TAIWANSEMICONDUCTOR
Sustainability Report

1

CONTENT
About This Report04

Message from the Chairman

05

Sustainability Performance
Highlights

06

Material Topics

07

Communication with Stakeholders

103

Sustainable Operation
and Governance
1.1 About TSC

131.1.1 Introduction to TSC

131.1.2 Financial Performance18

1.2 Corporate Governance19

1.2.2 Integrity Management

23

Green Manufacturing andOperation

3.1 Supply Chain Management59

3.1.1 Supply Chain Overview

59

5.1 Resources Management86

3.1.2 Sustainable Supply Chain
Management59

5.1.1 Carbon Emission
Management86

3.1.3 Conflict Mineral
Management62

5.1.2 Energy Management89

5.1.3 Water Stewardship

92

19

1.2.1 Sustainable Governance

5.2 Waste Management

94

25

5.2.1 Waste Management94

1.3.1 Risk Management25

5.2.2 Wastewater Management98

1.3.2 Information Security
Management29

5.2.3 Air Pollution Control

102

1.3.3 Climate Risk Management33

1.3 Risk Management2

Responsible Procurement

5

Innovative Products andServices46Equal Workplace
4.1 Talent Attraction and Retention

64

45

4.1.1 Diversity and Inclusion

64

2.1.1 Products and Services

45

67

2.1.2 Innovation and R&D

49

4.1.2 Human Resource
Development

2.1.3 Developing Sustainable
Products

53

4.2 Healthy Work Environment

72
72

55

4.2.1 Employee Health andBenefits

77

2.2.1 Customer Satisfaction
Improvement55

4.2.2 Labor Relations and Human
Rights Management79

2.2.2 Customer Privacy
Protection

57

4.2.3 Workplace Safety
Management

2.1 R&D and Innovation

2.2 Customer RelationshipManagement

Sharing Our Prosperity
with Society
6.1 Social Influence

7105

6.1.1 Humanitarian Care

105

6.1.2 Youth Empowerment

107

Appendix
GRI Standards Content Index

109

Sustainability Accounting Standards 114
Board (SASB) Content Index
Climate-Related Information of TPEx 115
Listed Company
Independent Limited Assurance
Report116

About This
ReportAbout This Report

About This Report

Sustainable
Operation and
Governance

Message from the Chairman

Innovative
Products andServices

Responsible
Procurement

Sustainability Performance Highlights

Equal
WorkplaceMaterial Topics

Green
Manufacturingand Operation

Sharing Our
Prosperity
with Society

AppendixCommunication with Stakeholders

GRI 2-1、2-2、2-3、2-4、2-5

About This Report

Restatements of Information

In response to global climate change issues, in 2022, Taiwan Semiconductor Co., Ltd.
(TSC or the Company) formed an ESG Committee to conduct our sustainability strategy
blueprint. This led to the establishment of the ESG Office and various task forces toimplement ESG projects and improve our ESG efforts from all perspectives. In addition, thisreport is the first sustainability report issued by TSC to disclose the status of its sustainable
development. It also serves as the first annual report to release non-financial information
publicly.

This report is the first sustainability report compiled by Taiwan Semiconductor Co., Ltd.,so there is no need for restatements of information.

This report is written by TSC based on the principles of integrity and transparency,
to communicate the Company's sustainable development strategies and performance inenvironmental, society, and governance matters to stakeholders, reflecting TSC's concern
and commitment to sustainability issues. This report has been reviewed and approved by
the ESG Committee before its release.

Principles of Report Compilation
This report referred to the GRI Standards released in 2021, the Task Force on Climaterelated Financial Disclosures (TCFD), and the Semiconductors Sustainability AccountingStandard 2018 by Sustainability Accounting Standards Board (SASB). It is prepared inaccordance with the procedures for compiling and submitting sustainability reports by listedcompanies.

Third-party Guarantee and AssuranceThis report was collected, compiled, and written by the ESG team of TSC, andconfirmed by each functional Supervisor to ensure that the report covers all material
topics. The Company has commissioned KPMG in Taiwan to conduct a limited assurancein accordance with TWSAE 3000 of the Taiwan ARDF on Financial Reporting Standards for
Non-Historical Financial Information Audit or Review (established referring to ISAE 3000
Revised). The Certified Public Accountant / CPA's independent assurance statement is
attached to Appendix Independent Limited Assurance Report of this report.

Contact Information
Should you have any questions or suggestions about the content of this report, please feel
free to contact us.
Contact Person: Hsieh Hsin-Yu, Executive Secretary
Address: 11F., No. 205, Sec. 3, Beishin Rd., Xindian Dist., New Taipei City, Taiwan (R.O.C.)
Unit: ESG Office

Report Boundary

Tel: +886 2 8913-1588 Ext. 1603

This report discloses the specific achievements of Taiwan Semiconductor Co., Ltd.
sustainable practices for the year 2022. As this is the first time Taiwan Semiconductor Co.,
Ltd. has compiled a sustainability report, the scope of this report is limited to the operationsin Taiwan (Taiwan headquarters, I-lan Site and Li-Je Site) within the consolidated financial
report boundary. In the future, overseas operations and subsidiaries will gradually be
included in the disclosure scope. To present the trend of changes over the years, some data
will be traced back to information before 2022. Any inconsistencies of the report period or
adjustments to the information disclosure scope will be noted and explained in the report.

Email: ESG@ts.com.tw

Fax: +886 2 8913-1858
Official Website：https://www.taiwansemi.com/

This report was issued in September 2023, with an information disclosure period fromJanuary 1, 2022, to December 31, 2022. It is expected to be published annually, with thenext edition scheduled for June 2024.
4

About This
ReportAbout This Report

Sustainable
Operation and
Governance

Message from the Chairman

Innovative
Products andServices

Responsible
Procurement

Sustainability Performance Highlights

Equal
WorkplaceMaterial Topics

Green
Manufacturingand Operation

Sharing Our
Prosperity
with Society

AppendixCommunication with Stakeholders

Message from the Chairman
The COVID-19 pandemic has accelerated digital transformation in recent years,
while extreme weather events, geopolitical turmoil, and the new establishment of Global
Semiconductor Climate Consortium, have caused semiconductor industry to focus moreon sustainable development issues. As a member of the global semiconductor supply
chain, Taiwan Semiconductor Co., Ltd. is committed to adhering to international standards,
engaging with stakeholders, and integrating sustainable development strategies into ourcore business. We have prioritized carbon reduction, green operations, environmental safety,
talent development, and community engagement to achieve sustainable development
and stay up-to-date with international trends. To align with the United Nations Sustainable
Development Goals (SDGs) and increase transparency of environmental, social, andgovernance (ESG) information, we published our first ESG report in 2023. Our goal is to use
our positive influence as a company and collaborate with our industry chain to move towards
sustainability and create a better future for the world.

Sustainable Governance on the Basis of Integrity
In 2022, we formed an ESG Committee to conduct our sustainability strategy blueprint.
This led to the establishment of the ESG Office and various task forces to implement ESG
projects and improve our ESG efforts in all perspectives. In terms of governance, we arecommitted to ethical practice and have strengthened our risk control, information security,and sustainable supply chain management. We have also integrated ESG targets into ourbrand and daily operations.
In terms of environment, we are actively responding to the global vision for carbon
reduction and Taiwan's goal of Net Zero by 2050. We have implemented various carbon
reduction measures, and identified the Company's climate risks and opportunities, inalignment with the Task Force on Climate-related Financial Disclosures (TCFD) framework.
These all demonstrates our determination to take climate action. Moving forward, we willcontinue to comply with domestic and international laws, such as carbon taxes and fees. We
will launch corresponding carbon reduction and renewable energy projects and evaluate
the feasibility of joining the Science Based Targets Initiative (SBTi) to take responsibility forcarbon reduction as an enterprise.

contribution helps conserve energy and reduce carbon emissions. Additionally, we plan touse fully recyclable and decomposable eco-friendly packaging materials.
In terms of manufacturing, we have optimized our processes by removing lead, treating
wastewater, and adjusting our electroplating process. We are paying close attention to themajor markets of automotive and industrial automation and control to consolidate our main
business and respond to the European Union's End of Life Vehicles Directive (ELV). We arecommitted to meeting the needs of all our stakeholders.

Shared Prosperity Through Social Charity
Employees are a valuable asset. Since 2022, our Company has launched several
talent development initiatives, including expanding industry-academia collaborations
and improving our internal education and training programs. These efforts aim to actively
enhance our employees' professional skills and technical know-how. Additionally, we holdemployee engagement conferences where our management team personally shares theCompany's future outlook. To foster open communication with our employees, we regularly
conduct employee opinion surveys and utilize various communication methods to ensure ahealthy, safe, and friendly workplace. We also prioritize giving back to society through social
charity events and creating value for our community.
Our first ESG report demonstrates to the public our Company's commitment to andefforts toward corporate sustainability. As we navigate the constantly evolving landscape,we remain committed to addressing all aspects of ESG concerns, listening to stakeholder
feedback, and promoting positive environmental, social, and economic growth through acomprehensive sustainable governance framework. We will continue to prioritize businessperformance while working towards these goals. We are excited to collaborate with industry
partners across all sectors to build a sustainable future together.
Chairman Wang Shiu-Ting

Innovative Product Research and Development
Thanks to the collective efforts of all our employees, the Company's revenue in 2022
exceeded NT$560 million, which is a 20% increase from the previous year. This outstanding
operating performance has laid a solid foundation for the Company's sustainable
development. In terms of products, we assist automobile clients in developing new energy
vehicles and improving their car performance with our high-quality automotive products. This
5

About This
ReportAbout This Report

Sustainable
Operation and
Governance

Message from the Chairman

Innovative
Products andServices

Responsible
Procurement

Sustainability
Sustainability Performance
Performance Highlights

Equal
WorkplaceMaterial Topics

Green
Manufacturingand Operation

Sharing Our
Prosperity
with Society

AppendixCommunication with Stakeholders

Sustainability Performance Highlights

Environment

Society

GovernanceIn the past three years, the energy-saving
plan has achieved savings of 1,418,830 kWh.

Average training hours per person for the
management level is 61.65 hours, while fornon-management level it is 56.39 hours.

The annual Corporate Governance Evaluation
System ranking reached the 21%-35%
bracket.

In non-supervisory positions, the mediansalary of full-time employees in nonsupervisory positions increased by 8.13%
over the previous year.

The proportion of Independent Directors
reached 57%.

In the past three years, the intensity ofgreenhouse gas emissions has continued todecrease.
The cooling water recycling project has
reduced water consumption by more than
2,520 tons per year.
Dedicated to promoting circular economy,
achieving 100% recycling and reuse of
discarded sludge.
The use of renewable materials in green
packaging has increased by 14.67%
compared to the previous year.

All employees are provided with healthcheck-ups annually. In 2022, over 80% of
employees underwent check-ups.
Implement occupational disease prevention
and health management, and maintain
zero occupational disease cases for threeconsecutive years.

In the past three years, there have been nodata security breaches.
Equipment automation coverage in TSC'ssites in Taiwan has reached 68.8%.
Introduce a knowledge management
system, with 38 patents.
Local purchases account for 72.7% ofprocurement.

The proportion of employees who haveundergone performance and careerdevelopment checks reached 100%.
Over the years, social charitable assistanceand donations to impoverished students has
exceeded NT$5 million.

6About This
ReportAbout This Report

Material Topics

Sustainable
Operation and
Governance

Message from the Chairman

Green
Manufacturingand Operation

Equal
WorkplaceMaterial Topics

Sharing Our
Prosperity
with Society

AppendixCommunication with Stakeholders

GRI 3-1, 3-2, 3-3

Material Topic Identiﬁcation

TSC referenced the domestic and international sustainabilityrelated evaluations and industry indicators, such as Dow Jones
Sustainability Indices (DJSI), Carbon Disclosure Project (CDP),
Sustainability Accounting Standards Board (SASB), Corporate
Sustainability Assessment (CSA), United Nations Sustainable
Development Goals (SDGs), industry regulations and norms,
issues of concern to benchmark companies in the upstream anddownstream, expectations of stakeholders, and opinions of expert
consultants in the identification process, identifying 21 actual andpotential impacts. In the evaluation stage, the ESG Committeeof TSC assesses the significance of the impacts based on theirimpact and potential level. At the same time, surveys are sent
to important stakeholders to understand their level of concern
for sustainability issues. After analyzing and ranking the impact
assessment results, taking into account stakeholder feedback andindustry concerns, six major themes are identified.

The main communication
targets of TSC are suppliers,
customers, employees, investors,
government, media, generalpublic, and academic institutions.

2

Climate Change
Mitigation And
Strategy

Product Liability

Environmental
Pollution Prevention◆ Twenty-one positive / negative impacts：

We have summarized 21 actual and potential impacts byreferencing information such as the Semiconductor Industry
Dow Jones Sustainability Index (DJSI), Carbon Disclosure
Project (CDP), Sustainability Accounting Standards Board(SASB), Corporate Sustainability Assessment (CSA), United
Nations Sustainable Development Goals (SDGs), industry
regulations and norms, issues of concern to benchmark
companies in the upstream and downstream, expectations ofstakeholders, and opinions of expert consultants.

3

Evaluation◆ Degree of Impact and Significance：

Based on the positive / negative impact andsignificance on the environment, society, andeconomy in 2022, the issue is assessed on a fourlevel scale from 0 (zero impact) to 3 (serious impact).

◆ Possibility of occurrence：

Assess the possibility of future occurrence basedon the impact, using a four-level scale from 0(impossibility) to 3 (high possibility).

◆ Calculation of Impact Significance：

The six material topics for 2022 are: customer relationshipmanagement, human resource management, climate change
mitigation and strategy, employee safety and health, productliability, and environmental pollution prevention.

Human Resource
Management

Identiﬁcation◆ Eight main stakeholders：

TSC conducts significant theme analysis and identificationin accordance with GRI Standards. Through the five steps ofidentification, evaluation, analysis, inspection, and approval,
it examines the potential and actual impacts that operational
activities may have on the economy, environment, and society/people, and uses this as a basis for planning and adjustingsustainable management strategies.

Employee Safety
and HealthResponsible
Procurement

Sustainability Performance Highlights

1

Customer
RelationshipManagement

Innovative
Products andServices

Analysis◆ Prioritization：

Identify and prioritize sustainability
issues into positive / negative
impacts, using a threshold valueof 33%. Any issue exceeding thethreshold will be classified as amaterial topic.

◆ Select six sustainable issues ofconcern as the material topic for2022, and create a TSC material
topic matrix.

The significance of the impact = impact x possibility.

5

Approval◆ After review by the ESG Office,it is submitted to the ESG
Committee for approval.

4

Inspection◆ Stakeholder feedback：Through the 2022 TSC Stakeholder and Material
Topic Questionnaire, surveys and interviews wereconducted on closely related and influential subjects.
7About This
ReportAbout This Report

Sustainable
Operation and
Governance

Message from the Chairman

Innovative
Products andServices

Responsible
Procurement

Sustainability Performance Highlights

Equal
WorkplaceMaterial Topics

Green
Manufacturingand Operation

Sharing Our
Prosperity
with Society

AppendixCommunication with Stakeholders

Material Topic Matrix
In response to the GRI concept, TSC considers factors such as industry, geographic location, and organization to define the positive and negative impacts of various sustainability issues.
Through the concept of risk management, TSC identifies the actual and potential significance of these impacts. The X-axis of the material topic matrix is set to represent the organization's
impact on the economy, environment, and society / people for each issue, with the magnitude of the impact differentiated by numerical values. The Y-axis of the matrix represents stakeholders'assessment of the likelihood of the issue occurring. A total of six material topics for 2022 have been assessed, as shown in the figure below.
High
Climate Governance and Strategies
Human Resource Management
Customer Relationship Management

Occupational Accidents
Environmental Pollution Prevention

Sound Corporate Governance
Responsible Products

Quality and Safety Requirements and Inspections
Possibility of
Occurrence ofSustainability Issue

Customer Privacy Leaks
Supplier Environmental and Social Assessment
Talent Drain
Energy Management
Water StewardshipIntellectual Property Protection
Human Rights Violations
Corrupt Behavior
High

Negative

Environment

Society

Environmental Pollution
Human Rights Violations
Prevention

Customer Privacy Leaks

Energy Management

Occupational Accidents

Supplier Environmental
and Social Assessment

Water Stewardship

Brain Drain

Intellectual Property
Protection

Sustainable Supply Chain Management

Material Topic
Topics of Concern（４governance；3 environment ; 4 society ; １products ）Corrupt Behavior

Product Services and Innovation

Hostile Work Environment
Extent of Negative Impact on the Economy,
Society, and Human Rights

GovernanceDiversity and Equal Opportunity
Social Philanthropy

Hostile Work Environment

Low

High

Extent of Positive Impact on the Economy,
Society, and Human Rights

Positive（ 2 governance；1 environment ; 3 society ; 3 products ）Product

Governance

Environment

Society

Product

Quality and Safety
Requirements andInspections

Sound Corporate
Governance

Climate Governanceand Strategies

Human Resource
Management

Customer RelationshipManagement

Social Philanthropy

Responsible Products

Diversity and Equal
Opportunity

Product Services andInnovation

Sustainable Supply
Chain Management

Note: The bold text in the table indicates material topics.

8

Sustainable
Operation and
Governance

About This
ReportAbout This Report

Message from the Chairman

Innovative
Products andServices

Responsible
Procurement

Sustainability Performance Highlights

Equal
WorkplaceMaterial Topics

Green
Manufacturingand Operation

Sharing Our
Prosperity
with Society

AppendixCommunication with Stakeholders

Material Topic Management
Positve:

NumberAspectMaterial
Topics in 2022

Value Chain Impact
Explanation of Positive / Negative Impact
Upstream

TSC

Downstream

Negative:

Management
Policy(Corresponding
Chapter)

Customer Relationship Management

1

Product

Customer
RelationshipManagement

Through regular customer meetings organized by the Company's customer service team,
we can understand the actual needs of customers and make immediate improvements tooperational plans. This will optimize and enhance the customer experience, as well as increasecustomer retention rate and loyalty, thereby improving economic performance.

2.2 Customer
RelationshipManagement

Human Resource Management

2

Society

Human Resource
Management

Establish an attractive, diverse, and equitable remuneration and benefits system to increase
employees' sense of identity and cohesion towards the Company. Develop diverse recruitment
channels to recruit excellent talents to enhance operational efficiency. Meanwhile, enhance
employee professional capabilities through a comprehensive talent development andcultivation system, provide appropriate positions for different employee characteristics, andthereby improve employee job satisfaction and operational performance.

4.1.1 Diversity andInclusion

Climate Governance and Strategies

3

Environment

Mitigation andStrategies for
Climate Change

Strengthening strategic deployment and the management of climate issues in enterprises (suchas increasing the proportion of renewable energy sources) helps to reduce environmental
impacts like carbon emissions and waste, mitigate future financial costs such as carbon
taxes / fees, and enhance the management measures of climate-related risks throughinvestment. It also helps to lead the development of low-carbon industries and enhance theclimate resilience of TSC.

1.3.3 Climate Risk
Management

Occupational Accidents

4Society

Employee Safety
and Health

Governance

Responsible
Products

The Company's operational safety regulations are not perfect, resulting in employees
encountering occupational accidents and diseases, or chemical hazards, causing disability
and harm to employees. As a result, the Company may face compensation and litigation
issues.

4.2.3 Workplace
SafetyManagement

Quality and Safety Requirements and Inspections

5

If there are any product safety / quality incidents, there may be related legal proceedings andviolations, resulting in litigation costs, compensation, and other economic losses, while also
compromising customer health and safety.

2.1.1 Products andServices

Environmental Pollution Prevention

6

Environment

Environmental
Pollution
Prevention

Waste, water, and air pollution from plants can have a serious negative impact on theenvironment. If companies do not have waste and wastewater management or fail to implement
air pollution prevention and control regulations and greenhouse gas reduction measures,
this may lead to their being required by relevant government agencies to clean up andtake responsibility for environmental improvement, which will also affect their reputation andincrease operating costs.

5.2 Waste
Management

9About This
ReportAbout This Report

Sustainable
Operation and
Governance

Message from the Chairman

Innovative
Products andServices

Responsible
Procurement

Sustainability Performance Highlights

Green
Manufacturingand Operation

Equal
WorkplaceMaterial Topics

Sharing Our
Prosperity
with Society

AppendixCommunication with Stakeholders

Communication with Stakeholders
TSC values and listens to the voices of various stakeholders. Through discussions and reviews within the units and departments under the ESG Committee, we gather information oninternal and external groups or individuals that have an impact on or are affected by the Company's operations. We also reference the five principles of the AA1000 Stakeholder Engagement
Standard (SES) to identify eight main stakeholders: suppliers, customers, employees, investors, government, media, the general public, and academic institutions. Through regular and irregularcommunication with stakeholders, we aim to understand the actual and potential impacts of our operations on stakeholders. This understanding serves as the basis for our future planning of
relevant preventive and mitigation actions.

Communication with Stakeholders
Stakeholders

Suppliers

Customers

Investors

Description

Provide TSC products,
services, or enterprises andtheir branch companies
that have commercial
relationships with TSC

The customer is the source ofrevenue for TSC. Understandthe customer's needs, grasp
industry trends, and provide
professional services.

Pay attention the investment
value of TSC, focusing on the
Company's growth strategy,
profitability, shareholder
return on investment, andsustainability performance.

Issues of Concern

Communication Frequency and Channels•

Responsible Products••Intellectual Property
Protection

Quarterly: Internal meeting on supplier delivery management capabilities
and scheduling flexibility.

••

Sustainable Supply Chain
Management

Annually: Written or physical audits, signing relevant agreements on
intellectual property protection with suppliers, RBA self-assessment
questionnaire.

•

Environmental Pollution
Prevention••

Occupational Accidents

Time to time: Communication meetings on intellectual property protection
issues for IC design companies, information product promotion activities,
informing contractors of hazards before factory construction, and signingoccupational safety and health commitment letters.

•

Customer Privacy Leaks•

Intellectual Property
Protection•

Supplier Environmental andSocial Assessment•

Annually: Customer Satisfaction Survey•

Time to time: Conduct meetings with customers regarding quality
and specification testing. Respond to questionnaires on
specific data platforms (such as Ecovadis, CDP, SupplyOn,etc.) according to customer requirements. Conduct RBA
assessments and CSR / ESG evaluations / audits according
to customer requirements. Communicate with automotive
industry customers about ESG-related progress and plans.
Coordinate and communicate with customers with their scorecard and results.

Communication Achievements in 2022•

Hold at least two information product promotion
events.

•Hold meetings with IC design companies todiscuss intellectual property protection from time
to time.

•

The factory held a pre-construction hazard
notification education training session with theparticipation of more than 500 contractors.

•

RBA self-assessment questionnaire response
rate exceeded 90%.

•

Conducting annual customer satisfaction survey,
with a response rate of 83%.

•

Complete three customer evaluation audits.

•

During Electronica in Munich, at least 15
business meetings were held with customers to
discuss future opportunities.

•

Conduct at least 10 meetings regarding existingand emerging market automotive-related
products. The content should cover the latest
product developments and achievements,
as well as listening to customer needs andevaluating trends in the automotive market.

•

Customer RelationshipManagement•

Quality and Safety
Requirements andInspections•

Responsible Products•

Climate Governance andStrategies•

Sound Corporate
Governance•Sound Corporate
Governance•

Quarterly: Quarterly financial statements

Quarterly financial statements held four times

Corrupt Behavior

Annually: Annual shareholders' meeting, annual financial statements.

•

•

•

Annual shareholders' meeting held once

Product Services andInnovation

Time to time: Investor conferences, company website updates on
operational performance, major announcements on Market
Observation Post System.

•

•

•

•

Five investor conferences have been held10About This
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Stakeholders

Employees

Government

Media

General Public

Academic
Institutions

Message from the Chairman

Description

All TSC employees

The operation of TSC directly
or indirectly involves, or isregulated by, the competentauthorities

The media plays the roleof a bridge between TSC
and stakeholders, helping
stakeholders openly
obtain accurate company
information and solidify theCompany's image.
TSC's operations cangenerate positive andnegative ESG impacts on thegeneral public.
Research institutions
collaborate with TSC
to develop advanced
technologies andapplications, assisting
industry-academia
cooperation in innovative
research and development
to enhance market
competitiveness.

Sustainable
Operation and
Governance

Product Services andInnovation•

Brain Drain•

Human Resource
Management•

Sound Corporate
Governance•Diversity and Equal
Opportunity•

Occupational Accidents•

Environmental Pollution
Prevention•

Climate Governance andStrategies•

Occupational Accidents•

Energy Management•

Sound Corporate
Governance•

Responsible Products•

Sustainable Supply Chain
Management•

Sound Corporate
Governance•Corrupt Behavior•

Social Philanthropy•

Supplier Environmental andSocial Assessment••

Responsible
Procurement

Sustainability Performance Highlights

Issues of Concern•

Innovative
Products andServices

Green
Manufacturingand Operation

Equal
WorkplaceMaterial Topics

Sharing Our
Prosperity
with Society

AppendixCommunication with Stakeholders

Communication Frequency and Channels•

Weekly: Product Development Meetings•

Quarterly: Independent study courses, production scheduling planning,
quality issue communication, cross-functional meetings, senior
executive meetings, all-hands meetings, occupational healthand safety meetings, labor-management meetings, etc.

•

Semiannually: SMART performance goal setting principles workshop•

Every year: Employee annual on-the-job safety and health training, KPI
setting•

The Li-Jie and I-lan Site conduct two fire escape drills and one chemical
spill drill annually.

•

Time to time: SMART Train the Trainer workshop, job content andoccupational competency development meetings, newemployee safety and health training, employee interviews.

•

Time to time: Updates on legal compliance matters on the Company
website, legal publicity briefings, industrial safety
counseling, inspections by the Occupational Safety and
Health Administration of the Ministry of Labor, wastewater
treatment planning and testing, waste-related audits, energy
consumption inspection reports, interaction with government
by official documents.

Communication Achievements in 2022•

Over 500 people participated in training courses
such as SMART workshop and SMART Train The
Trainer workshop.

•

Over 50 safety and health training sessions havebeen held, with approximately 300 participants.

•

Conducting over 25 government evaluations or
audits•Time to time: Investor conferences, face-to-face interviews, phoneinterviews, company official website, press releases.

•

Held five investor conferences.

•

Quarterly: Donate invoices to Genesis Social Welfare Foundation•

Invoice Collection Campaign•

Time to time: Disaster relief donations, lunch and miscellaneous fees
assistance for impoverished students, blood donation charity
events•Blood drives were held at the Li-Je Site andI-lan Site, and a total of 118 bags of blood were
donatedHuman Resource
Management••

Sound Corporate
GovernanceTime to time: Recruitment orientation, Industry-Academia Cooperation
Meeting

Collaboration and exchange activities were heldwith colleges and universities, with over 150
participants.

•

Annually: Governance and Training of Board of Directors•

Held three recruitment orientations, conduct face
to face recruitment and recruit interns.

11

1

Sustainable Operation
and Governance
1.1 About TSC
1.2 Corporate Governance
1.3 Risk Management

12About This
ReportSustainable
Operation and
Governance

Innovative
Products andServices

1.1 About
About TSC
TSC

1.2 Corporate Governance

Responsible
Procurement

Equal
Workplace

Green
Manufacturingand Operation

Sharing Our
Prosperity
with Society

Appendix

1.3 Risk Management

1.1About TSC
Taiwan Semiconductor Co., Ltd. (TSC or the Company) was established in 1979
and is a leading manufacturer of power semiconductor devices worldwide. With over
40 years of experience, the Company provides a wide range of products, including
power management ICs, rectifiers, ESD protection devices, bridge rectifiers, metaloxide-semiconductor field-effect transistors (MOSFET), insulated gate bipolar transistors(IGBT), trigger diodes, and silicon controlled rectifiers. These products and solutions arewidely applied to automotive electronics, power management systems, lighting, industrial
equipment, portable products, communication devices, consumer electronics, andcomputer 3C products. TSC continuously enhances its competitive advantage throughtechnological innovation, strengthens its sustainable supply chain to serve customers, andcontinues to develop its global market.

1.1.1 Introduction to TSC
Date of Establishment
Headquarters

Established in accordance with the Company Act inJanuary 1979
Address: 11F., No. 205, Sec. 3, Beishin Rd., Xindian Dist.,
New Taipei City, Taiwan (R.O.C.)

Capital

NT$2.634 billion

IndustrySemi-conductor manufacture

Afﬁliates

Automotive Industry

The business operations of Company affiliates include
electronics components manufacturing, office machines
manufacturing, computer and peripheral equipment
manufacturing, international trade, management
consulting, restrained telecom radio frequency equipment
and materials import, and controlled telecommunications
radio-frequency devices and materials manufacturing.

Date of Listing

Listed for trading on the Taiwan Stock Exchange inFebruary 2000.

Ticker Symbol

5425

Industrial
Control

Others (Drone,
Aerospace,
Medical)Communication
Industry

Smart Home
Appliances

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1.1 About
About TSC
TSC

1.2 Corporate Governance

Responsible
Procurement

Equal
Workplace

Green
Manufacturingand Operation

Sharing Our
Prosperity
with Society

Appendix

1.3 Risk Management

Operations
The headquarters of the TSC Group is located in New Taipei City, Taiwan. There are four production sites, including wafer fabs and assembly sites, located in Taiwan and mainland China.
Sales offices are located globally in mainland China, Hong Kong, Japan, South Korea, India, the United States, Germany, France, the United Kingdom, and other regions. The global employees
are over 1600. The subsidiary TSC Auto ID Technology Co., Ltd.. (Ticker Symbol: 3611) is mainly engaged in the manufacturing and trading of bar-code printers. For more information about
TSC Auto ID Technology, please refer to the Company's annual report.

China
Manchester

BeijingHong Kong
Shanghai Shandong Site
SuzhouTianjin Site
Shenzhen

MunichDenver

Seoul

Brea

Detroit

Tokyo
Paris

New Delhi

Baltimore
Phoenix

Pune
Bengaluru

Taipei Headquarters
I-lan Site
Li-Je Site

Headquarters
Operations
Front-end Wafer FabBack-end Assembly and Testing Plant

There are 18 sales and business locations worldwide, with anadditional four production locations in China and Taiwan.

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TSC

1.2 Corporate Governance

Service Scope of TSC

Responsible
Procurement

Equal
Workplace

Green
Manufacturingand Operation

Sharing Our
Prosperity
with Society

Appendix

1.3 Risk Management

Industry Value Chain

The development and manufacturing of power semiconductor is the corecompetitiveness of TSC. From product design, technology research and development,
wafer manufacturing, assembly and testing, to global marketing of its brand, TSC provides
customers with a comprehensive power semiconductor solution. Our production sites are in
I-lan and Li-Je (Wujie Township, I-lan), Tianjin Province and Shandong Province in mainland
China. The Li-Je Site and Tianjin Site mainly produce six-inch and four-inch wafers, while
the I-lan Site and Shandong Site mainly produce assembly and testing products such as
MOSFET rectifiers, surface-mount devices (SMD), and bridge rectifiers. After producing
wafers for self-use, the Li-Je Site and Tianjin Site will transfer them to the I-lan Site or
Shandong Site for assembly, depending on the production schedule and assembly process
requirements of each assembly site. TSC continues strengthening technological innovationand enhancing market competitiveness by integrating resources and collaborating with
upstream and downstream supply chain partners.

Equipment and Material
Supplier

PCB Supplier

DesignManufacturing

Assembly Test

Service Scope of Main Production Area

Li-Je Site (wafer fab)

The core
competitiveness of TSC

Design Components

I-lan Site (assembly and testing site)

Terminal Market:
Home appliances,medical, industrial control,
consumer electronics,
communication,
multimedia, automotive
Tianjin Site
Tianjin Everwell (wafer fab)Shandong Site
Yangxin Everwell (assembly andtesting site)15

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TSC

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Responsible
Procurement

Equal
Workplace

Green
Manufacturingand Operation

Sharing Our
Prosperity
with Society

Appendix

1.3 Risk Management

Business Philosophy
TSC strictly complies with the TSC Corporate Governance Best Practice Principles and deeply implements the concept of sustainable operation. As a significant member of theinternational semiconductor industry chain, TSC conducts comprehensive layout based on the development and demand of the global industry. TSC takes "Professionalization of Operation,
Value Co-creation, Technological Innovation, Quality Commitment, and Brand Internationalization" as the five dimensions for its corporate sustainable development strategy. In response toindustry trends, TSC effectively grasps social dynamics, deeply cultivates sustainable values and culture, implements corporate social responsibility, and promotes positive influence within theindustry.

1 Professionalization of Operations• In order to popularize capital, ownership and management rights are clearly divided.
• Professional managers are recruited to enhance operational performance.
• Management is systematized, with the goal of sustainable operation.

2 Value Co-creation

5 Brand Internationalization• Employees are encouraged to buy shares.

• The scale of the industry is expanded andinfluence enhanced.

• The results of operational achievements areshared.

• The Company's products and brand strive to
become leaders in the industry worldwide.

3 Technological Innovation

4 Quality Commitment• Technology and R&D and innovation are
deeply cultivated.

• A zero-defect policy is implemented toensure superior quality.

• Strategic partners are collaborated with tojointly develop new products.

• Enthusiastic service responds promptly
to customer needs.

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TSC strives to play an essential role in the global market through continuous technological innovation anda complete deployment in the value chain, responding to changes in the international situation and industry withother companies. We also actively participate in trade organizations and external initiatives related to its industry
and sustainable development, leading the industry towards mutual benefit.

Association
Name

About the Association

World
Semiconductor
Trade Statistics,
WSTS

WSTS is an international
semiconductor industry
organization responsible forcollecting and publishingstatistical data on the global
semiconductor market. It assists
the industry in making strategic
decisions through analysis andforecasting, and its findings areimportant reference indicators
for the semiconductor industry.

TSC became a member in 2012 andprovides shipment information to
WSTS on a monthly, quarterly, andsemi-annual basis. WSTS regularly
releases statistical information(including product categories andapplications) and market forecast data
for members' reference.

Chinese National
Association ofIndustry andCommerce,
CNAIC

The CNAIC is one of therepresentative organizations of
Taiwan's business community,
serving as a bridge forcommunication between thegovernment and enterprises.

TSC participates in seminars andevents organized by CNAIC on aregular basis to stay updated on thelatest economic and trade situations
and industry trends.

The CommonWealth
Magazine Group - ESG
committee regularly convenes
member discussions on
legal regulations, customer
requirements, and ESG
trends such as carbon tariffs
being implemented in various
countries.

TSC was invited to become acorporate member in 2023 andparticipate in the SDGs Workshop,
actively exchanging ideas withpeers and companies from different
industries, sharing its own corporatesocial responsibility and energysaving measures in the semiconductor
industry with the goal of jointly guiding
the sustainable development of
Taiwanese companies with industry
leaders.

CommonWealth
Magazine Group- ESG committee

Participation Methods andObjectives

TSC's
Role in the
Association

Green
Manufacturingand Operation

Sharing Our
Prosperity
with Society

Appendix

1.3 Risk Management

Participation in Associations▎ List of Participation in Associations

Equal
Workplace

Responding to International Sustainability
Initiatives• TCFD (Task Force on Climate-related Financial Disclosures):
In response to the TCFD initiative, TSC implements climate change
management based on the TCFD framework starting from 2022. We
will follow the TCFD framework to identify climate risks and conduct
risk and opportunity analysis through relevant responsible units basedon transition and physical risks, and develop adaptation and mitigation
strategies.
• SBT (Science Based Targets):
TSC is planning to develop a medium to long-term carbon management
plan in the near future, with the following four-stage plan:

MemberStage 1• Strengthen carbon inventory
foundation• Streamline supply chain• promote energy-saving projects

Stage 2
MemberStage 3• Establish strategies and goals, set
SBT submission time
• Carbon emission hot spots
management• Submit SBT commitments• Implement related education andtraining

MemberStage4• Implement science-based carbon
reduction measures according to
SBTs

17

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About TSC
TSC

1.2 Corporate Governance

Responsible
Procurement

Equal
Workplace

Green
Manufacturingand Operation

Sharing Our
Prosperity
with Society

Appendix

1.3 Risk Management

1.1.2 Financial Performance
TSC believes that good operational performance is the foundation for the sustainable
development of a company. In recent years, TSC has been deeply involved in thedevelopment of new products such as automotive electronics, industrial control, servers, andanalog integrated circuits (ICs). The overall synergy and effectiveness of these efforts havebecome increasingly evident year by year. TSC complies with the principle of informationtransparency. We continuously improve capital efficiency and push for communication withstakeholders to provide them with a comprehensive understanding of our operations andgrowth.
Through industry deployment and the joint efforts of all employees, we achieveda revenue of NT$5.69 billion in 2022, a growth of about 19% compared to the previous
year. The average gross profit margin increased to 29%, and net profit after tax reachedapproximately NT$1.56 billion. Earnings per share (EPS) increased from NT$3.55 to
6.28, and a cash dividend of NT$4 per share was distributed for the year 2022. TSC's tax
donations for the year reached NT$260 million, demonstrating its sound, stable operational
performance and continuous contribution to society. For more information on the Company's
operational performance and financials, please refer to TSC's 2022 financial report andannual report.

