Walsin Lihwa actively invests in the development of green products and clean technology^note and regards them as core strategies for sustainable operations. Starting from our core business, we are committed to high value-added products, establishing a resource-based industrial chain, managing upstream suppliers, and implementing green procurement; Implement green manufacturing through the smart manufacturing process; In addition to increasing the proportion of CleanTech products, we hope to create shared value with customers and establish a sustainable business model. The Company actively deploys the new energy industry, responds to the government's policy of promoting renewable energy, and assists in the construction of stable and resilient power supply hardware equipment; We also work with upstream, mid-stream and downstream suppliers to create a green industrial chain to reduce the carbon content of products and increase the added value of our products. In the future, we will also actively invest in the research and development of related clean technologies and continue to refine our products and technologies.

To pursue high-value transformation, the Wire and Cable Business and the Stainless Steel Business have simultaneously implemented multiple systematic initiatives. The achievements, progress, and the results of the action plans are as follows:

Wire and cable, as well as stainless steel, are both mature industries. The key to success lies in narrowing the gap in equipment and processes compared to competitors and catching up with industry leaders. It is essential to expand the distance from competitors through thorough investigation and analysis of their capabilities. The initiatives include:

• Setting benchmarks: Conducted investigations and analyses of benchmark companies in the industry to understand their production equipment, product variety, application industries, and technological capabilities.
• Identifying gaps: Recognized the gap between Walsin and the benchmark companies, regarding equipment, products, and technology, and set up our directions and goals.
• Surpassing: Transformed equipment and processes with our set goals, developing innovative products and applications, and closed the gap with benchmark companies.

Leveraging technology and harnessing the benefits it brings has been a crucial factor in accelerating our transformation. Walsin has planned ahead and embraced Industry 4.0, automation, and Smart Manufacturing to drive three major automation projects. These initiatives have enabled us to differentiate and enhance manufacturing, quality, cost, and customer service efficiency. As a result, we have been able to increase our value-added offerings:

Established an automated production mode by implementing the 3As, including automatic production, automatic dispatching, and automatic transportation, leveraging smart manufacturing to optimize production, product quality, and manufacturing costs delivering better services to customers and increasing added value.

Use big data analysis to improve the efficiency of quality abnormality analysis to ensure better quality.

In response to the evolving trends and customer demands, developing new products with high-performance, long-lasting, energy efficient, and carbon-reducing is the future direction. Through breakthroughs in equipment, process, smart manufacturing, and various core projects, we narrowed the gap with industry pioneers. Our strategies for advancement include the following:

Developing product materials and metallurgic technologies to improve material performance and meet customer needs.

Developing innovative production processes and equipment technologies to enhance product development efficiency.

Enhancing product application effectiveness and improving the development of application capabilities through solid product application technology and technical services.

Integrate three items above with intelligent transformation and intelligent knowledge management (iKM), communicate with customers and understand their needs in each industry, provide complete solutions, and move toward manufacturing services.

In order to quickly enter the market of high-end applications, we need to understand the industry, technology, and technological changes of competitors and analyze the industry and market positioning, and Walsin performs both by observing from afar and observing up close, and we have constructed a two-way development blueprint for technology and products:

Observing from afar: understand and pay attention to the overall environmental trends, and to recognize the changes in the macro environment to find out the direction of future expansion.
Observing up close: analyze customer inquiry records, industry development trends, and customer applications to establish technology, equipment and other capabilities and market needs, and establish products that can be developed that meet future needs.

According to the aforementioned blueprint, we will establish target products for development and identify projects that drive technology development, supplemented by customer needs to identify the future stars of tomorrow, in order to carry out early expansion. The overall operation can be integrated, including:

• Analyze and seize the trend of the general environment to establish the future development direction.
• Analyze and investigate the products and applications needed by industries, to further verify the gap of technologies and equipment.
• Establish industry analysis abilities to determine the necessary materials, related requirements, and market trends in the industry.
• Establish market survey abilities and conduct market surveys to understand customers, demand, and consumption in the industry.
• Verify and develop target products, and conduct industrial chain surveys.
• Verify technology development items and directions.
• Develop products with high added value and high-end applications industries, improving our technical capabilities and product quality.

Through continuous research and development, we provide essential products for CleanTech industries such as solar energy, wind power and electric vehicles. Develop low-carbon, eco-friendly materials to align with low-carbon policies and sustainable operations, including materials that comply with the energy storage standards of the Technical Inspection Association (TÜV), and invest in the development of recycled and eco-friendly insulation materials. We plan to launch cable modules suitable for green energy and electric vehicle charging plugs that have passed multiple certifications. At the same time, we are focusing on Internet of Things cable applications for Industry 4.0, such as heavy machinery and automated ports, and a number of products have been developed, including high voltage cables and composite cables for automation applications. Products developed in 2023 include high-voltage cables in 14MW offshore wind turbine towers, electric vehicle fast charging cable sets, automated heavy machinery hybrid cables, etc. Looking to the future, we plan to develop 25 types of cable modules for green energy applications, and develop 24 types of electric vehicle charging that have been certified by European safety standards (IEC), Voluntary Product Certification (VPC) and North American safety standards (UL). Among them, 7 certifications have been obtained, and 1 electric vehicle cable will be ISO 19642 certified by 2023.

In order to respond to the challenges of market and industrial changes and develop products that meet market demand, Walsin has advanced its technological deployment. In recent years, we have been actively cooperating with higher education and research institutions to enhance R&D and manufacturing capabilities, improve material characteristics and product performance, so as to expand the scope of application of the products in various industries and provide customers with more diversified product choices.

Promoting industry-academia collaboration and utilizing external resources is one of the strategies to promote the high-value transformation of Walsin. Through the past collaboration experiences, Walsin has established an excellent rapport with the National Taiwan University and joined hands with outstanding talents in the material field to create an innovation research and development center. It will not only benefit the cultivation of related technical talents, but also speed up the resolution of bottlenecks encountered in development and strengthen the ability to develop new products, so as to take the lead in the industry.

Walsin Lihwa has partnered with universities and research institutes in Taiwan to promote various industry-academia collaborations and external research projects to deepen the expansion of products and technologies, plan technological blueprints, expand the depth and breadth of process technology through the combination of theoretical knowledge and practical experiences, and increase the energy of research and development. There were more than 157 participants, and the project cost exceeded NT$26.41 million.

Walsin promoted the "Taiwan Intellectual Property Management System" (TIPS), which introduces the latest corporate governance assessment of intellectual property management indicators, setting up a systematic standard for the acquisition, protection, maintenance, and utilization of the company's intellectual property, and to establish systematic management of the company's and organization's intellectual property. Since the introduction of TIPS in 2020, we have successfully passed verification continuously. We passed TIPS A-level verification for the third time in 2023, and the verification is valid until 2025.

A total of 14 invention patent applications were filed in 2023, including 4 applications from the Wire & Cable Business group in Taiwan, Mainland China, the European Union and the United States, for technologies related to the charging guns of electric vehicles; The Stainless Steel Business group filed for a total of 9 applications in Taiwan and mainland China, and obtained 4 patents in Taiwan; 1 IT patent applications. To encourage colleagues to apply for patents, Walsin Lihwa provides patent application and certification bonuses. A total of 18 colleagues received bonuses in 2023.