PRESIDENT’S MESSAGE

Implementing Sustainable Development Through Innovation
總經理 李培瑛

To all stakeholders who are concerned about Nanya:

Many industries faced business challenges in 2021 due to the impact of the COVID-19 pandemic and the geopolitical state of the world. During these challenging times, Nanya Technology Corporation (Nanya) utilized its solid foundation, emergency response, and competitiveness gained over the years, and swiftly adjusted its business strategy to mitigate external impacts. Thanks to the collective efforts of the management team and all employees, we have achieved an excellent profit performance for nine consecutive years. We are deeply grateful for all the support and recognition of every sector.

Sustainable Development Driven by Innovation

Nanya has stood fast in its core business of DRAM while upholding a core philosophy of innovation. We successfully transitioned to innovation R&D and technological autonomy by accumulating R&D experience and cultivating an outstanding technology team. Nanya completed technology and product verification for the first generation 10 nm technology (1A) in 2021, and mass production is expected to begin in 2022. Development of second generation 10 nm technology (1B) is going well, and trial production is expected to begin in 2022. 1B process technology will improve energy use efficiency by more than 60%. Furthermore, Nanya has utilized AI smart manufacturing to improve its automated production processes. We developed 70 AI applications and cultivated 350 AI talents in 2021, which comprehensively improved our process efficiency and production capacity, making AI a driving force for adding value to production. In addition, we invested NT$300 billion to build the first DRAM factory in Taiwan with proprietary 10 nm technology, in order to enhance the future competitiveness of Nanya and meet long-term development needs. Mass production is expected to begin in 2025 and will create 3,000 employment opportunities, driving Taiwan's economic and local development.

Green Technology and Production Strategies

DRAM become a key component in the smart era. We develop advanced high-performance "eco-friendly products" that meet the needs of the market and customers. All our products incorporate life cycle thinking and designs for the environment from the early design stages. Furthermore, the Green Product Promotion Committee (GPPC) is responsible for green product management. Energy-efficient products accounted for 87% of our revenue in 2021, and helped customers save approximately 712.17 million kWh. The green products developed through innovative technologies make real contributions to the environment. Nanya is also actively implementing cleaner production practices and incorporating green management in its business operations. We implemented 33 energy conservation action plans in 2021, and saved over 7.59 million kWh of electricity. With regard to renewable energy, we purchased 10.4 million kWh of electricity from onshore wind farms in 2021, and will continue to purchase renewable energy (e.g., solar power or offshore wind power) in 2022. We expect that our renewable energy consumption will reach 250 million kWh within 10 years starting from 2023; moreover, we will continue to promote the RE100 initiative and work toward SBT.

Emphasis on Talent Development and Cultivation

Talent is the foundation of innovation, operations, and sustainable development. For this reason, we use a variety of methods to embed the core values and business philosophy of "integrity and accountability," "efficiency and innovation," and "sustainability," and build consensus among employees to develop into a company that all employees are proud of. Our theme for talent cultivation in 2021 was [We Together, We Learn, We Grow]. We stepped up the cultivation and development of comprehensive talent so that internal knowledge and creativity could sprout. Compared to 2020, the average number of training hours per employee increased 32.5% to 41.6 hours in 2021—the highest in the past four years. Furthermore, demand on talent has increased in the memory industry due to the rapid growth of the semiconductor industry. In response, Nanya signed an agreement with Chang Gung University to establish a master's program on memory technology. Students that enroll in the program not only receive a large scholarship, but also have a job waiting for them when they graduate. Nanya hopes to enhance the international competitiveness of Taiwan's memory industry through talent cultivation, recruitment, introduction, gathering, and retention, and hopes to provide more learning support and planning options for students.

Partners in Sustainability

Nanya has not only taken decisive steps toward sustainability, but has also collaborated with upstream and downstream partners on their path to sustainable development. We encouraged 295 suppliers that share our sustainability philosophy to sign the Nanya Commitment to Corporate Social Responsibility. The result—100% of our suppliers signed the commitment. We have also provided guidance to suppliers in making improvements for sustainability. By doing so, audits, guidance, and improvements were 100% completed, and we will continue to organize supply chain seminars. Furthermore, we have also jointly promoted human rights and environment related issues with suppliers. In terms of social projects, we assisted in refunding migrant workers a total of NT$45.1million in 2021. In terms of environmental projects, we provided guidance to 14 suppliers to promote energy conservation events, and saved 3,315 MWh in 2021. Nanya will continue to exert its influence to strengthen partnerships with suppliers and further improve the sustainability performance of the overall value chain.

Caring for Employees and Society

Nanya continued to monitor the spread of COVID-19 in Taiwan and overseas through its Epidemic Response Team in 2021 to protect employee health and maintain a safe work environment. We also implemented a number of epidemic prevention and response measures, and collaborated with the medical team of Linkou Chang Gung Memorial Hospital in setting up a screening station, providing employees and contractors with rapid testing services free of charge. The screening station provided rapid testing services to over 5,552 people. In addition, Nanya donated 3,200 rapid test kits to the New Taipei City Government and 2,000 epidemic prevention user packs to Cardinal Tien Hospital. Furthermore, we also helped schools in rural areas of New Taipei City purchase live streaming equipment, achieving inter-school co-learning and digital equality in distance learning during the pandemic, benefiting 2,000 students.

Recognition of Sustainability Performance

As a responsible corporate citizen, Nanya considers ESG to be an important commitment of companies, and continues to dedicate efforts to sustainable development; in fact, our sustainability performance has been recognized in Taiwan and overseas. This shows that Nanya has achieved a balanced development of its business performance and ESG. In terms of international recognition, Nanya was selected as a Constituent of the Highest DJSI World Index and Emerging Markets Index (ranked 1st in the global memory industry) in 2021. We were also recognized with the CDP Climate Change Evaluation’s highest honor: "A List Leadership Level" for the second year, and were selected as a Constituent of the MSCI/FTSE4Good Emerging Markets Index for the fourth consecutive year. In terms of domestic recognition, Nanya received the National Enterprises Environmental Protection Award from the Environmental Protection Administration and the Green Factory Certificate from the Ministry of Economic Affairs. We were also recognized with the Most Prestigious Sustainability Awards - Top Ten Domestic Corporate Award from the TCSA, the ESG Integrated Performance Award from Global Views Monthly, and were selected as a Constituent of the FTSE4Good TIP Taiwan ESG Index for four consecutive years. In addition, we ranked in the top 5% of the Corporate Governance Evaluation for the fourth time and were selected for the CommonWealth Magazine Sustainable Citizen Award.

Future Prospects

Facing the complex and uncertain external environment in 2022, Nanya will utilize its team wisdom to enhance its innovation and R&D capabilities, and will strive to achieve sustainable development through three strategies: "Creating Shared Value," "Promoting Sustainable Mutual Prosperity," and "Achieving Sustainable Development." Our vision is to become the "Best DRAM Partner for Smart World" We are committed to working closely with business partners and stakeholders across the world on the path towards sustainable development. This will further strengthen our competitive advantages and leadership in the global semiconductor industry.

總經理 李培瑛
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