▎ Overall Financial Performance
Type

2021

2022

Operating Revenue

3,642,461

4,803,477

5,699,155

Operating Costs

2,920,010

3,954,927

4,437,327

Employee Salary and Benefits

432,171526,993700,267

Dividend Distribution

395,228

658,714

1,053,942

0

5,341

9,810

44,602

124,583

267,253

Payments made to the Government*

Type
Tax Reductions and Deductions

Unit: NT$ thousand

2020

2021

2022

9,416

7,354

28,110Investment Subsidies, R&D Subsidies, andOther Related Subsidies

818

488

1,879

Other: Ministry of Economic Affairs' Return to
Taiwan to Invest Interest Subsidy

1,025

1,823

3,458

*Note: The government has not held any shares in TSC in the past three years.

Unit: NT$ thousand

2020

Interest Paid

▎ Revenue Proportion from the Government*Note: Payments made to the government include all the Company's tax payments and fines asreported.

18

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1.2
1.2 Corporate Governance
Governance

Responsible
Procurement

Equal
Workplace

Green
Manufacturingand Operation

Sharing Our
Prosperity
with Society

Appendix

1.3 Risk Management

1.2 Corporate Governance
Composition and Operation of the Board of Directors

1.2.1 Sustainable GovernanceTo ensure sound corporate governance, TSC complies with the principle of integrity incarrying out various business operations, strictly prohibiting any form of corruption, bribery,
and fraudulent activities for personal or others' gain through the abuse of power. We havealso set up a dedicated section for investors on the official website, regularly disclosing
financial and non-financial information such as annual Shareholders' Meeting reports and
ESG Reports. By enhancing information transparency, TSC strengthens communication
with stakeholders and safeguards their rights and interests. TSC's Corporate GovernanceEvaluation System result for 2022 rose one level compared to 2021, indicating a significant
improvement in our overall corporate governance efforts over the past year.

▎ Corporate Governance Structure

Audit Committee
Remuneration Committee

ESG Committee

As of the end of 2022, the average term of office for all Directors is three years.
According to Article 206 of the Company Act, attendance by the Board of Directors' shouldreach a majority. In the first half of 2022, the Board of Directors held seven meetings, withat least six Directors attending each meeting. The average attendance rate of Directors
was 95.9%, indicating good attendance and compliance with regulations. The ratio of total
Director remuneration to the Company's net profit after tax in 2022 was 3.92%.

Annual Shareholders’MeetingNomination and Selection of Directors

Board of Directors

Capital Expenditure
Review Committee

Audit Office
ChairmanPresident
President's Office
Management TeamThe Board of Directors is the highest governance body of TSC, responsible for guiding
the Company's strategy, supervising management, and being accountable to shareholders.
The Board of Directors of TSC exercises its powers in accordance with laws, Articles ofIncorporation, or resolutions of Shareholders' Meetings in relation to various operations andarrangements of the corporate governance system. In order to strengthen supervision andenhance management functions, the Board of Directors has established multiple Functional
Committees, including the Audit Committee, Remuneration Committee, and Capital
Expenditure Review Committee, and has specified organizational regulations to assist theBoard of Directors in fulfilling its supervisory responsibilities. The committees regularly reporttheir activities and decisions to the corporate governance body. The Audit Office of TSC
is responsible for regularly conducting internal audit operations, and its effectiveness andefficiency are supervised by the Audit Committee.

Overseas andOther Subsidiaries

The Board of Directors establishes the election system for Directors in accordancewith laws and the Articles of Incorporation. The selection process for all Directors is open
and fair, in compliance with the "Articles of Incorporation of Taiwan Semiconductor Co.,Ltd." Currently, the Board of Directors of TSC consists of seven Directors, including four
Independent Directors and one External Director. Among them, two Directors also holdpositions as employees or executives, which does not exceed the majority and complies
with legal regulations.
In addition, according to the Rules for Election of Directors established by the Company,
the method of selecting Directors and Independent Directors adopts a cumulative voting
system and a candidate nomination system, allowing shareholders holding a certain numberof shares or more to propose a list of candidates to promote shareholder participation
and avoid the monopolization or excessive use of nomination rights, thereby maintaining
independence. For more details, please refer to the TSC's Rules for Election of Directors.

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Equal
Workplace

Green
Manufacturingand Operation

Sharing Our
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with Society

Appendix

1.3 Risk Management

Diversiﬁed Composition of the Board of Directors

Performance Evaluation of Board of Directors

According to the articles of the TSC Corporate Governance Best Practice Principles,
the Company has established a policy of diversity and specific management objectives for
the Board of Directors. The diversity of Board of Directors is achieved by taking gender, age,nationality, culture, professional background, and industry experience into consideration
with regard to its composition. In this way, TSC can be guided by a diverse industry andinternational market perspective. Currently, all seven Directors of the Company are male
R.O.C nationals, and each possess the necessary knowledge, skills, and education for
fulfilling their duties. Each of them has a wealth of expertise in accounting, finance, business,law, marketing, or industry technology. Please refer to the 2022 TSC Annual Report for theCVs of the Directors.

To implement corporate governance and enhance the functioning and efficiency of theBoard of Directors, we have established performance goals. In accordance with Rules for
Performance Evaluations of the Board of Directors, TSC conducts performance evaluation
annually. In 2022, the evaluation will be conducted online or through self-assessment
forms. The evaluation will assess the overall operation of the board members, functional
committees, and performance of each Director. The evaluation results and improvement
plans will be submitted to the Board of Directors. The evaluation results for 2022 are rated as"excellent" to "outstanding" and will be disclosed in the Company's Annual Report and official
website▎ Board of Directors
Name of Director▎ Performance Evaluation Items of Board of Directors

Functional Committee
Members

Date FirstElectedAttendance
Rate

ESG Committee (Chairman)

1998.06.19

100%

Member of ESG Committee

2015.06.18

100%

None

2021.07.26

85.71%

2012.06.27

85.71%

2012.06.27

100%

Management of Conflicts of Interest in the Board of Directors
TSC follows relevant laws and regulations, with Independent Directors serving as
members of the Audit Committee to ensure the independence of the Board and fulfill its
supervisory function. TSC discloses positions of the Board of Directors' members in othercompanies in the Annual Report, indicating that there is no cross-shareholding with major
suppliers or other stakeholders.

Participation Level in Company Operations

Wang Shiu-Ting(Chairman andPresident)
TSC Auto ID
Technology Co., Ltd.
Representative:

Quality of Decision-Making by the Board of Directors

Composition of the Board of Directors

Wang Xing-Lei
UMC Capital Co., Ltd.
Representative:

Selection and Continuing Education of Directors

Liu Chang-Yu
Jhan Cian-Long(Independent Director)
Lin Bo-Sheng(Independent Director)
Fan Hong-Shu(Independent Director)
Ma Shu-Zhuang(Independent Director)

Audit Committee (Convener)
Member of Remuneration
Committee
Member of Audit Committee
Member of Remuneration
Committee
Member of Audit Committee
Member of Remuneration
Committee (Convener)

2012.06.27

100%

Member of Audit Committee

2021.07.26

100%

Internal Controls

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Sharing Our
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Appendix

1.3 Risk Management

Functional Committee
Functional
Committee

Responsibilities

Frequency of
Meeting

Major Resolutions

The main purpose of the Audit Committee is to supervise the following matters:• The proper expression of the Company's financial statements.

Audit
Committee• Selection, appointment, independence, and performance of Certified Public
Accountants / CPAs
• Effective implementation of internal controls within the Company.

At least once perquarter; a total of 6
times in 2022.

• Annual and Quarterly Financial Statements Report• Internal Audit Activities Report• Major Investment Projects of the Company• Company compliance with relevant laws and regulations.
• The management of existing of potential risks to the Company.

CapitalExpenditure
ReviewCommittee

Tracking operational performance by reviewing capital expenditure budgets,long-term development strategies, implementing plans, and making costeffectiveness adjustments.

At least once perquarter; a total of 3
times in 2022.

• Discussion of capital expenditure budgeting, and implementation, revision, andaddition of plans.
• Discuss and approve the performance evaluation of Directors and managers for
3Q22.
• Study and discuss the remuneration of Directors and managers for 2023.

Remuneration
Committee

The Committee is responsible for evaluating the remuneration policy and systemfor directors, supervisors, and managers of the Company in a professional andobjective manner, and for submitting its suggestions to the Board of Directors asa reference in the decision-making process.

• Discuss and approve the proposals of the Compensation Committee for 2023
At least once perquarter; a total of 3
times in 2022.

• Discuss and review the results of the performance evaluation of Directors andmanagers of the Company in 2022 and relevance and reasonableness of salaryand compensation.
• Discuss and approve the review of the actual payment of various salaries andremuneration of Company's Directors and managers in 2022.
• Discuss and approve the review of the Company's 2022 remuneration of Directors
and remuneration case of employees.

• Formulate the Company's sustainable development policy.

ESG
Committee• The Company's sustainable development, including the establishment ofgoals, strategies, and implementation plans for sustainable governance,
integrity in operational, environmental, and social aspects.
• Review, track, and revise the implementation and effectiveness of theCompany's sustainable development, and regularly report to the Board of
Directors.

At least once per year;
a total of one time in
2022.

• Formulate TSC Sustainable Development Goals• Establish the 2050 net zero goal
• Establish an ESG Office and set up various functional teams.

• Pay attention to the concerns and supervisory communication plansof various stakeholders, including shareholders, customers, suppliers,
employees, government, non-profit organizations, communities, and media.

Note: The Capital Expenditure Review Committee was established in March 2022, and the ESG Committee was established in May 2022. Therefore, the number of meetings held by these two committees inthe same year was lower than initially planned.

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Appendix

1.3 Risk Management

Audit Ofﬁce

ESG GovernanceIn accordance with the Regulations Governing Establishment of Internal Control
Systems by Public Companies, an Audit Office directly subordinate to the Board of Directors
has been established to set up a comprehensive internal risk control system and effectively
implement it. An internal audit plan is conducted once a year between November andDecember, and the audit plan for the following year is reported to the Board of Directors
in order to respond to changes in the internal and external environment of the group andensure the continuous effectiveness of the system.

The highest sustainable governance unit of TSC is the ESG Committee, establishedin May 2022. It serves as the decision-making and supervisory unit for our sustainable
development efforts, dedicated to promoting environmental conservation and fulfilling social
responsibilities. The committee has also formulated an ESG Committee Charter to ensurethat the Company fulfills its responsibilities in safeguarding the rights and interests of theCompany, employees, shareholders, and stakeholders.

The main purpose and execution requirements of the Audit Office are to investigate andevaluate deficiencies in the internal control system and the efficiency of operations as well as
providing timely improvement suggestions to assist the Board of Directors and managementin fulfilling their responsibilities. The Audit Office adopts independent full-time internal
auditing, conducting regular and irregular business audits and financial audits to effectively
evaluate the soundness, reasonableness, and effectiveness of the internal control systems.
When auditors engage in audit work, they will provide an audit report and a specified time
limit for improvement to the inspected unit, so that they can provide explanations andimplement improvement measures for abnormalities, and continuously track the progress ofimprovements.

Remuneration of Governance Body and Senior Managers
The remuneration provided TSC includes cash compensation, stock warrants, profitsharing and stock ownership, retirement benefits or severance pay, various perks, and othersubstantial incentives. The scope of these measures is consistent with the guidelines forthe disclosure of remuneration for directors, supervisors, and executives in the Company's
Annual Report. In order to improve the remuneration system for directors, supervisors, andexecutives, the Company has also established a Remuneration Committee and formulated
the Remuneration Committee Charter. The gender ratio of senior managers' remuneration
has shown a continuous upward trend over the past three years.

▎ Female to Male Remuneration Scale for Senior Managers

FemaleUnder the ESG Committee are the ESG Office and the Corporate Social Responsibility
Functional Team that ensure the promotion and implementation of corporate sustainable
development-related work. The ESG Committee is responsible for formulating the Company's
sustainable development policies, strategies, and implementation plans for corporate
sustainable governance, integrity operation, and environmental and social goals. It is also
responsible for reviewing, tracking, and revising the implementation and effectiveness of theCompany's sustainable development, and reporting to the chairman at least twice a year.
Additionally, ESG Committee should pay attention to the concerns of various stakeholders,
including shareholders, customers, suppliers, employees, government, non-profit
organizations, communities, and the media, and supervise communication plans.
The ESG Office is composed of supervisors of the Administration Division, andsupervisors and executive secretaries of each site. They are responsible for managing
relevant policies and action plans for sustainability goals, coordinating and tracking the
progress of various actions, and regularly reporting on the progress of sustainability projects
and other significant issues to the ESG Committee.

▎ Sustainable Governance Organizational Structure Chart
ESG Committee
Chairman: Wang Shiu-Ting, Chairman
Committee Members: Wang Xing-Lei, Vice President;
Yan Guo-Yin, Vice President/General Factory Chief

ESG Office

Year

2020

2021

2022

：

23%

19%

41%

Male

Note:
1. This table uses calculations based on basic salary plus additional remuneration.
2. "Senior managers" refers to people in positions at the level of vice president or above.

Administration Division Supervisor
Supervisors of Each Site
Executive Secretary

Coporate GovernanceTeam

Friendly Work
Environment Team

Financial Department
Supervisor
Legal Department
Supervisor
Department Supervisor

Human Resources
Department Supervisor
Supervisors of Management
Department in Each Site

Social Welfare Team
Public Relationship
Department
Supervisors of Management
Department in Each Site

Environmental and Energy
Management TeamSupervisors of Environmental
Engineering Department in Each
Site
Site Affairs Department
Supervisor
Equipment Department
Supervisor

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Appendix

1.3 Risk Management

1.2.2 Integrity Management
Integrity management has been the cornerstone of our business strategy for nearly
40 years. In addition to complying with relevant regulations in Taiwan, the Company alsoestablishes policies related to honesty and integrity management, as well as internal
supervision and whistle-blower protection systems. We promote various training and advocacy
programs to ensure that the behavior of all employees aligns with the moral values of TSC.

Policies and Norms of Ethical Conduct
TSC is committed to the soundness of integrity management, following relevant nationallaws and regulations, and has established the TSC Ethical Corporate Management Best
Practice Principles, Work Rules, Codes of Ethical Conduct, and various ethical conduct
management and guidelines as the ethical and behavior indicators for all employees (including
managers), expecting to shape a corporate culture of integrity and moral values. The integrity
operation policies and prevention plans are reviewed for their promotion and compliance by
the ESG Committee, and a report is submitted to the Board of Directors at least once a year.
Relevant policies and practices are disclosed on the Company's internal management platform
and official website for all employees and other stakeholders to refer to. For more details,
please refer to the Corporate Governance Regulations on the official website.

Internal Supervision of Integrity Management
The Audit Office of the Company continues to use effective accounting systems andinternal control systems to regularly analyze and supervise business activities within thescope of operations that involve higher risks of integrity violations. Through this, we establish
audit targets, scope, items, frequency, and other preventive measures, and regularly
conduct audits to ensure effective supervision and control. In addition to establishing internalmonitoring mechanisms, we also appoint CPAs to conduct audits or engage professional
consultants for assistance. After producing audit reports based on the audit results, wereport on the implementation status to the Board of Directors at least once a year. For specificresponsibilities of the Audit Office, please refer to Section 1.2.1 Sustainable Governance.

Whistle-blowing and Protection Mechanism
For improper behavior that violates the policy on unethical conduct, TSC has establisheda grievance email address (Tsgrumble@ts.com.tw), through which employees and relevant
stakeholders can file grievances with the Company. The handling of grievances is kept
confidential throughout the process to protect the whistleblower from any improper retaliation.
Subsequently, the supervisors of each site, the Audit Office, and the Legal Department
will handle grievances according to their responsibilities. We plan to establish smoothercommunication and a more comprehensive grievance channel by completing the update of
the official website by the end of 2023.

▎ Violation of Integrity Grievance Reporting Procedure

Grievance
Received

Data
Collection

Case
Investigation

Review of
Results

Review and
Improvement

Regulatory Compliance
Since the establishment of TSC, we have followed the standards and relevant regulations
for public companies, established various internal operating procedures, and continuously
paid attention to any domestic and international laws and regulatory policies that may affectits operations, making necessary adjustments at any time. In the TSC Ethical Corporate
Management Best Practice Principles, it clearly stipulates that all employees should comply
with the Company Act, Securities and Exchange Act, Political Donations Act, Government
Procurement Act, and other regulations. It strictly prohibits bribery, accepting bribes, or giving
or receiving political donations. It also adopts relevant preventive measures for businessactivities that pose a higher risk of dishonest behavior within the scope of Article 7, Paragraph
2 of the Ethical Corporate Management Best Practice Principles for TWSE / TPEx Listed
Companies, or other business activities. We comply with the highest professional ethicalstandards to uphold the Company's reputation and maintain the trust of all stakeholders.
To avoid improper disclosure of information and ensure the consistency and accuracyof external information, TSC has established a sound internal system for processing anddisclosing significant information. Additionally, in order to prevent insider trading, the Company
has formulated and published the Internal Handling of Significant Information and Preventionof Insider Trading Management Measures on its website for compliance. For more information,please refer to Internal Handling of Significant Information and Prevention of Insider Trading
Management Measures on the official website.

Regulatory Compliance Status
From 2020 to 2022, there have been no behaviors or significant incidents that relate tointegrity violations, corruption, or any violations of integrity management, ethical businessconduct, anti-competitive behavior regulations, or related fines and political donations,ensuring independent operation and a politically neutral position.
To avoid future incidents of corruption, we will conduct anti-corruption assessments
for each site. Simultaneously, it has identified risks related to corporate image and social
responsibility and proposed corresponding measures, as detailed in 1.3.1 Risk Management in
the ESG report.

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GovernanceTraining and Information
When new employees join TSC, they are required to carefully read TSC EthicalCorporate Management Best Practice Principles, which includes topics such as anticorruption, respect for intellectual property, and compliance with laws and regulations.
In the future, we will continue to strengthen related education and training. Starting inthe second half of 2023, the Legal Department plans to hold face to face education andtraining sessions on the Trade Secrets Act and intellectual property rights to ensure that ouremployees fully understand the relevant policies, content, and consequences of violating
ethical behavior. In addition, TSC also promotes and requires its supply chain to sign the
RBA Vendor Code of Conduct to ensure that business partners who engage in commercial
activities with the Company have guidelines to follow. See Section 3.1.2 Sustainable Supply
Chain Management for more details.
In addition to conducting anti-corruption communication training with the governance bodyand employees, TSC promotes the RBA Vendor Code of Conduct to suppliers, communicating
anti-corruption policies and procedures with business partners. In 2022, we successfullycommunicated with a total of 81 business partners, achieving a completion rate of 100%.

▎ Communication Training for Anti-corruption Policies / Procedures
Communication Training Targets

Governance
Body

Employees

2022

Number of Members (People)

7

Number of People inCommunication Training (People)

7

Communication Rate (%)

100%

Number of People who haveCompleted Training (People)

3

Completion Rate (%)

43%

Number of Employees (People)

612

Number of People inCommunication Training (People)

280

Communication Rate (%)

46%

Number of People who haveCompleted Training (People)

280

Completion Rate (%)

46%

Note:
1. Definition of business partner: suppliers, value chain partners.
2. The seven individuals in the governance body refer to Directors and Supervisors, excluding
other governance body.

Responsible
Procurement

Equal
Workplace

Green
Manufacturingand Operation

Sharing Our
Prosperity
with Society

Appendix

1.3 Risk Management▎ 2022 Integrity Management Training Courses
Course Information

Total Number ofPeopleTotal HoursTSC Code of Ethical Conduct and TSC EthicalCorporate Management Best Practice Principles

280

280

Prevention of Insider Trading Courses

7111

Note: The total number of people and total hours in this table are for general employees (excluding
17 executives).

Senior Governance of Integrity Management
To maintain alignment with national and industrial standards and uphold professional
ethics, the Board of Directors and senior managers regularly participate in relevant legal
training. The course topics include corporate mergers and acquisitions, the Controlled
Foreign Company (CFC) system, information security management, corporate governance,
securities regulations, greenhouse gas inventory, and corporate sustainable development,
among others. Through regular education and training for governance body and senior
managers, we strive to implement honest and ethical business practices.

▎ Participation of Directors and Supervisors in External Training Courses on
Integrity Management from 2020 to 2022
2020

2021

2022

Number of Participants

4

7

7*

Total Hours

30

49

44

Course Completion Rate

57%

100%

100%

*Note: Organizers of the course: Securities and Futures Institute, Taipei Exchange, Taiwan Academyof Banking and Finance, Financial Supervisory Commission R.O.C (Taiwan), Accounting
Research and Development Foundation, Taiwan Corporate Governance Association, andTaiwan Institute of Directors.

24About This
ReportSustainable
Operation and
Governance

Innovative
Products andServices

1.1 About TSC

1.2 Corporate Governance

1.3 Risk Management
1.3.1 Risk Management System
To identify and promptly grasp internal and external operational risks, safeguard therights and interests of all internal and external stakeholders, as well as effectively control
risks, TSC has constructed a sound risk management framework and policy, and included
all stakeholders within the scope of management. Additionally, regular risk identification andrisk testing plans are proposed to ensure that potential risks arising from various operations
are strictly regulated within the control range.

Risk Management Framework
The Board of Directors is fully responsible for establishing and supervising TSC's
risk management framework. The current supervisory department for risk control is the
President's Office, which is responsible for risk assessment and auditing. The risk control
implementing unit under the Office of the General Manager is the RBA Implementation
Committee, established in accordance with the RBA Code of Conduct, with the President
serving as the Chairman. The committee is responsible for implementing overall risk control
and related policy issuance for the headquarters and each site, and submits the risk
assessment form to President in December annually for further submission to the Board of
Directors for resolution, ensuring that its management objectives reasonably reflect market
and operational changes of the Company. The supervisors, assistant vice presidents, andvice presidents of each site are responsible for executing the risk policies assigned by the
President's Office and the RBA Implementation Committee, and controlling and reviewing
the risks identified by the responsible personnel for environmental safety and health in eachsite. For more information on the four-level framework and responsibilities for risk control andreview, please refer to the 2022 TSC Annual Report.
The Corporate Governance Team is scheduled to implement risk management
and establish its policies in the second half of 2023. The organizational structure of thismanagement will be divided from top to bottom into the Board of Directors, the ESG
Committee, the ESG Office, and the Corporate Governance Team, aiming to effectively
integrate the overall risk management capabilities and establish a more comprehensive risk
management system.

Risk Management Policies
With reference to the RBA Code of Conduct, TSC has established relevant policies
and management measures regarding professional ethics, social responsibility, safety andResponsible
Procurement

Equal
Workplace

Green
Manufacturingand Operation

Sharing Our
Prosperity
with Society

Appendix

1.3 Risk Management

health, environment, and risk possibilities. This includes the revision and control of theProfessional Ethics Risk Assessment Management Measures, Social Responsibility Risk
Assessment Management Measures, and Risk and Opportunity Management Proceduresby the President's Office. Additionally, the environmental safety and health departments
and personnel of each site implement the Safety and Health Hazard Identification and Risk
Management Procedures and Environmental Consideration Identification and Management
Procedures based on ISO 14001 guidelines. These serve as guiding and implementing
principles for risk management, facilitating risk identification and the development of
mitigation measures. We plan to establish the Risk Management Policy as the overarchingrisk control regulation in 2023, integrating the aforementioned measures and proceduresas the basis for risk identification audits. Currently, our risk management process includes
identification, assessment, reporting, and response, as shown in the diagram below.

▎ Risk Management Procedures
Risk
Identiﬁcation

Identify the sources of risk and recognize therisks and events that may have adverse effects
on TSC's operational objectives.

Risk
Assessment

Evaluate the effective methods for identifying
the causes, impacts, likelihood, and handling ofrisks.

Risk
ReportRegularly present risk management reports tothe management team and develop possible
control measures.

Risk
Response

Each implementing unit takes appropriate
response measures to reduce the possibilities
of risk occurrence.

For important matters such as investment and financial management, signing necessarycontracts, and significant procurement cases, TSC conducts reviews and undergoes regular
audits by the Audit Office. In terms of corporate sustainable development, TSC conducts
risk assessments on major climate change issues and has developed corresponding risk
management policies or strategies. Refer to chapter 1.3.3 Climate Risk Management for
more details.
25About This
ReportSustainable
Operation and
Governance

Innovative
Products andServices

1.1 About TSC

1.2 Corporate Governance

Responsible
Procurement

Equal
Workplace

Green
Manufacturingand Operation

Sharing Our
Prosperity
with Society

Appendix

1.3 Risk Management

Risk Identiﬁcation Assessment and Response
In the face of external challenges such as climate change, we have evaluated the possibility of occurrence and the significant impact of four major risks in the short- and medium-term
future, and divided them into four dimensions: strategy, finance, operations, and disaster prevention. The four major risks are as follows, and the remaining risks are related to information
security, occupational health and safety, and climate change.

▎ Identiﬁcation of Four Risk Categories

˙Legal Change Risk
˙Policy Risk
˙Market Risk

Strategic Risk

Financial Risk

Risk
Identification
˙Water Supply
˙Electricity Supply
˙Natural Disasters such as Heavy Rain
˙Fire or Chemical Spill
˙Epidemic Infectious Diseases
˙Climate Change

Disaster & Hazard
Prevention Risk

˙Interest Rate
˙Exchange Rate
˙Inflation Risk
˙Financial Risk

˙Site Expansion and Production
˙Research and Development Project
˙Raw Material Risk
˙Geopolitics
˙Information Security Risk
Operational Risk ˙Occupational Health and Safety
˙Corporate Image & Social Responsibility Risk
˙Professional Ethical Risk
˙Talent Development

˙擴廠與生產
˙研發計畫

26

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Prevention Risk

Corporate Imageand Social
Responsibility Risk

Innovative
Products andServices

1.1 About TSC

1.2 Corporate Governance

Responsible
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Equal
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Green
Manufacturingand Operation

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Appendix

1.3 Risk Management

Risk Description

Changes in national policies and laws may have a significant impact on the operation of TSC. For example, with the rise of global sustainability awareness,governments worldwide are strengthening measures to reduce carbon emissions, such as imposing carbon taxes or fees (CBAM). Taiwan also announced that it will
implement provisions for large electricity consumers in 2025 to restrict the carbon emissions of high-energy-consuming enterprises and impose carbon fees. Mainland
China also implements dual controls on energy consumption and power restrictions to force companies to undergo energy transition.

Potential Impact

The issue of global net zero carbon emissions has become prominent, and more stakeholders are concerned about our carbon reduction performance and the extent
of renewable energy use. This may result in increased costs for companies. If we cannot meet this requirement, there may be compliance risks and an impact on
customer recognition and corporate image.

Countermeasures

In order to respond to the risks of overall policy and regulatory changes, we established a ESG Committee in 2022 to closely monitor domestic and international trends
and changes in policies and regulations to prepare and adjust for upcoming challenges beforehand. For example, establishing a cross-functional environmental andenergy management team will be considered to develop plans for equipment replacement and the construction of solar panels on the site premises, seeking innovative
opportunities and increasing sustainable competitiveness. Additionally, TSC will gradually promote a carbon management program in the future to reduce greenhousegas emissions through scientific reduction methods.

Risk Description

Countries affect business activities by formulating or revising laws, including Export Administration Regulations (EAR) and tense cross-strait relations, which may affectChinese customers or suppliers and result in the loss of potential business opportunities. Additionally, the Russian invasion of Ukraine has caused energy supply
fluctuations and triggered geopolitical risks, intensifying the tension in the international regional situation.

Potential Impact

Geopolitical risks may have a significant impact on interest rates and exchange rates, affecting the development of economic globalization. They may also affect TSC's
entry into new markets or face issues such as supply chain disruptions, which would have a significant impact on our operations.

Countermeasures

In order to respond to these risks, we have already implemented a regional diversification investment deployment for its manufacturing bases and established adiversified supply chain to reduce reliance on a single country or region. In the future, TSC will closely monitor changes in the international situation and strengthen its
contingency plans to maintain industry competitiveness.

Risk Description

Losses and casualties may be incurred through natural or man-made hazards. With the frequent occurrence of climate-related disaster events globally, only by actively
facing and adopting various environmentally friendly and energy-saving activities can we mitigate the impact of environmental disasters and reduce the costs causedby environmental destruction.

Potential Impact

Extreme weather could lead to future energy and water resource crises, as well as an increased probability of various natural disasters occurring. TSC may be forced
to increase operational costs.

Countermeasures

In order to mitigate the impact and influence of environmental hazards on operations, TSC is committed to producing and designing environmentally friendly products.
We also implement measures such as planning for the reuse of recycled water and reducing energy consumption to cope with the impact of natural disasters.

Risk Description

Corporate image plays a significant role in risk management, covering our values, reputation, brand image, and corporate social responsibility (CSR), reflecting theoverall impression and trustworthiness of TSC to the outside world.

Potential Impact

Damage to reputation can lead to investor uncertainty, customer loss, partner doubts, and even potential legal action.

Policy and Law
Change Risk

Geopolitical
Risk

Sustainable
Operation and
Governance

1. Various departments jointly maintain the Company to ensure business practices comply with ethical and legal requirements, and uphold transparency and integrity
principles. In 2022, we established a Public Relationship Department to enhance transparency in corporate information disclosure and improve communication withstakeholders.
Countermeasures

2. In order to ensure the responsible operation towards society and the environment, the Company has proactively conducted an RBA and published the RBAManagement Manual on the official website. Meanwhile, corresponding regulations have been communicated to employees, integrating the spirit of sustainability
into daily business operations.
3. TSC also values human rights issues. Regardless of race, gender, religion, nationality, or other characteristics, everyone should enjoy equal rights. Through theestablishment of a supply chain management policy that respects human rights and the promotion of employee training and education practices, we ensure thatboth itself and its suppliers comply with basic labor rights policies. Please refer 4.2.2 Labor Relations and Human Rights Management for more details.

27About This
ReportEmergency Response
Mechanisms and Measures
To reduce the risk and harm of
emergencies, each site has establishedemergency response mechanisms andmeasures. Starting in 2023, we will follow
the framework and principles of ISO 22301
for operational continuity management
to continuously strengthen relevant
management systems and eliminate therisk of operational disruptions. The sites
will carry out regular drills and reviews
regarding potential risk events such as
supply interruptions, labor shortages,
critical equipment failures, earthquakes,
fires, and interruptions in water, gas, andelectricity supply in accordance with
relevant environmental, safety, and healthregulations, reviewing systems to enhance
rapid response and recovery after an
event occurs.

Sustainable
Operation and
Governance

Innovative
Products andServices

1.1 About TSC

1.2 Corporate Governance

Responsible
Procurement

Equal
Workplace

Green
Manufacturingand Operation

Sharing Our
Prosperity
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Appendix

1.3 Risk Management

Internal Control Systems

Risk Reporting Mechanism

TSC cooperates withaccounting firms annually to
conduct listed company audits andassurance. During the auditing,the effectiveness of the internal
control systems is also examined.
The Company's internal control
information cycle testing covers
testing and evaluation of our internal
control system to ensure properrisk management and business
operations.

In addition to risk management,
we include all employees in the scopeof overall risk management. Currently,
employees can use the Company's
internal network Employee Grievance
Mailbox platform to proactively
report potential risk items and assist
in managing the impact of various
internal and external risks. TSC did notreceive any employee complaints in
2022.

Education and Training
The employee education andtraining in risk is conducted bymembers of the Corporate GovernanceTeam, introducing the concept of risk
management and collaborating with
the Human Resources Department todevelop relevant courses and activities.
This is expected to be implemented
in 2023 to strengthen the Company's
operational risk culture awareness andunderstanding.

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1.1 About TSC

1.2 Corporate Governance1.3.2 Information Security Management
To protect the security of company and customer information, TSC is committed
to actively constructing a comprehensive level of information security management
and policies. In the meantime, through periodic information security project testing, we
examine whether there are vulnerabilities in the policies and management level, reducing
the frequency and probability of information security incidents. We have also gradually
introduced information security protection equipment and organized related education andtraining to establish a complete information security system.

▎ Information Security Management Structure

Responsible
Procurement

Equal
Workplace

Green
Manufacturingand Operation

Sharing Our
Prosperity
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Appendix

1.3 Risk Management▎ Responsibilities of the Information Security Management Team

Service and Internet Security

App Development

Cross-site dedicated network
application and troubleshooting

Application system program installation
Software and hardware maintenance

System Application

Database Management

System security control rights
management

User rights assignment
Database optimization

ESG Committee
Report at least once a year to the Board of Directors on the operation andeffectiveness of the information security management systems, further
strengthening the mechanism for managing information security risks.

ESG Office
The risk management measures of the Information Security Management Teamare implemented in accordance with the "Information Cycle and Electronic Data
Control Procedures" for internal control procedures.

Information Security Management Team• Plan corresponding security operations and security risk management basedon different aspects of information security, such as system applications,service and network security, app development, and database management.
• Ensure that information communication policy and network data security
management serve as the highest management bases for information
security, certifying the security of information infrastructure and application
systems, preventing all potential information security threats, and protecting
important assets of the Company.
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1.1 About TSC

1.2 Corporate Governance

Information Security Management Policies
TSC has developed the Information Circulation and Electronic Data Control Procedures inaccordance with the Guidelines for Information Security Management of Listed Companies andwith reference to the suggestions of Taiwan Computer Emergency Response Team / Coordination
Center (TWCERT / CC). The internal control system established by these procedures includes
control operations for the eight major operational cycles. In addition, our Information Security
Management Team has deployed management, analysis, and defense work for internet
information security, and is expected to complete ISO 27001 Information Security Management
System (ISMS) certification by 2025. To enhance network security, we have also procured
advanced network security protection software and hardware, and implemented an automatedendpoint security management platform to strengthen the absolute security of data and systems
in response to ever-changing information security challenges.

Responsible
Procurement

Selecting Consultant
Vendors

Review and Establishmentof Information Environment
and System

Certification
Auditing

2022/Q1∼2022/Q4

2023/Q1∼2024/Q3

2024/Q4

2025/Q1

Green
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Appendix

1.3 Risk Management

according to the emergency response procedures and items at each site. After the incident
is resolved, the information security management team will submit an analysis and handling
report to the ESG Committee for evaluation, then provide explanations to our customers andtrading partners as well as taking corrective measures to prevent the recurrence of incidents
and maintain the trust of stakeholders.

▎ Security Incident Response Process Diagram
1
7▎ Plans to Implement ISO 27001 ISMS Certiﬁcation

Preliminary Information
Collection

Equal
Workplace

Security incident occurrs
in factory area

Strengthen information
security management
and prevent incidents

2

Analysis conducted per
emergency response
procedures of site

3
6

Transparent
disclosureManagement
supervisors at alllevels notified andresponse measuresformulated

Identiﬁcation of Information Security Risks
Considering the value and importance of information security to TSC, we conduct a
preliminary analysis of potential threats and vulnerabilities, estimate the likelihood and impactof risks, evaluates the level of urgency and scope of impact, ranks risks, plans corresponding
management measures, in order to reduce the potential negative impacts on our operations,
reputation, financial status, competitiveness, and related aspects when information security
incidents occur. In 2022, we identified Product Patents and Research and Development
Technology as important key assets. After assessing the impact and likelihood of risks, theInformation Security Management Team collaborates with the Research and Development
Department to implement a Knowledge Management System to protect the Company's
intellectual property, such as patent technology and research and development achievements.
For more details, please refer to 2.1.2 Continuous Improvement and Innovation.

Investigation and Recovery Procedures
For the notification and handling of information security incidents, we have specificallyestablished information security notification and handling procedures. When a security incident
occurs, the information unit will report to various departments and determine the level of theincident. If it is a major security incident, it will immediately report to supervisors at all levels
and the risk management organization, and activate corresponding measures and actions

5

Production
analysis andprocessing report

4

Incident handling procedures
and system repair(TSC IT Department /Third-party Vendor)

Establishing a Protection Plan and Information Security Culture
To encourage employees to promptly absorb up-to-date information security knowledge,
we became a member of Taiwan Computer Emergency Response Team / Coordination Center(TWCERT / CC) in 2022. We will regularly forward TWCERT / CC information security news,
and we implement periodic information security testing to ensure the Company's information
security defense and maintenance through collaboration with TWCERT / CC.
TSC also follows the internal training plan to schedule information security knowledge
training in order to enhance employees' information defense capabilities and literacy. Eachsite also formulates annual emergency response plans and drills various information security
situation handling procedures and guidelines to strengthen employees' ability to respond to
information security incidents.

