Words from the executives

The world saw various pollical and economic impacts like inflation, Russia-Ukraine war, and lockdown in China in 2022. The macroeconomy was filled with uncertainty. The semiconductor industry suffered from impacts of inventory adjustments as well. Along with a reducing consumer momentum from the end market of electronic products, the industry sailed into a headwind. Nevertheless, we advanced steadily upholding the principle of “proactive development; prudent manufacturing.” For that, Nuvoton continued to invest ample R&D resources with the conviction that “innovation” makes the crucial key to maintaining its competitiveness. Meanwhile, through a careful production and inventory management, we stayed sensitive to the end market demand changes and strengthened our corporate resilience. In addition, we ceaselessly deepened our strategic partnership with clientele and proactively planned for the global sales landscape to seize business opportunities of different regions as the cornerstones of our ongoing growth. Through the joint efforts of our fellow colleagues and partners, we accomplished an historic achievement in 2022 with an annual revenue of NT$41.872 billion, a gross profit margin of 41.7%, and even a record high net income after tax of NT$4.221 billion.

As a corporate citizen, Nuvoton Technology upholds its corporate vision “Be a hidden champion in providing sustainable semiconductors to enrich human life,” contributing to the sustainable well-being of humanity. With the sustainability concept of ESG combined, we focus on three facets, i.e. climate change, innovative technologies, and social impact, implementing relevant works in full scale within the Company. “Non-Use of Conflict Minerals” is practiced at Nuvoton Technology. Through supply chain management, it extensively demands its suppliers to exercise the commitment to non-use of “conflict minerals,” thereby practicing the management of the use of conflict minerals. Meanwhile, through due diligence or demanding suppliers on the supply chain to emphasize human right issues, we probe into the implementation of the companies on human rights issues regularly and assign ratings as a reference for supplier selection. Besides, consultation is available if necessary to align them with the requirements in human rights. In addition, Nuvoton Technology works with various stakeholders to consolidate the identification with and investment in environmental protection and social engagement in order to exert its social influence. Upholding the philosophy of “giving back to society,” Nuvoton Technology constantly cares for the disadvantaged and promotes social welfare activities, aiming to create a win-win society of common prosperity.

The related strategies and plans of Nuvoton Technology for the future fully take the market demands and technological development trends into account to ensure the sustainable development of the industry. Hence, the Company shall continue to actively participates in the R&D and innovation of green energy technology and expand the applications in the fields of automotive, industrial control, and networking, so as to maintain its competitive advantages. Meanwhile, Nuvoton shall be actively engage in the Green Energy Technology Industry Innovation and Promotion Action Plan of the Executive Yuan to ensure the alignment of its industrial plans with the policies so as to further its long-term development.

Nuvoton Technology combines its advantages in sales pipeline and operational efficiency with the advantages of its Japanese subsidiary in technology and talent for the synergy in the sustainable business of the Company. In the meantime, by strengthening the strategy of “One-Team,” the Company shall realize the synergistic effect in value creation. Through culture learning, human resource policy integration, intellectual property sharing, and a focus on the sustainability goals, Nuvoton reinforces the formulation and implementation of its organizational culture to foster inclusiveness, elevate the competitiveness of the Company, and realize an enterprise of sustainable development.

Yuan-Mou Su, Chairman

Nuvoton Technology fuses R&D and innovation with energy conservation and carbon reduction. While pursuing business growth, it improves product performance through R&D and design, becoming an enterprise of diversity that thrives with the environment together with its clientele to weave the concept of sustainable business perfectly into the operational vision. Committed to the promotion of innovation in green product technologies, it plans its industrial blueprint accordingly to ensure the long-term development of the Company.

Regarding product development, aside from constant innovation for the existing product lines, Nuvoton actively entered the fields of electric vehicles, smart manufacturing, and new energy solutions. Hence, it not only optimizes the product portfolio of the Company but also demonstrates the powerful strength of the Company in innovation and technical development. As such, Nuvoton fully showcases its expertise and experience in the field of green energy technology, which is aligned with the macro trend of sustainable development promotion in the world.

