Dear Friends,

Global businesses continue to face economic volatility, geopolitical conflicts, shifting competitive landscapes, and escalating trade barriers. In addition, they are confronted with various environmental issues such as climate change, environmental protection, and energy conservation. For Walsin Lihwa in 2022, it is a year full of challenges and opportunities. We remain focused on enhancing our core capabilities by utilizing technology to pursue digital transformation and smart manufacturing, so that we can stay abreast with rapidly changing environment and move steadfastly forward.

Believing business success should be built on sustainable development, Walsin Lihwa reviews its environmental, social, and governance (ESG) practices on a regular basis to proactively identify operational risks, develop medium- and long-term objectives and strategies, and integrate cross-functional resources and strengths to strengthen sustainability initiatives. To continue improving the transparency and quality of sustainability information disclosure, we are an early adopter of the Task Force on Climate Related Financial Disclosures (TCFD) standard and the Sustainability Accounting Standards Board (SASB) standard in line with international trends and also comply with the requirements for disclosure of climate-related information as well as specific industries' disclosure of sustainability indicators announced by the Taiwan Stock Exchange in 2022. Moreover, there are annual sustainability reports to fully disclose our performance against sustainable management indicators and actively respond to the issues of stakeholders' concern.

Ongoing Improvement of Sustainability Governance to Strengthen Risk Control

Corporate governance-wise, Walsin Lihwa's effective implementation of the Taiwan Intellectual Property Management System (TIPS) has earned Class A certification from the TIPS for promoting product innovations and upgrades as well as smart manufacturing to create high added values. Moreover, supplier conventions as well as education and training for the board, senior executives, and employees to promote compliance and integrity take place on a regular basis. In 2022, Walsin Lihwa established the Rules Governing the Preparation and Filing of Sustainability Reports to include the operational procedure for sustainability report preparation and validation into the company internal control system for ongoing improvement of governance. Therefore, Walsin Lihwa has been a Taiwan Corporate Sustainability Award winner multiple times, ranked among the top 5% in the Corporate Governance Assessment conducted by the Corporate Governance Center of the Taiwan Stock Exchange, received a twA- long-term rating and a positive outlook rating from the Taiwan Ratings Corp. The company is also a constituent stock of the FTSE4Good TIP Taiwan ESG Index, Taiwan EMP 99 Index, and Taiwan Corporate Governance 100 index for its widely recognized sustainability performance.

In terms of risk management, Walsin Lihwa has been strengthening its TCFD framework implementation to dynamically assess the opportunities and risks in the framework for long-term transformation strategy development. Aware of the importance of data security in the digital era, we implemented the ISO 27001 Information Security Management System in 2022 and obtained third party certification of the implementation to ensure information confidentiality, integrity, and availability throughout the company by effective risk management to strengthen corporate resilience.

Commitment to Energy Development for Effective Energy Saving Transformation

Walsin Lihwa is aware of the importance of energy saving and emission reduction in the manufacture sector to decrease greenhouse gas emissions and strengthen energy efficiency through industry upgrades and energy development. We are committed to high value development of products and does so by starting from our core businesses for resource industry chain development including energy creation, storage, transportation, and utilization to develop green products and materials, so that we can better achieve the objectives of low-carbon circular economy with readily available new energies. In 2022, our cooperation with the National Taiwan University to establish an R&D Innovation Center facilitates the development of green circular technologies, applications of wastes, a green metal supply chain, green energies, as well as energy-saving and carbon reduction technologies.

In response to Taiwan's policy for net zero by 2050 and relevant global trends, Walsin Lihwa has developed a specific net zero roadmap. Over the past several years, the company has been strengthening production process and equipment performance optimization, and completed implementing the ISO 14064-1 standard for its greenhouse gas inventory at the plants in Taiwan and Mainland China and also completed implementing the ISO 50001 Energy Management System. The Taiwan plants' ISO 14064-1implementation has obtained third-party certification, which is planned to be obtained by the plants in Mainland China in 2023. The Taiwan plants have completed their carbon footprint inventory of major products according to the ISO 14067 standard and the Hsinchuang plant has obtained third-party certification of product carbon footprints.

Enhancement of Organizational Competencies and Stronger Social Engagement

Talents are the most precious assets of Walsin Lihwa. With the advent of the era of intelligence accompanied by ever innovative technologies, Walsin Lihwa lives up to the ideal of full participation throughout the company and dedicates itself to development of a learning environment with study groups, workshops, online courses, the TPS training of professional vocational skills, and learning by doing projects to improve multiple practical experiences and encourage cross-domain knowledge learning, so that employees can effectively explore their potentials and talents in an environment full of challenges and opportunities. While promoting employee growth, we continue improving the friendly environment at our company to make employees feel happy. There are an employee gym and health counseling courses on a regular basis to take care of employees' physical and mental health, PTA events to strengthen new employees' affinity for the company, emphasis on the management of migrant workers social activities with respect for culture and faith diversity, and multilingual courses to strengthen teamwork interaction.

Social engagement-wise, Walsin Lihwa subscribes to the ideal of common good for both society and businesses to dedicate itself to positive and balanced social development. To rescue an endangered indigenous language in Taiwan for cultural preservation, We have been the first to support the United Nations' International Decade of Indigenous Languages by audio-video recording of an aboriginal ballad class's indigenous language learning by signing and the language spoken by tribal elderlies as a precious cultural heritage archive to demonstrate Taiwan's multicultural vitality. In 2022, we continued helping improve children's education and commenced the 2nd phase of our Light Up the Corners throughout Taiwan project, "50 Questions for Children's Creative Thinking on the Theory of Inventive Problem Solving (TRIZ)" has been donated to 75 elementary and junior high Schools in the neighborhoods of our Taiwan sites, sponsor educational newspaper subscription to help strengthen reading comprehension and after-school tutoring at these schools, and support the Sunshine Social Welfare Foundation's used book donation program. In terms of environmental sustainability, there were promotion of food and agricultural education, contract farming of Taiwan kiwifruits, and a documentary on such farming to support local agriculture, prompt more people to cherish the land of Taiwan, and strengthen public understanding of environmentally friendly farming.

Manifested Corporate Value of Sustainability

Walsin Lihwa not only pursues growth and profitability but also does its best to become a good corporate citizen, incorporate sustainability into its strategic vision, and use core competencies to carry out the ESG ideal in daily operations. Walsin Lihwa hopes all its employees can continue improving themselves on their individual posts to grasp every opportunity to create a better future for society and work with different categories of stakeholders to create even higher value out of sustainability.

Chairman, Yu-Lon Chiao