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Innovative
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1.1 About TSC

1.2 Corporate Governance

Responsible
Procurement

Equal
Workplace

Green
Manufacturingand Operation

Sharing Our
Prosperity
with Society

Appendix

1.3 Risk Management▎ Implementation Status of Information Security Plans
Year

Measures

Hours

Number of Participants(people)Participation
Rate

2022

Information Security
Incident Drills

1

166

100%

MOTP (Mobile One
Time Password)

1

2021

2020

InternetCommunication
Security Training

Description
1. Emergency contact and response in the event of a simulated information network outage.
2. Simulate network outage and backup activation.
3. Simulate dedicated network service restoration and notification.

1

447

106

100%

Conduct MOTP training for the Li-Je Site and I-lan Site. MOTP is a mobile dynamic
password system that allows for quick and secure account login, effectively preventing therisk of account password theft and safeguarding against corporate information theft.

100%

With regard to information security education and training at the TSC headquarters, in thewake of the COVID-19 pandemic, there have been cases of phishing URLs and fraudulent
attacks impersonating the CECC and the WHO, exploiting popular news and current events
to lure people to malicious websites. Through this training, we shared common methods ofbusiness email fraud, techniques for disguising emails, and ways to avoid online phishing
during the COVID-19 outbreak.

Note: The participation rate is calculated by dividing the number of participants at a specific site by the total number of people at that site. The headquarters had a total of 106 people in 2020, and the twosites had a combined total of 447 people in 2021. The I-lan Site had a total of 166 people in 2020.

Introduction of ITA External Information Security Audit Mechanism
During the annual financial audit of the accounting firm, professional Information Technology Audit (ITA) personnel were simultaneously hired to conduct IT audits, including testingand evaluation of various aspects of the ITA system. This includes functional testing, security vulnerability testing, and data integrity testing to verify the system's reliability, security, andeffectiveness. The goal is to ensure that our ITA system can meet business needs and provide reliable data support.

Information Security Risk Incidents
There were no data leakage incidents in TSC between
2020 and 2022. Nevertheless, a network attack incident
occurred in 2022, which was discovered through anautonomous investigation by the endpoint information security
platform and the main server of the I-lan Site in January
2022. The IT Department at headquarters identified abnormal
connections and traffic from Tianjin site as a network attack
incident, and the abnormal emergency handling procedures
were immediately initiated.

Response and Improvement Measures
After reporting to the factory chief, Equipment, Manufacturing, Automation Development Department, and thehighest management unit, the connection in the area was immediately interrupted, and repairs were carried out
with the vendor. Meanwhile, the information unit of the Tianjin site was notified. The incident was confirmed to be amalicious program attack. Due to the real-time system alerts and a strict information security emergency response
mechanism, the incident did not have any negative impact on operations, nor did it result in any significant
data leakage. After the incident, TSC initiated a back-end investigation and strengthened information security
management procedures and related operations. In addition to using the original endpoint information protection
platform for defense, a USB information protection system and detection devices, as well as TXOne information
security equipment, were also added. These devices can effectively provide appropriate information security
protection to reduce the probability and scope of information security incidents.
31

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1.2 Corporate Governance

Responsible
Procurement

Equal
Workplace

Green
Manufacturingand Operation

Sharing Our
Prosperity
with Society

Appendix

1.3 Risk Management

Strengthening Industrial Control System Security with Zero Trust Management Mindset
Highlights

As the degree of our involvement in smart factories increases, we are also enhancing the level of information security protection for factory equipment and machinery.
In 2022, we will introduce TXOne Networks information security equipment, whose technology is based on the principle of "zero trust" proactive defense, leaving no
possibility for any stage of potential attacks on software and hardware devices. In the past, the biggest challenge in the industry regarding information security was that tocheck whether the equipment had viruses, antivirus software had to be installed. After scanning and confirming the security, the antivirus software would then be removed.
However, there are many devices and machines on the production line that cannot install security software due to default settings and commercial confidentiality factors.
TSC actively sought a solution, and in 2022, with the introduction of TXOne, new technology can scan and remove malicious programs without the need to install softwareon the machines, which is a significant breakthrough in the application of information security.
In the future, during the process of digital transformation, there may be increasingly complex and severe information security challenges. We will continue to seek
and integrate top-notch information security technologies to comprehensively enhance the overall security protection network in operating systems, network security, andendpoint protection areas.

▎ The objectives of system implementation:

Enhancethe reliability
and security ofdata access for
production line
equipment

Scan forand remove
malicious
programs on
devices whensecurity software
cannot beinstalled

Lay thefoundation for
the future ISO
27001 information
security
management
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1.2 Corporate Governance

Responsible
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Equal
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Green
Manufacturingand Operation

Sharing Our
Prosperity
with Society

Appendix

1.3 Risk Management

1.3.3 Climate Risk Management
TSC pays close attention to the risks and business opportunities that may arise from climate change, following the Rules Governing the Preparation and Filing of Sustainability Reportsby the Taiwan Stock Exchange Corporation and referencing to the climate-related financial disclosure suggestions of the Task Force on Climate-related Financial Disclosures (TCFD). TSC
integrates its climate risk and opportunity management mechanism with its corporate risk management process, continuously promoting low-carbon transformation and strengthening theCompany's resilience to climate change through four main directions: governance, strategy, risk management, indicators, and goals.

Governance

Strategy

Risk Management

Indicators and Goals

ESG Committee is a functional committee at
the Board level, chaired by the chairman andthe highest-ranking executive. The committee
oversees climate-related risks, opportunities,
response strategies, goals, preventive
measures, and concrete outcomes.

In accordance with the TCFD framework, develop
a methodology for assessing climate change risks
and opportunities, identifying short, medium, andlong-term climate risks and opportunities.

Establish a climate change risk identification
procedure based on the TCFD framework.

Set climate change-related management
indicators to facilitate annual performancetracking.

•

In 2022, a report was submitted to the
ESG Committee on the management
mechanisms and actual implementation ofclimate change-related issues and risks inthe office. A total of one meeting was heldin 2022.

The ESG Office annually reviews and assesses
climate change issues, planning responseplans, promoting risk protection, reviewing
p e r f o r m a n c e e x e c u t i o n , a n d re g u l a r l yreporting to the ESG Committee.
•••

The ESG Office is responsible for formulatingclimate change-related guidance strategies.
After formulating the main action plans, theEnvironmental and Energy Management
Team of the Corporate Social Responsibility
Functional Team implements climaterelated actions.
The Environmental and Energy Management
Team of the Corporate Social Responsibility
Functional Team reports on climate risks
and opportunities to the ESG Office atleast once every quarter, either in writingor face-to-face meetings. The ESG Officethen reports to the ESG Committee at least
twice a year, either in writing or throughface-to-faces.

•

Evaluate the climate risks faced by the TSC
and the upstream and downstream value
chains in terms of potential impact, possibilityof occurrence, and potential vulnerability todevelop and implement response measures.
For more information, please refer to the tables
below, Climate-related Risks and Impacts on
TSC Value Chain and Climate-Related Risks
and Response Measures for TSC.
Identify climate-related opportunities according
to the characteristics of the business and our
low-carbon strategy planning. For details, pleaserefer to Climate Risk Impact Assessment andScenario Analysis.

Analyze the potential operational and financial impacts
on TSC brought by the significant climate risks andopportunities based on the TCFD framework.
•

Complete the assessment of the impact ofmajor climate risks under different scenarios ofincreased greenhouse gas emissions costs. For
more details, please refer to the section Climate
Risk Impact Assessment and Scenario Analysis.

Analyze climate risks in different scenarios, and assess
short, medium, and long-term carbon reduction
strategies.
•

In 2022, per the International Energy Agency's(IEA) Announced Pledges Scenario (APS) and
Net Zero Emissions by 2050 Scenario (NZE),
we aim to analyze the impact of increased
greenhouse gas emission costs and develop
c l i m a t e c h a n g e s t r a t e g i e s a n d re l e v a n t
mitigation measures.

•

Identify climate change risks with reference
to climate change laws and regulations.
For more information on climate change
risk identification procedures, please referto the Climate Risks and Opportunities
section.

•Develop corresponding adaptation andmitigation strategies based on the resultsof climate risk identification and ranking.

•Integrate the climate risk identification
procedure into the existing risk management
procedure.

•

The materiality of office risk identification
is driven by the ESG Office. Based on themateriality of climate risk, strategies andmeasures are formulated by the ESG Office.
After confirmation by ESG Committee,
these measures are implemented in daily
operations and integrated into the risk
management process.

•Establish reducing greenhouse gas emissions,using renewable energy, improving energy
efficiency, and reducing product carbon
footprint as climate change performanceindicators.

Conduct inspections and disclose Scope 1
and 2 greenhouse gas emissions annually
to examine the impacts caused by theCompany's operations.
•

According to the results of various inspections
and assessments, continue implementing
carbon reduction measures to reduceorganizational greenhouse gas emissions.
For details, please refer to 5.1.1 Carbon
Emission Management.

Review climate management goals
achievement annually.
•

The ESG Office regularly reviews the
project performance of the Environmental
and Energy Management Team of the
Corporate Social Responsibility Function
Group on climate change mitigation toconfirm the progress of indicators andgoals, compiles and repor ts to ESG
Committee, and regularly monitors theimplementation results.

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1.1 About TSC

1.2 Corporate Governance

Responsible
Procurement

Equal
Workplace

Green
Manufacturingand Operation

Sharing Our
Prosperity
with Society

Appendix

1.3 Risk Management

Climate GovernanceIn 2022, TSC established the ESG Committee tooversee climate-related risks, opportunities, response
strategies, goals, preventive measures, and specificoutcomes. The ESG Office will hold at least two annual
meetings to report on and discuss the implementation
performance of climate change-related issues, risk
response strategies, greenhouse gas reduction, renewableenergy layout, and water resource utilization with the ESG
Committee.
The ESG Committee has established the ESG Office.
After formulating relevant sustainability policies and guidelines
by ESG Office, the Corporate Social Responsibility Functional
Team is responsible for executing these policies. The
Environment and Energy Management Team is specificallyin charge of climate change-related issues, including
achieving annual carbon reduction targets, implementing
greenhouse gas reduction plans, and promoting renewableenergy development. The Corporate Social Responsibility
Functional Team holds cross-site meetings once to twicea month to facilitate mutual learning and exchange among
factories on sustainability and climate issues, discussing
and discovering solutions to address the potential impactsof climate change on TSC. The organizational structure anddivision of responsibilities for climate risk management in
TSC are as follows.

ESG Committee
The highest governance body forclimate change, overseeing theoverall management of climatechange in TSC.

ESG Office
The climate change strategy
formulation unit is responsible fordeveloping climate change actionplans, budget planning, etc.

Evironmental and Enery
Management TeamThe Corporate Social Responsibility
Functional Team promotes
the implementation of various
greenhouse gas reduction
programs.

The Chairman serves as the President and person of highest
responsibility, and involves senior executive directors in decisionmaking and performance monitoring. The ESG Committee holds
at least two meetings annually to discuss climate change-related
issues, explaining the carbon reduction goals set by the Company
and the climate commitments and initiatives followed. The topics
include transformation and physical risk items, climate risk levels,
corresponding strategies, goal setting and improvement measures,and opportunities brought by climate change.

The Office Convener is appointed by the Administration Divisionand the Corporate Governance Officer to jointly develop carbon
reduction-related guidance strategies and major action plans withthe supervisors of each site and executive secretaries. They are
responsible for coordinating the division of labor, budget planning,and performance tracking of various business plans, as well ascompiling the sustainable performance and progress reports
and climate risk situations submitted by the Corporate Social
Responsibility Functional Team at least twice a year, either in writingor through face-to-face meetings, to the ESG Committee.

Composed of the supervisors of the Environmental Engineering,
Plant Operations, and Equipment Departments, the Environmental
and Energy Management Team is responsible for coordinating
annual carbon reduction goals and implementing various
greenhouse gas reduction plans. They are required to report to the
ESG Office at least once every quarter through written reports orface to face meetings. Their work includes promoting environmental
and energy-saving measures for production machinery and factorybuildings, encouraging the development of internal energy-saving
initiatives within the Company to optimize the efficiency of resource
utilization and reduce the impact on the environment. In addition, theEnvironmental and Energy Management Team actively explores thefeasibility of purchasing green energy and continues to invest in the
research and development of energy-saving products and processoptimization to achieve phased goals of reducing greenhouse gas
emissions.
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Climate Risks and Opportunities
To improve the climate-related risks and opportunities management
mechanism, TSC follows the guidelines of the TCFD and has establisheda climate-related risk management procedure. This procedure consistsof the following steps: (1) establishing a climate risk list, (2) analyzing thescope and duration of risk impacts, (3) prioritizing risks by materiality,(4) confirming and reporting, and (5) implementing strategies anddisclosing to the public.
In 2022, TSC summarized 10 climate-related risks and three climaterelated opportunities by considering the characteristics of operations andevaluating climate risks and opportunities based on potential impact,
possibility of occurrence, and potential vulnerability, and referencing
the TCFD recommendations, including risk and opportunity types,
evaluation of international sustainability indicators, and climate risks thatbenchmark companies are concerned about. Transition risks include
increased greenhouse gas emission costs, increased sustainabilityrelated demands and regulations, and changes in customer behavior;
physical risks include short-term risks such as typhoons and heavy rain,
and long-term risks such as rising average temperatures. We plan to
identify and assess climate-related risks and opportunities every three
years, considering the frequency, characteristics, and timing of theserisks. In the remaining years, we will review and confirm the current risks
and ensure the adequacy of response measures.

Responsible
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Manufacturingand Operation

Sharing Our
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Note：

Risk Type

Risk Aspect

Laws and
Policies

Transition
Risk

Appendix

1.3 Risk Management▎ Climate-related Risks and Impacts on TSC's Value Chain

Risk Name

Low、

Medium、High

Value Chain Impact
Upstream

TSC Itself

Downstream

Increase in greenhousegas emissions cost
Increase in sustainabilityrelated demands andregulations
Changes in Customer
Behavior

MarketIncrease in Raw Materials
Cost
Technology

Cost of low-carbon
technology transition

Reputation

Increase in negative
feedback fromstakeholders

Value Chain Impact Identiﬁcation Procedure
In order to understand the impact of climate risks on the value
chain of TSC, ESG Office reviewed the impact and scope of various
risks on upstream suppliers (wafer materials and diffusion materials),
its own operations, and downstream clients (information products,
communication products, digital appliances, automotive electronics,etc.). The supervisors of each operation use a three-level scoring
method to rank the impact of each risk within the three groups: upstream
suppliers, internal operations, and downstream clients. The scores
were arranged in percentile order, with the top 33.4% considered highly
impactful, 33.4% to 66.7% considered moderately impactful, and theremaining 33.3% considered low impact. This process identified thedegree of impact of climate risks on Taiwan's semiconductor value
chain, serving as a reference for operational strategies.

Equal
Workplace

Increase in Extreme
Weather Events Typhoons
ExtremePhysical Risk

Increase in Extreme
Weather Events - Heavy
Rain
Drought

Long-term

Rise in Average
Temperature

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Sharing Our
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with Society

Appendix

1.3 Risk Management

Procedure for Identifying Climate Risk Materiality
The ESG Office and supervisors from each site (I-lan, Li-Je, Shandong, Tianjin) reviewed the impact of various risks on TSC, so as to understand the impact of climate risks on TSC.
Climate-related risks were evaluated based on three aspects: potential impact level, potential vulnerability, and possibility of occurrence. The materiality of climate risks to our operations wascomprehensively assessed through the three aspects, and the impact levels of each risk were ranked in percentile order. The top 20% were considered high-risk, while the next 20 to 30% wereconsidered low-risk. According to these results, the risks were examined and placed in matrix regions. If a risk met both of the following conditions - (1) it fell within the top 20% of risk valuesand (2) it landed in the high vulnerability and high impact region of the matrix (yellow area) - then it was classified as high-risk. Otherwise, it was classified as low-risk. If only one condition wasmet, it was classified as a risk at the next level. Using the above methodology, a climate-related risk matrix for TSC was completed, and the results were used as a reference for developing risk
response and mitigation plans for TSC, as well as crisis management mechanisms.

1 Complete List of Climate Risks and Opportunities
With reference to the TCFD recommendations, including risk and opportunity
types, international sustainability indicator evaluation, and climate risks
that benchmark companies are concerned about, ESG Office convened a
discussion to establish a list of TSC climate risks and opportunities.

5 Strategy and External Disclosure
The responsibility for climate risk and opportunity
management is undertaken by the ESG Office, while theEnvironmental and Energy Management Team assists
in implementing measures and managing operations
related to climate risk and opportunity, plannimg thedisclosure of the management of climate risk andopportunity to stakeholders annually in the ESG Reportand on the Company's website.

Condition 1: Risk Value• Ranking is done by multiplying the scores of all risk vulnerabilities, impact levels, andpossibility of occurrence. The top 20 to 30% is considered high risk, while the bottom 20 to
30% is considered low risk.
• This logic is a comprehensive consideration of vulnerability, impact, and possibility ofoccurrence.

2 Analyze the Scope of Risk Impacts
The ESG Office examines the extent and scopeof various risks to our operations by distributing
questionnaires to each site and the supervisors thereof.
After that, the supervisors of departments evaluate therisks based on three aspects: potential impact level,
potential vulnerability, and possibility of occurrence.
The impact level of each risk is then ranked inpercentile order.
Condition 2: Matrix Position• The yellow area in the matrix is designated as high risk, in need of risk
mitigation due to its relatively high fragility and impact level.
• The gray area in the matrix is designated as low risk, in need ofresource reallocation due to its relatively low fragility and impact level.

4 Conﬁrm and Report
The ESG Officereports climate risks, corresponding
opportunities, response strategies, and the risk matrix
to the ESG Committee Member. This process should be
confirmed with the ESG Committee.

3 Prioritizing Risks by Materiality
The analysis results are cross referenced with the position of eachrisk on the matrix chart. If the risk satisfies both conditions - (1) itfell within the top 20% of risk values and (2) it landed in the highvulnerability and high impact region of the matrix (yellow area) - therisk is categorized as high risk; otherwise, it is low risk; if only one
condition is met, it is classified as the next level of risk.
36

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Sharing Our
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with Society

Appendix

1.3 Risk Management▎ Climate Risk Matrix
Bubble size: Represents the potential occurrence of risks (likelihood)
Monitor cumulative impact

High

Strengthen risk mitigation

Increase in negative feedback from stakeholders
Increase in sustainability-related demands and regulations

Potential Impact

Increase in Raw Materials Cost

Changes in Customer Behavior

Cost of low-carbon technology transition
Increase in extreme weather events - typhoons

Rise in average temperature

Increase in extreme weather events - heavy rain

Increase in greenhouse gas emissions cost

Drought

Low

Resource reallocation

Potential Vulnerability

Confirmation of Resilience Preparedness

High

Based on the analysis of the materiality of climate risks, an assessment was conducted on the potential impact of the identified 10 risks on operations and financial planning. The
corresponding risk response measures are formulated in the Climate-related Risks and Response Measures table.
Based on the impact of climate risks on the operation and value chain of our business, and the materiality of those risks, the ESG Office assesses related solutions and business
opportunities so as to formulate operational strategy adjustment directions and response measures and report to the President, who is responsible for risk management.
In consideration of the possible impact of climate-related risks and opportunities on various aspects of our operations, the Company actively develops related low-carbon products,
green processes, promotes the rollout of renewable energy, and continues to closely monitor climate-related policies. After confirmation by the ESG Committee, TSC continues to promote theimplementation in daily operational and risk management procedures.

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Green
Manufacturingand Operation

Transition
Risk

Transition
Risk

Transition
Risk

Transition
Risk

Risk
AspectLaws and
Policies

Laws and
Policies

MarketMarketRisk Name

Explanation of the Impact on TSC

Increase ingreenhouse gas
emissions cost

With the domestic Climate Change Response
Act and climate-related policies and regulations
in various countries (such as carbon tax / tariffs,
emissions trading systems, carbon pricing / fees,etc.), TSC may need to pay carbon fees, carbon
taxes, and carbon tariffs on products in the future.
Also, the related regulations may become stricter
year by year, and the costs and carbon taxes willthus also increase year by year.

Increase insustainabilityrelated demands
and regulations

According to Taiwan's Pathway to Net-Zero
Emissions in 2050, energy transition is listed as
one of the main strategies, actively promoting the
maximization of renewable energy. In addition, the"Renewable Energy Development Act" in Taiwan
stipulates that users with an electricity contract
capacity of 5000 watts or more must have a
10% renewable energy obligation by 2025, all ofwhich promote TSC's accelerated climate action,such as increasing the proportion of renewableenergy, reducing product carbon footprints, andenhancing climate-related management.

Changes inCustomer Behavior

Customers choose to use lower carbon andlower environmental impact products or request
the Company to provide more transparent
environmental information products / services tomeet the global net zero emissions trend andreduce environmental impact. If we cannot meetthese requirements, there may be a potential riskof losing customers.

Increase in Raw
Materials Cost

In recent years, extreme climate changes haveoccurred frequently, causing instability in raw
materials supply and increasing the difficultyof mining and transportation of raw materials.
Factors such as natural disasters may block
mining roads and high temperatures may reduce
productivity, making it difficult to control the
supply of raw materials, causing a shortage ofraw material supply, increasing transportationand scheduling costs, and increasing operating
costs.

Note：

Potential
Financial Impact

Rise in Costs

Rise in Costs

Decrease in
Revenue

Rise in Costs

Appendix

1.3 Risk Management▎ Climate-related Risks and TSC's measures
Risk Type

Sharing Our
Prosperity
with Society

Periods of Inﬂuence on
TSC *

Short

Short

MediumMedium

Risk
Level

Low、

Medium、High

Corresponding Measures andStrategies•

Adopt Energy-saving Equipment•

Develop Innovative Products•

Adopt Low-carbon / Renewable Energy
Sources•

Raise Carbon Reduction Awareness of
Employees•

Optimize Transportation Routes to
Reduce Carbon Emissions of Logistics•

Improve Product Performance•

Adopt Low-carbon / Renewable Energy
Sources•Continuously Optimize Energy
Management•

Improve Employees' Knowledge andSkills in Carbon Management•

Develop products / services that reduce
environmental impact.

•

Improve Product Performance•

Reduce Packaging or Use Low-carbon
Packaging Materials•

Continue to Demand Suppliers Undertake
Climate Adaptation and Energy Transition,
and Construct a Climate Resilient Supply
Chain

•

Conduct Supplier Risk Assessment
to Avoid or Reduce Purchasing from
High-Risk Production Areas•

Increase Local Vendor Storage Capacity
i n R e s p o n s e t o E x t re m e We a t h e r
Disasters38

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1.3 Risk Management

Note：

Risk TypeTransition
Risk

Transition
Risk

Risk
AspectTechnology

Reputation

Risk Name

Explanation of the Impact on TSC

Cost of lowcarbon technology
transition

Due to the growing international trend toward
carbon reduction, many companies are requiring
their supply chains to adopt sustainable andlow-carbon actions. TSC is gradually planning
its transition and promoting carbon reduction
technologies and equipment, which will have an
impact on our operating costs.

Increase innegative feedback
from stakeholders

Since the importance of climate change issues
continues to increase, stakeholders prefer lowcarbon or environmentally friendly companies
that contribute positively to humans and theenvironment. If TSC does not take proactive
measures, we will not be able to meet stakeholder
expectations and may damage the Company's
reputation.

Potential
Financial Impact

Rise in Costs

Decrease in Funds

Periods of Inﬂuence on
TSC *MediumLong

The frequency and severity of typhoons haveincreased, which will cause the following impacts:
Physical Risk

Physical Risk

Physical Risk

ExtremeExtremeExtremeIncrease in Extreme
Weather Events Typhoons

Increase in Extreme
Weather Events Heavy Rain

Drought•

Typhoons may destroy the power system,
causing partial regional power outages,
leading to operational or service interruptions.

•Typhoons may cause supply chain disruption.

•

Asset insurance premiums in high-risk areas
have increased, increasing operating costs.

As the frequency and amount of heavy rainincreases, it may cause damage to production
sites, production interruptions, and transportation
disruptions that prevent employees from going towork.

Due to droughts, water shortages have led towater supply interruptions, increased water fees,and disruptions in the purchase of external water
sources, affecting the water usage in factories.
This may also result in interruptions to operational
activities.

Rise in Costs

Decrease in
Revenue

Rise in Costs

AppendixMediumMediumMedium

Risk
Level

Low、

Medium、High

Corresponding Measures andStrategies•

Invest in High-Performance Equipment
and Low-Carbon Technology R&D•

Actively Cultivate Low-Carbon
Transition Talents•

Evaluate Investment in Low-Carbon
Technology Equipment•

Strengthen Climate Change Response
and Prevention•

Strengthen Appropriate Disclosure ofCompany Climate Action Information•

S t re n g t h e n C o m m u n i c a t i o n w i t h
Stakeholders•

Strengthen Production Site FloodControl and Drainage Equipment andContingency Measures•

Strengthen the Implementation of theBusiness Continuity Plan (BCP)•

Strengthen the Emergency Supply
Mechanism•

Strengthen Production Site FloodControl and Drainage Equipment andContingency Measures•

Strengthen the Implementation of theBusiness Continuity Plan (BCP)•

Strengthen the Emergency Supply
Mechanism•

Implement Water-saving Measures•

Increase the use of recycled water.

•

Build a large-scale reclaimed water
plant in the factory area to extend andstabilize the supply of process water.

•

Set up reservoirs to enhance water
storage capacity and control flexibility.

39

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1.3 Risk Management

Note：

Risk
AspectRisk Type

Physical Risk

Long-term

Risk Name

Explanation of the Impact on TSC

Rise in Average
Temperature

Climate change has increased the duration ofhigh temperatures, electricity demands, andrising energy costs globally. Moreover, droughts
caused by high temperatures pose a risk ofoperational disruptions.

Potential
Financial Impact

Rise in Costs

Appendix

Periods of Inﬂuence on
TSC *

Risk
Level

Long

Low、

Medium、High

Corresponding Measures andStrategies•

Implement Water-saving Measures•

Strengthen the Implementation of theBusiness Continuity Plan (BCP)•

Closely monitor electricity usage andadjust as needed in a timely manner.

Note: short-term (within 3 years), medium-term (3 to 5 years), long-term (above 5 years)

Climate-related Opportunities
TSC also depends on its operational strategy and planning, as well as industry-related reports, to evaluate the progress of the semiconductor industry value chain, identify potential
business opportunities arising from climate change, and evaluate the financial impact on TSC.

▎ Climate-related Opportunities
Opportunity
AspectOpportunity Name

Implications of Opportunities for TSC

Potential Financial Impact

Periods of Inﬂuence on TSC

Products andServices

Improve productperformance.

We are actively working to improve the energy efficiency of our products,
aiming to assist customers and users in reducing energy consumption
and greenhouse gas emissions during product use. In light of the rapid
growth of the new energy vehicle chip market and the 5G industry, TSC
will persist in optimizing product performance, expanding our market
presence, and increasing profitability.

Increase in Revenue

Short

Resource Utilization
Efficiency

Utilize more efficient
production anddistribution procedures

By enhancing the energy efficiency of production processes andtransportation logistics, as well as bolstering material, energy resources,
and waste management, it is feasible to decrease energy resource
consumption and carbon emissions, thereby reducing operating costs.

Decrease in Cost

MediumResilience

Participate in Renewable
Energy Source Project

To promote the utilization of low-carbon energy and establish a diversified
power supply to enhance climate resilience, it will be feasible to sustain
the transition towards low-carbon energy by constructing and procuring
renewable energy sources.

Change in Cost

MediumNote: short-term (within 3 years), medium-term (3 to 5 years), long-term (above 5 years).

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Sharing Our
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with Society

Appendix

1.3 Risk Management

Climate Risk Impact Assessment and Scenario Analysis
In 2022, we prioritized conducting a risk impact assessment analysis on the highly risky project of "Increase in Greenhouse Gas Emissions Cost". The purpose is to identify the impact
pathways on TSC and consider the effects of carbon fees and carbon tariffs on our value chain and its operations in different scenarios. Additionally, future financial quantification assessments
are expected to be conducted. The evaluation results will be applied to adjust the Company's operational strategy, reevaluate the Company's risk appetite and tolerance, and continuously
revise relevant response measures.

▎ Climate Risk Pathway - Increase in Greenhouse Gas Emissions Cost
Risk Pathway
Impact and Influence on TSC

Risk Factors

Increase ingreenhousegas emissions

Carbon fees are charged oncarbon emissions fromdomestic sites
Carbon emissions fromoverseas sites exceed the limitof carbon emissions
regulations

Exported products from TSC
have carbon emissions
exceeding local standards

TSC must purchaseincreased carbon emission
quota.

Increase in the Cost of Power
Generation in the Electricity
Generation Industry

Procurement

Increase in Manufacturing Costof Upstream Equipment/Raw
Material Suppliers
Increase in transportation costof logistics companies

Increase in cost of overseas
customers' import of TSC's
products

The electricity industry
passes on costs to TSC

Suppliers pass along costs
and prices increase

Financial Impact

Increase in Operating
Expenses

Increase in cost of overseas
sites' imports of TSC's
products

Sales

Domestic andforeign carbon
charging-related
regulations,
including:‧Revision of
Climate Change
Response Act tolevy carbon fees
‧DraftInternational
Carbon Tariff(EU/US Carbon
Tariffs)

Production

Transition Risk

Financial Impact Factors

Increase In
Operating Costs
Customers Moving or
Orders Decreasing

Decrease in Revenue

Decrease in
Revenue

Rise in electricity bills

Increase in Cost of
Procurement

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1.2 Corporate GovernanceTo assess the potential effects of future climate change on TSC, we rely on the
scenarios put forth by the International Energy Agency (IEA), specifically the Net Zero
Emissions by 2050 Scenario (NZE) and the Announced Pledges Scenario (APS). As climatechange escalates, countries are increasingly advocating for carbon pricing measures.
For instance, the European Union is on the verge of implementing the Carbon Border
Adjustment Mechanism (CBAM), while Taiwan intends to impose carbon fees, both of which
could raise production costs. Furthermore, these policies and regulations not only impact
TSC directly, but also have repercussions throughout the value chain. If suppliers become
subject to these fees, the costs of relevant raw materials and equipment investments may
gradually rise.
At the current stage, TSC evaluates three impacts based on the carbon fee scenarios
set in the NZE and APS by the IEA: upstream cost increase, increase in operational costs,
and customer orders moving.

1. Increase in upstream cost
In response to China's inclusion of the electricity department in the carbon trading
market and the implementation of carbon tariffs by the European Union, electricity providers
may increase electricity prices to pass on the cost of greenhouse gas emissions. As a result,
there may be a certain proportion of price adjustments by 2030, which will pose operational
expenses and cost increases for TSC and its suppliers. Additionally, in terms of procurement
costs such as raw materials, machinery and equipment, and logistics, relevant suppliers may
pass on carbon taxes, carbon fees, or the implementation of carbon trading markets / systems
in their respective countries to TSC, leading to an increase in procurement costs.
In light of the anticipated ongoing rise in upstream costs, TSC is proactively advancing
energy transition efforts and collaborating with the supply chain to develop plans for futurecarbon reduction. This includes building a climate-resilient supply chain and regularly
reviewing upstream costs to mitigate associated financial risks.

Risk Factors

ClimateScenario

Scenario Hypothetical Conditions

IEA - NZE

By 2050, the global energy departments are expected toachieve net-zero carbon emissions in the NZE scenario.
Greenhouse gas emissions will decrease annually, and by
2100, the global average temperature rise will be below
1.5° C.

Transition Risk
- Increase inGreenhouse Gas
Emissions Cost
IEA - APS

As per the APS, the global government's declared targets
for greenhouse gas reduction and achieving net zero will
be met within the specified timeframe. Greenhouse gas
emissions are projected to reach their highest point in
the mid-2020s, resulting in a global average temperature
increase of 1.7° C by the year 2100.

Responsible
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Appendix

1.3 Risk Management

2. Draft of Carbon Fee-related Policies
Based on regulations implemented in TSC, such as the Taiwan Climate Change
Response Act passed in early 2023, the EU CBAM, China's national ETS, and the relevant
emission quota schemes of the Interim Regulations on the Management of Carbon
Emissions Trading, as well as suggestions from outsourced research reports of the Taiwan
Environmental Protection Administration, it is estimated that the carbon fee will reachapproximately US$100 by 2030. Additionally, the regulatory impact of carbon will graduallystrengthen in the short term. Considering domestic and international carbon fee regulations
and the future reduction of greenhouse gas emissions, TSC will conduct a quantitative
assessment of the additional carbon fees and related costs that each operation may incur,
resulting in increased operating costs.
In addition to closely monitoring the development of domestic and international climaterelated regulations, we dedicated to actively developing high-performance products andenhancing procedural efficiency. Furthermore, we intend to participate in renewable energy
initiatives to mitigate the financial impact of climate-related policies.

3. Customer Orders Moving
The carbon-related policies of various countries will also have an impact on thedownstream value chain. For instance, the EU's CBAM could potentially necessitatecustomers to bear extra carbon tariff expenses when importing our products. This, inturn, may affect their inclination to purchase TSC's products and prompt them to seek out
competitors offering products with lower carbon content. Consequently, this presents achallenge to the sales market and results in a decline in revenue.
We will focus on low-carbon operations and improving product performance as theprimary strategy. This will involve offering customers more competitive low-carbon products
and services, while also consistently reducing the risk of customer order shifting due to risinggreenhouse gas emission costs.

Carbon Fee Parameter(Unit: US$ / CO2e)•

In 2030, it will be $90.

•

In 2040, it will be $160.

•

In 2050, it will be $200•

In 2030, it will be $40.

•

In 2040, it will be $110.

•

In 2050, it will be $160.

Scenario
Analysis Factor••

Electricity
expenses,procurement
expenses, andcarbon expenses
at production sites
The amount ofcarbon tariff paidon exported
products

Major Financial Impact•

Upstream costs: The rising electricity costs may resultin higher expenses for suppliers of raw materials
and logistics providers, thereby further affecting our
procurement costs.

•

Climate-related policy regulations: As a result of
the proposed climate-related policy, there will be arequirement to pay additional local carbon fees andcarbon taxes.

•

Customer market challenges: As a result of CBAM andother international policies, importers are obligated to pay
carbon taxes. Consequently, customers are opting for
products with lower carbon emissions, leading to shifts incustomer demand and a subsequent decline in revenue.

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Sharing Our
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Appendix

1.3 Risk Management

Indicators and Goals
In light of the impact and challenges posed by climate change, TSC acknowledges
the importance of the Science Based Targets Initiative (SBTi) methodology for establishing
reduction targets based on scientific evidence. Additionally, we have implemented ISO
14001, ISO 50001, and ISO 14064-1 management systems to address these challenges. We
also committed to utilizing renewable energy and implementing energy-saving measures.
To minimize product carbon footprint, we actively explores new markets and introduces lowcarbon technology products, while also incorporating automation in production. The current
goals and indicators are as follows:

1. Reduce Greenhouse Gas Emissions
We have established a net-zero objective for 2050, using 2022 as the reference year.
The aim is to achieve an annual reduction of 4.2% in greenhouse gas emissions for both
Scope 1 and Scope 2, relative to the baseline year.

2. Adopt Renewable Energy Source
The implementation of solar power generation facilities and a green energy procurement
plan began in the factory area in 2022. In 2023, an assessment plan for solar self-use
installation will be initiated at the I-lan Site.

3. Increased Resource Utilization Efﬁciency
We are actively promoting energy-saving initiatives in public systems and processes,
aiming to reduce electricity consumption by 1% compared to the previous year. This effort
is focused on enhancing the energy efficiency of its production operations. For more
information on the specific energy-saving measures implemented at facilities, please refer tosection 5.1.2 Energy Management.
Our production procedure is heavily dependent on water resources, and the drought
resulting from climate change presents potential risks to our operations. TSC is actively
promoting the recycling and reuse of wastewater, as well as enhancing the efficiency ofwater resource utilization. For more information on the energy-saving measures implemented
at our sites, please refer to section 5.1.3 Water Resource Management.

4. Assist Customers in Reducing Carbon Emissions
In light of the rapid growth of the automotive chip market and the 5G industry in 2023,
the upcoming generation of low-power chips will play a crucial role in the transition towards
a low-carbon economy. TSC remains committed to enhancing product performance,increasing energy efficiency, and supporting customers in reducing greenhouse gas
emissions throughout product usage. For details on our low-carbon product strategies,
please see section 1.1.2 Financial Performance and section 2.1.2 Continuous Improvement
and Innovation in Quality.