Through the advanced technological R&D, Nuvoton seeks to enrich the human life with technology as well as reduce the power consumption of products in running so as to march toward sustainability. In particular, the next-generation low-power microcontroller, the M251 series, adopted the process of low power consumption and low leakage. Compared to the prior generation of low-power microcontroller, it saves 15-20% in IC size and reduces the power consumption in running by 20-30%, offering the advantages of power conservation and miniaturization.

Nuvoton Technology has secured numerous honors and awards for product innovation, including for the launch of NuMicro®M030G/M031G Series MCU, which offers a complete optical transceiver solution platform to the market. Thus, it received the honors of “AspenCore World Electronics Achievement Awards (WEAA)” and “2022 EE Awards Asia - The Promising Product of the Year.”

Through the pathway of improvement in green products and green processes, we are to realize the goal of sustainable business of the Company. On one hand, the Company unceasingly innovates product functions to enrich people’s life, either in the fields of MCU, automotive products, or IC security applications. On the other, Nuvoton Technology has achieved excellence in business performance and presents responsible feedbacks to its investors, shareholders, and employees in order to attain a sustainable management of the Company.

Hsin-Lung Yang, President

Nuvoton Technology established the Corporate Social Responsibility Management Committee in 2012, which was renamed into the Sustainable Development Committee in 2021. The committee comprises 7 working groups, i.e. Corporate Governance, Labor and Human Rights, Environmental Safety and Health, Product, Energy Conservation, Supplier Management, and Social Participation, to promote works relevant to the sustainable development at the Company. Through such division of labor, it has been deepening relevant practices into the everyday operations.

Especially, we are facing new climate change risks, and the issues of which constitute one of the three facets of ESG at the Company. We are fully aware that net-zero emissions have become a global consensus, which is the mission and challenge we have to take on. Hence, the Company introduced the framework of the Task Force on Climate-related Financial Disclosures (TCFD) and assesses the risks and opportunities arising from climate change on a rolling basis. The long-term strategic blueprint for adaptation and transition has been formulated to actively tackle the shared challenges of the world. Nuvoton Technology set Net Zero by 2050 as its long-term goal to actively respond to the global trend of Net Zero. We have the energy management system (ISO 50001) in place. Through energy management, we reduce the indirect emissions of CO₂ from fossil fuel burning in the process of power consumption via an energy conservation plan that is systematic and traceable. Regarding Scope 1and 2, Nuvoton examined its operations and manufacturing processes and added greenhouse gas (GHG) treatment facilities to reduce emissions, raise operational energy efficiency, lower energy consumption, and actively increase its installed capacity of renewable energy. As for Scope 3, the Company continued to collaborate with suppliers, collected GHG inventory data from the supply chain, and advanced on the path to energy conservation and carbon reduction hand in hand. By elevating the efficiency of products, it assisted its clients to reduce the energy consumption in product use to fulfill the purpose of energy conservation and carbon reduction. On the path to carbon reduction, what Nuvoton seeks is not just to go fast, but to go far jointly with its value chain. With regard to water resources, in the event of water shortage throughout Taiwan in 2021, thanks to the relevant water conservation and response measures in place, along with regular drills and testing, these efforts enabled us to effectively respond swiftly to maintain the production capacity. At present, we keep tabs on the status of water reclamation to lower the water consumption in production. The implementation of these measures helps ensure a sustainable and stable provision of products and services in the event of water shortage.

Now, the global warming is accelerating at an astonishing speed. The Company is actively implementing various carbon reduction measures as well. There will be a myriad of challenges ahead waiting for us in the future. Nonetheless, Nuvoton Technology shall advance toward its goal one step at a time, committed to realizing the corporate vision of Nuvoton Technology.

Kuang-Lun Lin,Vice President