Dear Friends,

Walsin Lihwa values corporate social responsibilities (CSR), and its systematic and effective economic, environmental, and social initiatives help prudently engage in sustainability strategy development that exceeds legal requirements to keep strengthening competitiveness. To comply with relevant international standards and factors in the important information on climate change impacts on finance, our annual CSR reports have been step by step adopting the Sustainability Accounting Standards Board (SASB) and Task Force on Climate-related Financial Disclosures (TCFD) frameworks to disclose financial information related to environmental, social, and governance (ESG) risks for ongoing improvement in sustainability management.

The impact of COVID-19 highlights the importance of corporate support for social communion. Therefore, we keep vigilant of the health of our employees and suppliers by carrying out timely operation model adjustments and providing sufficient pandemic prevention materials to ensure resilient coordination between internal and external operations. As the COVID-19 pandemic has sweepingly changed how the economy works as well as the rules of market, we shall expedite the transformation of our company and intelligentization of operation to cope with the rapidly changing world and neutralize crises and pressure.

Effective Corporate Governance for Risk Management Implementation

The Board of Directors of Walsin Lihwa -- the highest governance body of sustainable business development at the company -- not only features interdisciplinary professional backgrounds but also governs more independent director seats than legal requirements. Our independent directors reelected in 2020 will continue participation in the Sustainable Development Committee to help drive and lead sustainable business development, and our Corporate Governance Best Practice Principles, Corporate Social Responsibility Practice Principles, and Principles for Ethical Management and Guidelines for Conduct are also amended on a regular or as-needed basis to help perfect our ethical management framework and strengthen employee awareness in this regard. In 2020, it was the 4th time that Walsin Lihwa ranked among the top 5% in the Corporate Governance Assessment conducted by the Corporate Governance Center of the Taiwan Stock Exchange. Such an honor celebrated our past endeavors again and will encourage us to keep up our good work.

Facing the escalating climate change risks, Walsin Lihwa had its Risk Management Policy and Procedures enacted and promulgated in 2020 with the TCFD framework incorporated to help identify climate change opportunities and risks, develop company transformation and long-term business strategies, and cope with common global challenges. In 2020, we provided a variety of product mixes through product added value enhancement while working with business partners for joint R&D of product customization to increase industry applications. Supply chain sustainability management was also strengthened by appraisal of the risks associated with key suppliers with follow-up counseling to help supplier chain partners grow together with Walsin Lihwa. The long-term rapport between Walsin Lihwa and supplier chain partners helped timely identification of the inventory and production status at suppliers upon the outbreak of COVID-19 for effective coordination. As a result, our raw material supplies were not affected by the pandemic and supply chain risks were minimalized.

Acceleration of Energy Saving and Carbon Reduction for Circular Economy Development

Aware of the emerging trend of circular economy, Walsin Lihwa is committed to manufacturing process optimization, waste reduction at source, and promotion of energy and material recycling and reuse to decrease the environmental impact resulting from production. In terms of our annual objectives for energy saving and carbon reduction, we have been investing in highly energy efficient equipment on production lines and independently developed our e-energy management system for major equipment and facilities. In 2020, the system was certified by the German-based TUV Rheinland, a 3rd party certification authority. Our manufacturing process improvement as well as waste heat recycling and reuse lowered total energy consumption by 9.14% compared to that in 2019. Our 2021 objective for the absolute energy consumption reduction is 10% lower compared to that in 2020.

Resource recycling-wise, we continued our water resource risk analysis in 2020 for operational planning and water resource efficiency management through reduction, reclamation, and reuse of water to ensure the long-term stability of our water supply system. Our R&D for reuse of furnace slags and other waste materials as well as commercialization of regenerated acids won a one-star award from the Environmental Protection Administration in 2020 to celebrate Walsin Lihwa as an outstanding enterprise in circular economy development and promotion of recycling and reuse of regenerated materials. We will continue expediting our resource recycling innovation.

One of World's Best Employers Providing Ongoing Social Care

In 2020, Walsin Lihwa won the 258th in the World Best Employers and the 2nd in Taiwan announced by Forbes because we always believe employees are the greatest business asset. We not only offer industry-competitive compensation and benefits but also commit ourselves to a friendly, healthy, and safe work environment where employees can feel belonged, competent, and a sense of self-esteem to fully fulfill themselves and become what they aspire to be. Our effective implementation of job accountability, focus on shift management, enhancement of employee consciousness of occupational safety, promotion of exchange and sharing among employees, organization of working groups, encouragement of employee involvement, and core competency projects for strategic transformation are successful in encouraging innovation at all levels of the company and equipping management executives with the knowledge and skills for change management. Such efforts are an attempt to help all our employees grow together with the company.

Providing ongoing care for different social segments, we focus on corporate citizenship, care for the underprivileged, environmental preservation and protection, and community outreach. Walsin Lihwa donated medical equipment to the Heavy Particle Cancer Treatment Center of Taipei Veterans General Hospital. In 2020, the equipment installation has been completed to help contribute to Taiwan's medical care technologies. In the same year, we also continued sponsoring the Wei Haimin Chinese Opera Foundation to help promote the quintessence of Chinese culture; supporting Chung Yuan Christian University's work study program backed up by academia- industry cooperation; and funding the Light up the Corner Throughout Taiwan Project for specialty education development. Our other ongoing CSR initiatives include sponsorship of child welfare organizations, promotion of restoration of Taiwan indigenous species, and local food and agriculture education promotion. Moreover, our employee volunteerism to provide philanthropic donations, help mentally retarded children, and assist newspaper reading at elementary and junior high schools is intended to synergize and sustain individuals' influences to enable ongoing societal progression.

Walsin Lihwa shall face up to pandemic impacts or challenging economic changes to keep strengthening management, increasing added values of products and services, and expanding into low-carbon green industries to accomplish company transformation and create momentum for further growth. We want to bring advantages to ourselves and others as well by working together with our employees, business partners, communities, and other stakeholders for sustainable economic, environmental, and social development to help create better life for future generations to come.

Chairman: Yu-Lon Chiao