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Innovative Products and Services
2.1 R&D and Innovation
2.2 Customer Relationship Management

44About This
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Innovative
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2.1 R&D and Innovation

Responsible
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Equal
Workplace

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Manufacturingand Operation

Sharing Our
Prosperity
with Society

Appendix

2.2 Customer Relationship Management

2.1 R&D and Innovation
TSC aims to implement sustainable development, and hopes to reduce theenvironmental impact caused by manufacturing processes, in line with the spirit of "Taking
from Society, Giving Back to Society". The Company has established product environmental
protection specifications to control the hazardous substances in its products. As well ascomplying with the requirements of the EU RoHS directive and REACH regulation, TSC
upholds the principles of environmental protection and HSF (Hazardous Substance Free)in the design and production stages, continuously incorporating the concept of green
products. Measures such as using non-hazardous raw materials and adopting low-pollution
and energy-saving production processes have gained favor from automotive customers,
allowing TSC to contribute substantial benefits in greenhouse gas reduction through its core
R&D capabilities.

2.1.1 Products and Services
TSC is mainly engaged in the manufacturing of Rectifiers, Transistors and LED Drivers,
Assembly, Testing, and After-sales Service. Our products include Power Management ICs,
Rectifiers, ESD Protection Devices, Bridge Rectifiers, MOSFETs, IGBTs, Trigger Diodes, andSilicon Controlled Rectifiers, which mostly are the automotive market (including gasoline
and electric vehicles), industrial market (charging piles, power tools, pneumatic device
equipment), and telecom market (5G, IoT).
Being an Integrated Device Manufacturer (IDM) is one of our competitive advantages.
We provide end-to-end services, from R&D, production, to assembly, testing, and sales. This
integrated approach optimizes the manufacturing process and enhance communication
mechanism.

The production self-manufactured rate (percentage from sites) in 2022 is about 70%,
with the remaining 30% being outsourced or purchasing. The sales revenue of our products
has continued to grow over the past three years. Due to recent industry trends, the majorityof customers in the automotive application market, which is the main focus of development,
are from Europe and America. Therefore, the sales share in Europe and America has
expanded in the past three years.

▎ Main regional market sales status and proportion (NT$ thousand)
2020

2021

2022

Asia

2,057,790

57%

2,569,777

53%

2,905,882

51%

America

515,94614%

755,533

16%

910,777

16%

Europe1,031,126

28%

1,347,227

28%

1,776,181

31%

Others37,5991%

130,9403%

106,315

2%

Total Sales
Revenue

3,642,461

100%

4,803,477

100%

5,699,155

100%

Unit: KPCS

▎ Total output of main products
12,000,000
10,000,000
8,000,000
6,000,000
4,000,000
2,000,000-

Production Capacity

9,568,832

9,566,990

7,063,712

7,062,352

2021
Year

2022

6,730,100
4,968,160
2020
Production Quantity*Note: Due to the wide variety of TSC's products and the significant differences in production units,
considering the reasonableness and accuracy of the information, only the total production of
the main product - Rectifiers is disclosed.

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Sharing Our
Prosperity
with Society

Appendix

2.2 Customer Relationship Management

Product Strategy and Development Policy
The types and application fields of products in TSC are relatively diverse. With a view to provide customers with more comprehensive product solutions, TSC has continuously improved
technological innovation and R&D capabilities in recent years. We have also formulated short, medium, and long-term product development strategies to meet customer needs and market
trends. In addition to establishing a sound product development strategy, we also promote a comprehensive quality management system. These two schemes are complementary to each other,
forming the foundation of our competitiveness.
Short-term Strategy

Mid-term Strategy

Long-term Strategy

Product Development• Gain a deep understanding of market demands andrapidly introduce products to the market; such ascontinuously developing more efficient automotive
semiconductor components like advanced MOSFETs,
Wide Bandgap Semiconductors, and High-Efficiency
Rectifiers.
• Develop new product variants using existing technology
and product platforms to meet customer needs.
• According to customer needs and market trends,
conduct a comprehensive product portfolio optimization.
• Discover new application scenarios and apply existingproducts to new markets and fields.

• Strengthen R&D on safety and reliability, and improve
product quality and market trust.
• Strengthen customer cooperation, provide custom
products and services, and increase market share.
• Develop a new product ecosystem.
• P ro m o t e s u s t a i n a b l e d e v e l o p m e n t a n d g re e nmanufacturing.
• Continue developing new markets and application
fields and increasing product application scenarios andmarket size.

• Strengthen research and practice on product lifecycle management to achieve long-term sustainable
development.
• Promote green design and green manufacturing ofproducts to achieve environmental protection andsustainable development goals.
• Develop cloud-based products and services to achieve
the sharing and collaboration of smart and digitalproducts.
• Promote product circular economy and resource
utilization, achieve product recycling and waste
reduction, and achieve sustainable development goals.

Technological Advancement• Introduce new talents and technologies to enhance
R&D and manufacturing capabilities.

• Introduce new materials and technologies to improve
product performance and power consumption ratio.

• Accelerate product smartification and digitization toenhance product added value and market competitiveness.

• Promote product design and testing automation to
improve product development efficiency and quality.

• Strengthen the R&D and manufacturing procedures of
products to improve efficiency and product quality.

• Promote smart manufacturing and industrial internet toenhance production efficiency and product quality.

• Strengthen cooperation with suppliers to improve
supply chain efficiency and reliability.

• Strengthen corporate innovation culture and R&D
capabilities, enhance innovation vitality andcompetitiveness of the business.
• Promote green manufacturing and strengthen green
technology R&D.

• Promote the application of cutting-edge technologies
such as artificial intelligence and machine learning toenhance product intelligence and autonomy level.
• Continue to advance technology R&D to maintain atechnological competitive advantage.
• Promote comprehensive corporate digital transition toenhance corporate intelligence and digitization level.
• Promote deep collaboration and innovation withindustry chain partners, jointly advancing industrial
development.

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Appendix

2.2 Customer Relationship Management

Product Quality Management

Comprehensive Quality Management Capability Building

TSC follows the product development plan to carry out quality management and setscorresponding quality objectives to ensure that the quality standards of the products meet
expectations. The Company implements measures such as control, improvement, andmonitoring of product quality, and adopts a Zero Defect Strategy, especially in the automotive
supply chain, with a rigorous mindset and strategy, focusing on continuous quality
improvement. Since 2004, TSC has passed IATF 16949 and ISO 9001. Through a rigorous
quality management system, TSC achieves the goal of continuous product improvement anddefect prevention, providing high-quality products to customers in the global automotive
industry.

To effectively implement the quality management policy, TSC has undertaken relevant
capability building in organizational culture, personnel skills, equipment, and system
automation. This includes promoting horizontal and vertical communication to ensure thespirit of "zero defects" is company consensus. We have also introduced more talented
individuals with extensive experience, strengthened the professional knowledge of internal
engineers and supervisors, expanded training in specific automotive technologies, and laid
the foundation for product quality management. Additionally, TSC is gradually introducing
automated equipment and systems to enhance the efficiency of quality management.

Zero Defect Management
PolicyRisk-based Quality
Management‧Comprehensive Zero Defect Goal
‧Visibility of the Zero Defect Concept‧Horizontally and Vertically Integrated
Communication‧Project Quality Management‧Risk-oriented Audit Strategy for
Change Control and Management‧Risk-oriented Audit Strategy

Quality
Management
Policy and
Goals

Continuous
Improvement

Stability of Products
and Processes‧Professional Knowledge Management‧Passing on Experience‧Career Development‧Defect Detection and Control‧System Integration and Automation‧Design for Manufacturability,
Reliability, and Testability

Since 2000, the Company has been strengthening management and ensuring productquality to meet customer requirements through VDA6.3 process audits and IATF 16949. In
response to the continuous improvement of the international automotive industry, we havefully implemented the latest version of AIAG-VDA FMEA (Failure Mode and Effect Analysis)
in 2020 to optimize costs for products and manufacturing procedures.
Our main automotive customers attach great importance to the international standard
VDA 6.3 process audits. In recent years, We have been committed to integrating the VDA
6.3 process audits with the existing quality management system to diagnose and optimize
internal processes, control process risks, and achieve zero defects goals. This can further
enhance our competitiveness in the automotive industry chain.

Establishment ofOrganizational Culture

Staff Upskilling

System and Equipment
Automation

Implementation of
Zero Defect Concept

Employing More
People withProfessional
Experience

MES Factory
Operations Control
System

EmployeeCommunication

Cross-Departmental
Communication

Continuing Education
Training

Customer
RelationshipManagement System
QIMS Quality
Integrated
Management System
SPC Statistical
Process Control
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Appendix

2.2 Customer Relationship Management

Health and Safety Impact Assessment of Products
In recent years, TSC has been developing the automotive market. Major European andAmerican automotive manufacturers pay great attention to the high quality and precisionof their products because of automobiles' importance in personal and traffic safety. If there
are any malfunctions, it may result in unforeseen risks and impacts. Defects in automotive
electronics not only pose potential risks to personal safety but also lead to negative impacts
on corporate reputation through subsequent product recalls. Therefore, customers haveextremely high requirements for the products provided by TSC. Only by offering high-quality
products, implementing a Zero-Defect Policy, and continuously monitoring the development
trends of harmful substance regulations at home and abroad can we maintain a competitive
advantage.
Through assessment, the products and services provided by TSC in 2022 have nosignificant impact on health and safety, and there have been no incidents that violate
relevant health and safety regulations for products and services. We will continue to
strive to manage the health and safety impacts of its products, and make the sustainable
development blueprint more complete.

Product Chemical Substances Control and Disclosure
Many chemical substances are used in the production process of TSC products,
and there is a risk of harm to human beings and the environment. As such, the control
of chemical substances is crucial. In recent years, environmental substance regulations
have been updated frequently, and the number of regulated items has increased year by
year, reflecting the increasing international attention to chemical management. Meanwhile,customers also attach great importance to the composition, showing their attention to thesubsequent R&D, design, manufacturing and quality maintenance of purchased parts. To
allow customers to quickly understand the chemical substances contained in products foraccelerating demand matching, we launched a product chemical substance disclosure
project and set up an intranet Material Composition Declaration system in 2022.
IT Department has designed the MCD Environmental System to control and manage
the chemical composition of products and establish a list of hazardous substances. The
information on the substances contained in the products is continuously compiled anddisclosed on the official website. Currently, all products have MCD data sheets, andcustomers, suppliers, and other stakeholders can quickly search for specific products thatmeet their needs through the self-service feature on the official website, accelerating theoverall communication process and saving time on back-and-forth communication.
In 2022, TSC preliminary disclosed full substance information for 9,131 products,
with a disclosure rate of 95% by product weight percentage. It is expected that throughcontinuous communication with suppliers, factory education and training, and system
optimization, a disclosure rate of 97% by product weight percentage will be achieved by
2023. In the future, we will continue to promote the declaration of full substance disclosurefor product components, consolidate them into a transparent and complete material
information database, identify high-risk material analysis, and ensure that TSC manufactures
environmentally and human-friendly products.

Hazardous Substances Management
The management of hazardous substances is a crucial part of sustainable
management, which is also important for customers. The Company strictly complies withinternational regulations, such as the EU RoHS directive, REACH chemical regulations,etc., and has established a database - TSC Environmental Compliance - to manage
hazardous substances. We provide manufacturing services that are more environmentallyfriendly and disclose hazardous substances in response to customer needs, supporting
customers in expanding the green product market. For a complete list of environmental
laws and regulations followed by TSC, please refer to the official website's "Compliance withEnvironmental Laws and Regulations".
In 2022, all product and packaging design and manufacturing of our products havecomplied with regulations and 100% meet customer requirements for hazardous substancemanagement. There were no violations of regulations on product information labeling or
voluntary agreements, nor were there any incidents leading to fines or warnings.
We strictly complies with the product import regulations or instructions of various
countries. After internal verification by the Company, the product pass rate in 2022 is 100%.
Regarding the EU RoHS directive, TSC has obtained third-party testing reports.
Laws or Directives

Compliance Rate of TSC Products

RoHS*1

100%

REACH

100%

Safe Drinking Water and Toxic Enforcement Act

100%

End-of-Life Vehicle (ELV)100%

Persistent Organic Pollutants (POPs)

100%

US Environmental Protection Agency - Toxic
Substances Control Act (TSCA)

100%

JEDEC J-STD-609

100%

Note: 1. This refers to the instruction for restricting the use of certain hazardous substances inelectronic and electrical equipment (Restriction of Hazardous Substances).

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with Society

Appendix

2.2 Customer Relationship Management

2.1.2 Innovation and R&D

Expected Beneﬁts of Product Development

TSC continues to invest in product R&D and technological innovation, gradually
introducing more professional talents and technologies. As the scale continues to grow, TSC
expanded R&D team in 2022, including new technical professionals in ESD, Wide Bandgap
semiconductors, and other product lines. The workforce of the R&D team is expected
to increase by 60% in 2023. Additionally, We incorporated the R&D performance of new
products into the performance bonus evaluation criteria for researchers to encourage theteam to actively pursue innovation. Since 2020, the annual investment in innovative R&D
has increased year by year, and its percentage of net revenue has also increased withrevenue growth.

▎ R&D Expenses and Percentage of Revenue(Unit: NT$ thousand)

2020

2021

2022

R&D Expenses

42,29656,976

81,604

Net Revenue

3,642,461

4,803,477

5,699,155

Percentage of Net
Revenue

1.16%

1.19%

1.43%

New Product Development Plan
In 2022, TSC launched a number of new product development projects, including
MOSFETs, voltage stabilizer ICs, ESD and other products, aiming to complete verificationand mass production from 2023 to 2025. The products involve different semiconductor
technology applications, such as automotive electronics, Advanced Driver Assistance
Systems (ADAS), Internet of Things, 5G, etc., laying the foundation for the company's longterm development.
TSC has established an effective project management system to track and managetasks and progress across departments to respond to the technical challenges, market
uncertainties, product design, and quality control issues associated with developing
new products. Additionally, the Company conducts training and exchange activities toenhance employees' skills and knowledge in product development, and to promote crossdepartment collaboration and communication.

Increase company revenue
and profit, and achieve
performance goals.
Initiate multiple new
product development
projects to expand theCompany’s product line
and enhance market
competitiveness.

Increase the company’s
mastery and applicationof new technologies toenhance its ability fortechnological innovation.

Improve product quality
and production efficiency,
and reduce problems
and defects in the
product manufacturing
process.

Improve employees'
professional skills andcross-functional
collaboration ability, andpromote the upgrade andtransformation of internalmanagement within thecompany.
Strengthen the Company’s
brand influence and awareness,further expanding market share.

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Appendix

2.2 Customer Relationship Management

Li-Je Site
Li-Je Site has been investing in the planning of factory automation since 2017 in order to enhance its efficiency, improve
process quality, and meet customer delivery requirements. The digital transition of the factory is being driven by three main
aspects: digital management, smart manufacturing processes, and intelligent inspection, with the aim of winning customer
trust through advanced information technology.

Practicing Intelligent Factory
To improve factory efficiency, enhance process
quality, and meet customer delivery requirements, TSC
established the Automation Development and Integration
Department in 2018. It introduced Manufacturing Execution
System (MES) and Equipment Automation Program (EAP)to optimize processes and product traceability, thereby
improving efficiency and achieving intelligent production.
We plan to invest over NT$200 million in new equipment
to expand MOSFET production capacity from 2022 to2025. Additionally, it plans to invest approximately NT$7
million in unlimited quantity EAP software licenses to meetthe needs of the new equipment. As of 2022, the overall
equipment automation coverage rate of the two factories hasreached 68.8%, and it is expected to reach 70% equipment
automation by the end of 2024.

DigitalManagement• Material management:
Managed throughdigital systems, it can
automatically schedulethe order of material
issuance and verify its
accuracy. Meanwhile,the system isolates
expired and abnormal
items to reduce theimpact of human error.

• Digital System Management (MES/EAP):Equipment canremotely and automatically perform parameter setting,and automatically retrieve production programs. When
products are put into production, the system can
immediately designate the process flow*. Additionally,
production information can be digitized and visualized.
Note: Automotive products can be produced with designatedequipment, and operators must pass verification
before operating, using materials, and automaticallydownloading programs.

• Automatic equipment:Intelligent sensing technology
allows the robotic arm to load and unload materials
automatically. The equipment can complete theentire process automatically, enhancing operational
efficiency.
• Product traceability:Through data management
for statistical analysis, it provides preventive andtroubleshooting functions. For example, it can querythe product batch code to track all quality issues
during the production process, and perform traceability
analysis on the entire history of that batch of products,
achieving effective production and continuous
improvement purposes.

Smart Manufacturing Process

Intelligent Detection• Diffusion process: Using intelligent sensing technology, the equipment
can automatically load / unload throughout the process, control
temperature, and automatically perform air intake.

• Visual inspection: Using
intelligent sensing
technology and digitalmanagement, it ispossible to conduct
automatic visualinspection and markdefective products, andsimultaneously
uploading photos ofdefects data facilitates
analysis and continuous
improvement.

• Photolithography process: Using intelligent sensing technology, theequipment is equipped with an automatic alignment control system toreduce the risk of manual alignment and improve the appearance yield.
• Etching process: Using intelligent sensing technology, the equipment
can automatically acidify / soak / swing / change the tank according to theformula, while monitoring whether the water resistance value reaches
the standard, improving electrical yield.
• Thin film process: Using intelligent sensing technology, the equipment
can load / unload the whole process and automatically switch the coating
material.
• Probing and testing process: Using intelligent sensing technology anddigital management, the equipment can automatically switch production
between different wafers and upload information, as well as monitor
wafer yield and provide alerts and analysis for low-yield wafers.

I-lan Site
Regarding the assembly testing equipment at the I-lan Site, TSC has been gradually purchasing new types of networked
and automated machines since 2017 and conducting assembly testing processes. We have also invested in EAP software
licenses to achieve process parameter control and automation access. The applicable products include diodes and
MOSFETs. Due to the increasing number of newly purchased equipment each year, more software automation engineers
are needed to assist in the implementation and development of EAP. As of February 2023, through hardware, software,and manpower recruitment, the I-lan Site has used machines with EAP automation capabilities to produce over 95% of its
products. Future new products and machines will also be equipped with EAP functionality to maintain the intelligent operationof the factory.
• Material management: Utilize digital systems to achieve visualized warehouse management, thereby improving inventory
turnover efficiency, reducing stagnant materials, enhancing product quality traceability, and increasing production efficiency.
• Assembly and Test process: Using digital management, it is possible to achieve automatic parameter setting, healthindex warning and disposal, and visualization of all production information.

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Highlights

Establishment of Knowledge Management System
In pursuance of continue practicing product innovation, TSC not
only improves the manufacturing process, but also considers the longterm development of technology and the accumulation of experience.
Therefore, TSC began to establish a Knowledge Management System(KMS) starting in 2022 to systematically store technical data anddocuments, enhance the convenience of technical data transfer andreuse, and accelerate the development timeline of R&D projects. In
the past, without establishing a project technology and research data
knowledge base, once the project took a long time or the R&D personnel
resigned, the experience of the R&D project would be challenging
to pass on, hindering the accumulation of product technology andknowledge. Thus, starting in 2022, we have successively completed
the KMS hardware equipment construction and plans to introduce R&D
projects in 2023, transforming existing technical documents from paper
to digital format, and establishing an SOP document library related toelectrical measurement and instrument equipment.
KMS will provide functions such as document management,
advanced search, and knowledge mapping. We will classify andmanage technical documents based on the Advanced Product Quality
Planning (APQP) framework, and establish a knowledge map that
includes relevant resources such as technical development documents,
databases, and expert opinions. The main purpose of this system is toestablish a database for project R&D technology, greatly improving teamefficiency and increasing the reference value or re-usability of technicaldocuments.

Establish a systematic and scalable
R&D project technical database.

Analyze the usage and development
needs of the R&D Department andintroduce a suitable and maturecommercial knowledge management
platform.

Optimize project document management
comprehensively to enhance teamproductivity.

Expand the project and technicalknowledge map to improve thereference value and re-usability oftechnical documents.

Expected
Beneﬁts ofKnowledge
Management
SystemThe R&D engineer publishes a R&D
memorandum on technical progress
to help the company accumulate corecompetitiveness.

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Intellectual Property Protection
Intellectual property represents the intellectual results and achievements of thecompany's investment in technology development, especially for the long-term developmentof the company; it is a significant intangible asset. TSC has formulated the Intellectual
Property Management Measures as the basis for managing and maintaining groupintellectual property rights. Meanwhile, to enhance the importance and economic value of
our company's R&D technology and cultivate patents, our company regularly commissions
external firms to provide intellectual property and patent-related training courses for internal
R&D and technical personnel.
In the face of the changing structure and rapidly advancing technology in thesemiconductor industry, TSC has redefined its goals and strategies for managing andmaintaining intellectual property rights. We aim to optimize existing technologies and focus
on researching core technologies, conducting an inventory and review of all patents within
the group, and retaining patents with economic value. Additionally, we place greater emphasis
on applying for new invention patents with higher levels of "originality" and "novelty". As ofnow, TSC has been granted and holds 38 valid patents, including 33 invention patents, 4utility model patents, and 1 design patent.
In addition, the Company's R&D and technical personnel continue to submit new caseapplications (all of which are invention patent applications) to collaborate with a technology

company in the United States for joint development of new technologies. This demonstrates
our company's goal and strategy for intellectual property management and maintenance,
which is not quantity-oriented but quality-oriented.
Aiming to strengthen the determination of our intellectual property deployment, theLegal Department, together with the senior management of the Company, not only plans
regular intellectual property training or industry-related courses for R&D and technicalpersonnel, but has also started planning and formulating new internal management
measures and systems (including the introduction and promotion of trade secret systems)
to enhance the content of technology and patents, and protect the core technology andpatents of the Company.

Patent Application Incentive Measures
To encourage employees to actively engage in research, invention, and innovation,and to improve product quality and functionality, thereby enhancing competitiveness, there
are numerous incentive measures, including proposal rewards, approval rewards, patent
infringement reporting rewards, patent rejection rewards, licensing rewards, and annual
rewards, which encourage employees to protect intellectual property rights through diverse
criteria collectively. In 2022, the R&D Department received rewards and was granted patents
for two projects, "Multi-protected Ring Schottky Diode" and "Multi-trench Schottky diode", inthe United States and Taiwan.

2022 Patent Highlights
Patent Obtained in the United States – Schottky Diode with
Multiple Guard Rings Structures
For 150V and 200V high junction temperature Schottky Diodeproducts, the multi-protection ring terminal area design can evenly
distribute the electric field in the terminal area and make it gradually
increase, effectively improving the stability of the collapse voltage,
and making the product remain in a stable state at high voltage.

Patent Obtained in Taiwan - Multi-trench Schottky DiodeTSC began to develop the second-generation multi-trenchterminal design in 2020. In addition to the original uniform distribution
and progressive electric field design, it is expected to save one layerof photomasking, reducing costs and shortening the process time. It
also saves resources and avoids environmental pollution.
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2.2 Customer Relationship Management

2.1.3 Developing Sustainable Products

products or higher power 1200V MOSFET products. This will not only maintain robust growthin operations but also contribute to energy savings, in line with sustainable operation.

Except for continuing to roll out smart factories, improve production efficiency, andachieve process energy saving, we also pay attention to the proportion of renewablematerials and recycled materials used. TSC uses recyclable packaging materials andexpects to reduce energy consumption and indirectly reduce carbon emissions through theoverall performance improvement of products, allowing end customers to reduce energy
usage. We actively involved in product innovation design, developing high-efficiency
products to gradually replace energy-consuming products in the past, such as replacing
traditional diodes with low loss diodes (LLD), and continuing to use sustainable packaging
materials in response to the energy-saving and carbon reduction trend.

Development of Third-generation Semiconductor Materials
Products
With the advent of the era of 5G and electric vehicles, the demand for products
resistant to high temperatures and high pressure, high power, and low power consumption
has increased. Considering the excellent performance and good heat dissipation of SiC
semiconductors in high voltage and high power applications, as well as their wide use inelectric vehicles, charging piles, and 5G, TSC launched a new generation R&D project ofpower devices in 2022. The project applied third-generation semiconductor materials, SiC
and GaN, to existing products with the view to introduce power MOSFET products with lower
power consumption and higher efficiency.
Since 2022, we have collaborated with the integrated industry's professional wafer
fabs and power semiconductor assembly factories to jointly develop SiC Schottky Rectifiers.
The samples fully meet the design specifications and are undergoing reliability andtrustworthiness testing. The first generation of SiC Schottky Rectifiers is expected to belaunched by the end of 2023. In the future, we will continue to make efforts to apply siliconcarbide materials to products of different specifications, such as 650V-1200V Schottky

Utilization of Recycled Materials
In the past three years, due to the expansion of business scale, the total amount of
raw materials used by TSC has increased. Nevertheless, TSC is committed to reducing
the environmental impact of its operations and actively increasing the use of renewablematerials. From 2020 to 2022, the proportion of renewable materials used in our main
products exceeds 50%, with a total renewable material usage of over 1,291 tons in 2022.

▎ Total Quantity and Percentage of Materials Used in the Production of Main
Products and Services.
Unit: Kg

2020
Weight2021

Percentage

2022

WeightPercentage

Weight

Unit: kg

Percentage

Total Amountof Renewable
Material

912,96260.31% 1,190,213

57.35%

1,291,661

52.73%

Total Amountof NonRenewable
Material

600,891

39.69%

885,05142.7%

1,157,710

47.27%

Total Amountof Material
Consumption

1,513,853

100% 2,075,264100%

2,449,371

100%▎ Progress of the New Generation MOSFET Development ProjectIndustry
MarketResearch

Customer
Research

Establish
DesignSpecification
Goals

Research And
Development

Meet Design
Specification
Goals

SampleTestingReliability And
Trustworthiness
Testing

Customer
Submission

Mass
Production

53

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2.1 R&D and Innovation

TSC supports the concept of using green packaging materials and strives to selectmaterials that are recyclable and reusable. Management is carried out by measuring themonthly recycling of product categories and their packaging methods.
I-lan and Li-Je Sites entirely use recyclable packaging materials and reusable cartons,
plastic packaging materials, buffer materials, and other packaging for products to be
shipped to customers. We also continue to pay attention to customers' instructions andrequirements for packaging materials, and integrates with upstream packaging suppliers
in real time to ensure recycling labels are clearly marked on the packaging according tointernational standards. The total consumption of non-renewable materials in TSC in the past
three years has shown a continuous downward trend. In response to growing pushes forenergy conservation and environmental protection, and to make packaging as sustainable
as possible, renewable materials accounted for 35% of the percentage of packaging
materials in 2022, a significant increase of 25% compared with 2021.

Li-Je Site

I-lan Site

(Front-end wafer manufacturing)(Back-end assembly and testing)

Cardboard Box

Cardboard Boxes, Inner Boxes

PP Buffer Material

Carrier Tape

PS Wafer Packaging Box

Cover Tape

PP Wafer Packaging Box

Anti-Static Reels

Dust-free Wrapping Paper

Electronic Component Packaging
Tubes

Round Foam Pads

Equal
Workplace

Green
Manufacturingand Operation

Sharing Our
Prosperity
with Society

Appendix

2.2 Customer Relationship Management

Utilization of Green Packaging Materials▎ Main Recyclable Packaging Materials Used in Each Site

Responsible
Procurement▎ Total Quantity and Percentage of Materials Used in Main Products andServices

Unit: kg

2020
Weight2021

2022

Percentage

WeightPercentage

WeightPercentage

Total Amountof Renewable
Material

12,696

5.95%

14,02410.13%

16,94235%

Total Amountof NonRenewable
Material

200,552

94.05%

124,366

89.97%

31,45865%

Total Amountof Material
Consumption

213,247100%

138,391

100%

48,400100%

Anti-Static Flat Pockets
4"Tubes
6"Tubes54

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2.1 R&D and Innovation

2.2 Customer Relationship Management
2.2.1 Customer Satisfaction Improvement
TSC is committed to maintaining customer trust and service quality, and as such takes
responsibility for customer satisfaction. In order to establish a smooth communication withour customers, Sales and Field Application Engineers cooperate with agents to hold productapplication briefings from time to time, so that customers can obtain the latest and mostcomplete product information.
The Company maintains close communication with customers through comprehensive
customer service, including proactively contacting and visiting customers, conducting
satisfaction surveys, and providing a smooth channel for communication of grievances.
Based on customer needs and feedback on products and services, TSC continuously
optimizes customer experience and reduces product defect and recall rates, thereby
improving customer retention and Company performance.
Regarding customer inquiries, orders, and other demands, our goal and commitment isto reply to customers' inquiries within 48 hours. The process is as follows:
Customerinquiry/
Orderreview

Confirm thequotation andorder details,
includingmodel, price,
quantity,
and terms oftransaction

Deliverydate inquiry

Review andreply time ≤48 hours

Ofﬁcialorder
establishedMeets
customer's
order
requirements

Order
conﬁrmation

Send orderconfirmation
within 48 hours

Orderchangereview

Satisfycustomerorder change
requests
and confirm
schedulechanges

Responsible
Procurement

Equal
Workplace

Green
Manufacturingand Operation

Sharing Our
Prosperity
with Society

Appendix

2.2 Customer Relationship Management

Product Information Inquiry PlatformTo provide customers with more comprehensive product information, TSC is planning
to revamp the official website in 2023. The website will provide complete information on
product items, types, and fields of application, allowing customers to compare and queryin real-time online, and filter based on specifications and their needs, thereby improving
customer satisfaction in accessing product-related information. In addition, when conducting
business and contacting customers, specific product URLs can be provided as references
to enhance matching demands and communication efficiency. In the future, website interface
and information updates will also be continuously optimized.

Customer Grievance Channel
To protect customer rights, we provide customers with diverse channels for filinggrievances. For example, customers can provide feedback or file grievances throughvarious regional Sales Departments in a timely manner. When the Sales Department
receives a grievance, the department will proactively contact the customer within 48 hours
to understand the situation of the abnormal product, including quality, delivery, and service,
and promptly handle the grievance case according to the operating regulations per theCompany's Procedures of the Customer Service Management. Then, the FAE / AE and the
Quality Assurance Department would understand the grievance situation and clarify thecause to formulate a solution and minimize losses for both parties. In 2022, TSC did notreceive any customer grievances.

Customer
Grievance

Emergency
containment
measures/
Cause analysis

After receiving thecomplaint, take
immediate followup actions within
48 hours

After receiving
samples, propose
improvement
measures within 5
to 7 days

Developcountermeasures

Conduct failure
analysis to clarify
reasons for customer
grievances, including
human error,
equipment failure,communication
misunderstandings,
etc.

Implement
standardizationof strategy

Submit a reporton failure analysis
improvement
and standardize
improvement
measures55

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Products andServices

Green
Manufacturingand Operation

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with Society

Appendix

Customer Audit Arrangement Procedure

In addition to a smooth grievance channel, customer satisfaction surveys are crucial
for maintaining strong customer relationships. TSC conducts annual surveys to understandcustomer needs and improve our products, converting those needs into actions to boost
our long-term competitiveness. We select survey list based on the previous year's revenue
and send out surveys covering product, delivery, and service. After collecting these andanalyzing the feedback, we proactively seek further input from customers who gave lower
scores and implement specific improvements. We then follow up six months later withanother survey to confirm the effectiveness of these measures. Our consistent customer
satisfaction scores of 4.5 or above over the past three years demonstrate our commitment toproviding high-quality service.

▎ Customer Satisfaction Survey Rate

Key Customer Satisfaction
Survey Index

Equal
Workplace

2.2 Customer Relationship Management

Customer Satisfaction Survey

Year

Responsible
Procurement

2020

2021

2022

4.6

4.7

4.6

(Max Score: 5 / 5)

Customer Audit
To feedback promptly and comprehensively, the Company seeks to understandcustomer opinions through various means. In addition to the above satisfaction surveys andcustomer grievance channels, TSC periodically cooperates with customers to conduct audit
operations, allowing customers to have a better understanding of our Company's products
and operational processes, and enhancing trust in TSC. In 2022, a total of 3 VDA 6.3 process
audits were conducted with 3 customers, all of which received positive feedback from thecustomers.
With complex challenges such as advancements in production technology andincreasing customer demands, TSC must ensure the implementation of quality managementin the supply chain. When customers request VDA 6.3 process audits, the Company
immediately initiates relevant preparations and arranges customer visitation processes toactively respond to customer demands. Ultimately, through quantified scoring results, we
strengthen product process quality management to ensure that the quality of the supplied
products meets customer requirements and increases our competitiveness.

Note*:
1. When evaluating whether a vendor can become a qualified supplier in its automotive supply chainor assessing items such as its process technology and products, customers will use the VDA
6.3 process audit standard for scoring. The items include product development and process,supplier management, mass production, as well as customer care, satisfaction, and service.
2. Due to the impact of the pandemic, audits include both online and physical audits.

1
2
4
6

The customer has requested
an audit.

Understand the audit forms(online, physical).

3

Understand the purpose
and scope of the audit(product / process, VDA 6.3).

5

Arrange reception(meals, transportation,accommodation, etc.)

Arrange the procedure

Conduct the audit

7

Review and discuss
improvements afterward.

56

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2.1 R&D and Innovation

Innovative
Products andServices

Responsible
Procurement

Equal
Workplace

Green
Manufacturingand Operation

Sharing Our
Prosperity
with Society

Appendix

2.2 Customer Relationship Management

2.2.2 Customer Privacy Protection
With the increasing reliance on the Internet for most modern information, the risk of information security is rising, and our emphasis on customer privacy protection has also increased
accordingly. In order to more rigorously protect customer information, and maintain customer trust and Company reputation, we will continue to review and optimize its privacy management
mechanisms.
In view of the globalization of our business and services, TSC is committed to implementing protection mechanisms for personal privacy and personal information to prevent leakage,abuse, and theft, thereby safeguarding the rights and interests of personal privacy. In the event of customer data leakage, we will respond in accordance with the guidelines set out by the
information security policy. The Company plans to gradually introduce the ISO 27001 Information Security Management System as a management mechanism starting in 2023, reducing thepotential impact and risks of customer data breaches by following international standards.
In addition to international standards, information security-related messages and advocacy will be increased through various channels and meetings in the future to enhance employees'
awareness and understanding of information security, explicitly specifying the legal use scenarios, storage measures, responsible departments, and handling procedures for personal data
incidents, continuously strengthening customer privacy protection. In 2022, there were no incidents of violating customer privacy or losing customer confidential information, and no complaints
were received regarding the violation of customer privacy or loss of customer data.

▎ We expect to have in place a complete privacy infringement handling procedure in 2024

Receipt ofgrievance caseAcceptance andhearing of thegrievance case

Investigation of
the case

Review of thecaseStrengtheningof management
mechanisms

Disclosure of
the results andfuture prevention
strategies

57

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3.1 Supply Chain Management58About This
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Procurement

Equal
Workplace

Green
Manufacturingand Operation

Sharing Our
Prosperity
with Society

Appendix

3.1 Supply Chain Management

3.1 Supply Chain Management▎ Percentage ofprocurement amountfrom local suppliers(%)

100%
75%

3.1.1 Supply Chain Overview

50%

In order to respond to the increasing complexity of supply management, meet the needsof customers in the automotive and consumer electronics industries, and actively expand its
presence in local procurement, TSC established the Supply Chain Management Department
in 2022. This department works with relevant units such as the Procurement Departmentof each site to manage raw materials procurement and wafer fab operations. Additionally,
TSC is committed to strengthening its sustainable supply chain and aims to make a positive
impact on green operations while consolidating its core business. The Company follows
the Responsible Business Alliance (RBA) guidelines to promote sustainable supply chain
assessments and avoid suppliers with significant environmental and social impacts, as well
as minerals from conflict areas, to fulfill their consolidated green supply chain goal.

25%

77.8%
57.7%

21
new suppliers

25

72.7%
23
new suppliers

new suppliers

Local Procurement
TSC recognizes the importance of sustainable operation and considers its impact inevery aspect of its business, including procurement targets and amounts. Although mostof its production equipment and raw materials are sourced overseas, TSC is committed tocollaborating with local suppliers to build a lean, robust, healthy, and sustainable supply
chain. In 2022, our local procurement accounted for 72.7% of its total procurement amount.
Moreover, our collaboration with suppliers resulted in the addition of 23 new suppliers, 16of which were local. We will continue to build stable partnerships, strengthen mutual trust,and increase the percentage of local procurement to promote the social and economic
development.

