devices.
3. Set up a firewall and conduct relevant information security education and training to continue educating employees about information security concepts.
4. Frequently scan for vulnerabilities to constantly upgrade and strengthen our information protection system.
5. Conduct internal information security audits at least once a year, followed by external audits by third-party certification agencies.
6. Perform information system recovery mechanism drills to test the effectiveness of our information system recovery procedures to ensure that the Company's system can continue to operate even if subject to natural disasters or malicious attacks.

Climate change management

Water Rationing /Outage

Water rationing and water outage will hinder operations, prevent the cooling of the temperature of the engine and testing equipment, and disrupt the work of personnel.

1. Establish a water level situation monitoring mechanism.
2. Modify the supply pipelines of city water, and modify them to the effect that they can supply water to equipment and machinery whenever needed.

Power Rationing/Outage

Electricity outage, whether due to power cut or a tripping circuit breaker, interrupts the operation of critical machine rooms and machinery, and may jeopardize personnel safety.

1. Implement generator operation test every month.
2. Regular maintenance of UPS every season.
3. Purchase oil pumps and empty oil drums.

Legislation change

In the future, if operations continue to scale up or the government revises down the emission threshold, the Company must bear additional carbon cost. Brand customers will also respond to the international requirement on disclosure of carbon information by demanding the Company to provide relevant data and adopt response measures.

1. Factories continue to implement carbon inventory and energy conservation and carbon reduction projects every year.
2. Purchasing renewable energy certificates.
3. Inventory the carbon footprint of major products gradually, gather relevant data, and grasp the carbon hot spots during a product’s life cycle.

Labor shortage

Local labor market manpower is not sufficient enough to underpin the development of the industry and the Company, and costs higher with increased competition.

1. We'll aggressively hire overseas compatriot students who study in Taiwan in the hope of attracting more exceptional international talent.
2. Reference the survey in the industry to constantly improve the attractiveness of employee welfare and salary.
3. Launch improvement projects based on the results of the employee opinion survey; maintain clear and effective labor-management communication channels; so as to enhance employees' recognition for the Company.
4. Provide new skills training diversity the portfolio of occupational competencies among existing talents, so that they are more aligned with the Company’s business direction in the future.