▎ Local Supplier Procurement Status

Unit: NT$ thousand

2020

2021

2022

Procurement amount from local
suppliers

618,567,980

1,081,380,774

797,304,214

Total procurement amount

1,072,548,908

1,390,834,664

1,096,024,758※ Note:1. All references to "local" herein are to the "Taiwan area" in the boundary of this report.

0%

2020

2021

2022

3.1.2 Sustainable Supply Chain Management
Supply Chain Management Measures and Strategies
TSC established a Supply Chain Management Department in 2022. The department
integrates procurement resources from each site and optimizes the overall supply chain.
The management covers aspects such as resources, demand, manufacturing, and supply.
It constantly reviews and integrates planning processes, leading cross-functional teams ina collaborative mode to support the Company's operational development goals. To ensurethat supply chain scheduling considers inventory risks and meets customer demands, theSupply Chain Management Department follows the principle of "supply continuity" to ensure
uninterrupted supply in unforeseen or force majeure situations. The areas of each sitemanage supply chain issues and collaborate with the headquarters to constantly assess
potential risks and continuously optimize the resilience and strength of the supply chain.

Supply Chain Management Department
供應鏈管理部
Planning andIntegration

Data ReportSupervisors of each site, supply chain specialists
各廠主管、供應鏈專責人員59

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Procurement

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Workplace

Green
Manufacturingand Operation

Sharing Our
Prosperity
with Society

Appendix

3.1 Supply Chain Management

While integrating organizational resources and strategies, we collaborate with customers
to lower supply chain costs and improve data transparency using technological collaboration
tools. This involves conducting Quarterly Business Reviews (QBR) and maintaining close
relationships with key and strategic suppliers. TSC also plans the training of supply
management talents, strengthening information synchronization across departments, andreducing procurement costs by implementing automation and standardized management.
With regard to supplier management, we established the Supplier Management
Operation Procedure. Before collaborating with suppliers, the Company assesses thembased on relevant assessment methods, including the supplier's record of environmental andsocial impacts. We encourage suppliers to obtain certifications such as ISO 9001, ISO / TS
16949, ISO 14001, and ISO 14064 to jointly enhance corporate social responsibility. In
addition, TSC follows the guidelines of the Responsible Business Alliance (RBA) to establish
measures related to supply chain management, such as the RBA Vendor Code of Conduct,
RBA Policy and Target Management Measures, Environmental and Social Responsibility
Exception Handling Measures, Professional Ethics Risk Assessment Management Measures,and Social Responsibility Risk Assessment Management Measures. All relevant policies aredisclosed on TSC's official website.

▎ Three Core Elements of Supplier Management
Stable Growth• Establishment of strategic sourcing to plan andexecute supply chain strategy, improving the scope,
flexibility, and resilience of the supply chain• By using a centralized control method, the flexibilityof the supply chain to respond to changes canbe enhanced, as well as the cost-effectiveness ofcentralized procurement and the efficiency of program
integration

Laying theFoundation

Sustainable
Operation• Integration of production and sales
plans, implementation of PDCA
management cycle• Improving of order service response
efficiency and capability• Integration with productdevelopment process to promote
automation• Implementation and maximizationof the value of information flow inbusiness management

Sustainable Impact Assessment for Suppliers
The resilience of the supply chain is a matter of great concern for TSC. In addition to
the basic selection criteria for suppliers, including technology, delivery, quality, cost, andother basic criteria, we conduct comprehensive assessments of economic, environmental,
and social aspects to realize the concept of sustainable operation. In order to ensure that
suppliers collaborate towards sustainability goals, all suppliers are required to sign the RBA
Vendor Code of Conduct, providing the foundation of a solid partnership. The RBA Vendor
Code of Conduct covers labor rights, anti-discrimination and anti-harassment, occupationalsafety, the environment, and business integrity. We hope that all suppliers and contractors
will work together to ensure the implementation of the RBA Code of Conduct and promote
the welfare of our stakeholders.
In addition, we refer to standards such as ISO 14001 Environmental Management
System and ISO 45001 Occupational Health and Safety Management System, extending
assessment to include environmental protection, safety and health, and management
systems, as well as whether suppliers have adopted policies and conducted due diligenceon the sources and supply chain of tantalum, tin, tungsten, and gold (3TG) in their products.
For details, please refer to section 3.1.3 Conflict Minerals Management.
Since 2017, we have conducted annual environmental and social impact assessmentson new suppliers. Out of the 21 new suppliers added in 2021, one did not meet thestandards of the assessment. This supplier has been identified as having significant actualor potential negative impacts on the environment and society. We have designated it as afocus of observation*2 for the following year. In 2022, we collaborated with 81 raw material
suppliers*1, all of whom underwent environmental and social impact assessments. There
were no suppliers with potential environmental or social impacts, and the sustainability
impact assessments for the 23 new suppliers added were 100% passed.

60About This
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Procurement

Equal
Workplace

Green
Manufacturingand Operation

Sharing Our
Prosperity
with Society

Appendix

3.1 Supply Chain Management▎ Sustainable Impact Assessment Sheet for Suppliers

Enhancing Communication with Suppliers

2020

2021

2022

Percentage of new suppliers assessed forenvironmental standard(%)

100%

100%

100%

Number of suppliers assessed for environmental
standards during reporting period

25

21

23

(A) Number of suppliers identified as having
significant actual or potential negative impacts
on the environment

0

1

0

Number of suppliers in (A) that have improved

0

0

0

Number of suppliers in (A) with whom
collaborative relationship was terminated

0

0

0

Percentage of new suppliers assessed forsocial standard(%)

100%

100%

100%

Number of suppliers assessed for social impact
by social standard during the reporting period

25

21

23

Number of suppliers identified as having
significant actual or potential negative impacts
on the society (B)

0

1

0

Number of suppliers in (B) that have improved

0

1

0

Number of suppliers in (B) with whom
collaborative relationship was terminated

0

0

0

※ Note:1. In 2021, one company was identified as having potential negative environmental andsocial impacts because it did not sign the RBA Vendor Code of Conduct. TSC is actively
communicating with the company and continuously improving its own supply chain's
environmental and social impacts.
2. Suppliers only include suppliers of raw materials and excluded suppliers of equipment andfacility procurement.

In 2022, TSC established a Supply Chain Management Department. This is expected topromote more transparent and effective communication channels starting in 2023, such as
Quarterly Business Review (QBR) meetings, communicating with suppliers regarding QDCST(Quality, Delivery, Cost, Service, Technique) and other projects. In addition, we plan toimplement a scorecard assessment mechanism to examine the practices and performanceof suppliers in various aspects, with the expectation of driving continuous improvement in
the supply chain through brand influence.

▎ Supplier QBR Program Implementation Procedure
HQ Supply Chain
Management Department
總部供應鏈管理部門啟動
initiates annual QBR
年度 QBR 計畫
programInvite key suppliers邀請關鍵供應商and send
scorecards
與寄送評分卡QRA Physical Meeting
QRA 實體會議

Attendance

Environmental and Social Impact
Assessment

Conﬁrm supplierattendance
QBR

Tracking and reviewing
communication
results
追蹤與檢視溝通成果

Writtencommunication

Unable to attend

61About This
ReportSustainable
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Products andServices

Responsible
Procurement

Green
Manufacturingand Operation

Equal
Workplace

Sharing Our
Prosperity
with Society

Appendix

3.1 Supply Chain Management

3.1.3 Conﬂict Mineral Management
Based on corporate social responsibility and the protection of international humanrights, TSC has established the Conflict Minerals Management Regulation and pledged
not to use minerals from conflict areas in our products. Meanwhile, we communicate theconflict minerals management requirements to our suppliers through the Responsible
Minerals Assurance Process (RMAP) and conduct due diligence for the entire supply chain.
In procurement, we encourage suppliers to opt for smelters or refineries that have beencertified by third parties as prohibiting the use of conflict minerals from the Democratic
Republic of Congo or neighboring countries. We require suppliers to sign a "Declarationof Non-Use of Minerals from Conflict Areas" during the supplier assessment process. We
aim to collaborate with suppliers to reduce social and environmental impacts. In addition,
the Company also discloses information about smelters and mineral sources in the supply
chain based on the results of mineral reports filled on the official website, as released by the
Responsible Minerals Initiative (RMI).

▎ Conﬂict Minerals Management Process
Conﬂict Minerals
Management
Regulation• Compliance with
TSC's Conflict
Minerals Policy

Mineral Sourcing
Investigation• Conflict Minerals Reporting
Template (CMRT)• Extended Minerals
Reporting Template(EMRT)

Public Disclosure• Disclosure ofconflict minerals
report on official
website• Conflict Minerals
Commitment LetterConﬂict Minerals Management Policy and Measures
TSC complies with the results of mineral reports issued by the Responsible Minerals
Initiative (RMI) to avoid using metals from conflict areas. TSC explicitly requires suppliers
to abstain from using raw materials, such as 3TG and cobalt, that are mined under illegal
and abusive working conditions like forced labor and abuse of child labor. Additionally, we
encourage suppliers to establish their own minerals management policies and pass themon to the next level of suppliers. In addition, we also encourage suppliers to purchaseminerals from non-conflict smelters certified by the Responsible Minerals Assurance
Process (RMAP) or other independent third-party auditors. This ensures that TSC does notuse minerals from conflict areas in its products.

TSC reassesses the list of smelters used in its products in accordance with the
Conformant Smelters List published on the official RBA website, and surveys suppliers ofconflict minerals through questionnaire audits. In order to understand suppliers' sourcesof minerals, we utilize the RMI Conflict Minerals Reporting Template (CMRT) for the survey,
requiring all suppliers to disclose the sources of their minerals and sign a Declaration of
Non-Use of Minerals from Conflict Areas, guaranteeing that the procurement sources are notfrom conflict areas and comply with requirements of both customers and laws & regulations.
Starting in 2021, the Company has proactively investigated into the sources of cobalt andmica smelters with suppliers, ahead of the updated EMRT 1.1 (Extended Minerals Reporting
Template) by the Organization for Economic Co-operation and Development (OECD) by
the end of 2022, demonstrating our active attention to this issue. We update the CMRT and
EMRT annually and discloses the survey reports on TSC's official website.

Declaration of Non-Use of Minerals from Conﬂict Areas
Through the supplier assessment process, we require suppliers to sign a "Declarationof Non-Use of Minerals from Conflict Areas". The signing rate reached 78% in 2022, with a
total of 63 suppliers completing the signing. TSC aims to fulfill its corporate responsibility
by jointly monitoring with suppliers to eliminate violations of humanitarian-related eventsand create sustainable corporate value. In the future, we expect to increase the signing
rate through continuous promotion.

▎ Signing Status of the Declaration of Non-Use of Minerals from Conﬂict
Areas in Each Site
Site

Number of suppliers
conﬁrmed to have signed

Total number ofsuppliers

Signing rate

Li-Je Site

28

32

88%

I-lan Site

35

49

71%

Total

63

81

78%

▎ Status of Declaration of Non-Use of Minerals from Conﬂict Areas

78%

63 Suppliers Signed the
Declaration of Non-Use of
Minerals from Conflict Areas

62

4

Equal Workplace
4.1 Talent Attraction and Retention
4.2 Healthy Work Environment

63

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ReportSustainable
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Innovative
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4.1 Talent Attraction andand Retention
Retention

4.1 Talent Attraction and Retention

Responsible
Procurement

Classiﬁcation

Employee Manpower Structure

Total Employees 612,
68 foreigners

11.1%

0.16%

68

1

612

Employee Distribution in Taiwan 611,
1 overseas worker

FemaleNumber
Percentage
Numberofof theofPeople Classiﬁcation People

Group Subtotals
and Percentages

Percentage
Numberof theofClassiﬁcation People

Percentageof the Total
Number of
Employees

Under 30
years old(inclusive)

71

60.2%

47

39.8%

118

19.2%

31 to 49 years
old

244

56.4%

189

43.6%

433

70.8%

35

57.4%

26

42.6%

61

10.0%

Management
Position

78

65.0%

42

35.0%

120

19.6%

GeneralPersonnel

272

55.3%

220

44.7%

492

80.4%

Permanent
Employee

350

57.2%

262

42.8%

612

100.0%

Temporary
Employee

0

0.0%

0

0.0%

0

0.0%

Nonguaranteed
Hours
Employee

0

0.0%

0

0.0%

0

0.0%

Full-time
Employee

350

57.2%

262

42.8%

612

100.0%

Part-time
Employee

0

0.0%

0

0.0%

0

0.0%

Total

350

57.2%

262

42.8%

612

100.0%

50 years old
and above(inclusive)

Employee Category▎ Employee Distribution and Percentage of Total Employees (by Nationality
and Work Location)

Age

PositionLevel

All 612 Taiwan-region employees are full-time regular employees (including cleaning
staff), with nearly 20% in management positions. The percentage of female managers is
35%. Due to the nature of the industry, the percentage of male employees is currently slightly
higher than that of female employees, but efforts will be made to continuously increase thepercentage of female managers.

Appendix▎ 2022 Employee Distribution in Taiwan (by Various Indicators)
Male

Talent is an important asset of TSC. The Company's goal is to establish a diverse,
equal, and inclusive friendly workplace, respecting the uniqueness and differences of all
employees. In order to achieve this goal, we recruit and employ talents domestically andinternationally, and ensure that relevant processes are strictly in accordance with laws andregulations. Across our global deployment, TSC provides various employment opportunities
through online and offline recruitment channels with a diversified and inclusive recruitment
policy, regardless of gender, age, race, nationality, religion, political affiliation, or sexual
orientation. As such, the Company's employees across both headquarters and sites comefrom all over the world, including Asia (Taiwan, Japan, the Philippines, Malaysia, India,
Vietnam).

Sharing Our
Prosperity
with Society

4.2 Healthy Work Environment

4.1.1 Diversity and Inclusion

612

Green
Manufacturingand Operation

Equal
Workplace※ Note:1. Management positions include entry-level, mid-level, and senior-level supervisors, with grade
ranging from 2 to 6, 7 to 8, and 9 and above.
2. Employee category is determined per the GRI guidelines.

64Sustainable
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Products andServices

4.1 Talent Attraction andand Retention
Retention▎ Distribution of Management and Non-Management Levels in 2022 (by Age
and Gender)
Management Level

Category

Age

Non-Management Level

Male

FemaleMale

FemaleUnder 30 years old(inclusive)

0

1

71

46

31 to 49 years old

56

34

188

155

50 years old andabove (inclusive)

22

7

13

19

Subtotal

78

42

272

220

Total

120

492

※ Note: The values in the table above refer to the number of people.

Indigenous People

0.8%

0.9%

10 People 1.9%

Based on TSC's assessment, there are several possible reasons for talent loss,
including employees' remuneration considerations, promotion opportunities, opportunities for
future development, and employee benefits. From the perspective of sustainable operations,talent is one of the Company's most significant assets. To reduce talent loss and strengthen
overall human resource management, we will improve the response rate of current employee
surveys in the future, conduct more comprehensive investigations and analysis of reasonsfor departure, and continue to enable each employee to fully unleash their potential.

Under 30
years old(inclusive)

1.0%

0.6%

Age

2022

14 People 2.3%
2020

2021

2022

2020

Appendix

In order to continuously enhance the diversity of the work environment, TSC uses online
channels to recruit talent, including establishing company pages and posting job openings
on platforms such as LinkedIn and 104 Job Bank, This not only helps to expand TSC's
exposure but also promote our job openings to highly matched talents. In 2022, in responseto the Company's long-term development plan and organizational adjustments, various
professional departments and the expansion of existing departments were added, including
Public Relations Department and Supply Chain Management Department. Thus, the numberof employees in 2022 increased by more than 10% compared with 2021.

People with Disabilities

0.9%

Sharing Our
Prosperity
with Society

Diverse Recruitment Channels and Talent Management

Distribution of new employees

7 People 1.5%
2021

Green
Manufacturingand Operation

4.2 Healthy Work Environment

1.3%

2020

Equal
Workplace▎ Distribution of New Employees (by Age and Gender)▎ Employee Distribution (Based on Diversity Indicators)
Total

Responsible
Procurement

2021

2022

※ Note: The percentage represents the ratio of the number of employees in this category to thetotal number of employees.

31 to49
years old
50 years
old andabove(inclusive)

2021

2022

Male

FemaleMale

FemaleMale

FemaleNumber ofPeople

17

11

21

18

52

29

Percentage

22%

13%

17%

15%

28%

16%

Number ofPeople

32

17

52

28

51

39

Percentage

40%

22%

42%

22%

28%

21%

Number ofPeople

2

0

2

2

11

2

Percentage

3%

0%

2%

2%

6%

1%

51

28

75

48

114

70

Subtotal
Total

2020

79

123

184

※ Note: The ratio is calculated on the basis of the number of people / new employee hires forthat year.

65Sustainable
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ReportInnovative
Products andServices

4.1 Talent Attraction andand Retention
Retention▎ Distribution of Employee Turnover (by Age and Gender)
2020

Under 30
years old(inclusive)

Age

31 to 49
years old
50 years
old andabove(inclusive)

2021

2022

FemaleMale

FemaleMale

FemaleNumber ofPeople

26

22

14

12

20

13

Percentage

18%

15%

13%

11%

18%

12%

Number ofPeople

54

33

44

29

38

30

Percentage

38%

23%

40%

27%

35%

27%

Number ofPeople

7

2

8

2

4

4

Percentage

5%

1%

7%

2%

4%

57

66

43

62

87
144

109

Equal
Workplace

Green
Manufacturingand Operation

Sharing Our
Prosperity
with Society

Appendix

4.2 Healthy Work Environment

Remuneration Policy

Male

Subtotal
Total

Responsible
Procurement

109

The salary and benefits of employees in TSC are determined in accordance with theLabor Standards Act (Taiwan) and relevant laws and regulations. They are implemented inaccordance with the company's Articles of Incorporation and relevant management measures
to ensure that the overall remuneration of employees complies with government regulations
and market trends. In addition, a clear employee performance evaluation system is established
to review and optimize the system annually to motivate outstanding talents. Regarding the
distribution of employee rewards, the individual dividend amount to be distributed to each
employee is determined based on their job performance, scope of responsibilities, and special
contributions, in accordance with the Employee Bonus and Stock Ownership Method.

▎ Gender Remuneration Ratio
All

2020

2021

2022

Basic Salary with Remuneration

Female: Male

Female: Male

Female: Male

4%

Assistant Vice President Level

0.37:1

0.42:1

NA*

47

Manager and Assistant Manager
Level

0.18:1

0.30:1

0.37:1

Section Manager Level

1.09:1

0.78:1

0.69:1

General Employees

0.82:1

0.75:1

0.72:1※ Note:1. The ratio is calculated on the basis of the number of people / employee departures for that year.
2. All employees are full-time and permanent.

※ Note:1. The gender remuneration ratio may vary slightly due to factors such as individual performanceand seniority. Remuneration standards at TSC are the same for both male and female and do
not differ by gender. Nevertheless, due to the characteristics of the semiconductor technology
industry in Taiwan, the supply of women in the relevant labor market is significantly lower thanthat of men, resulting in a higher pay ratio for men than for women.
2. There were no female assistant vice presidents in fiscal 2022.

▎ Median Salary of Fulltime Employees in Nonsupervisory Positions

NT$585 thousand
NT$541 thousand
2021

2022
MedianThe median salary of full-time employees in non-supervisory positions in 2022 increased by
NT$44 thousand compared to 2021, with a growth rate of 8.13%.
66

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About This
ReportInnovative
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4.1 Talent Attraction andand Retention
Retention

Responsible
Procurement

Green
Manufacturingand Operation

Equal
Workplace

Sharing Our
Prosperity
with Society

Appendix

4.2 Healthy Work Environment

4.1.2 Human Resource Development

Course Planning Process

Talent Retention

In order to enable employees to leverage their professional expertise and knowledge
skills, TSC places significant emphasis on the planning and implementation of professional
training. This is done to showcase the training effectiveness and relevant applications of
employees' learning outcomes. The main planning process is as follows:

To retain talented employees, we offer equal salaries and diverse benefits, fostering
employee cohesion and supporting sustainable development. The Company regularly
reviews market compensation levels, reward structures, and benefit policies, ensuring
effective communication with employees. This forms the basis for comprehensive salary andbenefit packages, including base salary, allowances, and performance bonuses, to retain
elite talent and support continuous growth.
We maintain a stable promotion system by prioritizing qualified employees and regularly
assessing performance and career development. Adjustments are made based on job
functions and potential. To adapt to industry changes, TSC provides professional skills
training and internal rotation opportunities. Talent development is actively promoted throughinternal training, overseas programs, and succession plans. For employees seeking careertransitions, we collaborate with the Employment Services office to provide relevant job
information.

Regularly review
rewards andbenefits

Ensure effective
communication with
employees

Review employee
career development

Actively promotetalent cultivation

Determine training goals

Assess employees' needs

Design course content

Conﬁrm resources for instruction

Talent Development and Cultivation
TSC attaches great importance to cultivating and developing talents of supervisors andcolleagues at all levels. To meet the needs of the company's development, we conduct anannual company-wide training needs survey to understand the technical skills, professional
knowledge, and leadership and management needs of supervisors and employees. Basedon these needs, corresponding courses are planned and designed in the training curriculum
framework.
The arrangement of training resources is based on the type of training courses, andboth internal and external resources are utilized for planning. Internal trainers with expertisein the field may be selected from within the company, or external experts who possess
the required knowledge may be employed as trainers. For example, we plan to invite
external trainers in 2023 to conduct competency module workshops for middle and seniorlevel supervisors as well as talents with potential. The workshops will use a combinationof the focus workshop approach and the habit theory method to delve into colleagues'
perspectives, viewpoints, and expectations of successful job functions within the company.

Schedule training time andlocation

Implement training courses

Assess training effectiveness67

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Retention

Comprehensive and Diverse Training

Responsible
Procurement▎ Average Training Hours for Each Position Level
2020

2021

2022

Position
Level

Management
Level

Nonmanagement
levelManagement
Level

Nonmanagement
level

Individual
effectivenesstraining

Each department organizes external training courses based on
job-specific skills, such as project management, research anddevelopment expertise, supply chain management, and ESG
studying. In addition, employees can also regularly participate inon-the-job training for environmental protection, quality assurance,
occupational safety and health, and various professional
competencies based on their skill levels, training assessments, orlaws and regulations to lay the foundation for their own job needs
and future development.

Appendix

Nonmanagement
levelManagement skills
training

To improve the management skills of supervisors, promote
effective communication at work, and provide employees with asound workplace, training is not only targeted at newly promoted
supervisors but also provides specialized training according toorganizational needs to assist mid-level managers in enhancing
their leadership abilities. TSC will continue to conduct training
on the management capabilities of supervisors at all levels inaccordance with the Company's mission and operational goals.

Sharing Our
Prosperity
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Level

New employee
training

Green
Manufacturingand Operation

4.2 Healthy Work Environment

TSC offers various training courses to employees of different position level and genders
based on their functional requirements, with the aim of improving their professional expertiseand abilities, enhancing their performance, and supporting their own advancement andcareer growth. In 2022, the average number of training hours per employee was 57.42 hours.

Pre-employment training can effectively aid new employees in
rapidly comprehending the Company's overview, organizational
structure, company regulations, business philosophy, emphasis on
quality, and management policies. In addition to understanding thecompany's policies and systems on the first day of employment,
new employees will undergo training courses on common language(core values, accountability) one to two months after joining thecompany. This enables them to better understand and assimilate
into the corporate culture. All departments will continuously
update the training blueprint for new employees in their respective
departments.

Equal
Workplace

Training
Hours

5,130.00

14,095.50

5,347.00

17,804.50

7,398.00

27,744.50

Numberof People

101

373

109

431

120

492

Average
Training
Hours

50.79

37.79

49.06

41.31

61.65

56.39

▎ Average Training Hours by Gender
2020

2021

2022

Male

FemaleMale

FemaleMale

FemaleTraining
Hours

11,646.26

7,579.24

14,234.14

8,917.36

22,305.50

12,837.00

Numberof People

259

215

299

241

350

262

Average
Training
Hours

44.97

35.25

47.61

37.00

63.73

49.00

68

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Retention

Developing Employee Skills, Building Succession Plans
The succession plan aims to secure the sustainable operation of the company. Throughprofessional training, knowledge transfer, and talent development, outstanding and potential
employees are selected from within the company for cultivation and development. The planestablishes succession plans at various levels and regularly assesses the development andimplementation of the plan, providing potential talents with opportunities to take over future
positions.
During the successor selection stage, TSC's management-level successors mustpossess fundamental skills such as management, decision-making, analysis, and crisis
handling to effectively apply executive power in professional fields. To this end, TSC will
select all-round talents through performance, project execution, and personality traits.
To effectively enhance successors' capabilities, the Company plans to provide training
in areas such as strategic planning, international operations, global marketing, innovation
management, and new economy. The detailed plan is as follows:

Practical Training

Training Program

Job Rotation andProxy System

By executing various project tasks, successors can develop skillsin the three major areas of management knowledge, management
skills, and management leadership, so as to identify insufficiencies
during the process and further deepen both professional andfunctional development.
The Human Resources Department holds key management
professional courses to cultivate and train middle and senior
supervisors, as well as deliver succession planning. The courses
cover various aspects such as management competencies(including strategic thinking, problem identifying and solving,
coordination and planning, project execution, communication
skills, talent leadership and development, and team coordination),
professional skills (including operational market judgment,
accounting, financial analysis, business management, crisis
handling, industry knowledge, and international market
perspectives), and personal development.

Combining job rotation training and the proxy system allows forthe development of versatile and comprehensive leadershipmanagement and decision-making execution capabilities forkey management levels, and ensures excellent organizational
development and company operations.

Responsible
Procurement

Equal
Workplace

Green
Manufacturingand Operation

Sharing Our
Prosperity
with Society

Appendix

4.2 Healthy Work Environment

Continuous Improvement of Employee Performance
Management Mechanism
Reshaping Performance Management Mechanism
To effectively measure the correlation between employee performance andcompany goals, TSC held a performance goal-setting workshop in 2022. The aim was tointegrate the principles of performance goal-setting into the performance management
system. Through active collaborative learning and the establishment of stringent
selection criteria, potential internal certified trainers were selected. Before the year-end
performance evaluation, these internal trainers taught the principles of goal setting. In the
fourth quarter, employees applied the principles to set their key performance indicatorsfor 2023. Supervisors then discussed work goals that align with these principles with
their team members.

SMART Workshop for Performance Management
The SMART workshop was held in the third quarter of 2022, inviting professional
speakers to conduct multiple courses. The overall participation rate was 98.3%. The
speakers presented clear and easily understandable concepts regarding performancegoal-setting principles, using lively and engaging activities. This helped employees
grasp the process and principles of setting performance goals and connecting theCompany's vision and operational plans, departmental goals, and individual employee
work goals, gradually establishing key performance indicators.

SMART Internal Trainer Certiﬁcation
TSC also had all indirect personnel in Taipei and I-lan undergo training, facilitatedby the HR team and rigorously assessed by the lecturer group, from which excellent
employees with potential were selected as internal certified lecturers. Through thisprogram, colleagues shared valuable feedback, furthered their personal development,
and met the certification standards while achieving individual goals. In addition toabsorbing the aforementioned knowledge, the internal training lecturers also embody
the spirit of course teaching and continuous improvement. Several certified lecturers
will subsequently hold multi-level courses to guide all grassroots personnel and newcolleagues. In 2022, we accumulated knowledge and training energy regarding
performance goal-setting principles, and a number of certified instructors were selectedfrom various units. In addition, in order to demonstrate appreciation and encouragement
the ongoing dedication of lecturers to the Company's training and improvement ofinternal teaching quality, with the support and participation of senior supervisors, anaccreditation recognition event for the certified lecturer group was conducted during the
All-Hands Meeting in the first half of 2023.

69

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Retention

Responsible
Procurement

Equal
Workplace

Green
Manufacturingand Operation

Sharing Our
Prosperity
with Society

Appendix

4.2 Healthy Work Environment

Establishing a New Performance Management Mechanism

Constructing Competency Module

In 2022, when establishing the assessment criteria for the upcoming fiscal year,
we adopted a new performance management system incorporating the principles of
performance goal-setting. This system enabled supervisors and employees to effectively
communicate attainable goals using definite and measurable indicators, facilitating
positive interactions and improving past practices.

To promote operational goals and establish clear and measurable competency
standards for employees, TSC has invited professional instructors to hold workshops focusedon competency construction. The Company aims to construct a unique competency module
by leveraging competency inertia, fostering consensus among employees and aligning themwith future operational goals. We also hope to establish a standardized reference that canguide future performance appraisal, promotion selections, training and development, andrecruitment as we implement our plan.

Based on the principles of performance goal setting, TSC has implemented a new
performance appraisal system. Different percentages of key performance indicators
have been set for different job levels. In addition to the regular annual performanceappraisal, supervisors can communicate implementation progress through the principles
of performance goal-setting and interact with employees during the mid-year to guide
expectations for tasks and provide care for employees. This enhances transparency
in performance evaluation, with a focus on improving individual and organizational
performance.
TSC provides all employees with reliable support tools and standards to set future
annual performance goals by reshaping the principles of performance goal-setting andconducting regular employee career development review, furthering the direction of thebusiness plan and helping staff gradually grow alongside the Company.

Percentage of Employees Undergoing Performance and Career Development Review
2020
Male

FemaleTotal

Review
Percentage

Management Level

66

35

101

100%

Non-management level

193

180

373

100%

To align with our mission, vision, business philosophy, values, and operational growthgoals and strategies, we invite consultants to design interview frameworks and questions,and then invites middle and senior-level supervisors, as well as talents with potential, toparticipate in focus workshops facilitated by the consultants and integrating the habit theory
approach. The purpose of these is to collect employees' insights, opinions, and anticipations
regarding competencies for corporate success. The qualitative findings from these
explorations are documented and used as a draft record.
We also organized a survey to explore the successful competency topics across theorganization, with the goal of surveying key talent. Subsequently, qualitative research andquantitative statistical results will be integrated to extract the concepts and frameworkof functions. From this, we will establish the behavioral levels of corporate functions.
Finally, it will be further focused on by senior supervisors to confirm that the content of
the competency framework and behavioral levels align with the Company's development
direction and expectations.
The competency module is mainly divided into two major: Core Competency andLeadership Competency. Each competency includes various items and levels of behavior toestablish definitive behavioral indicators. Based on our development strategy, culture, andmanagement needs, we have used scientific analysis tools and rational thinking to bring
together the Company's mission, vision, business philosophy, values, and goal strategies.

2021
Management Level

71

38

109

100%

Non-management level

228

203

431

100%

2022
Management Level

78

42

120

100%

Non-management level

272

220

492

100%

Core Competency

Leadership Competency

Accountability

Strategic Planning

Teamwork

Organizational Leadership

Pursuit of Excellence70About This
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Retention

Responsible
Procurement

Equal
Workplace

Green
Manufacturingand Operation

Sharing Our
Prosperity
with Society

Appendix

4.2 Healthy Work Environment

Management Outlook and Future Plans
Talent is the driving force of sustainability, and in the aspect of talent cultivation, TSC's prospects and plans are as follows:

We plan to enhance the professional capabilitiesof our employees. In 2022, we introduced a
dedicated HR team to reviewed our existing
training strategy. The HR team established acustomized learning and development programfor our employees to align with the company's
strategic development. The education and training
system will be planned around core functions,management functions, professional abilities, andgeneral education training.

We plan to promote a comprehensive competency
framework and invite professional consultants to
conduct workshops. These workshops will coverdefining "competency" and communicating theoverall competency framework and content of TSC.
Our emphasis is on the core functions serving as
the main motivating factor, targeting middle andsenior supervisors and indirect personnel locatedin Taipei and I-lan. In addition, the plan integrates
the concept of competency into performanceappraisal, promotion selection, training anddevelopment, recruitment and talent selection, andinternal activities, allowing employees to internalize
it diversely and coherently.

▲ Through the training of external instructors, the course aims to gradually establish key
performance indicators in order to reshape performance goal-setting principles.

To consider the promotion of efficient workers toteam leaders, we hope to build an understandingo f t h e ro l e o f s u p e r v i s o r s , s t re n g t h e n t h e
c o m m u n i c a t i o n s k i l l s o f c u r re n t a n d n e w
supervisors, clearly convey instructions, andbuild team consensus in order to effectively
communicate and collaborate within the team.
Therefore, a training program on communicationand collaboration for junior and middle-levelsupervisors will be held.

To improve work efficiency in TSC, we aim to
optimize the onboarding process. This will
reduce the time and effort costs for both new
employees and management, enabling quicker
task assignment for new hires, making new
employees feel valued and part of the Company's
culture and team, and ensuring that all details of
the onboarding process are handled properly. The
optimized process can be carried out digitally to
reduce risks and costs.

▲ Employees actively engage in class activities, demonstrating the high level of participation andengagement.

71About This
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Responsible
Procurement

Equal
Workplace

Green
Manufacturingand Operation

Sharing Our
Prosperity
with Society

Appendix

4.2 Healthy Work Environment

4.2 Healthy Work Environment
4.2.1 Employee Health and Beneﬁts

Total

Male

Female

Total

Male

FemaleTotal

Childcare Policy

26

17

43

28

14

42

23

13

36

Actual Number of Employees
who Applied for Parental
Leave in the Year (B)

1

4

5

2

1

3

1

4

5

Application Rate (B / A)

4%

24%

12%

7%

7%

7%

4%

31%

14%

Number of Employees
who have Taken Parental
Leave and are Eligible for
Reinstatement in the Year (C)

1

2

3

2

3

5

0

2

2

• Allow employees to take unpaid parental leave, maternity leave, prenatal
check-up leave, and paternity leave in accordance with the Act of Gender
Equality and Regulations for Implementing Unpaid Parental Leave forChild-rearing.

Actual Number of Employees
who Applied for Reinstatementin the Year (D)

1

2

3

2

1

3

0

2

2

• Enable employees to apply for parental leave or adjust their working hours
to balance work and family responsibilities.

Reinstatement Rate (D / C)

33%

60%

0%

• Employee labor insurance and National Health Insurance• Include term life insurance, accident medical insurance, hospitalization
medical insurance etc. (employees' dependents are eligible to participate
in the insurance coverage)• In accordance with the Shareholders' Meetings By-laws and Shareholders'
Agreement, employees are entitled to a company incentive subsidy of
30%, which is designed to encourage all colleagues to play active roles inbusiness operations and strive for outstanding performance.

• Offer various employee benefits, including childcare subsidies andeducation incentives.
• Provide a birth subsidy for each newborn as a congratulatory gesture.
Unpaid Parental
Leave

2022

FemaleEmployee Stock
Ownership Trust

2021

Number of Employees Eligible
to Apply for Parental Leave in
the Year (A)Employee Care
Employee Group
Insurance

2020
Male

Employees' well-being and overall health are crucial aspects of the company's
sustainable operation. By offering comprehensive benefit plans, flexible childcare policies,
and a range of health promotion initiatives, TSC is able to attract and retain exceptional
talent. This not only increases employee satisfaction and work efficiency, but also ensuresthe company's stable growth and long-term competitiveness.

▎ Employee Unpaid Parental Leave• In 2022, five colleagues in Taiwan applied for unpaid leave. The
reemployment rate in 2022 has increased to 100%, compared to the 60%
rate in 2021. We also monitor the employment status of colleagues who
have returned to work. In 2021 and 2022, 100% of colleagues who took
unpaid parental leave and returned to work served for more than one year,
regardless of gender.

100% 100% 100% 100%

100% 100%

Number of Employees
Reinstated in the Previous
Year (E)

0

6

6

1

2

3

2

1

3

Number of Employees
Remaining One Year After
Reinstatement in the Previous
Year (F)

0

4

4

1

2

3

2

1

3

Retention Rate (F / E)

0%

67%

67%

100% 100% 100% 100% 100% 100%72

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Responsible
Procurement

Equal
Workplace

Green
Manufacturingand Operation

Sharing Our
Prosperity
with Society

Appendix

4.2 Healthy Work Environment

Retirement Plan
TSC has implemented a retirement pension system toensure the well-being of employees after they retire. Thissystem is designed in accordance with the law, including
the retirement procedures outlined in the Labor Standards
Act and the defined contribution plan specified by the
Labor Pension Act. Additionally, the Labor Retirement
Reserve Supervisory Committee has been established.
Since July 1, 2005, TSC has been allocating 6% of theretirement pension to employees' Individual Labor Pension
Accounts monthly, as regulations require. If employees
choose to make voluntary contributions to their retirement
pension, the contribution will be deducted from theirmonthly salary and transferred to their Individual Labor
Pension Accounts at the Bureau of Labor Insurance, basedon the voluntary contribution rate. Employees can selecteither the relevant pension provisions of the previous
or new retirement system, while maintaining their workseniority before implementing these regulations. For the
fiscal year 2022, TSC has fully allocated retirement pension
expenses of NT$17,841 thousand to the Bureau of Labor
Insurance, in accordance with the retirement pension
allocation method.

Incentive System and Employee Beneﬁts
To foster a positive learning corporate culture, TSC publicly acknowledges senior employees and exemplary staff,
commending their contributions, service, and exceptional performance, thereby setting a positive example for theircolleagues. In terms of benefits, TSC not only grants holiday bonuses to all employees, but the Employee Benefit Committee
also plans a range of benefits each year. These include cash gifts for childbirth, scholarships for employees' children's
education, cash gifts for marriages, birthday cash gifts, condolence funds for illness or death, as well as other subsidies
and gifts. These initiatives aim to promote a healthy work-life balance for employees. Additionally, the Employee Welfare
Committee organizes various activities, such as festive events and year-end parties, to express gratitude for the efforts of all
employees.

Our benefit plan is in accordance with the Labor
Standards Act. The retirement pension for employees isdetermined by their years of service and the average salaryin the six months before retirement. Qualified actuaries
annually calculate and allocate funds to the Workers'
Retirement Reserve Funds Account at the Bank of Taiwan
to ensure employee retirement benefits. As of the end of2022, the Workers' Retirement Reserve Funds Accountbalance at the Bank of Taiwan is NT$41,587 thousand.
The retirement fund, as stipulated by the Labor Standards
Act, is managed by the Bureau of Labor Funds, Ministry ofLabor, and its utilization is governed by the Regulations for
Revenues, Expenditures, Safeguard, and Utilization of theLabor Retirement Fund. The minimum annual return on thesettlement and distribution of the fund must not be lower
than the return based on the interest rate of a two-year
fixed deposit in a local bank.

73

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Workplace

Green
Manufacturingand Operation

Sharing Our
Prosperity
with Society

Appendix

4.2 Healthy Work Environment▎ 2022 Incentive System and Beneﬁt Expenditure
Item

Frequency

Highlights

Once a year

The company distributes annual holiday bonuses to express blessings and gratitude, motivate employees towork actively, and enhance overall performance.

Mid-Autumn Festival
Dragon Boat Festival
Labor Day
Subsidies for Marriage, Funerals, andFestivals - Cash Gifts for Childbirths
Subsidies for Marriage, Funerals, andFestivals - Cash Gifts for Marriages
Festivals

Subsidies for Marriage, Funerals, andFestivals - Condolence Money for
Bereavements

Number of Applicants Approved

The company has an Employee Welfare Committee that organizes a range of benefits and activities
annually. In 2022, the committee primarily allocated its benefit funds towards cash gifts for occasions suchas childbirth, marriage, birthdays, as well as providing condolence money for instances of illness, injury, andbereavement.

Subsidies for Marriage, Funerals, andFestivals - Condolence Money for Injury
or Illness
Other (Birthdays)
Childbirth Subsidy - Parental Subsidy

Number of Applicants Approved

TSC has implemented a range of benefits and subsidies for employee childbirth. These initiatives aim tosupport employees in achieving a balance between their professional growth and family responsibilities. In
2022, We provided childcare subsidies to 78 employees and educational incentives to 110 employees.

Planned by the Benefits
Committee, multiple times per
year

In 2022, due to the COVID-19 pandemic, numerous routine welfare activities organized by the Welfare
Committee have been canceled in adherence to the government's epidemic prevention policy. Nevertheless,as a gesture of gratitude towards our colleagues, we have distributed gift vouchers instead, encouraging
them to plan their own holiday itineraries.

Exemplary Employee

Based on annual planning,
multiple times per year

At the TSC online year-end party in 2022, eligible senior employees were presented with certificates andgold coins. Each unit recommended exemplary employees, who were then selected by senior executives
to receive a cash prize and a certificate. The company's intranet also published the list of exemplary
employees, promoting a culture of positive role modeling among the staff.

Physical Examinations

Once a year

TSC partners with a team of medical professionals to ensure the well-being of its employees. The Company
goes beyond legal requirements by offering regular physical examinations to its staff. In 2022, a total of 490
physical examinations were conducted, surpassing 80% of the workforce.

Work from Home

Number of Applicants Approved

During the pandemic, employees could apply for remote work.

Christmas Cookie Delivery

Form and frequency of activities
determined according to festivals.

In 2022, senior executives from each district dressed up as Santa Claus to show appreciation for theircolleagues' efforts. They distributed small, warm gifts, creating delightful memories for the employees.

Online Year-End Party

Form of year-end banquet
determined according to annual
planning.

In 2022, TSC hosted its year-end banquet online and distributed year-end cookies as part of our pandemic
prevention policies. We are pleased to report that the participation rate for 2022 was 100%.

Childbirth Subsidy - Educational Benefits

MeetupsSenior Employees

Employee-related

Once a year74

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Manufacturingand Operation

Sharing Our
Prosperity
with Society

Appendix

4.2 Healthy Work Environment

Promotion of Physical and Mental Health andWork-life Balance
Health Promotion Resources and Activities
We partner with professional medical teams to conduct regular physicalexaminations for employees at our headquarters and various sites. Our healthmanagement program goes beyond legal requirements in terms of examination
duration and available resources, showcasing our unwavering dedication toemployee well-being.

HealthPromotion
Activities• Organize a sports competition (basketball shooting contest) to encourage employees toparticipate in sports, connecting and sharing joy with each other.

Active Prevention of Pandemic

2022 Workplace• Health
Promotion
In 2 022,
a t ot al of Results:
490 indiv idua l s u n d e r w e n t h e a l t hconsultations and interviews as part of our regular on-site
medical services. The examination rate reached 80%.

HealthService• Post health education posters (hand-washing; healthy eating;smoking, betel nut, and alcohol cessation; sexual harassment
prevention).
• Annual health lecture is held regularly.
• Work Overload Prevention: Arrange appropriate medical
services, manage working hours, conduct interviews, andprovide care. All subjects requiring health monitoring arescheduled for face-to-face interviews during regular on-site
medical services, ensuring a tracking rate of 100%.

HealthProtection
Plan• Prevention of Ergonomic Hazards: Gain an understanding of thecondition and causes of muscle injuries, and make necessary
adjustments to work.

During the pandemic, we have implemented measures to prioritize the health andwell-being of our employees. This includes allowing flexible working hours andthe option to work remotely. Additionally, we have been actively communicating
pandemic prevention and control information to keep our employees informed andensure a safe work and living environment.

In 2022, as a result of the COVID-19 pandemic, certain activities have been
modified to distribute gift vouchers as a token of appreciation to employees for theircooperation with the epidemic prevention measures, in line with the government's
proactive policy. Additionally, employees are encouraged to take advantage ofthese benefits to plan their own holiday trips, thereby promoting their overall healthand well-being.

• Maternal Health Protection: Assisting pregnant women in
conducting physical and mental assessments, evaluating theirwork environment, and making necessary adjustments to theirwork if needed.
• By distributing health questionnaires to survey the physical andmental conditions of employees within the company, achieving
a 100% response rate, and conducting annual regular follow-up
management by on-site medical personnel in each region, we
have ensured comprehensive monitoring of employee health.
• General Physical Examinations: Arrange for employees fromall sites to participate in physical examinations, surpassing
regulatory requirements.

PhysicalExaminations• Health Tracking Management: Professional evaluation of healthtracking proficiency by on-site medical staff in every district. For
those in need of further health tracking, all of them have had-face-to-face interviews arranged during regular on-site medical
services, achieving a tracking rate of 100%.

▲ On-site physician, caring for
employee health▲ Physical examinations,
implementing occupational
disease prevention▲ Warm Christmas Gift Giving

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4.2 Healthy Work Environment

Highlight Story

2022 Healthy Weight Loss Competition

Brilliant Results Across the Board

To enhance the physical and mental well-being of our employees, we haveinitiated the "2022 Healthy Weight Loss Competition." This competition serves as acatalyst for fostering a consistent exercise routine among our staff. Spanning threemonths, the weight loss competition signifies a new chapter in sports at TSC. Its
primary objective is to decrease body fat percentage, and both individuals and teams
are encouraged to partake. Cash prizes and commendations were awarded to thewinners in both the individual and team categories. Furthermore, each participant waspresented with a custom-designed sports towel, promoting camaraderie in exercising
together or capturing moments while on the move.

The weight loss competition serves multiple purposes for employees. It encourages them
to focus on their own physical well-being, improve their fitness levels, and adopt healthy eatingand exercise routines. Additionally, it boosts their self-confidence, expands their social network,and strengthens their relationships, while providing psychological relief from stress and garnering
enthusiastic responses from employees. Following numerous invitations, a total of 174 colleagues
formed 58 groups to participate in this event.

"Feel free to eat, be happy and slim; Easily lose
weight, and never regain."
We will organize health and diet lectures, inviting professional nutritionists
to share theories and experiences of healthy weight loss with all colleagues in thecompany. The lectures will cover topics such as correct dietary habits, increasing
basal metabolism, lowering blood sugar, and avoiding dietary imbalances. We will also
customize the content for office workers, providing information on obtaining healthy
meals and exercise options that fit their lifestyles. This will help them cultivate good
dietary habits and establish exercise plans.
Participants establish individual and team weight loss objectives, measurement
criteria, timelines, and implementation strategies, including:
1. Controlling calorie intake; choosing low-fat, low-sugar foods; and increasing
consumption of vegetables, fruits, and high-quality proteins.
2. Developing a weekly exercise plan that includes a variety of activities, such as
running, swimming, cycling, yoga, and more, selecting the exercise method andschedule that best fits your needs.

After three months of perseverance and determination, we successfully reduced body fat by
a total of 274.5%. This weight loss not only improved overall health, but also promoted a healthierlifestyle.

Measurement Stage

Cumulative Fat Loss Percentage

1st Month-138.30%

2nd Month-223.30%

3rd Month-274.50%

Follow-up: Healthy Living as Part of Sustainability
The Company's plan involves promoting healthy lifestyles and dietary habits among
employees, while also providing them with relevant knowledge and information. Additionally, we will
reintroduce the public group weight loss goal. Employees can share their successful experiences,
problems, and suggestions through various social media platforms, discussion forums, and online
chats. We aim to foster long-term effects and interactive communication, even after the competition
concludes, to make health an integral part of life.

3. Regularly measuring indicators such as weight, body fat, muscle mass, etc.,
analyzing progress, and tracking goal achievement.
4. Selecting a sport or challenge, such as daily step goals or weekly long-distanceruns, and progressively elevating the exercise intensity while incorporating
additional challenges.
5. Encouraging and sharing accomplishments with colleagues to foster a collaborativeenvironment and strengthen team unity.
Despite the pandemic's impact in 2022, colleagues have made efforts tominimize visits to enclosed spaces like gyms. However, this has not impeded theCompany's dedication to promoting a healthy lifestyle. TSC has capitalized on thissituation to encourage employees to exercise in more suitable environments, suchas running in expansive parks or playgrounds, and conducting bodyweight strength
training at home. This demonstrates the flexibility and diversity of a healthy lifestyle.

▲ TSC Sports Towel
encourages employees
to travel and exercise
together.

▲ 2022 Healthy Weight
Loss Competition - Most
Popular Award▲ 2022 Healthy Weight Loss
Competition - Participation
by Independently Organized
Teams

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4.2 Healthy Work Environment

4.2.2 Labor Relations and Human Rights Management
Management and Promotion of Human Rights Policy
TSC places great importance on labor and human rights, adhering to the principles of anti-discrimination and anti-harassment. To ensure this, we have implemented the "Prevention of
Sexual Harassment"and "Prevention of Workplace Unlawful Infringement"policies. Additionally, we have established a clear complaint channel and a system of rewards and punishments. TSCaligns with international human rights standards, including the Responsible Business Alliance (RBA) Code of Conduct, the Universal Declaration of Human Rights, and domestic laws andregulations. Moving forward, we will continue to provide relevant education and training on human rights protection for our employees and publicly disclose information in prominent areas within
the workplace.

▎ Human Rights Management Measures
Goal

Actions Taken

Performance• RBA policy explicitly forbids child labor, the exploitation of children, physical punishment, the abuse of
women, forced labor, and other forms of mistreatment.
• The employment of individuals under the age of 15 is prohibited, as outlined in the Rules of Work.
Effectively Eliminate Child Labor• Age verification (identification) is conducted during the recruitment process to prevent the employment of
individuals who may be under 18 years old, in order to ensure compliance with child labor regulations.
• In accordance with RBA regulations, we have established the Regulations on the Protection and Managementof Child and Adolescent Workers to prevent and safeguard underage workers (aged 16-18) who willingly
choose to be employed.

In the past three years, there were no
incidents of using child labor or young
workers in TSC.*1• The Company does not require employees to submit their personal identification documents for safekeeping.
Eliminate All Forms of Forced orCompulsory Labor• In accordance with the RBA guidelines, we have implemented Rules of Work as well as clear resignationand suspension of salary and resignation policies to ensure freedom of choice in employment and working
hours. Our employees have the freedom to resign and have the flexibility to arrange their non-working hours,
thereby eliminating any instances of forced labor or debt labor.

In the past three years, there were no
incidents of forced or compulsory labor in
TSC.

• TSC requires new employees to sign a Code of Ethical Conduct document.
Prevent the Occurrence ofDiscrimination• Establish and promote internal training for TSC Ethical Corporate Management Best Practice Principles andthe TSC Code of Ethical Conduct.
• Ensure equal rights for employees of different races, genders, religions, nationalities, or other identities, andsafeguard them from any form of infringement.

I n t h e p a s t t h re e y e a r s , t h e re w e reno incidents of discrimination or antidiscrimination incidents in TSC.

Prevent Infringement of theRights of Indigenous People• In accordance with the work regulations, a one-day holiday is granted for the seasonal festivals of the
fourteen indigenous tribes.

In the past three years, there have been
no incidents involving infringement ofindigenous rights in TSC.

The Eradication of Slavery and
Human Trafﬁcking• TSC has filled out the Slavery & Trafficking Risk Template (STRT) and published it on the official website.

In the past three years, there were no
incidents of the use of slavery and humantrafficking in TSC.

Note*1: The scope includes all operations and suppliers in TSC.

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4.2 Healthy Work Environment

Communication and Grievance Channels

Real-time Announcement

Two-way Communication• Intranet - The latest
Company news isreleased from time to time.

• Employee Improvement Proposal
E-mailbox / Care Mailbox - Collecting
employees' suggestions to provide
responses.

• Email Notification Announcement ofcompany regulations anddelivery of messages
from senior executives to
employees.
• Bulletin Board - Providing
information on laborrelated policies, healthand safety, and event
updates.

2022 All-Hands Meeting
Highlight Story

We place significant emphasis on employee relations andhaveestablished a variety of effective and open channels ofcommunication with employees. It actively encourages employees toreport any illegal behavior or file complaints if their rights and interests
are compromised. To ensure smooth communication, the company
has implemented work rules and complaint procedures, and regularly
shares information on the company's intranet. This facilitates the efficienttransmission and response to colleagues' feedback. From 2020 to 2022,
no grievances were received from colleagues.

In 2022, TSC conducted an inaugural all-hands meeting, which saw a turnout of 612
employees. The purpose of the meeting was to present a comprehensive overview of theshared objectives to be accomplished over the next three years, as well as the long-term
projects outlined in the company's plan.
At the meeting, we delivered the company's goals and related projects, providing
employees with real-time insight into the company's dynamics. This also facilitated thecommunication of long-term plans and progress to employees, as well as discussions on
directions for further improvement. In 2023, TSC intends to initiate the annual Employee
Opinion Survey to gain a comprehensive understanding of colleagues' work experience,
thoughts, and concerns. In addition, since 2022, TSC has been conducting bi-monthly
cross-departmental supervisors meetings to facilitate interdepartmental communication.
Through the participation of all employees in an all-hands meeting, we have gained
a better understanding of the company's long-term project. This has fostered a sharedgoal and mission, strengthening our sense of identification and cohesion with Taiwan
Semiconductor.

• Employee Grievance Email box- Dedicated grievance mailbox
Tsgrumble@ts.com.tw• Service / Grievance Hotline- Dedicated grievance filingtelephone line (Human Resources
Department telephone for each site)• Labor-Management Meetings Quarterly communication with
employee representatives.

2022 Labor-Management Meeting
Communication Topics and Frequency
TSC holds quarterly labor-management meetings to discuss
employee benefits and attendance issues. In 2022, a total of four issues
were discussed, including the flexible reduction of employee stock trust
amounts, flexible working hours, changes to the minimum unit for paid
leave application, and annual maintenance. After the labor-management
meeting, it was unanimously agreed to schedule the annual maintenanceby using paid leave, make-up leave, or shift changes.

▲

Annual all-hands meeting held by TSC.

▲ The employees actively
participated in the all-hands
meeting and engaged with the
speaker.

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4.2 Healthy Work Environment

4.2.3 Workplace Safety Management

Establishing a Complete Occupational Safety Management System

We acknowledge the importance of establishing a safe and healthy workplace environment
for sustainable operations. To effectively improve the management of the workplaceenvironment, we have implemented various measures. These include the Safety and HealthWork Rules, Emergency Incident Handling Procedures, Emergency Response Procedures, aswell as operating procedures for air pollution, wastewater, waste, noise, radiation, greenhousegas, and other related operations. The objective of these measures is to minimize potential
harm to employees and the environment during emergency situations.

The safety management framework at the I-lan Site and the Li-Je Site adheres to the
ISO 45001 Occupational Health and Safety Management System. Both sites have achieved
a 100% coverage rate, which has been verified. The internal environmental safety personnel
are responsible for operating the system, following the "Plan-Do-Check-Action"framework.
In addition to implementing automatic inspection plans, the Occupational Health and Safety
Management Committee oversees and continuously improves the system on a quarterly
basis. Furthermore, all employees, outsourced personnel, contractors, and visitors to thefactory must comply with the company's relevant regulations and requirements to ensure
the effectiveness and consistency of the system and to achieve the company's occupational
health and safety policies and objectives.

We offer comprehensive occupational safety and health education and training programsfor both new and current employees. This includes on-the-job training in occupational safety
and health, fire evacuation drills, safety lectures, earthquake drills, respiratory protection
education and training, safety protection training, AED+CPR basic first aid training, healtheducation lectures, and emergency response measures. These diverse courses aim to establish
a secure working environment. Furthermore, the company arranges for professional medical
institutions to conduct annual individual health examinations for employees. Simultaneously,
health promotion handbooks are provided to enhance employee health awareness.

Risk Identiﬁcation and Management Objectives
Ensuring zero accidents is our highest priority. To address occupational safety andhealth concerns, we conduct risk assessments and implement management policies
tailored to each site's characteristics. The I-lan Site, which focuses on assembly and testing,regularly identifies both positive opportunities and negative impacts on occupational safety
and health on an annual basis. Whenever there are changes in the situation, we promptly
identify and implement control measures. To mitigate environmental safety risks and reduce
unnecessary wastewater treatment processes and personnel risks, the I-lan Site has been
carrying out a wastewater treatment simplification project since 2022. As part of this project,
we plan to convert the wastewater storage tank to an above-ground barrel tank. For moredetailed information on wastewater management, please refer to section 5.2.2.
The Li-Je Site specializes in wafer manufacturing and is committed to identifying andaddressing occupational safety and health risks through its Occupational Safety and HealthManagement System. In 2022, several safety and health impacts were identified in the
manufacturing process, including the use of organic solvents, acidic and alkaline chemicals,
as well as risks associated with pipeline transportation, forklift handling, and the installationof high-pressure gas tanks. To address these concerns, the Li-Je Site has implemented
safety operating standards, conducts regular hazard identification and risk assessments,
ensures compliance with regulations, and stays updated on regulatory changes. Any
identified unacceptable risks or non-compliance with regulations prompt the formulationof improvement measures or projects, which are then implemented and evaluated for
effectiveness to ensure risks are reduced to an acceptable level or meet standards.
Li-Je Site prioritizes safety and health management by implementing a range ofmeasures aimed at achieving zero occupational accidents and zero occupational diseases,
going beyond regulatory requirements. To oversee these efforts, Li-Je Site has established
the Occupational Safety Department, a dedicated first-level unit responsible for formulating,planning, supervising, and promoting safety and health management initiatives. The
effectiveness of the management system is ensured through annual internal cross-unit
audits, external audits, and verification processes.
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4.2 Healthy Work Environment

Risk Assessment and Management Procedures
We believe that the probability of risk occurrence can be reduced through preventive measures and effective management. To achieve this, we conduct regular hazard identification
and updates risk assessments. Corresponding operating procedures and methods are formulated for different aspects, and graded control is implemented for safety and health projects.
Additionally, measures are taken to improve unacceptable risks. We also establish procedures for contract management, procurement management, change management, and inspection
management to conduct non-routine hazard risk assessments and identification.

Contract Management

Change Management

To enhance contractor safety
management, ensure the quality of theirwork, and maintain safety and hygiene
during construction, TSC has
implemented the Contractor
Management Measures. These
measures encompass various actions,such as establishing agreements, issuing
hazard notifications prior to construction,
inspecting machinery and equipment,
verifying personnel qualifications for site
access, assigning dedicated supervisors,
conducting on-site safety inspections,and implementing control measures forhigh-risk operations like hot work, lifting,scaffolding, and confined spaces.
Application forms for these operations
are utilized and reviewed to upholdconstruction safety standards.

TSC has implemented change
management procedures to address
personnel, machinery and equipment,
raw materials, construction methods, andoperating environments. For instance,
modifications to the engineering design
or configuration of machines canpotentially pose safety and health risks.
To mitigate these risks, TSC conducts
thorough risk assessments, provides
necessary training, updates relevant
information, and performs safety
confirmations prior to implementing any
changes.

Risk Assessment andManagement Procedures

Procurement Management

Inspection Management

TSC conducts risk and quality
assessments during the procurement
stage for new chemicals, raw materials,
protective equipment, or construction
priojects. Safety confirmation is thenimplemented prior to adoption.

Regular inspections are conducted in the
TSC factory area. These inspections help
us identify abnormalities and potential
hazards by detecting operational safety
observations. This allows us to effectively
reduce and control risks.

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4.2 Healthy Work Environment

Occupational Injuries and Occupational Safety Incidents
Both sites conduct hazard identification and risk assessment according to the production procedure. They mitigate risk by implementing hazard controls and establishing management
projects. The management system encompasses all factory workers, including employees, outsourced personnel, contractors, and visitors. They adhere to the procedures and operating
methods outlined in the ISO 45001 Occupational Health and Safety Management System to create various procedural documents.
The Company has established and follows a procedure for handling injuries and illnesses. In the event of a safety and health incident that causes harm to personnel, prompt contingency
measures are taken in accordance with company regulations and legal requirements. These measures include providing medical assistance to affected personnel, internally reporting to thesafety and health department and senior supervisors, and externally reporting to the relevant authorities. A thorough investigation is initiated for each safety and health incident, and a review
is conducted on various aspects such as elimination and substitution, engineering improvements, education and training, personal protective equipment, administrative management, andsupervision and control. The aim of this review is to reduce the impact of accidents and prevent the recurrence of incidents. From 2020 to 2022, the I-lan Site had no occupational injuries anddid not incur significant financial losses due to major violations of employee health and safety. However, the Li-Je Site experienced a minor injury incident in August 2021, which did not qualify
as a major occupational accident in terms of safety and health. The financial loss resulting from administrative penalties amounted to NT$60,000.
Comprehensive Analysis of Occupational Hazards:• Chemical Exposure: Long-term exposure to organic solvents and acidic or alkaline chemicals can potentially harm employees' respiratory system, nervous system, and skin. TSC
thoroughly evaluates the risks, quantities used, and measures taken to control exposure for each chemical.
• High-Pressure Gases and Corrosive Gases: Leaking high-pressure gases can present a potential health risk to our employees. As a result, TSC conducts risk assessments to evaluate theuse and storage of gases. This includes the implementation of leak detection and emission control systems.
• Transportation and Handling of Dangerous Goods: Operations such as pipeline transportation and forklift handling pose significant hazards. TSC conducts evaluations of transportation
procedures and warehouse equipment to ensure compliance with safety standards.
• Emergency Incidents and Disasters: Emergency incidents, such as fires or chemical leaks, may occur in the factory. TSC analyzes the implementation and effectiveness of emergency
response plans, alarm systems, evacuation routes, and employee training.
• High and Low Temperatures: The manufacturing procedure may expose employees to extreme temperatures, which can result in burns, heatstroke, or cold damage. TSC evaluatestemperature control measures, protective equipment, and employee training.
• Psychological Stress: The intense competition and fast-paced nature of the work environment can potentially have a detrimental effect on the mental well-being of employees. To address
this concern, TSC has implemented work stress assessments and implemented measures to provide support for mental health.

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4.1 Talent Attraction and Retention▎ Occupational Injury Ratio
Site

I-lan Site

Li-Je Site

Total

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4.2 Healthy Work Environment

Work Accident Description:

Occupational Injury Type

2020

2021

2022

Work Accident

1

0

0

Traffic Accident

0

0

0

Injury Rate (IR)

0.67

0

0

Occupational Disease Rate (ODR)

0

0

0

Absenteeism Rate (AR)

0

0

0

Lost Days

4

00

Lost Days Rate (LDR)

2.68

0

0

Number of Deaths

0

0

0

Work Accident

0

1

0

Traffic Accident

0

0

6

Injury Rate (IR)

0

0.39

0

Occupational Disease Rate (ODR)

0

0

0

Absenteeism Rate (AR)

0

2%

0

Lost Days0

50

Lost Days Rate (LDR)

0

1.95

0

Number of Deaths

0

0

0

Work Accident

1

1

0

Traffic Accident

0

0

6

Lost Days

4

50

Number of Deaths

0

0

0

• In 2020, a work accident occurred at the I-lan Site due to prolonged rainfall and water leakage. This
resulted in a slippery floor, causing personnel to slip and experience strain in their backs and discomfort
in their pelvis. Despite the incident, the personnel promptly resumed their duties after a brief rest.
However, three days later, they sought medical treatment independently and reported the incident, which
was subsequently determined to be a work-related injury. As a result, the personnel were granted a week
off and received six rehabilitation sessions at a work injury outpatient clinic. To prevent similar incidents
from recurring, the following improvement measures were implemented: fixing leaks, utilizing plastic
mats, displaying slip prevention signs, issuing fall prevention announcements, and removing moss fromthe factory's internal roads.
• In August 2021, there was one case of occupational injury at the Li-Je Site. The injury occurred due tochemical splashing, as the personnel failed to wear the required protective clothing during chemical
pipeline motor replacement operations. As a result, they accidentally came into contact with chemicalliquid on their back, resulting in superficial skin burns. Upon discovering the incident, the company
promptly utilized its emergency decontamination agents, Diphoterine and Hexafluorine, to rinse theaffected area. The injured person was immediately sent for medical treatment. Fortunately, the employee
made a full recovery and returned to work within a week. Simultaneously, an investigation into the incident
was conducted, and both internal and external reports were filed regarding the occupational injury. To
prevent similar incidents from occurring in the future, several improvement and preventive measures
were implemented. These included pipeline inspection and repair, lighting enhancements, educationand training initiatives, installation of signage, and dedicated personnel supervision during operations.
Unfortunately, as a consequence of this minor injury incident, the company received a fine of NT$60,000.

Procedure for Handling Safety and Health Accidents
Personnel injury
and illness incident
reported to the
Occupational Safety
Department

Assistance in medical
treatment for the
injured and sent to
the hospitalOccupational safety unit
reports to the supervisory
authority

Case closed and kept
on record for futurereference

Department of Safety
and Security reviewsand evaluates theeffectiveness of the
improvements

Department where theincident occurred conducts
an investigation andproposes improvement
measures• The Occupational Safety and Health Committee meets quarterly to report and review work injuries
and accidents. We analyze the causes, processes, and improvement measures of these cases toemphasize the value of employees and supervisors.
In terms of the personnel safety evacuation procedure, TSC places great importance on occupational safety
education and training. It is advised that in the event of immediate danger while working, individuals shouldcease their operations, evacuate to a secure location, and then inform their immediate supervisor. TSC also
incorporates Article 18 of the Occupational Safety and Health Act, which pertains to evacuation, as instructional
material for training purposes. Employees possess the right to distance themselves from hazardous situations,and the company is prohibited from penalizing or imposing any form of disadvantage on personnel who evacuate
when faced with danger.

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Procedure for Investigating Occupational
Accidents

1

The Disaster Accident / Close Call Accident Investigation
Report Form is issued by the Occupational Safety Department.

2

A team is formed to investigate and gather evidence
regarding the accident. The team includes a supervisor, asafety officer, and a labor representative from the department
where the accident took place.

3

The supervisor conducts a comprehensive assessment of theincident and completes corrective measures for improvement
planning.

4

After the investigation team has conducted an initial review
and reached a consensus on the corrective actions for theincident, it is then submitted to the site supervisor for further
examination.

5

The implementation of corrective measures is tracked by the
Occupational Safety Department.

6

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Occupational Safety Training
TSC is dedicated to preventing workplace accidents and enhancing employees' safety awareness andconduct. Alongside our comprehensive yearly occupational safety education plan, we offer extensive safety
and health education and training for new staff members. Furthermore, we have implemented a certification
management system to guarantee the credibility of safety and health certifications held by our colleagues.
We conduct regular reviews and facilitate the acquisition and renewal of certifications in accordance withregulations.
TSC conducts annual emergency response drills for its employees during regular working hours. Thesedrills consist of two fire self-defense and evacuation drills, as well as at least one hour of occupational safety
training for the entire company. It is mandatory for all employees to participate in this training, and those unable
to attend will be offered make-up sessions to ensure the effective implementation and communication of safetyconcepts. Additionally, we organize various small-scale drills, such as chemical leaks, supply interruptions, labor
shortages, critical equipment failures, water, power, and gas outages, outbreaks of infectious diseases, strikes,
sewage leaks, transportation accidents, major quality incidents, work injuries, communication disruptions,typhoons, earthquakes, and information system network attacks. These drills may be replaced by educational
training or tabletop exercises each year. If any actual incidents occur during the year, we will review its
implementation records and assess the need for routine drills. Furthermore, we provide training and lectures onhigh-risk operations, such as lifting and confined spaces. Health seminars conducted by professional physicians
and fire safety lectures by professional disaster relief instructors are also offered to continuously enhance
personnel safety and health awareness.

Occupational Disease Management
Two sites comply with legal requirements by conducting identification of special hazardous operations.
They also collaborate with operation environment monitoring, special hazardous operation health checks, andhealth management conducted by factory physicians and nurses. In addition, they establish various procedural
documents and operating procedures in accordance with the ISO 45001 occupational safety management
system. It is worth noting that there were no recorded cases of occupational diseases in 2022.
Types of Occupational Diseases in TSC:
1. If the chemicals used in the manufacturing process are not adequately controlled or protected against, and thisleads to workers falling ill or suffering organ damage, and a physician confirms that the injury or illness is workrelated, it is classified as an occupational disease.
2. Psychological stress, poor posture, improper exertion, lack of pregnancy protection, and diseases resulting fromworkplace violence are all potential causes of occupational diseases.

Occupational Safety Department reviews and confirms theclosure of the case.

Explanation of specific occupational health examination items for hazardous operations at the I-lan Site:• Bromopropane: The operation of automated machinery is accompanied by the use of local exhaustfacilities. It is ensured that each employee spends no more than 30 minutes per day in the designatedoperation area.
• Radiation: There are two X-ray machines on the premises. Employees must wear radiation armbands when
operating the machines. The machines are enclosed for safety during operation, and the radiation levels inthe vicinity of the machines are equivalent to the background levels.

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Occupational Disease Prevention Measures
Both sites convene Occupational Safety and Health Committees quarterly to assess
health management, occupational disease prevention, and health promotion matters.
They also establish targeted operating procedures to address potential causes of physicaland mental illnesses in the workplace. Additionally, they coordinate with healthcare
professionals to provide active healthcare services for employees. By regularly monitoring
the work environment, they ensure effective control of occupational disease factors. Healthexaminations and questionnaires are administered to assess employees' individual healthconditions. Likewise, healthcare professionals arrange health interviews and on-site visits togain a comprehensive understanding of employees' well-being.
Over the past three years, there have been no reported cases of occupational diseases
among employees at the I-Lan and Li-Je Sites. In 2022, a total of 28 and 26 special healthexaminations were conducted at the I-Lan and Li-Je Sites, respectively, with a perfectattendance rate of 100%. Our commitment to preserving the physical and mental well-beingof our employees remains unwavering.

Occupational Health Services
The company remains committed to achieving zero occupational accidents byimplementing various health management measures and actively supporting employees
through healthcare personnel. This includes promoting a friendly and healthy work
environment. In terms of occupational health services, a total of 106 consultations orinterviews were conducted at the I-Lan Site and 51 at the Li-Je Site in 2022.
1. Annual Physical Examinations and Special Health Hazard Check-ups
2. Comprehensive operation environment monitoring and chemical classification
management are conducted every six months throughout the entire site.

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4.2 Healthy Work Environment

Effective communication channels for occupationalsafety and health.
In addition to the labor-management meeting, each site convenes quarterly meetingsof the Occupational Safety and Health Committee. These meetings are chaired by the Vice
President and the Site Supervisor, respectively. The discussions cover a range of topics,
including policies, management plans, education and training, environmental monitoring,
health management, proposal improvement, inspection and audit, hazard prevention,
occupational accident investigation, management performance, and contract management.
Following the meetings, systematic and continuous improvement and optimization are
implemented based on the meeting's conclusions. The topics for 2022 focused on pandemic
prevention measures, key points of spring safety inspections, and audit deficiencies.
To enhance bilateral communication and solicit input from colleagues regarding
safety and health matters, 50% of the 22 committee members are labor representatives,elected by the labor-management conference, surpassing the regulatory requirement.
Supervisors, labor representatives, safety and health personnel, and committee members
from all departments of the entire site actively participate, collectively assessing diverse
safety and health management concerns. This enables members to stay informed about
the advancements in safety and health initiatives and put forth suggestions and proposals,
allowing managers to genuinely listen to employees' perspectives and consistently provide asafe working environment.
To facilitate effective communication among employees, we offer various channels
for feedback, including employee suggestion forms, communication records, complaint
channels, health questionnaires, and employee suggestion boxes. We promptly makeadjustments and optimizations based on stakeholder feedback. For further information,please consult section 4.2.2 on labor-management communication channels.

3. Annually, health questionnaires are distributed to proactively assess the physical andmental well-being of our employees.
4. Promote the implementation of measures to prevent overwork, excessive stress, humanfactor hazards, and workplace misconduct.
5. Protection for maternal health, employees with disabilities, and middle-aged and elderly
health.
6. Contracted occupational health service physicians conduct quarterly visits, interviews,
follow-ups, and care. If employees with hypertension are scheduled for medical treatment,
their medication status will be monitored until blood pressure control improves, thereby
reducing the risk of stress-related diseases.
7. Establishing Employee Personal Health Records and Regularly Tracking Status
8. Regularly conduct lectures on health-related topics.
9. Conduct health promotion activities on a regular basis.
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5.1 Resources Management
The climate change issue should brook no delay. In order to mitigate the impact on
the natural environment, and achieve energy and carbon reduction, TSC is committed tomaintaining the spirit of sustainable development and minimizing the environmental impact ofoperating activities. TSC conducts carbon emissions management according to greenhousegas inventory results. We also introduced the ISO14001 environmental management systemfor energy, water resources, waste, wastewater, and air pollution prevention. We continuously
implement various environmental management actions.

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In 2022, the primary carbon emissions at two sites are attributed to outsourced
electricity in category 2. The direct greenhouse gas emissions (category 1) at I-lan Siteamount to 0.9059 tCO2e, while the emissions from outsourced electricity (category 2) total
3,997.2177 tCO2e, accounting for 99.98% of the site's total emissions. Similarly, at the Li-Je
Site, the main source of greenhouse gas emissions is outsourced electricity in category 2,
which amounts to 10,341.862 tCO2e. This is followed by other indirect emissions (categories
3 to 6) totaling 4,672.2161 tCO2e, and finally, direct greenhouse gas emissions (category 1)of 34.247 t-CO2e.

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Appendix▎ Greenhouse Gas Emissions at the I-lan and Li-Je Sites in 2022
Site

Emission Source

GHG Type

Emissions(tCO2e)Stationary
Combustion

CO2, CH4 andN2O

0

Mobile Combustion

CO2, CH4 andN2O

0.2729Process Emission

VOCs

0

Fugitive Emission

CH4

0.6330Outsourced Electricity

CO23,997.2177

Stationary
Combustion

CO2, CH4 andN2O

0.4429

Mobile Combustion

CO2, CH4 andN2O

8.1974

Process Emission

VOCs

0

Fugitive Emission

CH4

25.6071

Category 2

Outsourced Electricity

CO2

10,341.862

10,341.862

Categories
3 to 6

Transport Emission(category 3),
Emission from
Products Usedby Organization(category 4)CO24,672.2161

4,672.2161

Category

I-lan
Site

Category 1

Category 2

Greenhouse Gas Inventory
TSC has implemented a greenhouse gas inventory mechanism in accordance with ISO
14064-1. The Li-Je Site has been conducting inventories for scope 1 and 2 (categories 1
and 2) since 2014, and expanded to include scope 3 (categories 3 to 6) in 2022. The I-lan
Site began conducting inventories for categories 1 and 2 in 2022. We plan to further expand
its inventory scope in 2024 to include TSC headquarters and overseas business locations,demonstrating its ongoing commitment to Climate Action. In 2022, TSC saw a slight increasein categories 1 and 2 compared to 2021, attributed to increased production capacity.
However, the intensity of carbon emissions per unit has been reduced for three consecutive
years. We will continue to implement energy-saving and carbon reduction initiatives throughvarious programs in the future.

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5.2 Waste Management

5.1.1 Carbon Emission Management
TSC plays a vital role in the semiconductor manufacturing chain and also endorses theconcept of "Extended Producer Responsibility". The Company is committed to producing anddesigning environmentally friendly products, reducing product packaging, and researchingenvironmentally friendly materials that are easily biodegradable. To implement various
environmentally friendly projects more efficiently, ESG Office has set up an "Environmental
and Energy Management Team" functional group to be responsible for annual carbon
reduction goals and Implement various greenhouse gas reduction plans, promote renewableenergy layout, etc., from the system to reduce greenhouse gas emissions.

Equal
WorkplaceCategory 1

Li-Je
Site

Total
(tCO2e)0.90593,997.2177

34.247486

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5.1 Resources Management▎ Greenhouse Gas Emissions at Li-Je Site & I-lan Site Each Year
2020

2021
Li-Je
Site

Unit: (tCO2e)

Direct GHG
Emissions(Category 1)

46.3758

0.8451CO2 Emissions

1.72850.30265.498

0.24898.56070.2809CH4 Emissions

18.5175

0.542522.2175

0.572525.5675

0.6330N2O Emissions

0.029800.089400.11920

PFCs Emissions

0

0

0

0

0

0

HFCs Emissions

26.1

0

0

0

0

0

Indirect GHG
Emissions(Category 2)
CO2 Emissions
CH4 Emissions

0

0

0

0.82140I-lan Site

34.24700.90590

9,436.4528 3,704.8074 9,604.0632 3,883.6527 10,341.862 3,997.2177
9,436.4528 3,704.8074 9,604.0632 3,883.6527 10,341.862 3,997.2177
0

0

0

0

Appendix

5.2 Waste Management▎ Greenhouse Gas Emissions Intensity
12,00010,0009,482.83

9,631.87

10,376.7

6,000
3,705.29

4,000

3,884.09

3,998.12

2,000
0Li-Je Site

I-lan Site
2020

2021

2022

Emissions Intensity Denominator
Unit: Annual Production Value (KNTD)

4,500,000

3,815,958

3,600,000

900,000
0,000

1,073,996 1,250,467
67,366
Li-Je Site

2020

2021

2022

Emissions Intensity

N2O Emissions

0

0

0

0

0

0

0.16

PFCs Emissions

0

0

0

0

0

0

0.12

HFCs Emissions

0

0

0

0

0

0

0.08

4,150,732

2,836,620

2,700,0000※ Note:1. The base year for Li-Je Site inventory is 2022 (Li-Je Site added category 3 to 6 GHG inventory,
so the base year is updated).
2. The base year for inventory of I-lan Site is 2022.
3. I-lan Site introduced ISO 14064-1 for Category 1 and Category 2 inventory in 2022 andconducted internal verification of the above data in the same year. I-lan Site plans to conduct
external verification in 2024.

Unit: (tCO2e)

8,000

1,800,000

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Total GHG Emissions

I-lan Site

CO Emissions
from the Use of
BiofuelsI-lan Site

Green
Manufacturingand Operation

Equal
Workplace

2022
Li-Je
Site

Li-Je Site

27.8046

Responsible
Procurement

0.14071

I-lan Site

Unit: T-CO2e / KNTD

0.04
0.008970.00

0.00830.0013

Li-Je Site

0.001020.00096

I-lan Site
2020

2021

2022

※ Note: Category 1 and 2 from the greenhouse gas emission table.

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5.2 Waste Management

Other Indirect GHG Emissions (Categories 3 to 6)
Since 2022, Li-Je Site has conducted an inventory of other indirect GHG emissions. In
2022, the Li-Je Site's Category 3 and Category 4 were the largest suppliers of raw material
intake - AUEEC and Taiwan Maxwave materials transportation emissions, as well as for
upstream fuel-energy related activities and operational waste treatment, the results were
4,672.2161tCO2e.

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Site

Category

Emission Source

GHG
Type

Emissions(tCO2e)Category 3

Transport
EmissionsCO22,675.7714

Category 4

Product Emissions
from Organization
Use

CO2

1,996.4447

Li-Je Site

Total
(tCO2e)4,672.2161

Future Carbon Reduction Program
The carbon reduction programs for both short and medium-term are divided into five categories: equipment replacement, energy-saving projects, clean energy utilization, building
management systems, and digital management systems. TSC optimizes energy efficiency through a "source-first" reduction strategy, along with optimizing process conditions and replacing
inefficient processing equipment. This helps to reduce both direct and indirect greenhouse gas emissions in our operations and processes.

▎ Five Carbon Reduction Strategies
Strategic Policy

Replace the Oldwith the New

Energy Saving
Project

Using Clean
Energy2023
1. I-lan Site has implemented an improvement plan for the ice water pump and cooling water pump. As part of thisplan, frequency converters have been installed for the existing equipment. It is estimated that this installation will
result in an annual reduction of electricity consumption by 4.9% by the end of the year.
2. Li-Je Site's performance improvement plan involves incorporating a high-performance magnetic suspension
chiller, while retaining the old machines as backups. This strategy results in a 45% reduction in power
consumption compared to conventional chillers.
1. Apply carbon reduction to energy consumption equipment of each site, employ energy-saving chiller
2. Replace old equipment with new to improve energy efficiency
Plans for using renewable energy sources in sites are based on the principles of energy conservation, creation, andstorage.
1. I-lan Site has formulated a solar panel assessment plan to achieve the goal of self-sustainability.
2. Solar and energy storage programs assessed by each site.

2024-2025
Since 2023, each site has proposed an improvement plan for thefollowing year, including lighting improvement, energy-saving air
conditioning, and other initiatives.

Conduct regular examinations of facilities to continuously improvecarbon reduction

1. Roof solar panel installation program
2. Using Green Electricity

3. Outsourced green electricity programs assessed by each site.
ISO management system of each site is continuously updated andpassed third-party certification.

Establishmentof Management
System

1. Implement or update ISO 50001 Energy Management System at each site

Introducing
DigitalManagement
SystemAssess smart carbon management programsIntelligent monitoring and management of energy resources

Assess data integration at each site and replace manual input with digital technology

Collect real-time data to perform analysis and prediction

2. ISO 14064-1:2018 GHG Inventory (categories 1 and 2 with partial categories 3 to 6)

1. Conduct internal inventory and audit annually, and obtainaccreditation from a third-party certification authority regularly.
2. Assess and introduce ISO 14067 product carbon footprint, andapply it to the main product line first.

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5.2 Waste Management

5.1.2 Energy Management
TSC is committed to improving energy efficiency and ensuring that electricity consumption and other energy consumption are reduced by at least 1% annually. Currently, both the Li-Je andI-lan Sites have implemented environmental protection plans that are based on their energy consumption. They conduct inspections on equipment that consumes a significant amount of energy
and continuously upgrade to new energy-saving equipment as replacements.

Energy Structure
TSC primarily relies on outsourced electricity as its main energy source. In 2022, electricity accounted for 99.84% of the company's energy consumption. Non-renewable fuel consumption,such as gasoline and diesel, made up less than 1% of the total energy consumption. In terms of energy distribution, the Li-Je site accounted for 71.41% of the company's total energy
consumption, followed by the I-lan Site at 27.46%, and the headquarters at approximately 1.13%. Over the past three years, TSC's energy consumption has increased by 50% due to the
expansion of production capacity. However, the energy consumption per unit of production value has decreased year by year at both the Li-Je Site and I-lan Site, indicating significant
improvements in energy efficiency.

▎ Energy Consumption Over the Years
2020

2021
Unit: GJ

66,741.12

5.00

Total Energy
ConsumptionbyOrganization
Total

0

65.34

0

0

Note4
0 0

0

Li-Je Site

I-lan Site

Taipei
Headquarters

66,763.8

28,377.65

1,367.38

96,508.83
Non-renewable fuels-Gasoline

7.72

0

Li-Je Site
Total Energy
Consumption 68,946.82
byOrganization

28,160.78

Biofuel0108.891,353.12
Note4
0 0
0

I-lan Site

Taipei
Headquarters

27,855.02

1,353.12

98,154.96

Total

Non-renewable fuels-Diesel

0

2.81
1.31
0

Unit: GJ

73,144.80

27,850.9
1,367.38

3.69
1.31
0

Unit: GJ

68,873.76

28,372.65
17.68

2022

6.39

0

Li-Je Site
Total Energy
Consumption 73,260.08
byOrganization
Total

Outsourced Electricity-Non-renewable energy

0

2.46
1.31
0

0

1,114.84
44.45
0 0
0

I-lan Site

Taipei
Headquarters

28,164.55

1,159.29

102,583.92
Outsourced Electricity-Renewable Energy Source※ Note:1. Gasoline is not distinguished by octane number.
2. The conversion coefficients are based on the heating value conversion method by the "Heat Content of Energy Products" published by the "Bureau of Energy, Ministry of Economic Affairs". Gasoline
7,800kcal / L (1 liter of gasoline = 0.0327GJ), diesel 8,400kcal / L (1 liter of diesel = 0.0352GJ), electricity 860kcal / kWh (one degree = 1 degree of electricity = 0.0036GJ).
3. Above numbers are rounded to the second decimal place.
4. The source documents for gasoline in 2020 and 2021 are incomplete at the Taipei headquarters; thus, figures are disclosed from 2022.

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5.2 Waste Management▎ Annual Energy Intensity
Year

Item

2020

2021

2022

Unit / Site

Li-Je Site

I-lan Site

Li-Je Site

I-lan Site

Li-Je Site

I-lan Site

Total Internal Energy Consumption

GJ

66,763.8

28,507.34

68,946.82

27,855.02

73,260.08

28,164.55

Denominator of Energy Intensity

Annual Production
Value (KNTD)

633,766

2,836,620

1,073,996

3,815,958

1,250,467

4,150,732

Energy Intensity

GJ / KNTD

0.105

0.010

0.064

0.007

0.059

0.007

※ Note:1. The base year for both I-lan Site and Li-Je Site is 2022.
2. The conversion coefficients are based on the heating value conversion method by the "Heat Content of Energy Products" published by the "Bureau of Energy, Ministry of Economic Affairs". Gasoline
7,800kcal / L (1 liter of gasoline = 0.0327GJ), diesel 8,400kcal / L (1 liter of diesel = 0.0352GJ), electricity 860kcal / kWh (one degree = 1 degree of electricity = 0.0036GJ).
3. Above numbers are rounded to the second decimal place.

Continuous Improvement on Energy-saving
Since electricity is the main source of energy consumption at TSC, the energy-saving
projects implemented over the past three years have focused on reducing electricity usageat our sites. These initiatives have included enhancing the heat dissipation of cooling towers,
optimizing the power of chillers, and updating lighting equipment, among other measures, allaimed at achieving energy savings and reducing carbon emissions. As a result of these efforts,
TSC has successfully reduced energy consumption by 5,107.79 GJ from 2020 to 2022.

▎ I-lan Site's Energy Saving and Carbon Reduction Program andEffectiveness
Year
Site

▎ Li-Je Site's Energy Saving and Carbon Reduction Program andEffectiveness
Year

2020

Site

Energy Saving Item

Energy-saving Quantity (GJ)
Energy-saving Quantity as a
Percentage of Total Electricity
Consumption in the Year

2021

2022

Energy Saving
Item• Air conditioning
system powersavingEnergy-saving
Quantity (GJ)

323.24

Energy-saving
Quantity as a
Percentage ofTotal Electricity
Consumption in
the Year

1.14%

0.79%

1.74%

1,291.11
1.76%

2021

2022
I-lan Site

• Improvement
measuresfor processcooling water(PCW)• Replacementof clean room
light source

Li-Je Site
• Boost chiller'spower• Adjust cooling• Reducewater flow rateequipment's
to improveventilation
cooling tower's• Improve thedissipation
lighting in the
repair area
1,195.76
526.292020• Improvement
measures foroutside air
handling unit
and chiller

1,329.89

4.77%• Light source replacement
plan for the front TMTT
station and molding press
station• Replace mercury lamps in
the utility apparatus roomwith LEDs• Exhaust pipeline merger
project for site441.501.57%

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5.2 Waste Management

Future Prospects

Li-Je Site will begin implementing the ISO 50001 Energy Management System in 2023. Our objective is to enhance the energy efficiency of the LI-Je
Site and elevate its energy performance to the highest level by utilizing PDCA (Plan-Do-Check-Action) mechanisms and relevant management strategies.
Through the implementation of greenhouse gas reduction, the Company can attain its goals of sustainable operation and environmental friendliness.
Considering that the air-conditioning system at I-lan Site operates at full capacity throughout the year, there is a risk of wasting energy resources
during non-summer seasons. To address this issue, we propose implementing an improvement plan for the ice water and cooling pumps. Specifically, weplan to retrofit 3 cooling water pumps (25HP) and 3 ice water pumps (15HP) with frequency inverters in 2023. These inverters will regulate the frequency
based on the equipment temperature requirements, reducing the motor running frequency when the temperature is sufficient and increasing it wheninsufficient. Based on current on-site data measurements, we have calculated the electricity consumption of the existing ice water pump and cooling water
pump equipment for the year 2022. This system accounts for 12.7% of the total plant electricity consumption. After implementing the improvement plan,
we anticipate a 4.9% reduction in site electricity consumption. By achieving both energy-saving and cost-saving objectives, this improvement plan willcontribute to the company's overall efficiency.

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5.1.3 Water StewardshipIn recent years, Taiwan has experienced droughts
due to climate change. TSC operates two factories inI-lan, an area without reservoirs. However, the region
benefits from abundant rainfall throughout the year andnatural groundwater areas in the Lanyang Plain, which
prevent water shortage crises in I-lan. As a member of thesemiconductor industry, we recognize the significant impact
of climate change and water resources on operations.
To ensure environmental sustainability and economic
efficiency, TSC effectively manages water resources. This
includes monitoring and recording water withdrawal anddischarge, as well as implementing a grinder and coolingcycle water recycling mechanism to efficiently recycle
water.

Water Resource Structure
I-lan Site and Li-Je Site are situated in I-lan County,
which is located in the northeastern part of Taiwan.
According to the Weather Bureau, I-lan County experiencesa monsoon climate, with an average annual precipitationof over 2700mm. In 2022, groundwater constituted
approximately 92.6% of the process water used at theI-lan Site, while tap water accounted for 7.4%. Due to theextended rainy seasons in I-lan and the site's proximity
to the mountainside, coupled with a daily withdrawal ofless than 100 tons of groundwater, there has been no
depletion of groundwater, and no water limitation measures
have been necessary. On the other hand, the Li-Je Siterelies on surface water as its water source. It utilizes the
Wulangkeng River as its primary source of pure water,
accounting for approximately 87.6%, with tap water making
up the remaining 12.4%. As the Wulangkeng River has
consistently maintained its water flow over the years, the
Li-Je Site currently does not require any water limitation
measures.

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Appendix

5.2 Waste Management▎ Types of Water Source and Water Withdrawal at Each Site
Water
Withdrawal by
Source2020

Unit: Megaliters

2021

2022

I-lan
Site

Li-Je
Site

Taipei
Headquarters

I-lan
Site

Li-Je
Site

Taipei
Headquarters

I-lan
Site

Li-Je
Site

Taipei
Headquarters

Surface Water
Withdrawal0

202.3700227.9700249.290Groundwater
Withdrawal

32.11

0

0

49.80

0

0

34.82

0

0

Thirdparty Water
Withdrawal *1

2.40

26.70

Note5

2.50

37.94

Note5

2.80

35.22

2.11

Total Water
Withdrawal of
Each Site

34.51

229.07052.30

265.91037.62

284.51

2.11

Total Water
Withdrawal

263.58318.21

324.24※ Note:1. The third-party water withdrawal is tap water.
2. According to the WRI Aqueduct Tool, the formula for calculating water stress is as follows: annual total water withdrawal divided byannual total available recycled water supply. Areas with water stress ranging from 40% to 80% are classified as high water stressareas, while those exceeding 80% are categorized as extremely high water stress areas. TSC exclusively relies on freshwater
sources with a total dissolved solid content of ≤1,000 mg / L. Additionally, all areas under TSC's purview have a water stress index
below 40%, and none are designated as water stress areas.
3. The data of seawater and produced water withdrawal, or other water sources for I-lan Site and Li-Je Site is 0.
4. Third party water and surface water withdrawal data are obtained from the water bill, and the groundwater withdrawal data iscollected from the water meter reading records of the sites.
5. Due to incomplete information in 2020 and 2021, the Taipei headquarters commenced disclosing using 2022 as the base year.
6. The water withdrawal at the Taipei headquarters is calculated by dividing the office building's water bill among its floors.

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Water Risk Stewardship
The semiconductor industry is a significant consumer of water during wafer production,
and any water shortage could have an immediate impact. Furthermore, the more advanced
the process, the greater the water consumption. In Taiwan, the reliance on seasonal rainfall
to fill reservoirs, coupled with climate change-induced rainfall instability, has raised concerns
about water supply. Although two sites in I-lan are not situated in high water stress areas anddo not face strict restrictions on water resource usage, the Company is actively promoting
water conservation by implementing a water recycling mechanism at the reproduction site toachieve sustainable development.

Highlight Story

Recycling and Reuse of Cooling Water from
Grinder

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5.2 Waste Management▎ Water Withdrawal and Discharge of Each Site
Item

2020

Unit: Megaliters

2021

2022

I-lan Site

Li-Je Site

I-lan Site

Li-Je Site

I-lan Site

Li-Je Site

Total Water
Withdrawal

34.51

229.0752.3

265.9137.62

284.51

Total Water
Discharge

11.61

270.71

12.32

270.71

10.84

297.99▎ Cooling Water Recycling Mechanism of Grinder

Due to the impact of global climate change, the efficient utilization andrecycling of water resources have become crucial issues. The Company
remains committed to promoting water conservation measures in order topreserve water resources. Since 2015, the I-lan Site has implemented a
project to recycle cooling water used in cutting machines, resulting in anannual reduction of over 2,520 tons in water consumption.
In 2022, the Li-Je Site developed a cooling water recycle plan for thegrinders, effectively reusing water resources. The annual recycling rateis expected to be approximately 2%, resulting in an efficient recycling of$540,000 and a reduction in wastewater treatment. The Li-Je Site recycles
cooling water, collects it through piping to the reservoir, and then transfers
it to the raw water tank using a power pump as a source of pure water.
Currently, the Li-Je Site drains the recycled water into the raw water tankfor use in the plant. After implementation, the actual recycling efficiency
in 2022 is 15 tons of water per day. Moving forward, TSC aims to continue
maximizing the use of water resources. The implementation of a coolingwater recycling system at the Li-Je Site is expected in 2023 to recycle
unpolluted and low-pollution water resources, thereby conserving water.

Equal
Workplace

DI Pure Water

Grinder

Before Improvement:
Wastewater Direct
Discharge

Water Pump
Tank

Raw Water
Storage Tank

After Improvement:
Recycling and Reuse

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5.2 Waste Management

5.2 Waste Management
Waste Output

5.2.1 Waste Management
Waste Management Policy and Goals
TSC is dedicated to reducing environmental impacts, specifically waste pollution, while
cutting operating costs by refining waste management and improving resource utilization
efficiency. Consequently, both sites have been certified by ISO 14001 environmental
management system and conduct regular internal audits based on the system. To
implement waste reduction, declaration, and cleaning (removal, treatment and reuse),
TSC collects the resource-type waste generated from the site and classifies it based on
its nature, and entrusts it to the external clearance. Moreover, for special waste generated
during the process, such as chemical solvents, are temporarily stored in specific areas
after classification, and are handled by qualified clearance companies approved by thegovernment authorities. On the part of grasping the final flow of waste, we also formulated
an audit plan for waste clearance companies, including tracers, GPS tracking, etc., andestablished a complete contractor management mechanism to actively implement waste
management.

▎ Our Commitment to Waste Management:
Compliance

Advocate for environmental
protection, ensure effective
environmental labeling, andmitigate potential disasters.

WasteManagement
Commitment▎ Waste Output in 2022
Category

Pollution Reduction
Implement more advanced
pollution control technology andequipment to reduce pollution.

Reduce Waste

Energy Saving

Reduce waste by applying
waste classification andresource recycling.

Improve management, use
efficient equipment, andsave energy consumption.

Unit: tons

2022

Category

Hazardous2022

Non-hazardous

Waste Liquid269.530

Sludge889.090

Empty Bottles ofChemicals

12.627Spent Mixed
Plastics

25.205

Waste Mixed Hardware

3.357

Other

19.515

Subtotal

285.514

Subtotal

933.810Total

For clearance of waste, autonomous inspection and management are conductedto continuously comply with the requirements of laws and regulations.

Zero Disasters

In 2022, TSC produced a total of 1,219.324 tons of waste, consisting of 285.514 tons ofhazardous industrial waste and 933.810 tons of non-hazardous industrial waste, including
the largest category of 889.090 tons of calcium fluoride sludge. Thus, TSC established thesludge reduction in 2023. As for the waste liquid, which is the second highest output, isproduced during the wafer process in Li-Je Site. The four-inch fab waste liquid is recovered
and recycled in collaboration with recycling manufacturers.

1,219.324※ Note:1. The statistics provided are sourced from Li-Je Site and I-lan Site.
2. Part of the non-hazardous waste produced by TSC, which is not required to be reported, has notbeen included in the above table due to incomplete information gathering. It is anticipated that
it will be disclosed starting in 2023.
3. "Waste electronic components" (included in the category of waste mixed hardware) areclassified as non-hazardous waste when stored and handed over to external clearancecompanies. However, due to the disposal stage is classified as hazardous waste by Ministry ofEnvironment, this table categorizes it under hazardous waste.
4. Waste mixed hardware includes waste solder paste, IC waste, copper waste, waste electronic
components, waste products and defective products, etc.
5. Sludge refers to calcium fluoride sludge.
6. Waste mixed plastics include waste rubber strips, general resins, and noble metal ionsexchange resins.
7. Others include waste glass, scrap activated carbon, and sandblasting waste.

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Waste Clearance and Management
Due to the distinct nature of processes at the I-lan Site and Li-Je Site, the types of waste
generated differ to some extent. Consequently, both sites have developed their own "waste
clearance process" to enhance waste management. This includes staying updated on
Taiwan's laws and regulations, periodically assessing the implementation status, organizing
meetings, and conducting regular reviews and corrections to ensure effective waste
management.

Waste Clearance Methods
The waste generated by Li-Je Site and I-lan Site is categorized into non-hazardous
industrial waste and hazardous industrial waste. TSC outsources the clearance of all wastefrom both sites. The outsourced process is carried out in accordance with the procedure of
the external clearance company and is meticulously documented as follows.

Non-hazardous Industrial Waste
On-siteOff-siteContact contract vendor for quotation ➡ Arrange clearance ➡ Issue
clearance document ➡ Proceed clearance
Follow contract processor by vehicle for weighing and photo-taking

Responsible
Procurement

Equal
WorkplaceOn-siteOff-siteContact contract clearance company to arrange clearance ➡ Issue
clearance document ➡ Proceed clearance ➡ Issue clearance triplicate
document
Modify the actual weight and confirm the document ➡ Download andarchive clearance vehicle GPS track map ➡ Archive the triplicate
document and other processed documents

Waste Recycling Methods
The clearance company adopts two methods of recycling and reuse, or direct treatment
according to the nature of the waste. TSC's recycling percentage of total waste was 87.29%,
which was categorized into recycling and reuse for original purpose.

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5.2 Waste Management

Waste Recycling and Reuse Status▎ Recycling and Reuse Amount in 2022
Recycling andReuse Methods

Unit: tons

2022

Recycling and Reuse
Methods

Recycling

159.849

Recycling

Subtotal

159.849

Reuse for Original Purpose

0.045

Subtotal

904.470

Hazardous2022

Non-hazardous

Total Amount

904.425

1,064.319※ Note:1. The statistics provided are sourced from Li-Je Site and I-lan Site.
2. Hazardous recycling items include empty barrels, waste liquid, and waste electronic
components.
3. Non-hazardous recycling items include calcium fluoride sludge, waste activated carbon, andwaste glass.
4. Non-hazardous items for reuse for original purpose include ion exchange compounds of noble
metals.

Outsourced Waste Treatment Status▎ Direct treatment by clearance company in 2022
Category

Hazardous Industrial Waste

Green
Manufacturingand Operation

Hazardous
Waste
Nonhazardous
Waste

Clearance
MethodClearance
Amount(tons)

Clearance
MethodPercentage(%)

Incineration

125.35380.87%

Other Treatment
Operations

0.312

0.20%

Incineration

25.16016.23%

Landfilling

4.180

2.70%

155.005

100.00%Total

Unit: tons

Category
Percentage(%)
81.07%

18.93%
100.00%※ Note:1. The statistics provided are sourced from Li-Je Site and I-lan Site.
2. According to the Ministry of Environment's announcement on "regulated recyclable waste andreuse waste, renewable resource items" and the Ministry of Economic Affairs' "Management
Regulations on the Reuse of Industrial Waste," a list of reusable waste items has been provided.
However, the hazardous industrial waste that is generated does not include any of the items
listed, making it impossible to recycle and reuse. The percentage of hazardous waste that isrecycled accounts for 55.99% of the total hazardous waste.
3. Other treatment operations refer to physical processing.
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Appendix

5.2 Waste Management

Waste Reduction at Li-Je Site

Sludge Reduction Plan

Li-Je Site actively promotes the utilization of off-site resources, effectively transforming
waste from production processes into valuable resources. The reuse percentage foroutsourced processing waste reaches an impressive 88.72%, resulting in waste reduction,
decreased energy consumption and waste treatment costs, and enhanced efficiency inresource recycling. Our efforts include collaborating with cement manufacturers to recycle
calcium fluoride sludge as a raw material in cement production, implementing physicaltreatment methods to crush and reuse waste glass, and conducting noble metal separationof waste electronic components. Additionally, we partner with recycling manufacturers torecover 94.40% of hazardous waste liquid. Through physical treatment techniques likedistillation, this liquid is converted into raw materials such as banana oil, which can befurther utilized in various industries, including paint production.

Sludge production at Li-Je Site accounted for 72.92% of the total waste. As outsourcing
the removal of high-concentration waste liquid incurred high costs, in the past, the sludge
was processed through Site's own wastewater system. We have further reduced sludge
output by minimizing the use of chemicals in the wastewater system. With the MVR
wastewater treatment mechanism, sludge production will be reduced by 10% monthly
compared to the planned.

Li-Je Site's waste processing is mainly outsourced. The procedure is as follows:

Non-reusable
About 0.5%
to 11%
Process
Production

Outsourced
Processing
Reusable

Including self-processing on site,

About 89%
to 99%

Incineration
About 0.3% to 10%
landfilling
About 0.4%
other industry use
About 11% to 22%
other industrial raw
materials
About
78%

then outsourcing and re-use

Highlight Story
We collaborated with the cement factory to recycle 100% of the sludge
produced by the Li-Je Site to create a circular economy. During wafer manufacturing
process, TSC uses hydrofluoric acid for wafer cleaning and etching. After chemical
condensation and precipitation, the resulting hydrofluoric acid waste can be converted
into calcium fluoride sludge. This sludge is then ground, stirred, and high-temperature
fired in a rotary kiln reaching about 1,450℃ . Afterwards, gypsum is added and groundto form cement. TSC then provides the recycled cement to the cement factory as raw
material to fully enhance the reuse value of waste liquid.

Circular Economy▍ Recycling of calcium fluoride sludge ➡ mineralizer as one of the raw
materials for cement manufacturing
Clay / Silica Sand / Iron Slag, Limestone
Calcium Fluoride Sludge

Formulating

FiringGrinding

I-lan Site Waste Reduction Plan
In the past, when our site purchased new equipment and materials, we would often
end up with a significant amount of waste packaging materials, such as wooden pallets
and crates, which were typically incinerated. In order to actively promote waste reduction,
I-lan Site will be collaborating with external clearance companies in 2023. Our goal is tofoster resource recycling by partnering with various industries and implementing recyclingplans for wood, strip, and plastic waste. We have set a target to reduce total waste by 10%
compared to the previous year, as well as decrease waste treatment costs by 20% from theprevious year. We anticipate reviewing the results by 2024. The I-lan Site is actively seeking
partnerships with manufacturers to achieve our reduction target and will also explore
additional opportunities for waste reuse in the future.

▍ Recycling Photo:

Grinding

Stirring

Cement

Plaster96

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Appendix

5.2 Waste Management

Contractor Waste Management
For contractors' waste treatment, TSC strictly requires manufacturers to regularly update their license. This includes conducting an annual audit of waste clearance and waste handlingbusiness activities, as well as noting it in the contract terms and regularly updating the contract. Failure to comply with waste management laws and regulations may result in contract
termination. To effectively monitor industrial waste clearance, We utilize the "Global Positioning System (GPS) Real-Time Tracking System" website. This allows us to track the driving routes of theclearance company's vehicles and promptly confirm their movements. We also check and save the GPS track map of the vehicles, and occasionally conduct inspections to strictly monitor theflow direction of the clearance. TSC ensures proper handling of proof documents and produces scrap equipment treatment reports. The Li-Je Site conducts an annual audit of waste removal
vendors, while the I-lan Site conducts audits on average once every two months. Vendors are scored based on the details provided in the table, with scores ranging from 0 to 5. A final score of
90 points is considered qualified according to the TSC waste clearance company standard. There have been no substandard contractor assessments for each site in 2022.

▎ Contractor Waste Assessment Items

Clearance● Regular maintenance on clearance machines● Pollution prevention and safety equipment forclearance machines● Clearance machines’ grade of fit andclearance ability assessment● Personnel driver’s license management,
dangerous goods delivery personnel
certificate● Emergency response equipment, methods,
manualsOther● Organization/Competence● Online reporting and proper handling of
documents’ accuracy and completeness● Relevant performance and experience● Accuracy of written information● Establish ISO 14000 system or operating
standard

Storage● Whether storage capacity in the clearancesite meets processing capacity● Chemical compatibility/regional classification● Groundwater/rainwater infiltration prevention
facility● Abnormal spills in storage area
● Preservation of hazardous and non-hazardous clearance documents

Industrial safety andfire protection● Safe protection apparatus documents● Feasibility of wearing and operation ofprotective equipment● Inspection of fire safety facilities, audit
records● Establish security measures and fire
protection equipment● Other industrial safety management systems

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5.2.2 Wastewater Management
Effective wastewater management is a crucial aspect of our sustainable development.
The discharge of wastewater can have a direct impact on the local ecology and can also
lead to the indirect pollution of the global environment through the spread of pollutants via
runoff. TSC has established a stringent objective of "cleanliness improvement" for wastewater
management, ensuring that waste liquid from each site is properly treated to prevent
contamination of the surrounding soil.

Wastewater Management Policy and Goals
In order to minimize the environmental impact of wastewater, TSC operates its
wastewater facility in accordance with the discharge license and complies with the "Effluent
Standards" for semiconductor manufacturing. We have implemented a comprehensive
wastewater management process, which includes daily water quality analysis and regular
engagement of third-party verification units to test the quality of effluent water. Additionally,
we plan to introduce Mechanical Vapor Recompression (MVR) in 2023 to ensure consistentwastewater effluent and meet regulatory standards.

Annual Wastewater Discharge Trend in Each Site
Due to differences in production activities and scale, the amount of wastewater
discharged at the Li-Je Site and I-lan Site varies. To address the specific needs andcircumstances of each site, we have implemented appropriate project management methods
and a water quality monitoring mechanism. The Li-Je Site specializes in semiconductor
front-end wafer manufacturing and consumes a larger volume of water compared to I-lan.
Consequently, the majority of wastewater discharged in 2022 originated from the Li-Je Site.
In total, both sites processed 308.83 megaliters of wastewater in 2022. The increase canbe primarily attributed to the expanded production capacity at the Li-Je Site. Conversely,
wastewater at the I-lan Site decreased from 2021, primarily due to reduced cutting water
consumption resulting from adjustments in the product mix.

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Appendix

5.2 Waste Management▎ Annual Wastewater Discharge in Each Site
I-lan Site

Li-Je Site

Total for Both Sites
Unit: Megaliters

308.83283.03282.316270.71

270.71297.9911.606

12.32

10.84

2020

2021

2022

※ Note: All drainage terminals in TSC are fresh water (≤1,000 mg / L total dissolved solids), and thewater pressure index in the area is lower than 40%, no discharge of wastewater to areas
with water pressure.

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Wastewater Monitoring Mechanism
Two sites have implemented the "Wastewater Management Operating Procedure" toeffectively control and process wastewater discharged during the production process.
This procedure clearly regulates wastewater collection, monitoring, recording, testing,and reporting. By strengthening wastewater quality control, we can prevent abnormal
effluent quality that negatively impacts the environment. The two sites diligently document
the discharge and dosage on a daily basis, ensuring compliance with the effluent quality
standards set by the Ministry of Environment. Additionally, they conduct 24-hour monitoringof the wastewater treatment system. The duty staff records the daily wastewater system
operation data and water quality analysis values, which are then approved by the systemengineer. The unit supervisor reviews these records, and the monthly reports are compiled
into charts and submitted to the top supervisor of the site for review.

Water Quality Monitoring Mechanism of I-lan Site
The wastewater from the I-lan Site is discharged into the I-lan River under thesupervision of the Site Affairs Department. The department conducts daily pH value
examinations, weekly observations of suspended solids, and prepares semi-annual water
quality reports. Additionally, the department undergoes annual ISO 14001 inspections
conducted by external third-party certification units. In 2022, an inspection was conductedon the wastewater discharge from the I-lan Site. The inspection revealed that the discharge
contained only a small amount of suspended solids (<5mg / L) and the pH level was
determined to be neutral without requiring any adjustments (pH 7 ± 1). Based on thesefindings, TSC concluded that all wastewater discharged from the I-lan Site in 2022 met theeffluent standard and did not cause any water pollution.
Due to the high purity and low pollution levels of the wastewater at the I-lan Site, as wellas its low volume, the environmental impact is minimal. In 2022, the Environmental Protection
Bureau of I-lan County advised TSC to apply for a modification to the wastewater discharge
permit in accordance with legal requirements. As a result, the Wastewater Site Simplification
Project was established at I-lan Site, aiming to reduce daily wastewater discharge from100 tons to 64 tons. Additionally, the I-lan Site has developed a comprehensive plan for
managing wastewater, which includes relocating the groundwater treatment unit tanks
to the ground floor. This measure ensures that unprocessed wastewater will not spill andcontaminate the soil. The completion of this plan is expected between 2023 and 2024.

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Appendix

5.2 Waste Management

improvement process if the plant's limits are exceeded. Any violations are documented,
and improvement plans are proposed. In terms of external audits, Li-Je Site's management
performance is evaluated and certified by a third-party organization annually. This
organization examines the operations and records of ISO 14001. Additionally, the quality of
Li-Je Site's effluent is tested quarterly by a third-party certification unit, which reports theresults to the Ministry of Environment using production data.

Regulatory Compliance and Improvement Measures
The Company's production process results in wastewater discharge that contains
small amounts of heavy metal nickel and fluorine ion pollutants. The wastewater discharge
from both sites complies with the "Effluent Standards" established for the semiconductor
manufacturing industry. On May 21, 2022, the Environmental Protection Bureau of I-lan
County conducted an audit of Li-Je Site. The audit revealed that TSC violated one paragraphof Article 7 of the Water Pollution Control Act. Specifically, the water sample taken fromdischarge port D01 did not meet the effluent standards (nickel: 2.39mg / L, exceeding the
maximum value of 1.0 mg / L). As a result, TSC was fined NT$561,000 and required to attend
2 hours of environmental lectures conducted by the Environmental Protection Bureau, I-lan
County. TSC made improvements by July 24, 2022, and developed short-term and long-termplans to enhance management and provide education and training to personnel, ensuring
the achievement of each stage's goals. Following this incident, Li-Je Site included the higher
hazardous pollutants present in the discharged water as part of the key items.

▎ 2022 Wastewater Discharge Violation
Site

Violation Incident

Li-Je Site

The water sampling quality test
results for the discharge port (D01)
do not meet the effluent standards.

Fines

NT$561,000

Water Quality Monitoring Mechanism of Li-Je Site
Li-Je Site discharges wastewater into the Xincheng River. The wastewater treatment
system is continuously monitored, and water quality is analyzed twice daily. Environmental
Safety and Site Affairs staff collect the data, which is then submitted to the system engineer
for approval. The unit supervisor verifies and analyzes the data, which is then compiled
into monthly charts and reports for review by the highest-level supervisor at the site. Li-Je
Site closely monitors any changes in water quality and promptly initiates an analysis and99

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5.2 Waste Management

Water Quality Improvement Program
In order to achieve the goal of improving water quality management, we conducted a thorough investigation into the incident of wastewater discharge violation in 2022. Following theinvestigation and review, we developed the Li-Je Site water quality improvement plan to ensure compliance with sampling standards. Moving forward, we have devised short-term monitoringmeasures and long-term improvement efforts. The following methods are employed to monitor water quality and prevent the recurrence of illegal activities.

Implementation Methods Li-Je Site
• Increase and confirm dosing quantity, alter the safety stock of chemicals to ensure consistent dosage.
• Assign personnel to perform nickel quick sieving of the WM05 high fluorine system rapid sedimentation basin daily to ensure effective dosing *1, by
adjusting dosage amount and dispensing concentration to ensure that heavy metal nickel in boiling water can be effectively removed. (figure below)
Short-term
Monitoring

Mediumterm
Monitoring

Long-term
Improvement＊1

UndosedAfter dosing• The new MVR system is scheduled for completion in 2023. It aims to decompose pollutants in wastewater to stabilize the quality of discharged water,
reduce the dosage of the wastewater treatment system, and evaluate the inclusion of nickel ion detection equipment for real-time monitoring of water
quality to ensure its normalcy.
• Utilizing innovative treatment technology to reuse sludge derived from wastewater treatment, forming a circular economy (please refer to 5.2.1 Waste
Recycling - Sludge Recycle and Reuse)• Transform wet processes into dry processes to minimize the discharge of high-concentration waste liquids and decrease the presence of pollutants in
wastewater.
• To enhance the efficiency of sludge treatment and minimize the potential for sludge spillage, it is recommended to procure and install a new sludge hydroextractor.

： The heavy metal collecting reagent is utilized to conduct a rapid screening test for nickel. This test is performed on heavy metal wastewater in a quick sedimentation basin. The purpose of this test is toconfirm the dosing status and ensure that the concentration of heavy metals in the water meets emission standards.

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Addition of Distillation Processing System
Highlight Story

Li-Je Site is situated in I-lan. In order to address the expensive outsourcing
costs associated with removing highly concentrated waste liquid produced at thesite, it was decided to process it through the site's wastewater system. In light ofthe "Effluent Standards" regulation implemented in 2021, which imposes stricter
controls on ammonia nitrogen and nitrate nitrogen management, the Company
conducted an assessment of the potential risks to the effluent water quality at thesite. In 2022, Li-Je Site carried out water sample testing and developed plans toincorporate it into the wastewater treatment facilities. By the end of 2022, TSC had
installed the Mechanical Vapor Recompression (MVR) system, which is scheduled
to be completed by the end of 2023. The first phase has already begun, converting
high-concentration waste liquid into clarified liquid discharge for the low fluorine
wastewater treatment system after undergoing MVR treatment. So far, the actual
performance has resulted in a reduction of the monthly treatment volume ofconcentrated waste liquid to 12,300 tons, while increasing the capacity for treatinghigh acid waste liquid to 214 tons per month. It is anticipated that in the future,these figures will further expand to 24,600 tons per month and 450 tons per month,respectively, leading to a significant reduction in various chemical substances in
the wastewater and effectively minimizing the production of sludge used in thewastewater systems.

Responsible
Procurement

Fractionating
Tower

Heat Exchanger(recycled)

Green
Manufacturingand Operation

Preheat Reclaimer

Stage 3:
Wastewater
recycling and reuse

Stage 2:
Wastewater management

Stage 1:High concentration waste
liquid discharging to thelow fluorine wastewater
treatment system through
MVR system

Low acid
waste
liquid

High
acid
waste
liquidSteam
Equipment

Control Panel

Appendix

For future utilization of MVR systems, TSC anticipates that the second phase of theplan will involve wastewater management. The Li-Je Wastewater Site will be utilized to treat
low-concentration wastewater, thereby mitigating environmental impact and minimizing
the potential for non-compliance with environmental laws and regulations at the site. In thethird phase, the objective is to recycle and reuse the wastewater, thereby reducing water
consumption and promoting sustainable operations.

Wastewaterfrom airpollutionscrubbingGold chloride
recycled water
Alkalineetching area

Sulfuric acid
Ammonia
Hydrofluoricacid
Nitric acidAqua regia
PhosphoricacidBOE
15-5-418-1-19-9-12-7

Reduce water
consumption

ChemicalLowfluoride
systemAdjustment
tank 60T

Pump
Heat
Exchanger

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MVR System
Booster
Equipment

Equal
Workplace

Preheater

Vaporizationtank

Condensed
water
sink

Intermediate
processing

Post
processing

SludgeEffluent

Vapor
compression

Reboiler101

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5.2 Waste Management

5.2.3 Air Pollution Control

Air Pollution Control Monitoring

TSC is dedicated to preventing air pollution and implementing environmental
protection measures. The company's air pollutant emissions, which include acid andalkaline waste gas, as well as volatile organic waste gas (VOCs), are effectively managed
through various control equipment. These include acid and alkaline scrubbing towers
and zeolite rotor incineration systems. Continuous monitoring is conducted using flame
ionization detector (GC-FID systems) to ensure that the control equipment operates
efficiently and meets regulatory standards. In 2022, due to the expansion of production
capacity, there was a slight increase in actual VOC emissions compared to 2021.

TSC complies with the "Air Pollution Control and Emissions Standards for the
Semiconductor Industry" to manage emissions and conducts regular audits, both internallyand externally, to monitor air pollution prevention equipment. In 2022, I-lan and Li-Je sites
had average VOC emissions of 0.202kg / hr and 0.33kg / hr, respectively, surpassing theemission standards set by the Ministry of Environment.

▎ Annual Noxious Gas Discharge in Each Site
NOx

SOx

VOC

Particulate Pollutants

Unit: tons

Total Noxious Gases
6.678

Waste Gas Treatment
TSC emits primary air pollutants that can be classified as acid and alkali waste gas,
as well as volatile organic waste gas. TSC utilizes specialized treatment equipment andprocesses that are tailored to the characteristics of each type of waste gas.

▎ Treatment of Each Air Pollutant

0.217

Air Pollutant Type

Treatment Method

3.865

Acid / alkaline
Exhaust Gas

Acid and alkali wastes are collected in an acid / waste
scrubbing tower for appropriate treatment, ensuring that theresulting wastes comply with emission standards.

4.768
0.117

3.380
0.085

1.773
0.944
0.944

2020

3.253

Li-Je Site:

2.283

0.811

2.596
1.773

0.811

2021
I-lan Site

1.013

2022

1.398

2020

2021

2022

Li-Je Site

Note:
1. Li-Je Site and I-lan Site have no emissions of ozone-depleting substance (ODS), persistentorganic pollutants (POPs), and particulate matter (PM) in the past three years
2. Measurement method: Real-time site monitoring data
3. I-lan Site did not detect any NOx, SOx, or particulate pollutants in the past three years.
4. Li-Je Site did not detect any SOx in the past three years.

Volatile Organic
Waste Gas

Volatile organic compounds (VOCs) are adsorbed andconcentrated using a zeolite rotor. This is followed by acontinuous high-temperature desorption process and catalytic
incineration. As a result, the treated waste gas meets emission
standards, achieving a reduction rate of over 90% for volatileorganic waste gas.
I-lan Site:
VOCs are treated using scrubbing towers to remove
VOCs from the waste gas. The resulting waste liquid isthen discharged into the wastewater system. Since theconcentration of VOCs is lower at the I-lan Site compared to
the Li-Je Site, scrubbing is the preferred treatment method.
This eliminates the need for concentrated purification using
zeolite rotor adsorption.
102

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5.2 Waste Management

The scrubber tower at Li-Je Site utilizes a parallel method to process both acidic and alkaline waste gases. In the event of an emergency, the remaining equipment can be adjusted
to handle the target exhaust treatment, while also coordinating with the production line to prevent air pollution. Furthermore, the zeolite rotor continuous incineration (RCO) system, which is
employed to treat volatile organic exhaust gases, can be switched to the activated carbon tower in parallel during emergencies. This allows for simultaneous coordination with the production
line to minimize environmental impact.

▎ Waste Gas Treatment Flow Chart
Emission Management
Volatile Organic
Waste Gas
Zeolite Rotor
Concentration
System➡

Zeolite Rotor
Adsorption
Purification➡

Heat Exchanger
A

High Temperature
Desorption
Heat Exchanger
B➡

Catalytic
Combustion

HeaterCatalyst Bed

Chimney

Desorption
Segment Cooling
Segment

P004

On-site Photos:

Catalyst Intake
Port100-500℃

Concentrated
Desorption

Waste Gas
Intake Port

Catalyst Outlet
Port
100-500℃

Adsorption

Adsorption

Waste Gas Treatment
AmountAdsorption
Segment

100-250cmm

To the Chimney

103

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6.1 Social Inﬂuence

6.1Social Inﬂuence
In line with the principle of "taking from society and giving back to society,"TSC
h a s e s t a b l i s h e d t w o k e y s o c i a l w e l f a re g o a l s : " h u m a n i s t i c c a re " a n d " y o u t hempowerment."Recognizing the challenges faced by charitable organizations in recent
years, particularly due to the pandemic, Li-Je and I-Lan Sites have taken proactive measures
to address the decrease in donations and limited resources. They have organized charity
sales, blood donation drives, and other public welfare activities, actively engaging withlocal communities and making valuable contributions. Regarding youth empowerment,
we have initiated industry-academia collaborations and launched internship programs inlocal campuses, providing students with practical opportunities to apply their knowledge
and fostering exchanges between academia and industry. Furthermore, we acknowledge
the significant impact of climate change on our planet and, in addition to their focus on"humanistic care"and "youth empowerment,"they have plans to launch an "environmental
public welfare initiative"in 2024, aiming to make a positive impact. The company aims
to harness the collective power of the public to generate sustainable value and foster aprosperous society.

▎ Two Major Visions and Goals
VisionGoal

TargetHumanitarian
Care

Regularly contribute
funds or resources to
disadvantaged groups
requiring assistance, andmaintain investment insocial engagement.

Variouspublic welfareorganizations
and institutions.

Promoting industryacademia collaboration
to foster talent in thesemiconductor industry.

College students

YouthEmpowerment

Corresponding UN
SDG(s)

6.1.1 Humanitarian Care
To implement social care and practice corporate social responsibility, TSC endeavors
to create a favorable working environment and actively engages in public welfare initiatives.
From the 2009 flooding in the wake of Typhoon Morakot to the 2014 Kaohsiung gas
explosion, we have organized various public welfare initiatives to engage with society
actively. Despite the ongoing pandemic, we continue to make meaningful contributions
through charity sales, material donations, and monetary support. These actions havepositively impacted our employees, fostering a culture of social responsibility andencouraging their active involvement in public welfare activities.
Since 2009, we have donated over NT$5 million to disaster relief, medical facilities,
education subsidies, and charitable organizations. Furthermore, we have actively engaged
in a range of philanthropic endeavors. This includes collaborating with Siangyu Care and
Education Institute in Taoyuan City to co-organize charity events. We have also participatedin blood donation activities organized by the Taiwan Blood Services Foundation. Additionally,
we have contributed to meal services for underprivileged children and families in need,organized by the World Peace Association. These initiatives exemplify our commitment toaddressing the nutritional needs of children through tangible actions.
Note*: The activities comprise the following: the "Spread Love Every Day" event, the "Save Hungry Children"
breakfast donation, the "Bags of Love for Hungry Children" winter vacation meal service, and thenutritional meal service for children from impoverished families in the northern region.

▎ Total Donation Statistics, 2009–2022

Unit: NT$

Category

Amount (NT$)

Impoverished Students

2,635,951

Social Love Assistance

3,190,000

105About This
ReportSustainable
Operation and
Governance

Innovative
Products andServices

Responsible
Procurement

Equal
Workplace

Green
Manufacturingand Operation

Sharing Our
Prosperity
with Society

Appendix

6.1 Social Inﬂuence

Highlight Story

TSC's Pandemic Blood Drive
In 2020, the world experienced the prolonged
COVID-19 pandemic, which had a significant impact
on public welfare organizations. Due to the inability tohold physical fundraising activities, these organizations
suffered a sharp decline in donation income. On January
26, 2021, in response to this situation, Li-Je and I-lan
Site collaborated to organize a joint blood donation
event. To motivate colleagues to actively participate,senior supervisors at TSC generously offered prizes forcolleagues to win. A total of 100 individuals took partin the event, collectively donating 118 bags of blood.
We intend to regularly host blood donation events in the
future, aiming to foster a culture of blood donation amongcolleagues and contribute to society as a team.

This year, we launched a fundraising campaign for publicwelfare initiatives. In response to the generous support
from the public, we collected a total of 288 invoices andNT$9,001. These donations will be given to the Genesis
Social Welfare Foundation, aiming to promote the concept ofsocial prosperity.

106About This
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Operation and
Governance

Innovative
Products andServices

Responsible
Procurement

Equal
Workplace

Green
Manufacturingand Operation

Sharing Our
Prosperity
with Society

Appendix

6.1 Social Inﬂuence

6.1.2 Youth Empowerment
TSC recognizes that talent is crucial for industrial development, and therefore places greatemphasis on talent cultivation. To support students in their growth, the company has been
actively implementing internship programs in recent years. Moving forward, we will strengthen
our collaboration with academic institutions to promote research project plans and scholarshipprograms, to nurture more skilled and practical talents.
In 2022, Taiwan collaborated with a reputable university in Yilan to enhance theinternship experience for college students. As part of this collaboration, the university's careerdevelopment center organized an internship briefing. During this briefing, students had thechance to engage in individual interviews to gain deeper insights into and participate in the
Company's internship program. The program achieved an impressive attendance rate of
93.3%.
In addition to creating a training plan, we implement a mentorship program for interns.
Each intern is paired with a mentor who offers professional guidance, consultation, andsupport. This program allows students to intern at the Li-Je Site during their senior year. Uponcompletion of the internship, interns are required to give presentations to showcase theirlearning and accomplishments at TSC.
To implement the internship program, We have established evaluation and supervision
mechanisms. These mechanisms ensure the effective implementation and achievement of
the internship program's expected goals. They involve questionnaire surveys and mutual
evaluations between students and mentors, fostering good communication. Mentors assist
students in setting specific and achievable phased goals. Students gain experience and a
deep understanding of basic process theory and semiconductor device physics through onsite practical operations.TSC is dedicated to improving the competitiveness of young people
and nurturing talent in the semiconductor industry. We will further our collaboration and forge
lasting partnerships with academic institutions.

▲ Students participated with enthusiasm
and actively engaged during the company
recruitment orientation.

▲ TSC has established an on-campus
internship program to bridge the gap
between academia and industry.

Future Industry-Academia Collaboration Projects

Research Project Plan

Scholarship Program

To foster talent that meets the demands ofthe industry, establish a connection between
academia and industry, and strengthen
the competitiveness of the semiconductor
industry, we partner with research universities
to launch research projects. Working
alongside professors specializing in relevant
fields, we undertake practical research to
tackle industry challenges. Additionally, TSC
aims to facilitate open communication among
students, companies, and professors throughthis collaboration, thereby expediting theadvancement of semiconductor technology
and internal knowledge enrichment.

To foster exceptional talent in the semiconductor
industry and recognize outstanding students,
we initiate a scholarship program inpartnership with research universities.
This program will offer scholarships toexceptional students, providing them with amonthly stipend throughout their scholarship.
Additionally, recipients will have the chance
to partake in internships, receive internshipsalaries, and be given priority consideration
for full-time employment opportunities at ourcompany.

107

7Appendix
GRI Standards Content Index
Sustainability Accounting Standards
Board (SASB) Content Index
Climate-Related Information of TPEx
Listed Company
Independent Limited Assurance
Report108

About This
ReportGRIGRI Standards
Standards Content Index

Sustainable
Operation and
Governance

Innovative
Products andServices

Sustainability Accounting Standards Board (SASB) Content Index

Responsible
Procurement

Equal
Workplace

Green
Manufacturingand Operation

Climate-Related Information of TPEx Listed Compan

Sharing Our
Prosperity
with Society

Appendix

Independent Limited Assurance ReportGRI Standards Content Index
GRI 2: General Disclosures(2021)

Report Chapters and Descriptions

Page
NumberGRI 2: General Disclosures(2021)

2-1

2-2

Entities included in
the organization's
sustainability
reporting

1.1.1 Company Profile, About theReportReporting period,
frequency, andcontact point

About the Report2-4

Restatements of
information

About the Report

2-5

External assurance

About the Report, Third-party
Inspection Statement

2-3

1.1.1 Company Profile, About theReport2-10

1.2.1 Sustainable Governance

19

2-11

Chair of the highest
governance body

1.2.1 Sustainable Governance

19

2-12

Role of the highest
governance bodyin overseeing themanagement of
impacts

1.2.1 Sustainable Governance, 1.3.3
Climate Risk Management

19, 332-13

Delegation of
responsibility for
managing impacts

1.2.1 Sustainable Governance, 1.3.3
Climate Risk Management

19, 332-14

Role of the highest
governance bodyin sustainability
reporting

1.2.1 Sustainable Governance, 1.3.3
Climate Risk Management

19, 332-15

Conflicts of interest

1.2.1 Sustainable Governance

2-16

Communication ofcritical concerns

1.2.1 Sustainable Governance, 1.3.3
Climate Risk Management

19, 33

2-17

Collective knowledgeof the highest
governance body

1.2.1 Sustainable Governance, 1.3.3
Climate Risk Management

19, 332-18

Evaluation of theperformance of thehighest governancebody

1.2.1 Sustainable Governance, 1.3.3
Climate Risk Management

19, 33

2-19

Remuneration
policies

1.2.1 Sustainable Governance

2-20

Process to determine
remuneration

1.2.1 Sustainable Governance, 4.1.1
Diversity and Inclusion

13

13

4

4
4, 116

Activities and Workers
Activities, value
chains, andother business
relationships

1.1.1 Company Profile, 3.1.1 Supply
Chain Overview, 3.1.2 Sustainable
Supply Chain Management

2-7

Employees

4.1.1 Diversity and Inclusion

2-8

Workers who are not
employees

2-6

4.1.1 Diversity and Inclusion

13, 5964
64

Governance
2-9

Governance structure
and composition

1.2.1 Sustainable Governance

19

Page
NumberNomination andselection of thehighest governancebody

The organization and its reporting practices
Organizational
details

Report Chapters and Descriptions

19

19
19, 64109

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ReportGRIGRI Standards
Standards Content Index

Sustainable
Operation and
Governance

Sustainability Accounting Standards Board (SASB) Content Index

GRI 2: General Disclosures(2021)

Report Chapters and Descriptions

Annual totalcompensation ratio

As the information is incomplete,
the total annual compensation of thehighest individual remuneration in theorganization is not disclosed at this
time.

2-21

Innovative
Products andServices

Page
NumberClimate-Related Information of TPEx Listed Compan

GRI 3: Material Topics (2021)-

Statement onsustainable
development
strategy

1.2.1 Sustainable Governance, 1.3.3
Climate Risk Management

Policy commitments

1.2.2 Integrity Management, 4.2.2
Labor Relations and Human Rights
Management

19, 772-24

Embedding policy
commitments

1.2.2 Integrity Management, 4.2.2
Labor Relations and Human Rights
Management

19, 772-25

Processes toremediate negative
impacts

1.2.2 Integrity Management, 5.2.2
Wastewater Management

19, 982-26

Mechanisms forseeking advice andraising concerns

1.2.2 Integrity Management

2-27

Compliance with laws
and regulations

1.2.2 Integrity Management, 5.2.2
Wastewater Management

2-28

Membershipassociations

1.1.1 Company Introduction

2-23

Green
Manufacturingand Operation

Equal
Workplace

Sharing Our
Prosperity
with Society

Appendix

Independent Limited Assurance Report

Report Chapters and Descriptions

Page
Number

Disclosures on material topics

Strategy, policies, and practices

2-22

Responsible
Procurement

3-1

Process to determinematerial topics

Identification of material topics andcommunication with stakeholders

7-11

3-2

List of material topics

Identification of material topics andcommunication with stakeholders

7-11

Customer Relationship Management

19, 333-3Management ofmaterial topics

2.2.1 Customer Satisfaction
Improvement

55

Human Resource Management

19

3-3

Management ofmaterial topics

4.1.1 Diversity and Inclusion, 4.1.2
Human Resource Development

64

Quality and Safety Requirements and Inspections
3-3

Management ofmaterial topics

2.1.1 Products and Services

45

Occupational Accidents
19, 9813

3-3Management ofmaterial topics

4.2.3 Workplace Safety Maintenance79

Environmental Pollution Control

Stakeholder engagement
2-29

Approach to
stakeholder
engagement

Identification of material topics andcommunication with stakeholders

7-11

2-30

Collective bargaining
agreements

Not applicable. There are nocollective bargaining agreements in
TSC in 2022-

3-3Management ofmaterial topics

5.2.1 Waste Management

94

Climate Governance and Strategies
3-3Management ofmaterial topics

1.3.3 Climate Risk Management

33

110

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ReportGRIGRI Standards
Standards Content Index

GRI 200

Sustainable
Operation and
Governance

Innovative
Products andServices

Sustainability Accounting Standards Board (SASB) Content Index

Report Chapters and Descriptions

Responsible
Procurement

Climate-Related Information of TPEx Listed Compan

Page
NumberGRI 300

Direct economic
value generated anddistributed

201-2

Financial implications
and other risks andopportunities due toclimate change

201-4

Financial assistancereceived fromgovernment

1.1.2 Financial Performance

204-1

23

Operations assessed
for risks related tocorruption

Independent Limited Assurance Report

Page
Number301-1

Materials used byweight or volume

2.1.3 Developing Sustainable
Products

53

GRI 302: Energy (2016)
1.3.3 Climate Risk Management

1.1.2 Financial Performance33

3.1.1 Supply Chain Overview

Incomplete information, notdisclosed in 2022

302-1

Energy consumption
within the organization

5.1.2 Energy Management

89

302-3

Energy Intensity

5.1.2 Energy Management

89

18

59

GRI 205: Anti-Corruption (2016)

205-1

Appendix

GRI 301: Materials (2016)

GRI 204: Procurement Practices (2016)
Proportion of
spending on local
suppliers

Sharing Our
Prosperity
with Society

Report Chapters and Descriptions

GRI 201: Economic Performance (2016)

201-1

Green
Manufacturingand Operation

Equal
WorkplaceGRI 303: Water and Effluents (2018)
303-1

Interactions with water
as a shared resource

5.1.3 Water Stewardship

92

303-2

Management of water
discharge-related
impacts

5.2.2 Wastewater Management

98

303-3

Water withdrawal

5.1.3 Water Stewardship

92

303-4

Water discharge

5.2.2 Wastewater Management

98

GRI 305: Emissions (2016)

-

205-2

Communication andtraining about anticorruption policies
and procedures

1.2.2 Integrity Management

23

205-3

Confirmed incidentsof corruption andactions taken

1.2.2 Integrity Management

23

305-1

Direct (Scope 1) GHG
emissions5.1.1 Carbon Emission Management

86

305-2

Energy indirect(Scope 2) GHG
emissions5.1.1 Carbon Emission Management

86

305-3

Other indirect (Scope
3) GHG emissions

5.1.1 Carbon Emission Management

86

305-4

GHG emissions
intensity

5.1.1 Carbon Emission Management

86

305-6

Emissions of ozonedepleting substances(ODS)

5.2.3 Air Pollution Control

102

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Standards Content Index

Innovative
Products andServices

Sustainability Accounting Standards Board (SASB) Content Index

GRI 300

305-7

Sustainable
Operation and
Governance

Report Chapters and Descriptions

Nitrogen oxides(NOx), sulfur oxides(SOx),

Responsible
Procurement

Equal
Workplace

Green
Manufacturingand Operation

Climate-Related Information of TPEx Listed Compan

Page
Number

Sharing Our
Prosperity
with Society

Appendix

Independent Limited Assurance Report

Report Chapters and
Descriptions

GRI 400

Page
NumberGRI 401: Employment (2016)
5.2.3 Air Pollution Control

102

and other significant
air emissions
GRI 306: Waste (2020)

401-1

New employee hires andemployee turnover

4.1.1 Diversity and Inclusion

64

401-2

Benefits provided to fulltime employees that are notprovided to temporary or parttime employees

4.2.1 Employee Health andWelfare72

401-3

Parental leave

4.2.1 Employee Health andWelfare72

306-1

Waste generationand significant wasterelated impacts

5.2.1 Waste Management

306-2

Management ofsignificant wasterelated impacts

5.2.1 Waste Management

94

403-1

Occupational health andsafety management system

4.2.3 Workplace Safety
Maintenance

79

306-3

Waste generated

5.2.1 Waste Management

94

403-2

Hazard identification, risk
assessment, and incident
investigation

4.2.3 Workplace Safety
Maintenance

79

306-4

Waste diverted from
disposal

5.2.1 Waste Management

94

403-3

Occupational health services

4.2.3 Workplace Safety
Maintenance

79

306-5

Waste directed todisposal

5.2.1 Waste Management

94

403-4

Worker participation,
consultation, andcommunication on
occupational health and safety

4.2.3 Workplace Safety
Maintenance

79

403-5

Worker training on
occupational health and safety

4.2.3 Workplace Safety
Maintenance

79

403-6

Promotion of worker health4.2.3 Workplace Safety
Maintenance

79

403-7

Prevention and mitigation ofoccupational health and safety
impacts directly linked bybusiness relationships

4.2.3 Workplace Safety
Maintenance

79

403-8

Workers covered by an
occupational health and safety
management system

4.2.3 Workplace Safety
Maintenance

79

403-9

Work-related injuries

4.2.3 Workplace Safety
Maintenance

79

94

GRI 403: Occupational Health and Safety 2018

GRI 308: Supplier Environmental Assessment (2016)308-1

New suppliers thatwere screened using
environmental criteria

308-2

Negativeenvironmental impacts
in the supply chain
and actions taken

3.1.2 Sustainable Supply Chain
Management

3.1.2 Sustainable Supply Chain
Management

59

59

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ReportGRIGRI Standards
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Innovative
Products andServices

Sustainability Accounting Standards Board (SASB) Content Index

Report Chapters and
Descriptions

GRI 400
403-10

Sustainable
Operation and
GovernanceWork-related ill health4.2.3 Workplace Safety
Maintenance

Average hours of training peryear per employee

4.1.2 Human Resource
Development

404-2

Programs for upgrading
employee skills and transition
assistance programs

4.1.2 Human Resource
Development

404-3

Percentage of employees
receiving regular performanceand career development
reviews

4.1.2 Human Resource
Development

405-1

Diversity of governancebodies and employees

4.1.1 Diversity andInclusion. For details about
governance body, pleaserefer to TSC's Annual Report
2022

405-2

Ratio of basic salary andremuneration of women to men

1.2.1 Sustainable
Governance, 4.1.1 Diversity
and Inclusion

Incidents of discrimination andcorrective actions taken

4.2.2 Labor Relations andHuman Rights Management408-1

4.2.2 Labor Relations andHuman Rights Management

Operations and suppliers at
significant risk for incidents offorced or compulsory labor

4.2.2 Labor Relations andHuman Rights Management

Report Chapters and
Descriptions

Page
Number

Incidents of violations involving
rights of indigenous peoples

4.2.2 Labor Relations andHuman Rights Management77

New suppliers that werescreened using social criteria

3.1.2 Sustainable Supply
Chain Management

59

414-2

Negative social impacts inthe supply chain and actions
taken

3.1.2 Sustainable Supply
Chain Management

59

67

GRI 415: Public Policy 2016
415-1

Political contributions

1.2.2 Integrity Management

23

GRI 416: Customer Health and Safety 2016
64

19, 64416-1

Assessment of the health andsafety impacts of product andservice categories

2.1.1 Products and Services

45

416-2

Incidents of non-complianceconcerning the health andsafety impacts of products andservices

2.1.1 Products and Services

45

GRI 417: Marketing and Labeling 2016
77

417-1

Requirements for productand service information andlabeling

2.1.1 Products and Services

45

417-2

Incidents of non-complianceconcerning product andservice information andlabeling

77

2.1.1 Products and Services

45

GRI 409: Forced or Compulsory Labor 2016409-1

Independent Limited Assurance Report

414-1

GRI 408: Child Labor 2016
Operations and suppliers at
significant risk for incidents ofchild labor

Appendix

GRI 414: Supplier Social Assessment 2016

67

GRI 406: Non-discrimination 2016406-1

Sharing Our
Prosperity
with Society

GRI 411: Rights of Indigenous Peoples 2016
411-1

GRI 405: Diversity and Equal Opportunity 2016

Green
Manufacturingand Operation

GRI 400

79

67

Equal
Workplace

Climate-Related Information of TPEx Listed Compan

Page
NumberGRI 404: Training and Education 2016404-1

Responsible
Procurement

GRI 418: Customer Privacy 2016
77

418-1

Substantiated complaints
concerning breaches ofcustomer privacy and lossesof customer data

2.2.2 Customer Privacy
Protection

57
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Sustainable
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Innovative
Products andServices

Sustainability
Sustainability Accounting
Accounting Standards Board
Board (SASB)(SASB) Content
Content Index
Index

Responsible
Procurement

Equal
Workplace

Green
Manufacturingand Operation

Climate-Related Information of TPEx Listed Compan

Sharing Our
Prosperity
with Society

Appendix

Independent Limited Assurance Report

Sustainability Accounting Standards Board (SASB) Content Index
Report Chaptersand Descriptions

SASB

Page
NumberTC-SC-000.A

Total production

2.1.1 Products andServices

45

TC-SC-000.B

Percentage of production from
owned facilities

2.1.1 Products andServices

45

Greenhouse Gas Emissions(1) Gross global Scope 1 emissions

TC-SC-110a.2(2) Amount of total emissions fromperfluorinated compounds
Discussion of long-term and shortterm strategy or plan to manage
Scope 1 emissions, emissions
reduction targets, and an analysis ofperformance against those targets

5.1.1 Carbon
EmissionManagement86

5.1.1 Carbon
EmissionManagement86

TC-SC-150a.1

Description of efforts to assess,monitor, and reduce exposure of
employees to human health hazards

4.2.3 Workplace
SafetyMaintenance79

TC-SC-320a.2

Total amount of monetary losses
as a result of legal proceedings
associated with employee health andsafety violations

4.2.3 Workplace
SafetyMaintenance79

Recruiting & Managing a Global & Skilled Workforce(1) Percentage of employees that areforeign nationals(2) Percentage of employees that arelocated offshore

89
TC-SC-440a.1

Description of the managementof risks associated with the use ofcritical materials

Water Management

4.1.1 Diversity andInclusion

64

3.1.2 Sustainable
Supply Chain
Management, 3.1.3
Conflict Minerals
Management

59
62Intellectual Property Protection & Competitive Behavior(1) Total water withdrawn(2) Total water consumed, percentage
of each in regions with High orExtremely High Baseline Water
Stress

94

Materials Sourcing
5.1.2 Energy
Management(3) Percentage renewable from totalenergy consumption

TC-SC-140a.1

5.2.1 Waste
Management

TC-SC-320a.1(1) Total energy consumed
TC-SC-130a.1

Amount of hazardous waste frommanufacturing, percentage recycled
Employee Health & Safety

TC-SC-330a.1

Energy Management in Manufacturing(2) Percentage grid electricity(purchased electricity) from totalenergy consumption

Page
NumberWaste Management

Activity Metric

TC-SC-110a.1

Report Chaptersand Descriptions

SASB

5.1.3 Water
Stewardship

92

TC-SC-520a.1

Total amount of monetary losses
as a result of legal proceedings
associated with anti-competitive
behavior regulations

1.2.2 Integrity
Management

23

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Innovative
Products andServices

Sustainability Accounting Standards Board (SASB) Content Index

Responsible
Procurement

Equal
Workplace

Green
Manufacturingand Operation

Climate-Related Information of TPEx Listed Compan

Sharing Our
Prosperity
with Society

Appendix

Independent Limited Assurance Report

Climate-Related Information of TPEx Listed Company
According to the TWSE's "Rules Governing the Preparation and Filing of Sustainability Reports by TWSE Listed Companies", the following tables are disclosed
Item

Implementation Status

Describe the board of directors' and management's oversight and governance ofclimate-related risks and opportunities.

Please refer to "1.3.3 Climate Risk Management".

Describe how the identified climate risks and opportunities affect the business, strategy,
and finances of the business (short, medium, and long term).

Please refer to "1.3.3 Climate Risk Management".

Describe the financial impact of extreme weather events and transformative actions.

Please refer to "1.3.3 Climate Risk Management".

Describe how climate risk identification, assessment, and management processes areintegrated into the overall risk management system

Please refer to "1.3.3 Climate Risk Management - Climate Risks and Opportunities".

If scenario analysis is used to assess resilience to climate change risks, the scenarios,parameters, assumptions, analysis factors and major financial impacts used should be
described.

Please refer to "1.3.3 Climate Risk Management - Climate Risk Impacts Assessment andScenarios Analysis".

If there is a transition plan for managing climate-related risks, describe the content of
the plan, and the indicators and targets used to identify and manage physical risks andtransition risks.

Please refer to "1.3.3 Climate Risk Management - Indicators and Goals".

If internal carbon pricing is used as a planning tool, the basis for setting the priceshould be stated.

There are currently no plans being considered, and the company is still in the discussion phase.

If climate-related targets have been set, the activities covered, the scope of greenhousegas emissions, the planning horizon, and the progress achieved each year should bespecified. If carbon credits or renewable energy certificates (RECs) are used to achieve
relevant targets, the source and quantity of carbon credits or RECs to be offset shouldbe specified.

Please refer to "1.3.3 Climate Risk Management - Indicators and Goals".

Greenhouse gas inventory and assurance status

Please refer to "5.1.1 Carbon Management". Li-Je Site has been conducting inventory andverification since 2014, with inspection being handled by TUV Rheinland Taiwan LTD (TUV).
TSC has steadily increased the greenhouse gas inventory scope in line with the Sustainable
Development Roadmap of Listed Companies.
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Innovative
Products andServices

Sustainability Accounting Standards Board (SASB) Content Index

Responsible
Procurement

Equal
Workplace

Green
Manufacturingand Operation

Climate-Related Information of TPEx Listed Compan

Sharing Our
Prosperity
with Society

Appendix

Independent
Independent Limited Assurance
Assurance Report
ReportIndependent Limited Assurance Report116About This
ReportGRI Standards Content Index

Sustainable
Operation and
Governance

Innovative
Products andServices

Sustainability Accounting Standards Board (SASB) Content Index

Responsible
Procurement

Equal
Workplace

Green
Manufacturingand Operation

Climate-Related Information of TPEx Listed Compan

Sharing Our
Prosperity
with Society

Appendix

Independent
Independent Limited Assurance
Assurance Report
Report117

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ReportGRI Standards Content Index

Sustainable
Operation and
Governance

Innovative
Products andServices

Sustainability Accounting Standards Board (SASB) Content Index

Responsible
Procurement

Equal
Workplace

Green
Manufacturingand Operation

Climate-Related Information of TPEx Listed Compan

Sharing Our
Prosperity
with Society

Appendix

Independent
Independent Limited Assurance
Assurance Report
Report118

About This
ReportGRI Standards Content Index

Sustainable
Operation and
Governance

Innovative
Products andServices

Sustainability Accounting Standards Board (SASB) Content Index

Responsible
Procurement

Equal
Workplace

Green
Manufacturingand Operation

Climate-Related Information of TPEx Listed Compan

Sharing Our
Prosperity
with Society

Appendix

Independent
Independent Limited Assurance
Assurance Report
Report119

Taiwan Semiconductor Co., Ltd.
11 Fl., No. 205, Sec. 3 Beishin Rd., Xindian Dist., New Taipei City, 231 Taiwan
ESG@ts.com.tw